Court Bars Further Implementation of AB32

As we were wrapping up our Board of Directors meetings last week, the Superior Court of California in San Francisco barred further implementation of AB 32 pending CEQA compliance.  In Association of Irritated Residents, et al. v. California Air Resources Board, et al., the Superior Court issued a “tentative statement of decision” (Tentative Decision) that prevents the California Air Resources Board (CARB) from implementing a state-wide Green House Gas reduction regulatory program under AB 32 until the agency complies with the requirements of the California Environmental Quality Act (CEQA).

AB 32, the state’s landmark 2006 climate change statute, required CARB to develop a regulatory program to reduce state-wide GHG emissions to 1990 levels by 2020.  In response to this mandate, the Board of CARB already approved a first set of comprehensive regulations in December 2010; the regulations were based on an earlier “Scoping Plan” developed by the CARB staff.   The Tentative Decision partially grants a petition for a writ of mandate brought by a coalition of environmental justice organizations (Petitioners) that alleged that CARB’s Scoping Plan violated both AB 32 and CEQA. “Environmental Justice” is the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.

Although the Superior Court denied all claims related to AB 32, the court found that CARB: 1) failed to adequately discuss and analyze the impacts of alternatives in its proposed Scoping Plan as required by its CEQA implementing regulations; and 2) improperly approved the Scoping Plan prior to completing the environmental review required by CEQA.  In upholding the Petitioners’ challenge on these two CEQA issues, the Superior Court issued a Peremptory Writ of Mandate and enjoined CARB from further implementation of the Scoping Plan until it complies with all CEQA requirements. Parties to the case have 15 days from the issuance of the Tentative Decision to file objections before the Superior Court issues a final decision in the case.

While this is good news for some, the order to stop the implementation of AB 32 has little effect on the housing sector and will not affect other Green House Gas reducing mandates already in place such as SB 375: the anti-sprawl law which requires regional governments to reduce Green House Gas emissions via land use and transportation planning, and AB 758: which will require energy efficient retrofits in California’s existing homes and commercial properties. The stay will, however, affect the development of regulations concerning Cap-and-Trade, Low Carbon Fuel Standards, Renewable Energy, Landfills, Vehicles, Industrial Emissions, etc.

C.A.R. took a neutral position on AB 32 when it passed through the legislature in 2006.  At the time, C.A.R. did not find tailpipe emissions reductions and cap-and-trade policies to be of direct and immediate concern to REALTORS®.  Subsequent to the passage of AB 32, C.A.R. has monitored AB 32 implementation planning and policy development meetings. C.A.R. remains neutral on the goal of GHG reduction yet continues to urge CARB and other state agencies to consider the real cost of doing business and to take a realistic approach to the implementation of their rules and policies.

NAR Pres. Elect Moe Veissi Talks Turkey at CAR Mid-Winter

Take-aways from our recent California Association of Realtors Mid-winter meetings.

From NAR President-elect Moe Veissi –

Six of the past eight recessions have ended due to increasing strength in the housing market. The other two were due to wars. That seems like an easy choice. We need to get behind housing. This battle against housing is counterproductive and the attack on the mortgage interest deduction is an attack on one of the basic foundations of the American Dream.

Similarly we should seek to preserve the basics of the GSE’s.They can certainly be improved upon but their services are vital to home buyers. They provide a foundation and critical financial instruments that allow many people to buy homes that otherwise would not be able to. Keep in mind that during the height of the meltdown, Fannie and Freddie had take-back rates of about 3 1/2% while at the same time banks like B of A and Wells were taking back 15% to 18%.

You hear people today who don’t know the history, who don’t know any better – oh, Canada doesn’t have a 30 year fixed mortgage and their housing market is great. Oh, Europe doesn’t have a Fannie/Freddie and their market is great. The fact is, their markets don’t compare with ours. Never have. Nobody does it like us. These other countries are trying to figure out how to do it like we do and we’re trying to figure out how to kill our system and adopt the systems others are trying to get rid of. So why would we try to emulate markets with which we have nothing in common? Why would we destroy 100 years of success to become more like an inferior market? It just doesn’t make sense.

These are not short term problems we are dealing with and they will keep rearing their heads. We have saddled ourselves with tremendous debt so attacks on basic and short term sources of tax revenue will be ongoing. Don’t believe them when they tell you – oh, we aren’t going to take it all away. Just this little bit. Yeah, just that little bit this time. Then  a little more, then a little more, you know how that works.

