Trendy Hotel Checks Into Iconic Hollywood and Vine

Hollywood Boulevard and Vine Street is an iconic intersection that fell into disrepair decades ago, yet has remained a pop culture symbol as the destination for Hollywood dreamers.
By: ALEXA HYLAND: Los Angeles Business Journal Online
Now, Dallas developer Gatehouse Capital is bringing back all that glory with its $350million W Hollywood Hotel & Residences project framing a Metro Red Line subway station.

Subway riders emerging from the Hollywood and Vine stop will be greeted by the sight of a 12-story building, stores, lush landscaping and huge graphics.

“If we can combine an iconic location like Hollywood and Vine, with the ability to get downtown in 10 minutes or up to Universal (Studios) in five, we are all over that,” said Marty Collins, chief executive of Gatehouse.

Extra care went into integrating the preexisting subway façade into the surrounding W Hotel and condominiums. Architecture firm HKS Inc. reconfigured the entrance and exits of the subway station but didn’t alter any of its underground features.

The incorporation of the subway entrance is one reason why the mixed-use project has captured attention. Local officials are hoping that the accessibility of the station will encourage residents and tourists to use the subway system.

“Instead of trying of trying to create a wall or distance between the subway and the brand, they are actually embracing it,” said Kerry Morrison, executive director of the Hollywood Entertainment District, a business improvement district that spans much of Hollywood Boulevard.

Nearly a decade ago, Collins and his team began scouting spots in Hollywood where they could build a W, a trendy hotel operated by Starwood Hotels & Resorts Worldwide Inc. At the time, construction of the Hollywood subway was just being completed, and people were only beginning to talk about developing projects along public transportation corridors.

“We like the vision thing,” Collins said. “We would prefer the risk of being the first mover than the liability of being a late entrance.”

Gatehouse and development partner HEI Hotels & Resort, a hospitality specialist that came on board in 2005 and provided funding, forged ahead with their plan to build a 305-room luxury hotel paired with 143 luxury condominiums – penthouses top out at $8 million.

The result: a twin-tower contemporary building that features a French brasserie, two rooftop pools as well as an outdoor movie screen.

The condominium residents can choose from five different floor plans averaging 1,608 square feet. Kitchens feature designer Kuppersbusch ovens and stoves, and Subzero wine coolers. Bathrooms are outfitted with Kohler cast-iron bathtubs and Brazilian fossilized limestone floors.

Although the development promises to offer the height of luxury, Collins said the most important amenity of the project is the subway stop.

“We think it adds a huge amenity to buyers or any hotel customer,” he said. “It anchors the project and gives it a sense of space.”

OUTSTANDING PROJECT

W Hollywood Hotel & Residences

Intersection of Hollywood Boulevard and Vine Street, Hollywood

Developer: Gatehouse Capital, Dallas

Description: 305 hotel rooms, 143 condominiums, 50,000 square feet of retail space atop the Hollywood and Vine Metro Red Line station. Fall 2009 projected opening.

Key Fact: Site will feature a 3,500-square-foot outdoor lounge with a movie screen.
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Commentary: House Prices Will Rise Greatly over the Next Few Years, Buy Now

Those who do not study history are condemned to repeat it.”
Commentary by Mike Parker: RISMedia
So spoke Sir John Buchan, the First Baron of Tweedsmuir, back in the mists of time often referred to as “the good old days.”

Well, I may not be as old as the Baron, but I did live through President James Earl Carter, 21% prime interest rates, 20% inflation, Paul Volker and his attempt to strangle inflation by strangling the money supply, and that famous “WIN (Whip Inflation NOW!)” button the White House handed out. The period I am referring to was in the 1970s and early 1980s, and it effectively reduced the purchasing power and the true value of the dollar forever.

It wasn’t that long ago that we lived in a different economy altogether
Americans often affectionately remember the 50s, when Ike was president, America was the benefactor of the world, and life was so simple. Then, a man making $10,000 annually was quite successful. Then, a home might cost $13,000. A nice Ford or Chevy might cost $2,300; New and gleaming and using 22 cent-a-gallon gasoline.

But it was only in 1971 that I bought my first home for $33,690 in Chelmsford, MA; the same year I purchased a new 454 Corvette Roadster for $5,100 out the door. Then, $50,000 a year was the equal of my dad’s $10,000 in earning power.

I remember how excited I was when I finally had $100,000 in savings-I was wealthy, I thought, and my future seemed assured. When the pardon of Richard Nixon jolted America into changing administrations, the Peanut Farmer, James Earl Carter of Plains, Georgia, was elected to the Presidency of the United States. The wreckage his administration presided over made it possible for “The Great Communicator” to be elected in 1981; and by the time that happened, houses were $300,000 and cars cost about $30,000.

