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August 2007 Entries
Defensive behavior: Safety Tips Just for You
You might not think of your job as being dangerous, but it can be —
if you’re not careful. A self defense instructor shares some important lessons on safety.
BY WENDY COLE
Christine Vyborny, a broker with Century 21 Country North in Roscoe, Ill., has always followed her hunches. At an open house several years ago, the sudden arrival of a group of boisterous men and women suddenly made her uncomfortable. She promptly walked outside and stood on the lawn until the crowd left.
“I felt outnumbered — simple as that,” Vyborny says. “It was an intimidating situation.”
That same protective instinct emerged again a few months ago when a man showed up at the tail end of an open house. He proceeded to amble slowly through every room, apparently unconcerned about the late hour. Forty five minutes later, he finished his tour on the back deck, where Vyborny was waiting. She decided not to walk back inside with him.
“I didn’t know if he was a bad person, but since I was by myself I didn’t want to take any chances,” says Vyborny. “It’s terrible to think like this, but it’s precautionary.”
Would something bad have happened in either of those scenarios if Vyborny didn’t follow her instincts? Luckily, she’ll never have to find out. Self defense experts say she did just the right thing by quickly removing herself from the risky situations, which could have turned ugly if she wasn’t paying attention to her surroundings.
Defensive Behavior Saves Lives
“The majority of people working in this field are women, and they have to take strangers in their cars and meet people at vacant homes,” says Joe Rosner, a second-degree Black Belt in karate who teaches a safety course for real estate professionals in Woodstock, Ill., near Roscoe.
Men, who comprise 41 percent of REALTORS®, also can’t afford to let their guard down. After all, no one is immune to crime. In 2005, five real estate professionals died as a result of “assaults or violent acts,” according to the federal Bureau of Labor Statistics. That’s about the same annual rate since the beginning of the decade.
And 25 percent of respondents in a NATIONAL ASSOCIATION OF REATLORS® survey indicated that they had been involved in unsafe “incidents or harassing situations” while working. “Not everyone you meet is a menace, but things can happen,” Rosner says. “No sale is worth risking your life.”
9 Must-Know Safety Rules
Vyborny credits her defensive behavior to never being a victim of a crime in her 30-plus years in real estate. She joined other real estate practitioners in August to sharpen her safety skills at one of Rosner’s workshops. Here are some of the potentially life-saving tips she learned.
- Know your prospects. Never meet a first-time prospect at a property based only on a phone call. Meet at your office first. Tell the prospect that it’s company policy to make a copy of a driver’s identification of all customers. (Download a customizable prospect identification form.) Also, introduce that person to at least two other people in your office. Criminals are less likely to take action if they think they’ll be recognized.
- Create a distress code. When you feel threatened, you can use this seemingly benign verbal code in a phone conversation to your coworkers, friends, or family. The code is a tip-off that you’re in danger and need help. For example, your distress code may be the phrase “red file.” If you’re in trouble, you would call your office and say something like “could you see if there’s a RED FILE on the property?” The person on the phone would then know to call 911 or take another action you’ve agreed upon.
- Don’t be too flashy. Wear conservative clothing and avoid ostentatious jewelry that could make you a target for theft. Real estate professionals often market themselves with photos, which can be risky, as perpetrators have been known to scan real estate photos looking for victims. Make sure your business photos are professional, not sexy, so that you don’t attract unwanted attention. Also, don’t reveal too much personal information in your ads or in conversations with customers.
- Be in the driver’s seat. Always use your own car when showing a property so you stay in control. If a client insists on driving, let him take his own car and follow behind you. Also, remember to lock the doors whenever entering or leaving your vehicle to prevent criminals from attacking after you’re in the car, or waiting for you in the car while you’re running errands.
- Don’t get stranded. Always keep your car’s gas tank filled above a quarter-tank. Also, keep the following safety tools in the car: A charged cell phone, a battery jumper, a spare tire, and a roadside emergency kit that includes a flashlight and flares also are smart accessories to keep in your car.
- Carry pepper spray. Have a pepper spray dispenser easily accessible on your key chain at all times. Pepper spray is a chemical that causes temporary pain and even blindness when sprayed on an attacker. It also can be used against aggressive animals.
- Keep an eye on the exit. During home showings, never walk into a room first. Instead, allow potential buyers to explore areas of the home on their own, with you following behind to answer their questions. Avoid escorting prospects into basements or other secluded areas, where you can become trapped. Always position yourself between the customer and the exit.
- Check in often. Let your office and family know when, where, and with who your appointments will be and when you should return. Make it your policy to check in every hour when you’re with clients. If you don’t call to check in, the office should call you right away.
- Never say you’re alone. If you encounter an individual while working late, never indicate to that person that you are alone. Say something like, “My supervisor will be right with you and should be able to assist you.” Likewise, if you’re meeting a customer at a home for a showing, never say anything about the home being “vacant.” Make it seem as though other people may be at the house.
Above all stay safe and know your surroundings at all times!
If it seems fishy, go with your instinct!
This article was published on: 09/01/2007
Back to nature - Log Home Living
It’s more than just an architectural style; it’s a mindset. Learn about the wide array of log homes available today and what choices buyers of these homes now have.
Log houses have truly stood the test of time.
