What Exactly Does "Green Building" Mean?

LEED certification is a great marketing tool, but what does it mean?

“Green building” is the growing buzzword in construction and real estate these days. The concept of green building has gained favor with the general public, who perceive value in a building’s longevity and reduced maintenance costs.

As more and more homes and commercial buildings tout their “green building” status, few consumers actually understand what this means. In its most general sense, green building refers to a method of building that protects the heath of its occupants, efficiently uses water and energy and reduces the building’s impact to the environment.

Green building standards have been established by the U.S. Green Building Council’s Leadership in Energy and Environmental Design. The LEED rating system has emerged as a powerful tool to rate the design, construction and maintenance of a green building.

LEED ratings give points, or credits, for the presence or absence of several factors. At the lowest end of the ratings scale, a green building can be LEED Certified. The more credits a building is awarded, the greater chance of it being awarded the prestigious LEED Silver, Gold, or Platinum status.

LEED credits are awarded according to six factors:

SUSTAINABLE SITES
Where a developer chooses to build is a crucial first step. A green building will address density (for example, a mixed-use residential/commercial project) and access to the surrounding community. Alternative transportation is also considered. Does the building give its occupants easy access to public transportation? Incorporate bicycle storage? Address parking capacity and ride-sharing?

Other factors in sustainable sites include redeveloping a brownfield, restoring or protecting a habitat, and maximizing open spaces. A truly green building will also reduce the thermal difference between the building and surrounding environment. This is done with solar panels or light-reflecting roofs, as well as by planting trees and other vegetation around the site.

WATER EFFICIENCY
Landscaping is an important consideration in this step. In recent years, there has been a push to incorporate indigenous plants into the landscape of a potentially green building. This also means utilizing drought-tolerant or drought-resistant vegetation, as well as alternative watering methods.

Rainwater collection, drip irrigation, and graywater reuse are becoming popular in green buildings. Higher water efficiency is also established through the use of low-flow fixtures, such as energy and water-efficient toilets, shower heads, washing machines and dishwashers.

ENERGY AND ATMOSPHERE
A green building must have energy systems that are properly installed and calibrated. When operating, these systems must meet minimum standards of energy efficiency. A green building will further reduce ozone depletion by not using chlorofluorocarbon (CFC) refrigerants, not only in its heating and cooling, but in its fire suppression

Additionally, a green building will ideally reduce the demand for energy, perhaps by harvesting free energy or recovering wasted energy. Some green buildings also incorporate advanced monitoring systems that will easily point to problems within each system. Of course, green power is ideal, including the use of renewable energy sources such as solar, hydro and wind power.

MATERIALS AND RESOURCES
In order to be a green building, a close examination of the building’s construction is necessary. The program gives credits to building remodels where a significant portion of existing walls, floors and roof are reused. In the green building’s construction phase, waste management is taken into account.

Building materials that are recycled, created locally, or farmed from rapidly renewable materials are also highly desirable in a green building. These items may be found in flooring, insulation, architectural salvage, and myriad other methods. It should be noted that a green building must also have an on-site area for collecting recyclable materials.

INDOOR ENVIRONMENTAL QUALITY
Under this category, a green building must provide a healthful environment for its occupants. This is not only achieved through proper ventilation. In order to achieve this, builders must control or eliminate building materials that may emit hazardous contaminants, such as paints, sealants, finishes, stains and carpets.

A green building’s environmental quality is also measured by individuals’ ability to control temperature and lighting. By increasing the number of individual light switches and thermostats, occupants in a green building are more comfortable use less energy. And by designing primary living and working spaces around the perimeter, lighting costs are reduced, as well as increasing quality of life within the building.

INNOVATION IN DESIGN
Many consumers think that this category refers to the unique appearance of a green building. But innovation in design actually means that a building exceeds standards designated under the green building program. This can be achieved through design, technology, education and equipment.

Building owners can achieve innovation in design by utilizing Energy Star appliances, following green housekeeping procedures, saving water, and using natural pesticides in landscaping. Some green buildings earn these extra credits by tremendously exceeding the requirements other categories.

Foreclosure Roundup

There were a number of submissions to the Foreclosure Central roundup. I can only assume that most people were tied up with taxes, as very few of the submissions had anything at all to do with foreclosure.

The most insightful blog author regarding foreclosure was Andrea Dickson at Wise Bread. In her article "How to Avoid Foreclosure" she gives homeowners who might be facing foreclosure some real tools and steps to follow.

I also like that Andrea touches on the community impact of foreclosures, stating "At least 4 properties (all rentals, all owned by the same person) on my street alone are being auctioned off within the next month, and that kind of activity is going to affect my property values..." Scary stuff.

Each state's foreclosure process is somewhat different. To see an overview of each state's foreclosure process, go to Foreclosure Basics - By State.

Meanwhile, as more investors shift from residential to the more stable commercial side, Craig S. Higdon at Investment Property Insider explains some basics with Commercial Real Estate Credit, and urges potential investors to "Weigh your risks carefully"

Subprime mortgages and foreclosure statistics continue to dominate real estate-related news stories.

Nationwide, CNN Money shows that foreclosures are up 7% from March to February of 2007, a whopping 47% increase from last year at this time.

For the third straight month, Nevada leads the nation in foreclosures. Las Vegas has the second-highest foreclosure rate among cities monitored by RealtyTrac. The article reports that "Nevada reported 4,738 foreclosure filings, more than triple the number in March 2006. Its foreclosure rate showed 1 filing for every 183 households, more than four times the national rate of 1 per 775 households"

More bad news for Florida. RealtyTrac says that Florida ranks second in the nation for foreclosures with an increase of 33% from February to March of 2007.

The San Francisco Chronicle reports Foreclosures, default notices hit 10-year high. "The number of California homeowners who defaulted on their mortgage payments jumped to its highest level in almost 10 years, exacerbated by slowing home sales and adjustable-mortgage resets."

But Washington State's real estate market remains strong. The Seattle Times shows Foreclosures in state fall, bucking national trend, while the Atlanta Business Chronicle points to a bounce in that state's foreclosure rates as well.

Financial Services Chariman Barney Frank is calling for a quick pass of legislation that would set national protections for all mortgage borrowers and clearer disclosure statements.