Personally, I wasn’t noticing the effects of inflation, yet-after all, we sold that original home and moved into a beautiful new home that cost $86,000 just as President Carter took office. Although I sold that home for north of $200,000 a mere five years later, it never occurred to me that our currency was being debased; no, I thought I was a brilliant investor!

Whatever happens, the stage is set for inflation to come back with a vengeance.
Discounts abound, but prices of durable goods are increasing.

In the 1970s those gurus of the Federal Reserve told us that “M1 (an arcane measurement referring to the ‘money supply’-the total number of dollars in circulation), was the most key statistic to watch, for if the money supply grew too quickly, inflation would persist and continue.” We then became a nation of M1 watchers, and the Fed attempted to control the most complex economy in the world by watching that one statistic and throttling the economy with interest rate surges that brought about disintermediation, the death of the savings bank industry and that set the stage for the rise of Merrill Lynch and Wall Street to replace banks and savings and loans as purveyors of the American mortgage.

Interest rates were so high banks couldn’t keep deposits because they were subject to interest rate restrictions. “Let them compete-take the shackles off the banking industry” Washington thundered, and so the Garn-St. Germaine banking act was passed, allowing the community bank ‘to compete’ with Merrill Lynch.
Predictably, Merrill Lynch won. King Pyrrhus couldn’t have put it better: “One more such ‘victory’ and I am undone.” We are all paying for that ‘victory’ today.

The savings and loan industry abandoned 50 years of thrift and sound banking practices and put insured deposits into junk bonds sold by that ever-smiling Michael Milliken and his henchmen instead of local mortgages. When the dust cleared, there was no mortgage expertise left, no savings and loan industry recognizable to anyone left, and Wall Street had achieved their goal of displacing the community bank and becoming the “one stop shop” for all things financial (See; Sanford Weil, Citigroup, et al).

In any case there can be no debate that the trillions of dollars about to be pumped into the economy-while they will save us-will also bring inflation back; unless-of course-all that stuff about M1 and the money supply, and all those pronouncements by Paul Volcker, then-Chairman of the Fed, were mistaken . Since Mr. Volcker has now returned in a quasi-official capacity to advise the President’s team, I’d guess we’re in for inflation, now, and part of his mission is to try to minimize it.

Good luck Tim Geithner.

Our new secretary of treasury is reportedly a brilliant man– perhaps a little forgetful about taxes, but nonetheless, brilliant, by all accounts. Together with the rest of the Obama team, he will need every bit of that intelligence and brilliance to help this great country of ours avert total meltdown, but I believe that the team will indeed accomplish that and we will make a recovery, led in part by housing. It’s never smart to bet against the United States of America.

But when the money supply is increased by an amount equivalent to 20 or 30% of Gross Domestic Product or more-naturally or unnaturally, inflation must result. That means that prices of all fixed assets rise to keep pace with the devaluation of the currency. We won’t be taking the wheelbarrow to the market full of dollar bills to buy a loaf of bread, as happened in Germany after WWI, but we will be going on a pretty thrilling ride for a while.

Now, what is going to happen to home prices over the next few years?

I am not as formally schooled in such matters as our current leaders are. I’m just a guy who has seen this movie, too. It is my belief that a side effect to saving America’s economy will be a robust increase in inflation. I believe that Inflation will regain all the “value” we lost in housing over the past two years, and that it will regain it in five years or less. Simply put, to put the brakes on inflation, government must inhibit the recovery. The people in power aren’t going to do that. Inflation is a necessary evil compared to a full scale depression and an acceptable trade off for most of us. (And oil won’t stay at about $40 a barrel too long, either!)

So, tell your clients the truth: Interest rates will never be this low again in their lifetimes. Home prices won’t be this low again in their lifetimes. This is the perfect storm economically, but it also the perfect time to buy a home; provided that you buy it as a home and not a piggy bank. It’s just a nice side benefit that five years from now, the home you bought today will have appreciated so much that you’ll be thinking (just like I did in 1979): “What a smart investor I am!”

This just happens to be the perfect confluence of opportunity and necessity: we must fix the economy and we’re going to, whatever it takes. Inflation is an unavoidable side effect. Buy that house this year!
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Obama Unveils Plan to Stem Foreclosures

President Barack Obama rolled out a bold $75 billion, three-part plan Wednesday to halt the soaring rate of mortgage foreclosures nationwide, one that seeks to encourage refinancing of homes now worth less than their mortgages and provides incentives for lenders to lower the debt load on struggling homeowners.
By: Kevin G. Hall: RISMedia
The Homeowner Stability Initiative, which Obama unveiled in Phoenix, seeks to address one of the triggers of the global financial crisis: the 2.3 million U.S. foreclosures last year that are protracting the housing crisis and helping to drive down home prices across the nation.