Realtors just don’t realize the power we have in our communities and our country. But we’ve got to stand up and be counted if we want to be heard. We need to present Congress with 1/2 million Realtor calls on issues instead of 100,000. When we can consistently deliver 1/2 million member voices or more to our Congressional leaders, they will know we mean business.

Murrieta men agree to prison in fraud case

The headline was exciting yesterday when news of our long-time resident scam artists started to trickle out. The authors of a $142 million dollar ponzi scheme & investment fraud have been in jail awaiting this moment for the past 1 1/2 years and now start to look forward to doing the rest of their time.

Long-time readers will be familiar with the Stonewood case, wherein these perpetrators enticed hundreds of people to invest in real estate. But not just invest – they were talked into buying homes for $100,000 or more over asking price with that overage going to the third party – Stonewood. People who could barely qualify for a car loan were talked into buying multiple properties, most i the $500,000 and over range, with the promise that the deficit between rental payments and the mortgage payment would come out of an investment fund seeded by that ‘overage amount’.

In some cases deficit payments were made for a month or so but quickly vanished as the perpetrators lived large, driving fancy cars, boats and living in multi-million dollar homes themselves. Ultimately over 200 homes went onto foreclosure, many starting in 2006 – well before the foreclosure crisis started. This wave of dead lawns jump-started our local foreclosure fiasco as the 200 homes were dumped onto the market along with dozens more from people who had bought in neighborhoods where the fraudulent purchases has driven up the comps.

Our local real estate association started noticing these transactions in late 2004 and by mid-2005 had compiled an extensive dossier on the scheme. At that time it involved about 60 homes and maybe $30 – $40 million dollars. We tried in vain to get local law enforcement, our District Attorney, our Dept. of Real Estate, the FBI – ANYBODY – to take an interest. To no avail.

Finally in late 2007 the SEC got involved not from the real estate side but from the investment fraud angle. This prompted the DRE to yank the brokers license from the principles but by then the damage had largely been done. Finally in 2008, the Justice Department, FBI and our DA got involved and brought the scanm to a screeching halt. Of course by then it had ballooned from 60 homes and $30 million to over 200 homes and $140+ million. Our DA was all puffed up taking credit for this great bust when, for years we had not even been able to get a meeting with him to discuss it. He was the first incumbent DA in our county to be voted out of office in over a century when voters rejected him this past November.

Two local reporters, Leslie Berkman of the Press Enterprise, and Chris Bagley or the Californian, were instrumental in keeping this in the public eye. Dozens of the victims banded together in a class action lawsuit. That helped. Our own Real estate Fraud Task Force was born out of this scandal and remains active and vigilant to this day.

So while many of the victims say a 18 year prison sentence is not nearly long enough for the ringleader, it’s at least a start. No punishment can ever rebuild the damage done to our community and no jury award will ever compensate for the retirement savings lost and the lives ruined by these people.

Maybe the lesson to be learned is – if the deal sounds too good to be true…

Of course as we all know, there’s a sucker born every minute and two grifters to fleece him out of his cash.

For the full story, please click below:

Murrieta Men Agree to Prison Time
Victims of Duncan’s Scheme Speak Out

Sen. Joel Andersen introduces emergency legislation to protect taxpayers from State-issued IOUs

SACRAMENTO – On the heels of State Treasurer Bill Lockyer’s warning that the state may soon issue IOUs, Senator Joel Anderson (R-El Cajon) introduced emergency legislation to help businesses stay afloat in such an event. “IOUs could be a death knell for already struggling California businesses,” State Senator Joel Anderson stated. “This emergency legislation could be their lifeline.”
Senate Bill 120, if passed and signed into law, would force state agencies and departments to accept the state’s IOUs as payments for bills owed to the state. The State of California is facing a whopping $25.4 billion budget deficit. As reported by the Los Angeles Times, Treasurer Lockyer stated that California is facing another immediate cash crisis and could issue IOU notes in April or May.
In 2009, the state issued billions of dollars of IOUs when it ran out of money. That same year, Anderson introduced a similar proposal to protect businesses when IOUs were issued in place of actual payments. Over 3,000 letters of support flooded Anderson’s office from businesses, citizens, and elected officials – including one from State Controller John Chiang. Chiang stated in his letter, “When a person receives an IOU from the State, the State should accept the IOU for payment obligations owed to the State.” The bill sailed through both houses of the Legislature and had over 70 bi-partisan co-authors.
Governor Schwarzenegger vetoed the measure. Senator Anderson reintroduced this bill to help California businesses out of the untenable position of having to pay their own bills while the State of California is unable to pay its obligations.
Senator Joel Anderson represents the 36th Senate District, which includes portions of San Diego and Riverside County, including Fallbrook and the Inland Empire.