Thankfully, not everyone is jumping on the bandwagon for a legislative bailout. The Cincinnati Enquirer reports Go slow on foreclosures, Congress told. "Federal regulators and mortgage lenders this morning warned congressional lawmakers against moving too aggressively to regulate the mortgage industry in response to a soaring number of home foreclosures."

Senator Chris Dodd was one of the earliest and most vocal proponents of legislating the nation out of the subprime debacle. Today it seems he has made a quick about-face. He is quoted as saying "I'm not overly anxious to legislate," he said. "We think there may be enough laws on the books."

Fannie Mae and Freddie Mac are developing new types of loans to help distressed borrowers with high-risk mortgages, including a possible 40-year mortgage.

Lowest Common Denominator LawsAnd the Subprime Lending Market

In the United States, laws are typically written for and around the very small percentage of the population who, for some reason, need to be told very basic things. It’s truly unfortunate that some in our society do need laws and penalties to prevent or punish them for things the rest of us would simply never think of doing. And I truly think that the majority should not accept this any longer.

In the small California town where I grew up, the Fourth of July parade used to be a thing of wonder for children. Not for the parade itself, but because all of the families in town used to pitch tents in the wide grassy medians that separated the north and south-bound lanes of the town’s main road.

Everyone would bring their picnic baskets, sundries, and toys. Children ran around playing tag during this town-wide slumber party, and adults would discreetly sip wine or beer from plastic cups. These July 3rd evenings were so uneventful that there was rarely even any good gossip to talk about the next day.

As time went on, folks from other towns started crossing over into the community to participate. They too brought their tents and sleeping bags, but their foreign presence changed the environment. The first evidence of this was that ‘stranger danger’ at the campout meant that parents felt the need to always have their kids in sight.

The newcomer adults inevitably took the lax police enforcement of open containers to mean that this was more Mardi Gras than town social. For the first time, there were fights and arrests for disorderly conduct. I’m sure you can figure out what happened next. Alcohol was quickly banned, a decision that the town of course supported. Within a few years, camping on the median was also a thing of the past.

I wanted to share this example because, as you can see, when the town had to shift their standard operating procedure for July 3rd and 4th, it wasn’t a reflection of the town itself. It became necessary because of the small percentage of folks who came into town and couldn’t or wouldn’t behave within the established codes.

I like to call these kinds of shifts “Lowest-Common Denominator Laws.” They’re created in response to the small but powerful number of folks who throw a wrench into the works. And by extension, the rest of us get locked into this new norm, even when we can and always have handled the extra burden of responsibility like good citizens and intelligent adults.

The L.A. Times this week points out that the same trend is happening with mortgages. The article points out that the more relaxed lending standards are responsible for allowing a record number of Americans the opportunity to own their homes.

As the “Lowest Common Denominator” rule goes, not everyone is living up to the responsibility. And now Congressmen and Presidential candidates alike want to legislate their way out of the problem.

I’ve got several problems with that. The first is that private industries gauged their risk tolerance and (one would think) moved forward with due diligence. It is worth noting that not all subprime lenders are in the same boat. Obviously, some managed their risks better than others. But because some firms jumped in head-first, this is another instance of “Lowest Common Denominator” thinking.

My second problem with legislating our way out of the subprime mortgage downtick is that fully NINE out of TEN subprime borrowers are paying their notes.
So why should it be acceptable that the 10% who either cannot or will not meet their obligations now become the standard for lending?

Future borrowers will no doubt be held to a standard that is designed to protect against 10% of the population. The 90% of marginal borrowers who own their homes are not even factored into the equation. And thanks to this, 100% of future borrowers will be disallowed the opportunity that 90% of previous borrowers have lived up to, but 10% have ruined for everyone.

Blog Carnival "Foreclosure Central" #1

This month the news has been packed with doomsday talk about subprime loans, mortgage fraud, and market correction. It seemed like a logical time to start a "Foreclosure Central" blog carnival.

The reality is, foreclosure rates have been steadily rising over the past six months. Many Americans are looking to the originators of these loans for their culpability. After talking to a few mortgage brokers I know, I do understand their origination thoughts.

Historically, lenders counted on the fact that home ownership is the cornerstone of the American Dream. They knew that the vast majority of us would subsist off of pancakes and ramen noodles for years on end to make the note each month. I know many white-collar professionals in southern California who have been doing just that.

Unfortunately, a number unscrupulous lenders preyed on this fact and "helpfully" refinanced people into notes they could never meet five years later. The broker got his hefty commission and called it a day. Some people who hold these notes did so to meet the demands of a life crisis. Others did it because they didn't read the fine print and thought they were getting a deal (in which case, I think they should refrain from signing any other contracts in the future).

Still others willingly and knowingly committed mortgage fraud. And now we're all up in arms over this fact, as it makes the "soft landing" that much further out of reach.

But while the inevitable foreclosure boom follows the home ownership boom, a lot of good people will get caught in the undercurrent. This is really unfortunate, and I know we're all pulling for the folks who face some serious belt-tightening in the coming months.

For the benefit of home owners, investors, and real estate professionals, here is what the blogosphere would like for you to know about foreclosure:

FORECLOSURE CENTRAL #1

TOP HONORS

Silicon Valley Blogger gets the (very subjective) First Place award for the article "6 Ways 6 Ways To Protect Yourself From Different Types Of Mortgage Fraud". The articles at http://thedigeratilife.com are always well written, and this one is no exception.

This is a great article for consumers, who can protect themselves from becoming unwitting co-conspirators in any number of fraudulent schemes. The article walks us through the different types of fraud and includes some great links on identifying and reporting mortgage fraud and abusive lending.


FOR CONSUMERS

Michael Emilio Rodriguez offers the article "8 Steps to Getting Your Finances in Order for a Mortgage. It's a good primer for first-time homeowners, particularly since those 100% loans seem to be going the way of the dodo.

I would add one piece to Michael's checklist. Since many homeowners will be paying more to own a home than they are paying in rent, start paying that higher amount now while you're planning to buy. Take the excess and put it into your house fund. Not only is this a way to cushion your savings for the home purchase, but you will acclimate to paying the higher amount now, rather than after close of sale.


Michael Cook writes in with "Influence Real Estate Appraisals: How an appraiser values your home can increase your property's worth". If you're selling your home this season, Michael offers some solid pointers on getting the most out of your appraisal.