“When the housing market collapsed, so did the availability of credit on which our economy depends. As that credit dried up, it has been harder for families to find affordable loans,” Obama said. “In the end, all of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to deepen _ a crisis which is unraveling homeownership, the middle class, and the American Dream itself.”

Specifically, the Obama plan seeks to provide low-cost refinancing for as many as 5 million Americans. It seeks to help delinquent or at-risk borrowers get their mortgages modified so that no more than 31 percent of their income is tied up in their mortgages. And it provides financial incentives to lenders and even a new insurance program to promote more mortgage modifications.

Like the failed efforts under the Bush administration, however, the Obama plan doesn’t compel banks and other lenders to modify troubled mortgages. Instead, it provides a menu of incentives that may or may not prove sufficient.

“This is not just the treasury secretary going into the room and asking people to do the right thing,” said a senior Treasury official, speaking on the condition of anonymity to speak more freely. “This is the first time there has really been a systemic incentive strategy for them (lenders).”

Banks joined two prior voluntary efforts during the Bush administration _ Hope for Homeowners and the Federal Housing Administration’s FHA Secure _ but these efforts have resulted in relatively few mortgage modifications.
Now they’ll have a stick waved at them if they don’t comply with the subsidy plan. It will come in the form of Obama’s support for legislation pending in Congress that would allow bankruptcy court judges to modify the terms of a mortgage.

That’s forbidden right now, and banks and other lending institutions fiercely oppose what they call “cram down” legislation, warning that it’ll bring uncertainty for lenders, who will respond by restricting mortgage lending.
Banks may soon have to choose between the lesser of two evils. They could either modify loans - with a subsidy - to provide lower lending rates, and lose what they might have made from the higher lending rate over the life of the loan. Or they can do nothing and run the risk that a homeowner could file for bankruptcy and then have a judge order new loan terms that allow the borrower to stay in the home - and pay the lender less money.

The president’s plan also offers payments to mortgage servicers, who collect mortgage payments on behalf of investors who own the mortgages originally issued by banks but were sold into a secondary market. Servicers apparently would be offered a payment for modification on par with what they would collect in the case of foreclosure.

Help for Homeowners Q&A: Will the President’s Plan Help Your Clients?

The White House website posted a Q&A on its blog yesterday for homeowners in distress to learn how the President’s plan will help them specifically. Here are a few excerpts:

Borrowers Who Are Current on Their Mortgage Are Asking:

• What help is available for borrowers who stay current on their mortgage payments but have seen their homes decrease in value?

Under the Homeowner Affordability and Stability Plan, eligible borrowers who stay current on their mortgages but have been unable to refinance to lower their interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they hold in their portfolios or that they placed in mortgage backed securities.

• I owe more than my property is worth, do I still qualify to refinance under the Homeowner Affordability and Stability Plan?

Eligible loans will now include those where the new first mortgage (including any refinancing costs) will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you apply to refinance.

Borrowers Who Are at Risk of Foreclosure Are Asking:

• What help is available for borrowers who are at risk of foreclosure either because they are behind on their mortgage or are struggling to make the payments?

The Homeowner Affordability and Stability Plan offers help to borrowers who are already behind on their mortgage payments or who are struggling to keep their loans current. By providing mortgage lenders with financial incentives to modify existing first mortgages, the Treasury hopes to help as many as 3 to 4 million homeowners avoid foreclosure regardless of who owns or services the mortgage.

• Do I need to be behind on my mortgage payments to be eligible for a modification?

No. Borrowers who are struggling to stay current on their mortgage payments may be eligible if their income is not sufficient to continue to make their mortgage payments and they are at risk of imminent default. This may be due to several factors, such as a loss of income, a significant increase in expenses, or an interest rate that will reset to an unaffordable level.
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Obama to sign stimulus bill Tuesday

President Barack Obama will sign the $787 billion economic stimulus bill on Tuesday in Denver, a White House official said on Saturday.
Reuters.com
Obama on Saturday hailed congressional approval of the stimulus bill as a "major milestone on our road to recovery" and vowed to move swiftly to set the plan in motion.

"I will sign this legislation into law shortly, and we'll begin making the immediate investments necessary to put people back to work," Obama said in his weekly radio address from Chicago after his biggest legislative victory since taking office on January 20.