Realtors Discover Content – Can Control Be Regained?

Friday’s Wall Street Journal contained an interesting article entitled ‘The Airlines Discover ‘Content”.

The article begins, “Air travelers are asked to pay for everything nowadays. So goes a common complaint, though the natural rejoinder is that passengers always paid for everything. Today a traveler who doesn’t want a blanket and pillow doesn’t have to subsidize those who do. One who travels light doesn’t have to subsidize his fellow traveler who can’t leave home without the entire contents of his closet.”

The article goes on to quote Delta CEO Richard Anderson. “The industry has to evolve to a model of other industries where people pay us for our content rather than us paying them to take our content.” (italics mine).

That’s what’s behind current pricing wars among airlines trying to reach their customers more directly and has lead to recent blackouts by some airlines on sites like Orbitz and Expedia. Some airlines, most notably American, are also at war with the giant on-line reservation booking system Sabre.

And it’s not just to save the $3 buck commission on flight legs. The airlines are coming to realize that after years of giving their content away, or even worse, paying others to take it and profit from it, that it’s time to take back control of their own data and use it to better serve their customers and increase their own profitability at the same time.

As I re-read the article, I started substituting ‘Realtor Associations’ for ‘airlines’ and found that the article provided an equally compelling read. For years now at every local, state and national meeting I’ve attended there is much debate about how we as Realtors have lost control of our own data, our content. We gladly pay others to take our data and do with it pretty much as they want.

The listing you worked so hard to obtain you pay a fee to list on the mls. That mls will then take your data and sell it to numerous outlets that re-publish it. They use your data as a bargaining chip to join other regional or statewide mls’s, all without your approval and with no compensation to you. Some organizations will even use your data to generate leads and then charge you to get the information your data provided to begin with. Do you have any idea how many places have access to your listing information right now? How many newspapers, search engines, statewide and national aggregators and others are paying somebody else for the content YOU generated?

As the article notes – “Content, in the digital age, is what attracts eyeballs and, in turn, transactions, which in turn leaves a growing pile of data about who a customer is and what he or she might like to buy in the future. They want to bypass the electronic middleman and have a more direct relationship with shoppers.” Airlines or real estate?

The trend in real estate is for ever larger regional, statewide and national aggregations of mls data – your data. But at the same time Realtors are bemoaning the fact that for that greater exposure they have lost all control of the content they generate.

Maybe the airlines are onto something.

Maybe bigger isn’t necessarily better or more  cost-effective when it comes to the value of your content.

Maybe it’s time to retake control of our content before it’s too late and we’ve been disintermediated right out of the transaction.

Maybe I should just shut up and let you figure it out for yourself. Yeah, that’s probably best.

City of Temecula Grants for Homeowners

The City of Temecula has several programs in place to assist your clients, existing homeowners and prospective homeowners. Starting with their First Time Home buyer Program – designed to help people who have not owned a home in the previous 3 years. If you’re buying a home but need some repairs to make it move-in ready, check out their Residential Improvement Loan Program. There are also grants available to Seniors to help with repairs for their homes – with no repayment required!

And their newest program is the Residential Energy Efficiency Program. This program is available in amounts up to $15,000 for low to moderate income homeowners for the repair or replacement of older heating and cooling systems, water heaters, insulation, windows and dolors.

For more information on any of these great programs, how to qualify and participating lenders and vendors, click on the following links or call the Citys Redevelopment Department or call them at 951-694-6412.

Residential Energy Efficiency Program (REEP)

The Residential Energy Efficiency Program (REEP) was established to encourage homeowners to make energy efficient improvements by repairing or replacing older heating and cooling systems, water heaters, insulation, window, doors, and/or implementing other energy saving measures.