Alvaro wants homeowners to know that foreclosures are difficult and emotional situations, and shares some exercises and tips for better stress management. Certainly, if you are facing foreclosure, you will want to check out the article "Stress Management Workshop for International Women's Day".


FOR INVESTORS AND REAL ESTATE PROFESSIONALS

Walt offers a great reminder that "If You Want To Be Great, Money Should Not Be The Motivation". This is a wonderful reality check to the myriad "get rich quick" schemes in the world, and is certainly not limited to real estate.

Walt's piece underscores the reality that, in this life, we are all going to stumble and sometimes fall. Some days, the only reward is the work itself. Setting out with the intention of "getting rich" is akin to "getting famous." If you don't have some degree of passion for the endless work load, it's not going to pan out.


I was excited to see Craig S. Higdon join this carnival. As a 14-year veteran of commercial real estate lending, Higdon is uniquely qualified to speak to the investment side of real estate. Everyone should read his article "Commercial Real Estate Loan Myth Debunked!"

Goodness knows we like debunking myths around here, so Craig's article is a great addition to the carnival. As commercial real estate has remained strong in contrast to the residential market, I imagine he's had more and more people showing up in his office to do some similarly creative financing for commercial properties. If you're shifting into the commercial side, get thyself to Craig S. Higdon's website now.


THE LIGHTER SIDE

We get to wrap this up with a bit of a chuckle, thanks to the BiggerPockets.com Real Estate Investing Community. Check out "A Few (really crappy) Real Estate Domains You Could have Had". My personal favorite is www.thishousewilldrainyourwallet.com


A big thank you to everyone who contributed to Foreclosure Central #1. This will be an ongoing carnival for a little while, with deadlines on the 1st and 15th of each month.

If you would like to contribute to the next Foreclosure Central blog carnival, please use this Submission Form.

FBI Issues Mortgage Fraud Warning

Last week, the FBI issued a strong statement regarding mortgage fraud. The announcement confirmed that the agency is working with the Mortgage Bankers Association to prevent and prosecute mortgage fraud.

The action is reminiscent of the early whistleblower channels that were established in order to more effectively prosecute corporate misdeeds. It also sounds like the warning shot to offenders that mortgage fraud will be the high-priority, high-profile topic for 2007.

And with 2008 being an election year, I expect this will become at least a minor topic on the campaign circuit. A Congressional action similar to Sarbanes-Oxley cannot be too far behind.


FBI ISSUES MORTGAGE FRAUD NOTICE IN CONJUNCTION WITH MORTGAGE BANKERS ASSOCIATION

Washington, D.C. – Today the FBI and the Mortgage Bankers Association (MBA) entered into an agreement to combat Mortgage Fraud. The FBI and the MBA will make available a Mortgage Fraud Warning Notice as a proactive means of educating consumers and mortgage-lending professionals of the penalties and consequences of this criminal activity.

“Mortgage Fraud is clearly becoming a problem that requires the unified efforts of law enforcement, regulators, and industry,” said Karen Spangenberg, Section Chief of the Financial Crimes Section, Criminal Investigative Division, who signed on behalf of the FBI. “The FBI is pleased to have worked with the Mortgage Bankers Association in the development and distribution of this advisory as we continue to strengthen our relationship with such key organizations to combat Mortgage Fraud.”

Mortgage Fraud Suspicious Activity Reports (SARs) referred to law enforcement by financial institutions increased from 17,127 SARs in Fiscal Year 2004 to 35,617 SARs in Fiscal Year 2006, reflecting estimated losses of $946 million. FBI Mortgage Fraud investigations have focused on large-scale frauds perpetrated by organized crime and industry insiders, including attorneys, brokers, appraisers, and realtors. Since September 2002, the number and types of investigations have increased from 436 to 1,036. Of these current cases, 51% involve expected losses in excess of $1 million, and 57% involve our federally insured financial institutions as victims.

Combatting significant fraud in this area is a priority, because mortgage lending and the housing market have a significant overall effect on the nation’s economy. The FBI works closely with national associations such as the MBA, as well as with individual lenders, in a continual effort to define and combat the growing Mortgage Fraud problem. The newly developed Mortgage Fraud Warning Notice enhances the FBI’s endeavors to do so by putting potential perpetrators on notice in an effort to stop potential crime before it is committed.

“We wish to thank the FBI for working with us to provide mortgage lenders another item in the toolbox to help combat fraud against lenders,” said John M. Robbins, CMB, Chairman of the Mortgage Bankers Association. “Fraud against lenders costs the mortgage industry billions of dollars each year, affecting everyone in the mortgage process, including consumers and the communities we are trying to help build.”

The Media's Mishandling of the Casey Serin Story

If you missed our previous primer on Casey and Galina Serin, I would encourage you to go back and read "Mortgage Fraud: Why Lenders Need to Know Casey Serin." My friend Aspeth and I are trading off blog posts on this story, and she picked up today's meme. I've cleaned up the content a tad, as Aspeth has been known to make sailors blush. For this portion of the thread, Aspeth wanted to focus on how the so-called "Old Media" has covered this debacle.


Traditional media's handling of the Casey Serin story has been grim, and it certainly lends credence to folks getting their information from alternative sources. At the very least, the Old Media folks should have cross-referenced their stories by speaking to law enforcement officials to give readers a full picture of the scope and potential punishment of Casey and Galina Serin's crimes.

It's lazy journalism, plain and simple. Anyone who has spent a brief amount of time actaully reading and researching Casey Serin's story is immediately struck by the extenxive chain of fraud that occurred. But print and glossy media has persisted in portraying Casey Serin (and by extension, his wife Galina Serin) as poor victims of the real estate bubble, predatory lending, or any other real estate buzzword of the day.

I find this particularly offensive. Casey and Galina Serin are not innocent victims of the real estate industry. They are the perpetrators of multiple crimes against various banks, lenders, and creditors!!!!

Bloggers have gone out of their way to alert government agencies and creditors alike to Casey Serin's illegal activities. This includes tracking the complicity of his wife Galina Serin and other 'known associates'.

The rage in these posts, and in the comments, is palpable. But it's easy to understand why. People who have followed Casey Serin's story for any length of time are not just content to see him arrested. Nothing short of a ridiculously long prison term and FULL REPAYMENT of "every dirty penny" will suffice.