They emerged in the United States as early as the mid-1700s, serving as a sturdy home-made structure for settlers to call home. Hundreds of years later, a loyal segment of home buyers are still in love with log-home living. And thanks to specialized builders and remodelers, buyers can choose from numerous styles, from authentic rustic cabins to sprawling, luxury, high-tech homes.
Here's a primer to help you and your clients understand the origins of log homes and stay current on the latest trends.
The Beginnings
Although the very earliest homes in American were shacks, tents, and other more transient structures, log homes began to be built as early as 1725, with the arrival of immigrants from Sweden, Finland, England, and other countries, says Ralph Kylloe, founder of Ralph Kylloe Rustic Design in Lake George, N.Y.
By 1740, the style became more mainstream, thanks to English settlers who improved upon the ax, says Kylloe, who authored The Rustic Home (Gibbs Smith Publishers, 2006).
The refined tool, dubbed the “American ax,” had a heavier form and a sharper blade, which helped settlers build log cabins more easily from indigenous tree species such as spruce, white pine, hemlock, cedar, and oak, Kylloe says.
Since nails weren’t readily available, early log homes had notched corners that allowed logs to stack solidly atop one another. Gaps between the logs were filled with twigs, stones, mud, and wet clay — a mixture known as chinking, Kylloe says. These bare-boned structures typically lacked windows because glass was scarce and easily broken.
Over time, the log home was transformed into an America icon: Grade-school history books often note that Abraham Lincoln was born in a log cabin in Kentucky. Author Laura Ingalls Wilder wrote about growing up in a log cabin in her popular Little House books. Legends about hulking lumberjack Paul Bunyan further romanticized the log house. And children could even build their own small-scale versions with Lincoln Logs, a toy introduced in 1916 by John Lloyd Wright, son of architect Frank Lloyd Wright.
Remaking the Log House
Computers and advanced construction techniques helped to further interest in log homes in the 20th century. A host of manufacturers began to produce designs on a large scale in the late 1970s and ’80s using computer-aided design (CAD), says Jeremy Bertrand, executive director of the Log Homes Council, a division of the National Association of Home Builders.
“When you stack round logs, there can be gaps in between. But with computers, you can take a log and mill it to almost the same dimensions as other ones, and stack them with a tighter seal,” Bertrand says.
Bertrand’s group represents 60 manufacturers, but he estimates that 400 to 500 companies now produce a variety of log homes. The demand for this style isn’t limited to America; more than 10,000 log homes are exported annually to Japan, Kylloe says.
And today’s home owners don’t have to give up modern-day comforts to live in a log home. While some of these homes are tiny no-frills cabins, many newer models are multi-room residences that are just as posh as any stick-built home.
Some people, like Frank Groff, opt to rehab an older log home. Groff, who lives most of the year in Southern California, transformed a small 1930s log house along the Salmon River near Portland, Ore., house into an elegant weekend retreat with rustic vibe. A skilled contractor matched missing pine paneling, and designer David Michael handled the rest, he says.
Bill and Darla Soles, like many log-home buyers, decided to start from scratch. They conjured up a design for a 4,500-square-foot, Northern white cedar log weekend house near a lake in western Maryland, and then took their drawings to Katahdin Cedar Log Homes, a builder in Oakfield, Maine. The couple intended for it to become their retirement home.
Log homes even have come to the chic Hamptons in New York. The 7,000-square-foot weekend house of Jill Rappaport, contributor to NBC’s Today show, recently was featured in Architectural Digest magazine. The magazine showed off the Western-themed styling of Rappaport’s 11-room, seven-bathroom house, which overlooks her 18-acre horse farm.
Decisions, Decisions, Decisions
With so many options for log homes, buyers must be prepared to make lots of decisions — especially when they plan to build.
- Construction method. Architects and builders can design a custom home in the traditional log construction method, or they can construct a traditional stick-built house and apply logs on the exterior and interior for an “authentic” look, says Chris Seile, director of corporate sales at Kuhns Bros. Log Homes Inc. in Lewisburg, Pa.
- Building plan: Custom or ready-made? Most manufacturers have a collection of ready-made plans, which can be adapted for custom designs or used as-is. Some manufacturers preassemble parts of homes in a factory, where logs are predrilled for electrical wiring and lettered and numbered to speed up on-site construction. Other companies produce modular designs with the shell totally completed at the factory. Plans also can be found at log-home shows, in books, and on the Web. Simply type the term “log home plans” into Google and you’ll see just how many vendors exist.
- Shape of the log. For a flat inside wall surface, you can use logs with a “D” shape, which are curved on the exterior but flat on the interior. For a more traditional, rounded look on the interior, you can choose a log shape that’s called the “Swedish cope” profile. There also are a variety of ways that the logs can interlock at the corners of the home. Some popular options are the “Scandinavian saddle notch” and the “dovetail.”
- Choice of woods. Your choice of wood affects the look of the home and its required maintenance. Paul Puryear, a builder and founder of Roaring River Log Homes in Hilham, Tenn., says he prefers Northern or Eastern white pine because the grains tend to twist and warp less. General contractor Christopher Hodshon, who built a log house on the DIY Network’s documentary “Blog Cabin” with his twin brother Simon, prefers cedar and hemlock because they’re decay resistant. He avoids poplar because it’s soft.