The Senate cast the final vote, 60-38, late on Friday, hours after the House of Representatives passed an identical bill, 246-183, capping weeks of arguing over how to best jolt the economy out of deep recession.
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For Some, It's Finally Time to Dive Into Housing Market

For years, even as her friends bought huge houses in the expensive Phoenix market, Elizabeth Child remained a renter.
By: MARY PILON: WSJ.com
But in January, the airline customer-service agent and her boyfriend closed on their first home.
The three-bedroom, two-bath house, complete with granite countertops and a pool, had been listed for $340,000 in late 2007, but the couple bought it for $220,500. "Six months ago I didn't think I would own a home," says Ms. Child, 27 years old. "And now I do. It's so perfect."

The housing bust is creating a new group of winners: first-time home buyers. People who sat on the sidelines - often watching wistfully as their friends became homeowners - are suddenly in a position to grab some great deals. Indeed, first-time home buyers made up 41% of all buyers at the end of 2008, up from 36% in 2006, according to a recent survey from the National Association of Realtors.

The new buyers are being lured in by home prices that are down about 25% from their peak levels in mid-2006, according to the S&P/Case-Schiller Index. In some markets, prices have dropped even further - slumping around 40% in Phoenix, Miami and Las Vegas. Lower mortgage rates have also helped make real estate more affordable, and as houses languish on the market longer, more homeowners are willing to negotiate. With Congress considering plans to sweeten a tax credit for first-time home buyers, the picture could get even brighter.

"Buyers are now coming back into those hard-hit markets to take advantage," says Lawrence Yun, chief economist for the Realtors' association. "It's a buyer's market."

Ululani and Scott Larson looked for a house in the Seattle area several years ago, but held off from buying, deterred by the high prices. "I felt like we were missing out, because everyone knows it's the American dream to buy a home and build equity," Mrs. Larson says.

The couple was shocked to discover recently that they could afford a four-bedroom home in Federal Way, Wash. The assessed value of the home in January was $400,000, Mrs. Larson says. Their offer of $315,000, with a down payment of $15,000 was quickly accepted by the relocation company, which had had the property on the market for six months. "Honestly, I didn't think we'd get as nice of a house as we did," Mrs. Larson says.

Of course, would-be buyers need decent credit scores and the money for a decent down payment. Also, finding the right property can be a challenge for first-time buyers, who tend to be seeking less-expensive homes. The typical first-time buyer purchased a home costing $165,000 last year, according to the National Association of Realtors. Yet some of the best bargains right now are in luxury condos and sprawling single-family houses.

"The disproportionate McMansion inventory doesn't work," says Shari Olefson, a real-estate lawyer who works in southern Florida. "Even if you qualify for the loan, there are huge overhead costs to buying a larger home."

Still, real-estate agents and mortgage lenders are banking on first-time buyers to help stimulate the otherwise dreary housing market. Many are holding workshops and information sessions designed specifically for first-time buyers, addressing federal and state tax incentives for homeowners, local prices and ways to take advantage of low mortgage interest rates. Tim Epps, a mortgage adviser in Tulsa, Okla., runs rent-vs.-buying simulations for would-be buyers and recommends that other prospective buyers do the same long-term calculations.

Mr. Epps and many mortgage lenders recommend that buyers come up with as big a down payment as possible, even though Federal Housing Administration loans will allow some first-time buyers to enter the market with as little as 3% down. (Hud.gov has more information about FHA loan programs designed for first-time buyers.)

"Even if [a home owner] loses some paper equity, in the long run, there are some tax benefits," says Mr. Epps, referring to the deduction for interest paid on mortgages and the credit for first-time home buyers.

"Elizabeth Child bought a home once listed at $340,000 for $220,500."

The $7,500 tax credit for first-time buyers, which Congress passed last year, has had little effect on the market so far. Because the credit has to be repaid, buyers are viewing it as another loan, industry experts say. But the stimulus package that Congress is working on is likely to repeal the provision that requires buyers to pay the credit back and possibly enlarge the tax credit as well.

For many buyers, the biggest question is whether to hold out for even better conditions. Historically, recoveries in the housing market are slow, and most experts expect the prices to stay low for some time. That means people can take their time shopping for the right property, real-estate experts say.

John Stratton, an agricultural engineer in Lisle, Ill., was serious about buying last summer but held off from making a bid. Some of the money he planned to use for a down payment suffered losses from mutual-fund investments. He's also waiting for prices in his area to go down further. "I can do better investing in things other than real estate," he says. "Right now, I'm not diving in."

Patience can pay off. Jen and Drew Rocky spent over a year tracking their prey before the price was right. In the summer of 2006, they saw the four-bedroom, 2½-bathroom home of their dreams in Sherman, Conn. The asking price was $565,000, "completely out of our price range," Mrs. Rocky says.

But they didn't give up. The Rockys kept driving by the vacant house. They had online alerts to notify them of changes in the property's listings. They went to town hall to research the home's public records. As they suspected, the home was in foreclosure. "There were liens all over the place," Mrs. Rocky says.