First Time Home Buyer Program (FTHB)

The City of Temecula Redevelopment Agency (RDA) is offering a First Time Home Buyer Down Payment Assistance Program (FTHB). The primary objective of the First Time Home Buyer Program is to provide housing inventory on a continuing basis which will be available for purchase by first time home buyers of low and moderate income.

Residential Improvement Loan Program

The purpose of the Residential Improvement Loan Program is to provide assistance in exterior improvements to residences. Participants typically use the loan to repaint, repair, or replace roofs, garage doors, and/or fences.

There is no payment collected and the loan is forgiven after five years. If the participant sells the house within five years, the loan is repaid with 5% interest.

Senior Home Repair Grant

The City of Temecula offers one-time Grants of up to $3,000 to senior citizens for needed repairs to their homes. No repayment is required.

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The opinions in this commentary are strictly Gene Wunderlich’s personal opinions. While any reasonable and/or rational indivdual should agree wholeheartedly, the opinons reflected herein may not necessarily be those of the Southwest Riverside County AOR,  or any local or state government or other mental institution.

Protecting the Mortgage Interest Deduction

Resolution Protecting Mortgage Interest Deduction Introduced
California Representative Gary Miller (R-42), along with five original co-sponsors, Representatives Calvert (R-CA), Manzullo (R-IL), Meeks (D-NY), Baca (D-CA) and Hinojosa (D-TX), have introduced House Resolution 25. The resolution expresses the “sense of the Congress that the current Federal income tax deduction for interest paid on debt secured by a first or second home should not be further restricted.” Representative Miller has sent a “Dear Colleague” letter asking other Members of Congress to co-sponsor the resolution. NAR will be working with Congressman Miller’s office to seek additional co-sponsors by visiting every office in the House of Representatives to present the dear colleague letter as well as a letter from NAR requesting additional co-sponsors.

If you have questions, CONTACT Jerry Nagy at or 202-383-1233.

Spirit Cleansing – how to move that house that just won't sell.

Move over Feng Shue, look out Wabi Sabi,  there’s a new process home buyers and sellers are turning to in an effort to make sure a property is livable – spirit cleansing. I kid you not.

We’ve always known that some homes appear to be haunted – heck I own a 120 year old home myself that some folks will swear has a spectral resident. There are entire industries that have sprung up around that phenomenon including exorcisms, TV shows and movies.

bad vibesBut there’s a new form of home that’s appeared on the market – the house of bad vibes. Apparently what we in the business casually refer to as a ‘distressed’ property may actually be distressed in more ways than financially. It may have all sorts of negative vibes, residues or ‘energy imprints’ associated with it as a result of arguments, emotions, money problems and loss.

And of course where there’s an opportunity, there are opportunists. While it’s not unusual for some religious or ethnic groups to have their homes blessed occasionally, this new group is at the beck and call of home buyers and sellers to help rid a house of the funk either before it is put up for sale or before it closes escrow.

Practitioners of the art utilize a wide variety of customs and items in their cleansing treatment. Ringing bells, according to some, breaks up the negative energy. Iron, especially iron swords, are effective at keeping evil spirits away if placed before windows and doors. Kosher salt, candles, fresh flowers, scented oils, spices and incense can also play a role in the ceremony and in maintaining the ongoing positive aura of the home.

abaloinePractitioners of native arts insist that the same power can be derived from smudging ceremonies involving sage, cedar and sweetgrass applied to the person and the home. If you prefer this method, make sure to use a clay or stone bowl rather than an abalone shell. As we all know, abalone shells should only be used in water ceremonies, not burining rituals,  at the risk of offending Grandmother Ocean.

Consultants, astral healers or in some cases, witches, advise on a number of procedures including a thorough top-to-bottom house cleaning and airing-out as a precursor to the spiritual cleansing or invocation. Herbal mixtures, or just a sea salt and water concoction, can be used to sprinkle the house or actually wash down the place if the vibes are really bad. This is accompanied by a blessing, incantation or charm session, lighted candles in every room and the application of more herbs and fresh flowers to keep the negative energy at bay.

But as always, there’s a caution. Advocates warn that by doing this you are entering into a relationship with an unseen power of the plants and spirits which must be treated with respect and honor. Worse yet, you may actually remove a beneficial spirit that will result in even greater harm to you after the ceremony. You are advised to know what effects the spirits are having on your environment before you take any action.