- Treating the wood. The wood you select should have its bark removed. It is then usually air-dried or kiln-dried to remove moisture, and stained to protect it from weather, sunlight, animals, and bugs. The wood also may need to be treated to repel water, Seile says. Logs can be stained a lighter color to achieve a brighter look inside the home, or can also be covered with sheetrock for a smooth finish and painted.
- Amenities. As with any other style of home, the sky’s the limit when it comes to what materials, furnishings, and amenities you can choose for your log house. “Anything that goes into a conventional home can be incorporated — smart-wiring, radiant-floor heating, wine cellars,” Seile says.
- Pricing. Manufactured log homes generally run between $145 and $165 a square foot to build, Seile says. Adds Puryear, “The wild card’s the cost of the site.”
Quality Counts
With so many aesthetic details to determine, buyers shouldn’t overlook the quality factor, experts say. Log homes have special engineering and construction needs; joints need to be put together precisely and vertical posts should be placed to allow for some shrinking, says Hodshon, co-owner of Clinch River Custom Builders Inc. in Knoxville, Tenn.
Because of that, Bertrand, of the Log Homes Council, says that it’s essential for buyers to work with a builder with experience in the log-home industry.
One of the council’s top goals is to ensure quality, and one way to do that is by requiring its members to use logs certified by a third-party grading program. “Logs with too many large knots can affect the structural stability,” Bertrand says.
Whether it’s a rustic retreat reminiscent of America’s earliest cabins or a brand new log-style McMansion with media room, chef’s kitchen, and spa-level suite, buyers have an exhaustive list of choices that would have made Abe Lincoln, Laura Ingalls, and other early inhabitants turn green with envy.
Learn More
The Log Council
Get essential information on log homes. Browse featured homes on the site, access a directory of log home products and services, and find details on the next log home expo.
Home Mortgages - Understanding the Process and Your Right to Fair Lending
published by The Federal Reserve Board
You’ve been looking at houses for months and months, and you have finally found it--the house that’s just right. Now, you’re anxious to buy your new home, move in, and get settled. But you still have an important task ahead of you--getting a mortgage loan.
This brochure explains about dealing with mortgage lenders. It tells you where to look, what to look for, and what takes place when you apply for a mortgage. Knowing what to expect, especially if you are a first-time homebuyer, may make it easier for you to get through the process.
You’ll also learn about your legal rights to fair lending and what you have a right to expect in fair treatment. The Fair Housing Act and the Equal Credit Opportunity Act make it unlawful for a lender to decide whether you qualify for a loan, or to offer less favorable terms, for reasons such as your race, national origin or sex and other prohibited factors.
If you believe you have been unlawfully discriminated against by a lender, or have questions about the treatment you have received, this brochure also tells you where to file a complaint.
 Where to Shop and What to Look For
The Mortgage Application Process
Understanding Your Rights to Fair Lending
Directory of Federal Agencies
10 rules for building wealth (Part 9 of 10)
By Jia Lynn Yang Fortune reporter
9. Ditch credit card debt All debt is not created equal, so rank yours by interest rate and pay off the bad stuff first. That usually means credit cards, which can carry interest rates as high as 30 percent. (Compare your card's APR with others at Bankrate.com.) On the other end of the scale are student loans. Those rates are generally between 3 and 6 percent, so consider making the minimum payment and investing in your 401(k) instead. Hey, even Supreme Court Justice Clarence Thomas was still paying off his school loans when he joined the bench.
Foreclosure Resources for Consumers
If you are having difficulty making your mortgage payment, one of the most important things you can do is seek assistance. The following resources provide information and links to agencies and organizations that may be able to help you.
Department of Housing and Urban Development (HUD)
Federal Housing Administration
Federal Reserve System
Federal Trade Commission
NeighborWorks® America
10 rules for building wealth (Part 8 of 10)
By Jia Lynn Yang Fortune reporter
8. Hold down fees
Be wary of any mutual fund charging a management fee higher than 1 percent (a few stellar managers may be worth it; most are not). A manager with a high buying and selling rate (called "turnover") should also set off warning bells. If you aren't interested in watching your fund manager like a hawk, stick with an index fund, like one from Vanguard, where expenses are typically around 0.2 percent. And if you're trading stocks, don't be fooled by low commissions: They add up
Minnesota Housing Market Facts & What Needs to Change
by Glenn S. Dorfman
Minnesota Association of REALTORS®
Where we have been
Prior to mid-2005:
- Lowest interest rates in 45 years creating extraordinarily high housing demand.
- Explosion of hybrid mortgage instruments (no doc, no down, etc.,) allow many renters to buy who may not have bought until years later
- Strong, positive demographics–baby boom in prime earning years
- Strong immigration/migration driven by strong national and Minnesota economy.
- Explosion in second home purchasing fueled by primary residence home equity borrowing and Capital Gains exclusion for sale of principal residence (TRA 1997).
- Strong and growing state economy, low unemployment (uneven nationally-housing very positive economic influence -Greenspan 2001, 2003)
Where we are now
Post 2006:
- Rising interest rates will price more buyers out of the market
- Credit crunch: consumer/mortgage broker/lender/ investor irresponsibility comes home to roost. Credit tightening will make it harder for some buyers to qualify for a mortgage.
- Demographics turn negative:
- less replacement buyers: sold first time homebuyers "forward" many years
- Baby boom ages and enter their 60's (2006)
- Anti-immigration sentiment begins to have impact
- Rising state unemployment
- Consumer homes tapped out as source of easy credit locking consumers into place (no equity).