They bought the home in December 2007 for $410,000. "I felt so vindicated," Mrs. Rocky says. "We got a good deal, but I'm sure there are even better deals out there."
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Stimulus Still Expected to Pass But Not without Complications

This much is clear: Sometime soon, probably this month, President Barack Obama will sign an economic stimulus plan.
RISMEDIA
However, it probably will have at least $50 billion less spending than the Senate’s current version does, and it probably will win a handful of Republican votes after lengthy White House-congressional negotiations.

Senators huddled on Wednesday-with one another and with Obama-trying to craft a plan that will get the 60 votes needed under Senate rules to stop any filibuster, the tactic that obstructs extended debate. Republican moderates, joined by some Democrats, were looking for a way to pare the $900 billion-plus package by at least $50 billion, likely by cutting much of the education aid and a long list of small spending initiatives.

Late Wednesday the Senate approved a plan sponsored by Sen. Johnny Isakson, R-Ga., to give anyone who buys a home this year a tax credit of $15,000, or 10% of the price, whichever is less.
Sen. Olympia Snowe, R-Maine, met with the president at the White House and listed programs that she thought didn’t belong in the stimulus package. She said the president was “very amenable” to the centrists’ ideas but made no commitments.

Sen. Mel Martinez, R-Fla., was optimistic. “There’s a great desire by a number of us to move pretty quickly,” he said.

The Senate still hopes to pass the legislation by the end of the week, but the urge to reach final agreement is complicated by a variety of unusual and sometimes contradictory developments at the Capitol:

- Obama is popular, the stimulus is his first major initiative and few lawmakers from either party want to appear defiant.
- There’s a bipartisan consensus that some sort of big package must be passed as soon as possible. The lawmakers get jolted almost daily by bad economic news and are likely to get more on Friday, when January jobless numbers are released.
- Members of both parties are concerned that the current Senate bill is too loaded with projects that won’t do anything to provide a quick economic stimulus. Education aid, many say, is a matter for states, not Washington.
- At the same time, members see the package as a way to add favored projects, which increase the cost.

The biggest hurdle that Obama and congressional leaders need to overcome is convincing enough members that the bill would provide real stimulus.

“We are really trying to reduce things that have less value in terms of stimulus and investment and move it into a place where we know we really need the money,” said Senate Budget Committee Chairman Kent Conrad, D-N.D. He was among 14 Democratic senators who met late Wednesday to discuss a compromise.

Yet Obama continued to defend the package’s inclusion of long-range policy projects that would add few jobs in the next 18 months: “It is not merely a prescription for short-term spending-it’s a strategy for long-term economic growth in areas like renewable energy, health care, and education,” he said at the White House.

Also bothering some senators is the package’s size. When talks began after the November election, lawmakers initially aimed to craft a $300 billion plan. With the inclusion of broad-based tax cuts, aid to states and a long list of spending projects, it grew to $819 billion in the House of Representatives and has now inched over $900 billion in the Senate.

Conservative Republicans say that $445 billion is enough. Their plan includes temporarily ending part of the payroll tax, lowering the bottom two income tax brackets and providing $32 billion to aid homeowners facing foreclosure. Gone would be aid to education and some health programs, as well as a long list of spending programs that many Republicans, as well as Democrats, say have nothing to do with stimulus.

More likely to gain traction is the compromise being discussed by Conrad, Snowe, Martinez and others. Leading the effort is Sen. Ben Nelson, D-Neb., who also met with Obama Wednesday. Among their possible spending cuts are $445 million for computer related expenses at the Agriculture and Energy departments, more than $1 billion in medical research, $650 million for the analog-to-digital television conversion and $1 billion to alleviate overcrowding in federal prisons.

There’s a complication, however: Even as members rail against the bloated bill, they can’t resist adding projects. The home tax credit would cost about $20 billion, for instance.

Similarly, Maryland Sen. Barbara Mikulski’s $11 billion tax break for most car buyers sailed through the Senate on Tuesday. Sen. Sam Brownback, R-Kan., complained that the overall bill “has been put together too hurriedly,” then sided with Mikulski, saying that her plan “will actually end up moving car sales, helping the industry, helping the automobile manufacturers and the whole industry of dealerships.”

Senate Finance Committee Chairman Max Baucus, D-Mont., tried to stop the effort, reminding senators that the auto industry is getting billions in emergency aid from other government sources. And, he argued, a new break would encourage more consumer debt, “when debt is becoming a problem in this country.” He lost a key procedural vote by a 3-to-1 margin.