As always, as with any phase of our business, it’s best to hire a professional.

Lawrence Yun responds to MID criticism.

January 2, 2011

It’s a common misperception that the mortgage interest deduction benefits primarily the wealthy, as argued in the Washington Post’s January 1 editorial, “Trim the Excessive Tax Subsidy for Real Estate.”

In fact, the MID actually benefits primarily middle- and lower income families. Sixty five percent of families who claim the MID earn less than $100,000 per year, and 91 percent who claim the benefit earn less than $200,000 per year. As a percentage of income, the biggest MID beneficiaries are younger middle-class families.

The MID helps many families become home owners by reducing the carrying costs of owning a home. The ability to deduct the interest paid on a mortgage can mean significant savings at tax time. For example, a family who bought a home last year with a $200,000, 30-year, fixed-rate mortgage, assuming an interest rate of 5 percent, could save nearly $3,500 in federal taxes when they file next year. That’s real money they can use to pay down other debts, save for their children’s college education, or put away for retirement.

It’s no wonder, then, that most Americans support the MID. In fact, in a recent NAR survey by Harris Interactive of 3,000 home owners and renters, nearly three-fourths of home owners and two-thirds of renters said the MID was extremely or very important to them.

Unlike the very rich, much of whose wealth is tied to the stock market, the wealth of most middle-class American families is connected to their home. Millions of these Americans bought their homes with the understanding that mortgage interest is tax-deductible, and many of them have steadily paid down their mortgages to build equity in their home. Eliminating or reducing the MID would destroy part of this hard-earned equity for all home owners, independent of their tax filing status.

Furthermore, we also need to be mindful that home owners already pay 80 percent to 90 percent of U.S. federal income tax, and this share could rise to 95 percent if the MID is eliminated. Proposals that would remove certain tax benefits in return for lower tax rates just may hold for one or two terms of Congress before the tax rates are changed again. Americans are not naïve; they understand the nature of Washington politics.

For people who don’t have hundreds of thousands of dollars in savings to buy a home outright, tax benefits like the MID help them begin building their futures through home ownership. In a time when the middle class faces increased economic pressures, you can be sure that the National Association of Realtors® will remain actively engaged to ensure that hard-working, home-owning families continue to receive this important benefit.

NAR Chief Economist Lawrence Yun

Christmas Calm Before The Storm

It’s the holiday season and my wife reminds me that my personal newsletter to you should be cheerful and positive.  So I will not mention the near $26 billion deficit that years of legislative inaction, overspending, over-regulating and just plain bad management has heaped on all of us – Republicans, Democrats, Independents and those who won’t even vote because they are so darn mad.  After all – It’s Christmas, so let’s at least have a few weeks of good times and good will before reality comes crashing down in the State Capitol.

Okay… That’s enough good time.  Let’s talk Christmas turkey.

We have a new Governor who is going to be sworn into office in early January. Okay, he’s not really new.  Really, in California, he would be more properly titled as “recycled”.  So in the holiday spirit – let’s wish him well.  Let’s cheer him on when he holds our feet to the fire and says that we have to cut up the credit cards and live within our means.  Let’s raise a toast to him when he says that California needs to be a place where businesses can flourish, be profitable and hire more employees. Let’s say “Thank You Governor” when he tells regulators and bureaucrats that they work for the people of this state – not the other way around. Those are nothing but a Christmas Wish you say?  You bet. A wish, a prayer, a goal, and a hope.  All of the above, because I’m not giving up during my last two years.

I briefly met with our new Governor last week. He was candid, unscripted and had no staff in the room to whisper in his ear.  He was direct and listened to our concerns and our hopes.  In short, we are in for some really tough times with regards to our state finances. While I did not support him at the ballot box, I am, in fact, hopeful that he will turn out to be the right man at the right time. California needs a very strong-willed and focused Chief Executive Officer to help us climb out of our financial abyss. Anything less will be a disservice to every Californian who wants a state they can be proud of.

And speaking of proud, please remember that we have thousands of Californians in uniform serving in hostile foreign environments.  These men and women will not be home for the holidays. They will not be home for a big family dinner, nor to open any gifts with family. Let’s keep them in our prayers and thoughts.

Merry Christmas and Happy Holidays to all.


Kevin Jeffries