- Fewer people moving to the state
Recommendations to REALTORS® and their customers:
- Housing must go on sale. (During the boom, sellers got a premium for their properties–that bloom will be reduced in this market.)
- Prices must drop or homes taken off the market in order to reduce the high and rising inventory.
- Buyers are being realistic in their offers…it is the sellers who do not understand three things:
- Their home values increased a lot from 2000-2005.
- They are selling into a falling market so 10% less today is better than 20% less next spring.
- Selling in this market (getting less for their home) permits them to buy in this market (buying for less).
- Brokers must reduce the number of "unproductive agents" (x transactions per year) in order to stop the dilution of productive, professional agent's income. If this does not happen, REALTORS® should stop the blabber about "professionalism." My definition of a "professional" in real estate is someone who counsels consumers in the buying and selling of real estate and does at least 10 transactions per year. [Real estate sales is an experiential based business: the more business one does over time the more proficient, competent one is–consumers/customers make this determination based upon the depth and breath of the services provided by the REALTOR® not based upon the symbolic REALTOR® "R."]
- The real estate business must develop management acumen. There are no rational business models that hire more people during a time of market weakness. Why would broker's intentionally dilute the income of their best agents by hiring agents on the hope of selling to his/her relatives? What kind of service does this type of agent provide other than a 50% commission split? Isn't the point of a consumer-centric business to be consumer, not agent centered? The "agent as customer model" is not pro-consumer and violates the professional role/image competent REALTORS® try so hard to project.
- Real estate brokers must focus more on the training, development and management of their sales staff and less on raw numbers of salespeople. Highly trained and managed agents are the broker's tool to win the public's confidence and the key to stronger earnings
The search for the next great eurostars
Europe's economies may be growing slowly, but its markets are heading for a fourth year of double-digit increases. We found six promising stocks. By Nelson D. Schwartz - Fortune senior writer
British Petroleum
NYSE: BP
Price: $69
52-week low: $63
52-week high: $77
P/E ratio: 10
Yield: 3.5%
For Britain's BP, 2006 has been what Queen Elizabeth II once called an annus horribilis. From a pipeline leak that forced the company to close its Prudhoe Bay oilfield in Alaska in the summer to billions in legal claims stemming from a disaster at a Texas refinery, the past 12 months have been an exercise in what analysts call "headline risk." But while those problems have been a major headache for CEO John Browne and have revealed deep management failures at BP's North American unit, the long-term outlook remains solid. The company is still the second largest of Big Oil's super-majors in terms of production (only Exxon Mobil is bigger), with huge untapped reserves stretching from Russia to West Africa to the Gulf of Mexico.
For investors there's a silver lining to BP's stormy year. Despite bumper profits from record oil prices, BP shares have underperformed rivals such as Exxon, Chevron and Royal Dutch Shell, making the British giant an appealing value proposition. While Exxon is trading at 11.8 times next year's earnings, BP carries a multiple of only 9.8. "At the end of the day, BP has reasonable growth prospects and no longer trades at a premium," says Putnam's Byrne. Meanwhile, BP's multibillion- dollar stock-buyback plan and its 3.5% dividend offer further downside protection. Even if oil prices moderate, says Bear Stearns analyst Nicole Decker, "BP is among the rare few companies that will continue to grow organically at a reasonable cost." Plus, says Decker, 2007 should see a recovery in both the company's image and its financial performance as it puts Alaska, Texas and other trouble spots behind it. She thinks BP shares could hit $82 by the end of 2007, a 21% gain over the current $68.
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Rio Tinto
NYSE: RTP
Price: $214
52-week low: $171
52-week high: $253
P/E ratio: 11
Yield: 1.4%
Rising oil prices may have grabbed the spotlight in recent years, but they're only a small part of the global commodities boom. Metals have appreciated even faster. Copper has nearly tripled over the past year, as demand from China and other emerging markets has soared. Mining stocks have jumped as well, but few companies are better positioned to benefit than Britain's Rio Tinto. With huge operations in Australia (shares are listed in both London and Sydney), Africa and the Americas, Rio Tinto expects revenues this year to grow 25% compared with last year's, while profits should finish up more than 50%.
Copper and iron ore account for 75% of earnings, but the company also has valuable exposure to other hot metals, such as uranium. Even better, it has deep reserves, including an interest in four of the world's top ten undeveloped copper projects. Iron ore production is also growing rapidly, says J.P. Morgan analyst David George, which should help earnings even if copper prices cool off. And with a P/E ratio of ten and minimal debt, Rio Tinto is cheaper than such rivals as BHP Biliton, which trades at more than 12 times earnings. George sees a 30% upside in Rio Tinto shares, which have pulled back recently to $215 amid global fears of an economic slowdown.
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Credit Suisse
NYSE: CS
Price: $68
52-week low: $50
52-week high: $69
P/E ratio: 12
Yield: 3.4%
Our next pick, Credit Suisse, is well known in the U.S. as a major player in investment banking, but back home in Switzerland, says Putnam's Byrne, it has long played second fiddle to UBS because of the latter's dominance in wealth management. Now that's changing: Credit Suisse sold its slow-growth insurance business, Winterthur, to AXA for $10 billion this summer and is focusing on its own wealth management business while boosting margins at its U.S. investment bank. The Zurich giant has also launched an aggressive stock-buyback program, with the goal of snapping up nearly $2 billion of its stock, or 3% of outstanding shares, by next April.