What’s probably needed next, leaders said, is a stronger push from Obama. He tried again on Wednesday:

“A failure to act and act now will turn crisis into a catastrophe and guarantee a longer recession, a less robust recovery, and a more uncertain future,” the president said. “Millions more jobs will be lost. More businesses will be shuttered. More dreams will be deferred.”

Senate leaders also got a three-page letter from White House Budget Director Peter Orszag reminding them of Obama’s “principles,” notably that the bill “jump-start job creation with a direct fiscal boost” and revive the housing sector. Even so, said Senate Republican leader Mitch McConnell of Kentucky, “at some point, we’re going to have to learn to say no.”
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Ensign Addresses Housing Crisis With New Bill; ENSIGN’S FIX HOUSING FIRST BILL TO GET VOTE TODAY

Nevada Senator John Ensign is drafting a bill he says will help fix the housing market.
By: Kellene Stockwell: Channel 2 News
Ensign says the underlying problem in the economy is the housing market so he's targeting it with the ‘Fix Housing First Act.'
It would allow homeowners to refinance their current mortgages or finance new homes for about 4%. On average that would amount to savings up to $400 a month or $150,000 over the course of a 30-year loan.
His plan also includes a $15,000 tax credit and tax cuts for the lowest-earning Americans.


Additional Information on Ensign’s Fix Housing First Act:
Senator John Ensign, Chairman of the Republican Policy Committee, drafted an economic recovery plan that will help fix the housing market, create jobs and provide tax relief to middle-class families and small business owners. The bill, titled the Fix Housing First Act, is scheduled for a vote today.

“The underlying problem with our economy is the deteriorating housing market,” said Ensign. “In Nevada, just a few short years ago housing prices were through the roof. Now, we’re leading the nation in foreclosures. We need to address the root problem, and my bill does that by helping homeowners stay in their homes.”

Under Ensign’s plan, American homeowners would be able to refinance their current mortgages or finance the purchase of a new home for about 4 percent. On average, this means monthly payments would be $400 lower – a savings of up to $150,000 over the course of a 30-year loan. Estimates show that almost two-thirds of Nevadans could take advantage of this plan.

“People I talk to about this proposal immediately begin to do the math,” said Ensign. “This is real help that helps struggling families, and we do this in a much more fiscally responsible way because we removed the wasteful Washington spending that’s in the ‘so-called’ stimulus bill.”

Ensign’s plan costs half as much as the trillion dollar stimulus bill currently being considered. The Fix Housing First Act also includes a $15,000 homebuyer tax credit, tax cuts for the lowest tax brackets and tax relief for small businesses so they can help boost our economy. The lowest tax brackets would be lowered from 15% to 10% and from 10% to 5%.

“Let’s make sure that all taxpaying American families see immediate relief, whether they own a home or not,” said Ensign. “And we need to help small businesses because they are always the engine that drives us out of a downturned economy.

For small businesses, Ensign’s plan would eliminate capital gains taxes for start-ups and extend bonus depreciation, both helping to create jobs, stimulate spending and boost our economy.

“This legislation brings the emphasis back to where it needs to be - on housing and targeted tax relief, not pet projects that bury future generations under insurmountable debt,” Ensign concluded.
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Pending home sales post increase of 6.3 pct

An index that tracks signed contracts to purchase existing homes rebounded in December, as buyers snapped up properties at deep discounts, especially in the South and Midwest.
By ALAN ZIBEL, AP Associated Press.
It was the second positive sign in the past two weeks for the troubled U.S. housing market, and may indicate that a bottom is forming — at least for home sales.
Analysts, however, caution that prices are likely to keep falling through 2009, and say the outlook for home sales is highly uncertain, especially as layoffs mount.

The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for previously owned homes for December rose 6.3 percent to 87.7 from an upwardly revised November reading of 82.5, which was lowest month on record. That's better than the 82.3 reading economists expected, according to a survey by Thomson Reuters.

The reading also was up 2.1 percent from December 2007.

Typically there is a one- to two-month lag between a contract and a done deal. Home sales that were pending in December are likely to be completed in the coming weeks.

After the stock market crashed last fall, sales of existing homes plunged in October and November, but recovered in December. Tuesday's pending home sales report indicates January sales data, to be released later this month, may look good too.

Pending home sales increased about 13 percent in the South and Midwest, but fell almost 4 percent in the West and about 2 percent in the Northeast.

The Realtors group, normally known for its optimistic view of the housing market, is now cautioning against getting too enthusiastic about any recovery — as it lobbies hard for new government tax credits to boost home sales.

"Significant uncertainty still clouds the housing market despite improved affordability conditions," Lawrence Yun, the group's chief economist said in a statement. "For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus."

Of course, the U.S. housing market is still coping with the worst downturn in decades, and much of the country remains weak.