Whether writing about the complexity of mortgage fraud, deconstructing Casey's attempts to dodge responsibility, or pointing out Galina's complicity, the blogosphere is just the beginning of the impending public response to Casey Serin.

So CHEERS to the bloggers. And a big "Boo! Hiss!" to the Old Guard. Here's our list of media sources that totally dropped the ball in fully informing the public about Casey Serin. In chronological order, here is the Casey Serin Media Hall of Shame:

San Francisco Chronicle
On October 6, 2006, the SF Gate posts a laughably optimistic story about Casey Serin's role in the real estate bubble. His ill intent is glossed over; instead, he is held up as some sort of poster-boy for failing markets and dodgy lenders.

"But by offering himself up as a penitent whipping boy of real estate, Serin has unwittingly offered us a glimpse into the fast-approaching future in which those high-flying real estate trade secrets come home to roost."

Wow. We surely cannot be referencing the same Casey Serin. Casey Serin is anything but "penitent."


USA Today
This is the one that brought Casey Serin into the national spotlight. In the October 22, 2006 edition, Noelle Knox writes If there's a poster child for everything that went wrong in the real estate boom, it just might be Casey Serin.

Rather than paying attention to Casey Serin's extensive mortgage fraud, much less say what else might lie beneath the surface, Noelle Knox writes basically that 'a lot of things can go wrong in real estate.' For a nationally syndicated newspaper, this certainly falls short of breaking the story wide open.


Inman News
Matt Carter writes that Casey Serin bought eight homes in six states using 100 percent stated income loans, getting $15,000 to $50,000 cash back on every loan. First, this is the only time I've seen mention of six states. Judging from the depth of fraud committed, that could very well be true.

But since it has not come up anywhere else in print or online media, I question the voracity. Secondly, I would expect that the highbrow, real estate-only news bureau Inman would delve much more deeply into the casually typed phrase "15,000 to $50,000 cash back on every loan."


New York Magazine
As recently as February 12, 2007, Emily Nussbaum had evidently done enough research into Casey Serin to include him in her piece on twentysomethings revealing their lives on the internet. But she paints a plucky portrait of young Casey, merely writing a few paragraphs about his online confessional.

That he is confessing to multiple felonies doesn't seem to faze Ms. Nussbaum. In fact, that element is never mentioned. Perhaps she never got past the title of Casey Serin's blog to actually read one of the numerous instances where he details his crimes. That's quite a shame, because she, too, missed the story entirely.


CBS 5 San Francisco
The most recent incident of a no-research fluff piece on Casey Serin occurred on March 7, 2007. John Lobertini presented yet another piece of Casey-Serin-as-victim-of-big-real-estate. Lobertini's piece is similar to the other 'Casery Serin-lite' pieces, where journalists follow right down the path that Casey leads them.


And while this is far from 'old media', it is worth noting that mortgage broker Niles Swaby has put out several press releases, positing himself as the authoritative source on Casey Serin. Niles Swaby chose the self-important headline Aspiring Web Journalist Lands Real Estate Story of the Year.

Well, that's really stretching it, isn't it? As you can tell from the timeline above, two major news outlets had already "landed" the story when he issued this press release on Halloween of 2006. (And regarding the timing, it's just too easy...I'm leaving that one alone.)


One last thing....I stumbled across an old blog of Casey Serin's. It was interesting in that was supposedly written on his 25th birthday. This was news, in a sense, since everyone thinks he's 24. But what really struck me was this:



Wait a minute....am I reading that correctly?!?!

Casey Serin was born on SEPTEMBER 11 ?!?!?!?

Talk about your 'day that will live in infamy'......

Mortgage Fraud Why Lenders Need to Know the Name"Casey Serin"

Real estate practitioners are often slow in adapting to new technologies. I understand why--most successful real estate professionals spend very little time in an office, much less say in front of a computer.

But this is a compelling reason why you should keep up to date with basic technologies: SAFETY. Real estate practitioners have often been encouraged to follow safety guidelines when dealing with a potential client, such as making a copy of their drivers' licenses before driving them around.

Allow me to offer another step. GOOGLE ANY POTENTIAL CLIENT.

This is certainly something that Casey Serin's lenders, realtors, and other lien-holders should have done. Because some of them may have just been 'doing their jobs', but that will be a hard row to hoe when the authorities sort the difference between them and the co-conspirators.

I am loath to give this guy any more publicity. But suffice to say that we at The RE Forum have joined the list of folks who have contacted law enforcement agencies about this con artist. We have forwarded information to the U.S. Attorney's Office, FBI, the District Attorney and Police Departments of each relevant property. We know that others have already contacted the IRS.

Unfortunately, if you're a real estate professional and haven't heard of Casey Serin, you're doing yourself a great disservice.

In short, Casey's story goes like this: In 2006, at the age of 24, Casey Serin acquired at least 8 (known) properties in 4 states. He committed mortgage fraud to obtain the loans by lying about owner-occupancy, lying about his income (he had quit his job), inflating the value of the properties, and getting cash back at close. By his own admission, the banks were not aware of his cash-back schemes, where he received anywhere from $15,000-$50,000 per closing.

The properties that Casey Serin has admitted to owning (there may be more) are:
??? Calla Way, Sacramento, CA SOLD
6842 Burdett Way, Sacramento, CA 95823 FACING FORECLOSURE
6021 Guadalajara Dr NE, Rio Rancho, NM 87144 FACING FORECLOSURE
??? Sonora Ave, Albuquerque, NM SOLD
1910 Muncy Drive, Modesto, CA 95350 FACING FORECLOSURE
6656 W 10250 N, Highland, UT 84003 MULTIPLE ATTEMPTS TO WRAP
6500 Larchmont Dr, North Highlands, CA 95660 FORECLOSED
9524 Angleridge Rd, Dallas TX 75238 FORECLOSED

Those "cash back" monies were used in a classic pyramid scheme. Each closing brought more money to keep loans current on his existing properties. They also allowed Casey Serin and his wife Galina Serin to live an extravagant lifestyle. Casey and Galina Serin blew through the money quickly, and within months he was facing foreclosure on all 8 properties.