Like our energy-sector recommendations, Credit Suisse is also reasonably priced, trading at 10.9 times forward earnings, compared with P/E multiples of 12.6 for UBS and 11 to 12 times earnings for U.S. investment banks, according to Citigroup analyst Jeremy Sigee. In November, Sigee upped his rating on Credit Suisse from hold to buy, while increasing his target price to $75. With Credit Suisse currently trading at $67 - and boasting a 2.8% dividend - you're looking at a potential gain of nearly 15%. Not bad for a typically conservative Swiss bank.
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Banco Santander
NYSE: STD
Price: $18
52-week low: $13
52-week high: $19
P/E ratio: 12
Yield: 2.5%
While Credit Suisse has been refocusing on its core business, Spain's Banco Santander has been riding an expansion wave that has made it the biggest bank in the eurozone. Earlier this year it acquired Britain's Abbey National, boosting an international profile that also includes such rapidly growing Latin American markets as Brazil, Mexico and Chile. In addition, Santander is thriving because of the boom in its home market, where economic growth over the past ten years has averaged 3.6% annually, nearly twice the rate of other European countries. Morgan Stanley analyst Pablo Beldarrain Santos, who rates Santander his top pick among Spain's banks, expects earnings to jump 25% this year and 20% in 2007.
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Veolia
NYSE: VE
Price: $67
52-week low: $43
52-week high: $68
P/E ratio: 29
Yield: 1.4%
Although Veolia has been in business in France for more than 150 years, its name may be unfamiliar even to investors who follow European business. Formerly the water-supply and environmental- services division of Vivendi, Veolia was split off and renamed in 2003. Since the split from the entertainment side of the business (which retains the Vivendi name), Veolia has thrived, nearly doubling over the past two years on strong growth in its utility business in France and around the world. In the U.S., for example, Veolia supplies drinking water in Indianapolis and wastewater treatment at Kentucky's Fort Knox. Earnings growth for 2006 is expected to top 30%, while revenues are rising at a 20% rate.
For long-term investors, the appeal of Veolia is that it's a great way to play the growing demand for a commodity that in many parts of the world is scarcer than oil - fresh drinking water. In India, China and other emerging markets, population growth and environmental pressures offer Veolia tremendous opportunities in areas like water treatment and desalinization. The company already provides water to nearly 19 million people in China and has also won new contracts recently in the Persian Gulf and in Yerevan, the capital of Armenia. Shares of Veolia have rallied since the summer, when management abandoned plans to merge with French construction company Vinci, but HSBC analyst Verity Mitchell still sees 20% upside in the stock, which currently trades at $66.
Royal Philips Electronics
NYSE: PHG
Price: $37
52-week low: $27
52-week high: $38
P/E ratio: 7
Yield: 1.2%
Our last pick, Royal Philips Electronics, is well known as a maker of consumer products like Norelco shavers, light bulbs (the British royal family recently asked Philips to light Buckingham Palace with its low-energy bulbs) and medical devices such as CT scanners. But on Wall Street, says Franklin's Brugere, analysts have tended to focus on the company's huge but low-margin semiconductor business.
Now in the midst of a turnaround, Philips agreed in August to sell 80% of the chip business to private-equity buyers for more than $10 billion, freeing up cash for higher-margin divisions such as medical devices, as well as an aggressive stock-buyback program. With this transaction, says Brugere, "volatility has been reduced, multiple expansion is taking place, and management is doing what it has promised in terms of restructuring." Wall Street has taken notice: Philips shares have rallied since the August deal, rising from $30 to more than $37, and the company has boosted its multiple to roughly 22 times 2007 earnings. Even so, says Brugere, there's still an upside of 20% as this Dutch giant cuts costs, drives shareholder returns, reallocates capital, and earns new respect from the Street.
Despite that kind of earnings growth, Santander remains reasonably priced, trading at ten times projected 2007 earnings, a 10% discount to other banks in Europe. If all that weren't enough, Santander pays a 3% dividend, which analysts expect to rise as profits grow in the next few years. Santos sees an upside of 20% in the shares of this fast-growing bank, which are now trading at $18 for its U.S.-listed ADRs.
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10 rules for building wealth (Part 7 of 10)
By Jia Lynn Yang Fortune reporter
7. Go heavy on stocks
The more time you have, the more risk you should take. If you're just starting out, 80 percent to 100 percent of your assets ought to be in stocks. The simplest trick? Subtract your age from 120: That's the percentage you should have in stocks; the rest should be in bonds. "If you have, say, 30 or 40 years, what happens over the next three months or even three years doesn't matter. If you need the money in two years and it drops 40 percent in one year, that's a problem," says Stuart Ritter, a certified financial planner with T. Rowe Price.
Countrywide Financial gets $2B rescue
by COMBINED WIRE SERVICES
The infusion of $2 billion from Bank of America Corp. should help shore up sagging Countrywide Financial Corp., analysts said yesterday. Even so, the chief executive of Countrywide, the nation's largest mortgage lender, said the U.S. housing downturn is likely to lead the country into recession.