Sales of newly built homes plunged to the slowest pace on record in December and builders posted their worst annual sales results in more than two decades, the government said last week.

On Tuesday, D.R. Horton, the nation's biggest homebuilder, said it lost almost $63 million in its most recent quarter as sales slumped by half.

Concern about the health of the housing market, which triggered the recession, is driving a plan by Senate Republicans to push down the cost of mortgages. The plan could be included in the economic stimulus bill at the top of President Barack Obama's agenda.

Republicans on Monday were coalescing behind a proposal designed to give banks an incentive to make loans at rates currently estimated at 4 percent to 4.5 percent. Mortgage finance companies Fannie Mae and Freddie Mac, which were seized by the federal government in September, would be required to purchase the mortgages once banks have made them to consumers.

Officials said loans to creditworthy borrowers on primary residences with a mortgage of up to $625,000 would qualify, including those seeking to refinance their current loans. Republican officials also intended to press for a $15,000 tax credit for homebuyers through the end of the year.
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Fed Extends Emergency-Loan Programs, Swaps to Oct. 30

The Federal Reserve extended its emergency-lending programs and foreign currency-swap lines by six months through Oct. 30, citing “continuing substantial strains in many financial markets.”
By: Scott Lanman and Simon Kennedy: Bloomberg.com
The decision applies to five emergency-lending programs that provide funds or Treasury securities to securities brokers, money-market funds and companies that issue commercial paper, along with swap lines with 13 other central banks, the Fed said today in a statement in Washington. The programs had been previously authorized through April 30.

The move signals Fed Chairman Ben S. Bernanke and colleagues see credit markets in the U.S. and around the world taking longer to repair than previously thought. The lending programs are authorized under a provision allowing loans to non- banks under “unusual and exigent circumstances.” Outstanding loans and swaps under the programs totaled $884 billion as of Jan. 28.

“There are a few signs that things are improving, but not very many,” said former Fed Governor Lyle Gramley, now senior economic adviser at Stanford Group Co. in Washington. “By and large, things are still very, very tight. They’re just going to have to continue to extend this until they see some thawing.”

The Fed’s decision applies to the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility, the Commercial Paper Funding Facility, the Money Market Investor Funding Facility, the Primary Dealer Credit Facility and the Term Securities Lending Facility.

Currency-Swap Programs

The Fed extended currency-swap programs with the central banks of Australia, Brazil, Canada, Denmark, the U.K., the euro region, South Korea, Mexico, New Zealand, Norway, Singapore, Sweden and Switzerland. The Bank of Japan will consider an extension when its policy makers next convene, the Fed said.

The dollar value of outstanding swaps has risen more than sevenfold since the Lehman Brothers Holdings Inc. bankruptcy in September, to $465.7 billion as of Jan. 28.

The expiration date of the Fed’s Term Asset-Backed Securities Loan Facility, a program set to start this month to prop up markets for consumer and business loans, remains Dec. 31, the central bank said. The Term Auction Facility, which lets commercial banks bid for loans, doesn’t have an expiration date.

In December, the Fed cut its main interest rate almost to zero and shifted its policy focus to the size and composition of the central bank’s balance sheet, whose assets have more than doubled to $1.93 trillion over the past year.

Frank, Bernanke Talk

“They have every capacity to take that liquidity back out if and when that becomes necessary,” House Financial Services Committee Chairman Barney Frank told reporters today, saying he had a “good conversation” yesterday with Bernanke.

Today’s action is the fourth extension of the currency swaps since the Fed began dispatching dollars around the world more quickly in December 2007. Under the arrangement, the Fed sends dollars abroad so that other central banks can auction them in their own markets.

The cost of borrowing in dollars yesterday rose to the highest level in more than three weeks as banks continued to balk at making loans. The London interbank offered rate, or Libor, that banks say they charge each other for three-month loans, climbed to 1.23 percent today from 1.08 percent on Jan. 14, the British Bankers’ Association said.

Libor Drifts Higher

“There has been a somewhat troubling drift by three-month Libor as of late,” and the Fed’s action today may help bring the rate down closer to the central bank’s benchmark, said John Lonski, chief economist at Moody’s Capital Markets Group in New York, in an interview with Bloomberg Television.

“It’s going to boost confidence among investors regarding the adequacy of liquidity in the financial system,” Lonski said.