With deflating markets in many of the areas where Casey Serin bought homes, he has been unable to "flip" them as he intended and is now $2.2 million in debt. Serin hopes to file for bankruptcy to avoid paying his debts, but has been advised that the fraudulent manner in which they were acquired means that he will almost certainly be prosecuted for felony fraud.

While this is all interesting, this is why you should be very aware of this story. Casey Serin is today still trying to make real estate deals. As he is a multi-state offender, Casey Serin may appear in your office in some form.

Casey Serin repeatedly makes reference in his blog to making offers on other homes, and is reportedly even shopping for an apartment complex. So he may be contacting residential and commercial brokerages.

Watchful observers have pointed out that Casey Serin has used several aliases and known associates. Some of these may be straw buyers; others may be simply a front to hide his own identity. He and his wife have also registered two known DBA's.

It is also known that Casey used the name Alesky Serin in 1997 to run his first pyramid scheme--at the ripe old age of 14!!!

Per Casey Serin's own admissions through his blog, here are some other names you should know:

KNOWN ALIASES, POTENTIAL CO-CONSPIRATORS, POTENTIAL STRAW BUYERS:
Casey Konstantin Serin, Casey Serin's full name.
Galina Serin, Casey's wife, maiden name Suprun.
Finch Properties, Owned by Casey Serin and Galina Serin
Able Buyer, Owned by Casey Serin and Galina Serin
Alesky Serin (Casey's father. Casey has reportedly bought and/or transferred properties to this name) Sacramento, CA. Other known cities: Fair Oaks CA, Rancho Cordova CA
Anna Serin (Casey's monther. Casey has reportedly bought and/or transferred properties to this name) Sacramento, CA. Other known cities: Fair Oaks CA, Rancho Cordova CA

KNOWN ASSOCIATES:
Nigel Swaby, Mortgage Broker, Integrity First Financial, Salt Lake City, UT. Other known cities: Sandy UT, Salem OR, Portland OR, Beaverton OR
Duane LeGate, President, House Buyer Network, Atlanta, GA. Other known cities: Marietta GA, Midland GA, Columbus GA, Orange Park FL, Cedar Grove WV
Paul Prestwich, Secure Tomorrow - Asset Protection, Sacramento, CA

One of these associates has said that Casey Serin has recently partnered with a California "investor" referred to as simply "G". They traveled to Salt Lake City together, and it is unclear if the duo were reconciling Casey's existing properties or searching for new ones.

Casey Serin typically used smaller, independent lenders. No doubt he thought that his approach might be caught by larger, nationwide lenders. If you have had any real estate dealings with Casey Serin, we encourage you to contact authorities immediately.

As con artist Casey Serin continues to weave a web of deceipt and leave a trail of debt in his wake, you will not only be saving other potentailly defrauded lenders. At this point, a proactive call to police will also help authorities separate those who unknowingly assisted Casey from his willing co-conspirators.

Call For Carnival Submissions"Foreclosure Central"

Unfortunately, we've had a significant amount of request for foreclosure information. With that in mind, we are opening the floor to submissions from homeowners, investors, and real estate/mortgage professionals to share what they know on this topic.

This will be an ongoing carnival, with submission deadlines at midnight (Eastern) on the first and fifteenth of each month.

Sumbit your Foreclosure article here.

Thank you in advance for your participation. We look forward to seeing your foreclosure information submissions!

Innovative Marketing Ideas

Since there are plenty of real estate agents and investors who come to this page, I thought I'd include a great marketing story I found this week. It struck me as an opportunity to remind ourselves to continually reinvent the way we do business.

Against all standard business advice, an Atlanta woman has generated an incredible buzz around her product. In this day and age, when it becomes more and more difficult to get the attention of potential customers, this story has really stuck with me.

I hope that marketing professionals such as real estate agents will be inspired to push their creative limits after reading this. And it's frankly the best human interest story I've found in quite a long time.

Sounds like good Sunday reading to me.

Lisa Campbell is an Atlanta radio personality, who seemingly took every chance possible to travel with her daughter. Fellow travelers know that our foreign excursions often touch us in ways we'd never imagined; that we take away impressions and ideas more often than trinkets.

Lisa Campbell was no different. In Jamaica, she was introduced to a memorable cup of South African rooibos tea. In England, she left the country deeply impressed with the variety and pageantry that tea offered.

She went home and started mixing and infusing teas, presenting them like designer cocktails to her friends who came to visit. She began selling her blends online. Folks in her community wanted to know why she didn't have a shop they could visit.

Today, there is a specialty store called the Urban Tea Party within Atlanta's hip and happening neighborhood of Virginia-Highlands. But Lisa Campbell isn't the owner. She was, until two months ago. But then she literally "gave away the store."

What would be, by any standard, a bad business decision is probably anything but. Lisa opened the Urban Tea Party, and its devotees came in droves. But she was still a full-time news personality on local radio. After two years, the pace became too much.

She planned to sell the business. But as the story now goes, she saw an Oprah episode, where the talk show host passed out $1,000 to each of her audience members and asked them to do something significant for someone they didn't know.

Lisa says she woke up one night and realized, "I'm going to give the store away." She wanted to find a wanna-be entrepreneur who had the desire and talent to run a business, but couldn't find the necessary start-up money.

As a radio personality, Lisa knows the media. She put the word out to the "communiTEA", asking interested parties to compile a one-page business plan. She assembled a team of business-savvy associates to evaluate the applications that came in.

Expecting about 75 applications, she was overwhelmed to receive exactly 457. She was under the gun, as she wanted her new owner to be installed in time for the lucrative Christmas shopping season.

She narrowed the field to 10, and then brought them in to interview, round-robin style, with her search "commitTEA". (Yes, Lisa's got the wordplay down pat.) Sherolyn Sellers was the candidate who stood out to the entire team, and she received the keys to the store, including its extensive stock and existing customer base, on December 4, 2006.

So how is this good business? Well, Lisa still owns the parent company,
Urban Tea Company, and still sells tea online. She plans on franchising the business between 2008 and 2010. And she's publishing a book, also called "Urban Tea."

The word of mouth about Lisa's decision has traveled across the country. And no doubt if Oprah comes calling to have Lisa Campbell tell her story on daytime television, sales will go through the roof. This is certainly an out-of-the-box marketing idea that would flip Madison Ave on its head.