"I've seen this movie before, and the ending of the movie always ends up in some form of recession," Angelo Mozilo said. "I can see the economy slowing down substantially enough to give the regulators, the Fed some pause in what's going to happen next."
Countrywide, based in Calabasas, Calif., faced a credit shortage this month as mortgage defaults rose and capital markets tightened. On Aug. 16, it announced an unexpected drawdown of an entire $11.5-billion credit line because it had trouble selling short-term debt.
But Wednesday, Bank of America said it would invest $2billion in the lender, buying preferred securities convertible into common stock. Mozilo, 68, called the investment a "vote of confidence" and a "priceless endorsement," but said housing and the economy were not out of the woods.
Neither, apparently, is his company.
Yesterday, a consumer group accused Countrywide of steering consumers into unaffordable adjustable-rate loans and said it should be required to refinance them.
The Neighborhood Assistance Corp. of America, a Boston-based housing nonprofit, said U.S. regulators should press Countrywide to change the terms of high-cost loans. The group brought Countrywide customers to a meeting with staff at the Treasury Department's Office of Thrift Supervision in Washington.
"We're going to look into each one of their cases," said Bill Ruberry, spokesman for the Office of Thrift Supervision. "We'll talk to the institution about each one of their cases and try to get to the bottom of them and see what can be done."
The news conference featured borrowers who struggled to meet ballooning payments, said they got little cooperation from Countrywide and came close to losing their homes.
Sharon LaPier, 59, who fell behind on her monthly payments after suffering a heart attack last year, said Countrywide was unwilling to help defer her payments. She received a foreclosure notice 10 days before Christmas.
"It wasn't a very good Christmas," LaPier said. "I couldn't buy a single Christmas present for my children or my grandchildren."
LaPier, a retiree from upstate East Greenbush, said she escaped foreclosure after Countrywide added her missed payments and $10,000 in fees to the balance of her loan.
In an e-mailed statement, Countrywide said it has helped more than 35,000 borrowers stay out of foreclosure this year.
"For borrowers that respond to our contact efforts and have the financial ability and willingness to stay in their home, we have tools available to resolve their situation," the lender said.
The number of U.S. homes under foreclosure almost doubled in July from a year earlier as homeowners with adjustable-rate mortgages struggled to meet rising monthly payments, RealtyTrac Inc., a seller of foreclosure data, reported Aug. 21.
Mozilo called on the Bush administration and Federal Reserve Chairman Ben Bernanke to state that they will not allow the housing environment to get out of control.
Last Friday, the Fed cut the discount rate at which it lends to banks to 5.75 percent. Mozilo said it should be reduced so that it is the same as the federal funds rate, now 5.25 percent.
Countrywide shares closed up 20 cents at $22.02 yesterday. They have fallen 48 percent this year.
Copyright © 2007, Newsday Inc.
Commercial Real Estate Index Hits Record High by Daily Real Estate News | August 21, 2007
A forward-looking index for the commercial real estate market recorded its ninth consecutive improvement in the second quarter, according to the NATIONAL ASSOCIATION OF REALTORS®.
The Commercial Leading Indicator for Brokerage Activity rose 0.5 percent to an index of 120.7 in the second quarter, the highest on record, from a downwardly revised reading of 120.1 in the first quarter. It is 1.1 percent higher than the second quarter of 2006 when it stood at 119.7. NAR’s track of the index dates back to 1990.
Lawrence Yun, NAR senior economist, says the commercial sectors are benefiting most from rises in industrial production, shipments of durable goods, and wholesale trade.
“Despite some signs of slower overall economic expansion, the rise in the index means net absorption of space in the industrial and office sectors is likely to expand over the next six to nine months,” he says. “In addition, an improvement in returns on investment implies healthy rent increases for commercial property owners.”
Positive movements in the index components more than offset a fall in the National Association of Real Estate Investment Trusts price index. The net gain in NAR’s index also indicates modestly higher completions of overall office, warehouse, retail, and lodging structures.
What You Can Expect
“In short, the latest data suggests improved business opportunities for commercial real estate practitioners in the months ahead,” Yun says.
Net absorption in the office and industrial sectors in the fourth quarter of 2007 is expected to be 30 million to 40 million square feet, with about $365 billion to $375 billion in new completed commercial construction activity. That is compared to $343 billion of new construction reported in the second quarter of this year.
The rise in the commercial leading indicator also implies that commercial real estate practitioners could expect leasing and sales activity in the fourth quarter of this year to be about 1.1 percent higher than the fourth quarter of 2006.
More than 120,000 NAR members offer commercial services, and 68,000 of those are currently members of the REALTORS® Commercial Alliance. NAR’s commercial division.
The commercial leading index is a tool to assess market behavior in the major commercial real estate sectors. The index incorporates 13 variables that reflect future commercial real estate activity.
— REALTOR® Magazine Online
Cities with the most Golf Courses? Most golf played
None are on the Best Places to Retire list this year, but here are cities from the Best Places to Live database where residents play the most golf.
| Rank |
City |
Golf activity index
(100=national avg.,
200=twice national avg.) |
| 1 |
Coconut Creek, FL |
141 |
| 2 |
Palm Harbor, CA |
139 |
| 3 |
Palm Desert, CA |
134 |
| 4 |
Lake Havasu City, AZ |
133 |
| 4 |
Woodbury, MN |
133 |
| 6 |
Yorba Linda, CA |
132 |
| 7 |
Boca Raton, FL |
131 |
| 8 |
Rancho Santa Margarita, CA |
130 |
| 8 |
Greenville, NC |
130 |
| 10 |
Diamond Bar, CA |
129 |
| 10 |
Cape Coral, FL |
129 |
| 10 |
Burke, VA |
129 |
| 13 |
Laguna Niguel, CA |
128 |
| 13 |
San Ramon, CA |
128 |
| 13 |
Carmel, IN |
128 |
| 16 |
Peoria, AZ |
127 |
| 16 |
Lake Forest, CA |
127 |
| 16 |
Highlands Ranch, CO |
127 |
| 16 |
Port Charlotte, FL |
127 |
| 16 |
Port St. Lucie, FL |
127 |
| 16 |
Naperville, IL |
127 |
| 16 |
Shawnee, KS |
127 |
|
| 16 |
Plymouth, MN |
127 |
| 16 |
St. Peters, MO |
127 |
| 16 |
Toms River, NJ |
127 |
Source: MRI and InSource marketing survey data
Affordable homes - What cities have the lowest home sale prices?
None are on the Best Places to Retire list this year, but here are cities from the Best Places to Live database with the lowest median home price.
| Rank |
City |
Median home
sale price 2005 |
| 1 |
Reading, PA |
$42,850 |
| 2 |
Buffalo, NY |
$45,000 |
| 3 |
Niagara Falls, NY |
$47,000 |
| 4 |
Camden, NJ |
$55,000 |
| 4 |
Youngstown, OH |
$55,000 |
| 6 |
Utica, NY |
$58,000 |
| 7 |
Flint, MI |
$59,000 |
| 8 |
Rochester, NY |
$60,000 |
| 9 |
Saginaw, MI |
$62,000 |
| 10 |
Dayton, OH |
$63,000 |
| 11 |
Pittsburgh, PA |
$64,500 |
| 12 |
Syracuse, NY |
$64,650 |
| 13 |
Canton, OH |
$65,000 |
| 14 |
Odessa, TX |
$66,700 |
| 15 |
Pharr, TX |
$67,600 |
| 16 |
Port Arthur, TX |
$69,142 |
| 17 |
Decatur, IL |
$69,500 |
| 18 |
Detroit, MI |
$69,900 |
| 18 |
Erie, PA |
$69,900 |
| 20 |
Springfield, OH |
$70,000 |
| 21 |
Akron, OH |
$74,900 |
| 22 |
Birmingham, AL |
$75,000 |
| 22 |
Midwest City, OK |
$75,000 |
| 22 |
Lancaster, PA |
$75,000 |
| 25 |
Union, NY |
$76,750 |
Source: Money Magazine - OnBoard, Actual sales collected from county and municipal assessors' offices.
Only includes sales within city boundaries.
10 rules for building wealth (Part 6 of 10)
By Jia Lynn Yang Fortune reporter
6. Make saving automatic
No one wants to think about saving - so don't. Already more companies are making 401(k) enrollment automatic (34 percent of big companies, vs. virtually none ten years ago). If you're already maxing out your 401(k), see whether your company can transfer money directly from your paycheck into your Roth IRA or a taxable account. Or ask if your bank can transfer a set amount (even $100 a month) from your checking account into a high-interest-bearing online savings account (check out HSBC's and ING's offerings).
10 rules for building wealth (Part 5 of 10)
By Jia Lynn Yang Fortune reporter
5. Don't chase trends
You want to grow your money for the long haul, so you can't switch your strategy every time you read the headlines. If you see an asset class that's catching fire - like real estate investment trusts (REITs) in the late '90s or commodities this year - ask yourself some basic questions: Can I describe how it works in plain English? If not, start your research at Investopedia.com. Why is it so popular right now? If the answer is "Paris Hilton bought some," best to stay away.
___________________________________________________________________________________________
Best Places to Retire - Top 5 Towns (Part 5 of 5)
Foreclosures rise sharply in July across the US According to a research firm report foreclosures are up 93% over last year
Foreclosure filings rose 9 percent from June to July and surged 93 percent over the same period last year, with Nevada, Georgia and Michigan accounting for the highest foreclosure rates nationwide.
Foreclosure filings include default notices, auction sale notices and bank repossessions. The figures are the latest measure of the current real estate market, which has seen defaults and foreclosures soar as financially strapped borrowers have failed to find buyers or make payments on their property.
According to RealtyTrac Inc.179,599 foreclosure filings were reported during July, up from 92,845 in July a year-ago. A total of 164,644 foreclosure filings were reported in June.
Irvine-based RealtyTrac Inc. noted that the national foreclosure rate in July was one filing for every 693 households.
RealtyTrac Chief Executive James J. Saccacio said, “While 43 states experienced year-over-year increases in foreclosure activity, just five states — California, Florida, Michigan, Ohio and Georgia — accounted for more than half of the nation’s total foreclosure filings."
The real estate market will only move forward when this national foreclosure issue is fully resolved. Until then, the market ups and downs will keep viable invenstors on the side line.
There are many great real estate buys currently on the market. Buyers need to be informed and make their choice wisely.
When is a great time to purchase?
For the savvy buyer, this is definately the "right time" to find that great real estate deal . . . .