But her campaign doesn't seem contrived. In fact, she could have generated a lot more PR if she had extended the application period. Instead, she made it clear that there would only be about two months for the process to unfold, as her new owner had to get that profitable Christmas season to allow her to be successful in her first year.

Lisa's passion for tea is apparent. As a rabid coffee drinker, I have to say that, after perusing her pages, she's definitely drawn me in. On her website, Lisa expounds for pages about the history, flavors, and types of teas. As someone who loves the nuances in wines, I'm intrigued. I'll admit, I've got tea listed on this week's grocery list.

The new owner of the Urban Tea Party in Virginia-Highlands obviously has big shoes to fill. But Lisa remains in constant contact with Sherolyn Sellers, advising her on every element of the business.

People will certainly be talking about this transaction. I know that the next time I'm scheduled to fly through Hartsfield-Jackson, I'll organize my flights so that I have time to go check this place out.

Millions of advertising dollars probably wouldn't cause me to say that. But a weird and wild business idea has. So, contrary to standard b-school thinking, it turns out that giving away the store really is good business.

How can you profit from doing the unexpected?

PMI Explained

PMI, or Private Mortgage Insurance, has been around for a while. But it used to be reserved for people with less-than-stellar credit ratings. In its early days, PMI was a mark of shame of sorts, the scarlet letter that home buyers carried with them and averted their eyes when discussing the topic.


WHO HAS PMI?

In recent years, PMI has become the norm rather than the exception. According to the National Association of Realtors's 2006 Profile of Home Buyers and Sellers, the typical first-time purchaser bought with just 2 percent down while replacement home purchasers bought with 16 percent down. While PMI is often associated with first-time buyers, the reality is that even home buyers who are 'trading up' into a larger or more expensive home are carrying PMI.


WHAT IS PMI?

As the term PMI gets bandied about with ever-increasing frequency, many potential home buyers might not feel comfortable asking about the particulars. Simply put, PMI is insurance for the lender, usually paid for by the home buyer, when the buyer has less than 20% equity in the home at the time of purchase.

So if you have one of those creative 80-20 loans, you've got PMI. If you did anything other than a conventional 20% or more down payment, you've most likely got PMI. Some home buyers sidestepped PMI, but the trade-off was to pay a higher interest rate.


HOW DO I GET RID OF PMI?

PMI used to be incredibly difficult to do away with. Borrowers were responsible for keeping track of their loan ratio, and then had to contact their lenders to have PMI removed. Buyers who did not keep track of the numbers continued to pay into PMI, even when they surpassed the investment requirement that would release them from the additional payment.

Loans secured after July 29, 1999 have added protection with automatic cancellation or termination of the PMI once the balance is below 80 percent of the original value. This is known as "Automatic Termination", and typically kicks in when you accrue 22% equity.

But your lender is certainly not keeping track of your home's natural appreciation. So if you are in an area that has seen strong appreciation over the past few years, or even if you have made improvements to your home, you might already be at or beyond the necessary threshold to cancel PMI.

David Porter points out that, in the case of "Borrower Requested Cancellation", home owners should be aware of the following restrictions:

May be requested once you pay down your mortgage to the point that it equals 80% of the original purchase price or appraised value of your home at the time loan was obtained, which ever is less.
No 30 day late payments on your mortgage in the last year.
No 60 day late payments on your mortgage in the last two years.
Your mortgage servicer may require an appraisal to evidence the current value.
Having a second mortgage will likely foul up your request.


PMI MYTH: My real estate taxes will increase if I have my home reappraised.

Many people wonder if having their lender reappraise their homes will trigger an increase in property taxes. The fact is, the A mortgage lender's professional appraisal of your home has absolutely nothing to do with your property tax assessment....Only the local tax assessor -- not a licensed appraiser hired by your mortgage lender -- can reassess your property.


As more and more people are faced with increased mortgage payments from adjustable rate mortgages, getting rid of PMI could prove to be an incredibly helpful tool for home owners.

The 2006 Real Estate Year in Review

The 2006 numbers have been tallied, and it turns out that it was a bit of a cool year. Overall, real estate prices continued to trend upward, but at a much slower rate than in previous years.

What will 2007 hold? Of course, real estate agents and brokers are nervous. They and the folks in the mortgage industry will be watching Fed rates closely in the coming year. The days of easy refinances and quick sales seem to be gone for now. But those professionals who evolve with this current market, rather than clinging to the 'good old days' of just a couple of years ago will continue to do just fine.

In trying to predict the 2007 real estate market, those in the real estate industry are doing some interesting dances. The National Association of Home Builders reverses themselves in two back-to-back articles. On January 15, 2007, they write the optimistic article "Eye On the Economy: Home Sales May Be Firming Up." Just a week later, they draft an article titled "Recent Reports to Fed Show More Cooling in Housing Markets."

The National Association of Realtors is covering itself in a similar fashion. On January 25, 2007, they lead with the article "Existing-Home Sales Ease, Supplies Tighten." On February 1, they write "Pending Home Sales Index Rises." One can't help but wonder if these conflicting reports are drafted with the idea that one set goes to home sellers and the other to home buyers, as the broker or agent sees fit.

	EXISTING HOME PRICES	PERCENT CHANGE	AVERAGE PRICE
2002	$166,200	7.6	$208,400
2003	$180,200	8.4	$225,000
2004	$195,200	8.3	$245,800
2005	$219,000	12.2	$267,400
2006	$222,000	1.4	$269,600

A Common Myth of Home Buying

Piggybacking off of my last post, Hiring Real Estate Agents, What's Your Method of Choice? I'd like to address a common misconception among home buyers.

Every couple of months, it seems, I have to talk a friend or family member out of doing this, so I thought I'd share this common myth with the rest of the world.

Home buyers often convince themselves that they will save money by choosing one of two options. They believe that if they A) represent themselves, or B) work with the selling agent, they will somehow save themselves 3% of the commission.

Here is the honest-to-God truth, from someone who does NOT work in the real estate industry: Nothing could be further from the truth.

The reality is, commission is set by a contract between the home seller and the agent whom the seller chooses to represent the home. The selling agent, then, determines how much of that they are willing to share with the "other side", the buyer's agent.

If the agreed-upon commission is, say 6%, a selling agent could very well choose to offer only 1% to the buyers' side. This is unlikely, as few buying agents would leap at the chance to sell a home for 1%. Conversely, if the agent needs add extra incentive to sell the home quickly, they could choose to offer 5% to the buyers' side. During the time I was involved in real estate marketing, I did see several 4% offers to the buyer's side in return for quick sales.

If there is no buying agent, the selling agent keeps the 6% commission to themselves, since that is the contract they have with the seller. A home buyer does not play a role in the contract between seller and seller's agent. And, again, that is where commission is set.

Home buyers are often convinced that a selling agent will reduce their side of the commission of there is no buyer's agent. This is highly unlikely. When it does happen, let me tell you why you should be extremely wary of these folks:

1. You are not adequately represented in the largest financial contract most of us will ever be involved with in our lifetimes. If you choose to allow the seller's agent to have "dual agency", where one agent represents both sides, how good of a deal do you think you're getting in contract negotiations? Particularly if the agent has agreed to do twice the work for half the pay, per your insistence?

2. An ethical agent who will reduce commission and allow you to represent yourself will wind up representing you anyway. Only rookie agents will make this mistake. And a rookie agent will have a hell of a time navigating the complex waters of implied dual agency.

An unethical agent will take advantage of you to the fullest, since he or she will have to explain each step of the process to you, thus creating a lot more work.

No matter how you feel about real estate agents (and I'll state right here that I've got plenty of mixed feelings myself), you need to be represented when you purchase a home.

I'm flummoxed when I hear otherwise rational human beings, people who realize that after a certain age you just hire professionals to do things, suddenly decide to forego a buyer's agent.

Unless you're willing to pick up another full-time job, you're saving yourself nothing. By that I mean that you must be prepared to see homes, navigate inspections, negotiate contracts, etc. and do it well enough to protect what is likely the largest investment in your 'portfolio'.

If you don't do it well enough, you can find yourself in a home in need of serious repairs, in a contract that exposes you to a world of liability, or any number of worst-case scenarios.

I don't know too many people who would drive without car insurance, no matter what the expense. Because the reality is that, if something goes wrong, it goes very wrong. And no amount of money saved compensates for that.

I hope this posting will clear up a widespread myth about home buying. I know a lot of people will be irritated to read this, but I hope that ultimately most people find it helpful.

Hiring Real Estate AgentsWhat's Your Method of Choice?

This is a topic that I'd like to pose to both consumers and real estate agents:

With literally millions of agents to choose from in America, and hundreds of thousands in major American cities, what is the most effective way to hire a real estate agent?

Personally, I'm one of those highly-strung researchers who spends ages of time fleshing out a topic before I move forward. But I know that the vast majority of consumers are not like this.

In fact, many of those consumers are my friends and family. And I watch as they hunt and peck their way through the buying process, going through multiple agents before they finally pair with one who suits them.

For consumers, I wonder, how do you choose an agent? I know many folks rely on referrals from friends and family. But, (in the realm of theory here) say my little brother is looking to buy his first condo....is it right to assume that the elderly lady who sold my parents their multi-million dollar golf course-fronted retirement villa is a good match for him?

So how do you filter through the thousands of options? How did you find your last agent, and if you had it to do all over again, what would you do differently?

For agents, I'd like to give you a forum here. What things do you wish clients would know, do, research, or ask when they're looking for an agent? I know you all would be just as happy as your customers if clients and agents were paired appropriately. How can we make this happen?

After all, you've probably had your share of bad clients. I'm also pretty sure you may have salivated as you saw someone in your office working with a client who is an 'okay' fit, but would be a perfect match to your expertise.

I'm really looking forward to hearing from readers on this topic. It will certainly answer a lot of questions for home buyers across the country.

The Changing Face of Homeowners Insurance

Two states to watch in 2007 will certainly be Mississippi and Florida. The real estate markets in these two states have traditionally withstood natural disasters such as hurricaines. But insurers are fleeing the disaster-prone areas, leaving homeowners, and states, with no safety net.

State Farm made a huge round of news stories when it announced that it would not write any new policies in Mississippi. At the heart of the issue is whether hurricane damage was caused by wind or water damage, as homeowners' policies do not cover against water damage.

Insurers in Florida are in the process of scaling back their wind policies. Now Florida's legislators are trying to keep both insurers and property owners in the state. "At the root of the trouble is that insuring against a major storm in much of South Florida has been deemed simply too risky to be affordable."

Mississippi's response has been to threaten to mandate insurance companies into writing policies in that state, which has drawn widespread criticism from homeowners in other states. Florida's plan, meanwhile, has been to promise billions of dollars of bailout monies for both parties.

Certainly, every state has its own unique propensity for natural disaster. From tornado damage in the Midwest to California's ubiquitous earthquakes, the nation is poised to watch the developments in Florida and Mississippi very closely.

Homestead Exemptions

Many homeowners have never heard the term "Homestead Exemption." There are three possible reasons for this. First, you live in a state that does not require an Exemption Declaration, such as Texas, meaning that your Homestead Exemption is automatic. Second, you might live in one of the small number of states that do not offer their residents the protection of a Homestead Exemption. Third, your real estate agent never told you to file one after you bought your home.

So what's the big deal?

In its broadest sense, a Homestead Exemption allows a homeowner to retain all or part of their home's value or acreage in the following circumstances:
Preventing the forced sale of a home to meet the demands of creditors;
Providing a surviving spouse with shelter;
Providing an exemption from property taxes.

The Homestead Exemption will NOT protect your home from a forced sale to cover mortgage debt or a mechanic's lien.

The terms of the Homestead Exemption, of course, vary widely from state to state. Florida and Texas are considered to have the most liberal Homestead Exemptions. Florida protects an unlimited value of a home, but limits that protection to a half-acre within a municipality. Rural properties in Florida are allowed much greater acreage. Texas also places no cap on value, and allows for a generous 10 acres within a municipality, 100 acres in a rural area, and 200 hundred acres for a family in a rural area.

Most states don't allow for such a broad application of Homestead Exemption. In those cases, if your home goes into a forced sale, a certain number of dollars or percentage of value will have to go to the homeowner, even if that reduces the amount of debt than can be paid back through the home sale. You are generally only allowed to have an exemption on one property, and it must be your primary residence.