Running out of real estate by Marketplace - 8/22/07
The past decade has been a brilliant time to be a real estate agent, but with home prices plummeting and buyers short on loans, some agents are thinking about a career change. The National Association of Realtors says for the first time since 1997, it's gonna have a drop in membership. About 4 percent. Last year, the group had 1.4 million members, nearly twice as many as a decade ago.
Fighting Back Against Identity Theft According to the Federal Trade Commission (FTC)
 This website is a one-stop national resource to learn about the crime of identity theft. It provides detailed information to help you deter, detect, and defend against identity theft.
On this site, consumers can learn how to avoid identity theft – and learn what to do if their identity is stolen. Businesses can learn how to help their customers deal with identity theft, as well as how to prevent problems in the first place. Law enforcement can get resources and learn how to help victims of identity theft.
Read on to find out more about identity theft and what you can do about it.
To check this out in more detail go to http://www.ftc.gov/bcp/edu/microsites/idtheft/index.html
Best Places to Retire - Top 5 Towns (Part 4 of 5)
10 rules for building wealth (Part 4 of 10) By Jia Lynn Yang Fortune reporter
4. Don't try to beat the market
Even the best fund managers have trouble beating the S&P 500, so give up the chase. The most straightforward way to avoid this trap is to diversify your assets and then rebalance your portfolio at least once a year. Check your asset breakdown with Morningstar's free Instant X-Ray tool (www.morningstar.com). Essentially, rebalancing means selling some winners that are taking up too big a share of your portfolio and redeploying that cash to bulk up in areas that have lagged. (Buy low, sell high - get it?)
Statement by Countrywide Bank on Its Depository Franchise - August 17th
CALABASAS, Calif., Aug. 17 /PRNewswire/ -- In light of recent media attention, Countrywide Bank, FSB today made the following statement regarding its depository franchise.
"It is important for Countrywide Bank's valued customers to know that the highly publicized issues related to the mortgage market do not impact the safety of FDIC insured deposits at Countrywide Bank," said Tim Wennes, president of Countrywide Bank.
Key facts about Countrywide Bank:
-- Countrywide Bank is a federal savings bank with more than $107 billion
in assets
-- Countrywide Bank offers depository products that are FDIC insured
-- Bank representatives are trained experts in helping customers structure
their accounts to maximize the FDIC protections available to them
-- Countrywide Bank continues to receive "investment-grade" ratings by the
three major credit rating agencies
-- Countrywide Bank offers high-yield depository products for retail and
commercial customers.
-- The Bank currently has 105 financial centers throughout the U.S.
Countrywide Bank provides a wide array of consumer finance products,
including high-yield CDs, and the Bank's high-yield online savings
account called SavingsLink(SM).
"Offering consumers highly competitive rates on savings products has always been at the core of Countrywide Bank's business model. Our current 5.65%(1) rate on a 12-month CD is among the highest in the nation and demonstrates our commitment to meeting the needs of consumers eager to maximize their savings," concluded Wennes.
For more information, visit http://www.countrywidebank.com.
* About Countrywide Bank
Countrywide Bank, FSB is a member of the Countrywide Financial Corporation (NYSE: CFC) family of companies. Countrywide Bank offers consumers highly competitive rates on certificates of deposit and money market accounts and, through its family of companies, also offers investment and insurance products.* Customers can review banking products and services, check rates on deposits, and apply for new accounts by phone, online, or at one of the financial centers located throughout the country. In addition, the company offers the same superior rates and unsurpassed personalized service to its business customers through its Premier Business Banking and Commercial Banking Divisions. Since its launch in 2001, Countrywide Bank has steadily expanded the reach of its financial centers to 15 states including: California, Arizona, Colorado, Texas, Florida, Arkansas, Illinois, Michigan, Ohio, Pennsylvania, New York, New Jersey, Massachusetts, Virginia and Washington. For more information about Countrywide Bank, visit http://www.countrywidebank.com. Member FDIC. Equal Housing Lender.
* Countrywide Investment Services and Countrywide Insurance Services
Products
Not FDIC Insured Not Guaranteed By Any Bank Not A Deposit
May Lose Value Not Insured By Any Federal Government Agency
(1) The Annual Percentage Yields (APY) effective as of August 16, 2007 at
8:30 AM EST and are subject to change without prior notice until
account opening. APYs shown apply to only individual and joint
consumer accounts opened via the internet. The minimum deposit to open
a CD account and obtain the APY is $10,000 for a regular CD and $2,500
for an IRA CD. A penalty may be imposed for early withdrawal. See
Application Disclosure Handbook for details. There may be additional
IRS penalties for early withdrawal from an IRA account. Consult your
tax advisor.
Your Credit Report - What It Says About You
This overview was based on materials originally created by the Federal Reserve Bank of Philadelphia.
Most people finance their homes with mortgages and pay for their cars with loans. Young people often obtain loans to pay for college. And, of course, lots of people make purchases with credit cards.
You can't expect to receive credit as a matter of course, however. You must apply for it. And just as you would hesitate to lend money to a stranger, banks, retailers, or finance companies will not grant you credit without knowing something about you.
It used to be that a retailer or bank would have to call each creditor you listed on an application form before they would decide to extend credit to you. Today, they rely on credit reports, so it's important for you to know what is in yours.
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