Some states, counties, and even cities give their elderly, low-income, and disabled homeowners a property tax break via the Homestead Exemption. This can cap the dollar amount of property taxes, or allow for a certain dollar value (i.e. up to $75,000) to be non-taxable. This is especially helpful for those on a fixed income who may be living in an area undergoing tremendous growth or increase in property values.


Now for the necessary disclaimers: I am not a lawyer and do not work in real estate. This is the extent of what I know on this topic, from personal knowledge and culled from reference materials. Like all things in life, if you need a professional (such as a lawyer), by all means hire one and do not rely on this discussion forum for legal advice!!! I sincerely hope that readers will comment, expand, and expound on this topic.

More information on Homestead Exemptions can be found in the excellent Nolo Law series.

Hot Real Estate News, Feb. 15, 2007

Hot Real Estate News

February 15, 2007

The Wall Street Journal reports that 100% loans are losing favor with lenders. Typically referred to as an 80-20 loan, the second mortgage rounds out the loan amount to a full 100% for buyers without a down payment. Lenders are having a difficult time reselling these loans on the secondary market, and are wary of upcoming foreclosure rates from the already creative lending practices of the past several years.

'Across the board, everybody is ratcheting up'" the minimum credit score at which they will make particular loans" cites the Journal, further stating that "Borrowers have been rapidly falling behind on loans made in the past year or so."

What happens when you marry the concepts of hiring actors for open houses and providing virtual tours on YouTube? The Chicago Tribune has found it: Webisodes...a video soap opera of sorts where developers hope that home buyers will, literally, buy into the lifestyle they present:

Dougal and Anya are fictional characters. Their onscreen story is "Sex and the City" meets "Will & Grace." But there's another character in the mix, and it is the building.

The building is the Donovan, a soon-to-be-real high-rise in the hip Yaletown neighborhood in Vancouver. It's a major player in "Donovan Life," a professionally produced sitcom introduced online Wednesday.

Forbes pinpoints the "Best and Worst Housing Markets" in America, noting that incredibly expensive real estate markets such as Boston and San Diego have cooled slightly. Their prediction for the Gulf Coast looks brighter, as homes appreciated from 7-15% in post-Katrina cities.

According to Forbes, the strongest real estate markets in America right now are Seattle, El Paso, and Houston, reflecting the relocation trends that Americans have created in search of jobs and an affordable cost of living. Detriot, Miami, and Indianapolis are the loss-leaders at the moment.

Meanwhile, MSNBC reminds American home buyers that the grass is still greener on this side of the pond. Their article "77 sq. feet for $335,000? Welcome to London" describes an unfurnished basement closet with no heating or electricity on the market for an astonishing $4,340 a square foot.

Real estate appreciation in London's poshest districts has been incredible, with an average increase of over 22% in the past year. In places such as Kensington and Chelsea, homeowners have averaged a whopping 60% appreciation.

Ultra high-end property prices in London are the most expensive in the world, with some recent sales hitting $6,000 per square foot....Similar properties in New York can go for about $5,000 per square foot, while those in Hong Kong sell at around $4,000 per square foot.

Refuting "Facts" at RealtyTimes.com

It looks like we get to kick things off with a piece that proves the need for our website's very existence.

The well respected site Realtytimes.com posted an interesting article on its homepage today. Interesting, because if you try to follow the advice within, you'll wind up committing tax fraud.

Today, Diane Kennedy writes about the generous $250,000/$500,000 capital gains exclusion that homeowners can take on the sale of their homes. But in her second paragraph, she makes this assertion:

"The IRS allows you to have temporary absences from your home each year that can be up to 11.5 months! You can literally buy a home, live in it for 2-3 weeks per year for two years and take the entire tax-free gain exclusion."

My first reaction to reading this was "That's just wrong!" But, always one to admit that things change, and I could indeed be incorrect, I decided to research the facts before sharing them. I went to the IRS website, which helpfully reinforced what I thought I already knew.

Just to clarify, yes, you are entitled to take a $250,000 capital gains exclusion ($500,000 on joint returns) on the sale of your home. But, like everything else in life, it's not quite as simple as that. Straight from the IRS, here are the requirements you'll need to meet in order to keep from paying taxes on the first $250,000/$500,000 profit on your home's sale:

"To be eligible for an exclusion, your home must have been owned by you and used as your main home for a period of at least two years out of the five years prior to its sale or exchange. The required two years of ownership and use during the five–year period ending on the date of sale do not have to be continuous. You can meet the ownership and the use tests during different two year periods. However, both tests must be met during the five–year period ending on the date of the sale or exchange."

In other words, yes, the IRS does take into account that you may have more than one residence and is, for once, lenient in its application of "primary residence." But you must have lived in the home for a total of two years out of the previous five. Applying Ms. Kennedy's advice, that you could live in a home for a couple of weeks and take the exclusion after two years, will almost certainly get you audited.

There are exceptions to this two-out-of-five rule. "Unforseen circumstances" such as a health crisis, change of employment, or military duty. To explore those exceptions further, read the IRS's publication "Topic 523" for more information.

In the meantime, we've alerted Realty Times to their error, and will wait to see a correction posted.

Welcome to The RE Forum - The Real Estate Forum

The idea for this site came from the hundreds of hours I've spent in research and conversations with friends and family about real estate. The fact is, there are a lot of myths and urban legends out there about real estate. And we're here to provide solid facts for homeowners, home buyers, and home sellers. Heck, we'll even let real estate agents, brokers, and other industry folks play with us. Like Fair Housing, we don't discriminate--there's a lot to learn!

The idea behind "The RE Forum" is simple. We want to be a great source of information for folks at every tier of the real estate industry. Come here and tell others about your home buying or home selling experience. First-timer? Post questions for experienced home buyers and home sellers to comment on and answer.

Thinking about taking the for sale by owner (FSBO) route? Read what others are saying about buying and selling homes. Relocating? Come here to ask other RE Forum users for a referral to an agent or broker in your new hometown.

We have a lot of big plans for this site--some very interesting and innovative user tools that we hope you will find incredibly helpful as you navigate real estate markets. We encourage you to become an active member here (free, of course!) by posting your comments and questions, playing with the fun widgets we post, and letting us know what you think.

Welcome to The RE Forum - The Real Estate Forum.