Last week, the Fed reported for the first time the amount of currency swaps with other central banks after previously listing them as “other assets” on its balance sheet. The swaps had risen by $2.88 billion to $465.7 billion over the previous week, it said.
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10 Ways to Make Your House Greener

Everybody's talking about the importance of eco-friendly living. We found some of the coolest and smartest products - at every price point - to help home owners do their part for the environment.
By: Wendy Cole: REALTOR®Magazine
Smokefree Fireplace

As chic as it is eco-friendly, the EcoSmart Fire system gives you the pleasure of a fireplace without the pollutants.
The self-contained unit is fueled by clean-burning denatured ethanol, a renewable resource. These portable fire boxes can be placed anywhere inside or outside a home since they require neither a utility connection nor a chimney. To make this green product even greener, the company will plant two trees on the buyer’s behalf for every unit purchased. Cost: Models range from $2,100 to $11,500. www.ecosmartfire.com

Vintage Year for Wall Tiles

Old wine bottles and other recycled glass get a new life as exquisite, glossy tiles suitable for kitchens and bathrooms. Glass donated by the public is sorted by color, ground into granules, and turned into tile by high-temperature fusion. Bedrock Industries introduces no colorants or oxides to the production process, which has saved hundreds of tons of material otherwise destined for landfills. Also, 100 percent recyclable material is used for shipping. Cost: Tiles start at $36 per square foot. www.bedrockindustries.com

Composting for the Masses

Instead of tossing food scraps in the garbage, NatureMill’s fully automatic and odor-free composter will recycle up to 120 pounds of kitchen waste, including paper, per month. A built-in computer on the 17-pound unit (20 by 20 by 12 inches) controls the mixing, heating, and aeration process. After two weeks, a red light pops on as a reminder that your composted fertilizer is ready for immediate use on your garden or lawn. Compost can also be piled outdoors until you need it. A NatureMill composter can recycle its weight in waste every 10 days, diverting more than two tons of waste from landfills over its life. Energy use is just 5 kilowatt-hours per month. Cost: Prices start at $299. www.naturemill.com

Your Plants (and Lawn) Have Your Number

You’ll never overwater another houseplant with the Botanicalls system. Digital sensors in the soil let your African violet or potted palm text message you when it needs water or light. The unit will also send a texted "thank you" after the plants’ needs have been met. The do-it-yourself kit offers a connection to your leafy green pal via Twitter. You can view status updates online or have them routed to your mobile phone. Botanicalls comes with all necessary parts to set up a soil moisture sensor communication system, even a leaf-shaped circuit board. While human intervention is necessary for the actual watering, the reminders are a novel means of keeping houseplants healthy so they can help reduce levels of carbon dioxide in the atmosphere. Cost: $99. www.botanicalls.com

A bigger water savings may come from Cyber-Rain XC, which lets you hand over the chore of watering your lawn to your Windows PC. Here’s how it works: Your sprinkler system receives information wirelessly from your PC about local weather conditions and uses this information to calculate the right amount of water needed for as many as eight yard zones. Households save 30 percent to 70 percent on their water bills annually, according to the manufacturer. Cost: $349. www.cyber-rain.com

Safe and Responsible Wood

Hardwood cabinetry can be beautiful and eco-friendly if it’s made from formaldehyde-free plywood. Columbia Forest Products’ cabinets are made from wood certified by the Forest Stewardship Council, which guarantees that responsible timber industry practices, including the maintenance of the ecological functions of the forest and respect for indigenous peoples’ rights, were followed. The company also uses an innovative soy-flour resin system to comply with leading green standards programs. Cost: $150 to $450 per linear foot. www.cfpwood.com

Heated from Within

The relatively constant temperature of earth a few feet below ground enables geothermal heat products to heat and cool homes using 40 percent to 70 percent less energy than conventional systems. In the winter, the pumps draw heat into a house through a series of underground pipes and an electrically driven compressor. In the summer, they pull the heat from the home and discharge it into the ground. Cost: The typical home requires a three-ton unit costing roughly $7,500, or nearly twice the installation price of a standard heat pump system. Drilling costs can add upwards of $10,000. www.geoexchange.org

Solar Cooking

You can bake, boil, or steam your family’s next meal using a the sun’s energy. The outdoor Sun Oven can cook food at temperatures up to 400 degrees and can be used during all seasons. The device is affected more by the brightness of the day than by the outside air temperature, meaning that cooking times can be slowed by the arrival of pesky clouds. But Sun Ovens help keep homes cool in the summer by keeping cooking heat outside. Cost: $279. www.sunoven.com

Whole New Light

It’s stunning, energy-efficient, and unlike any lighting technology you’ve seen before. Planilum is a light-emitting glass panel developed by two French companies, Saazs and Saint-Gobain Innovations. Less than an inch thick, each panel consists of four layers of glass infused with nontoxic gas and phosphorous compounds. Planilum lights can be incorporated into shelves or tables or can stand alone, Each light is expected to last about 20 years if used eight hours a day. Saazs’ One, a four-foot high panel featuring rows of doughnut-shaped light circles. Cost: About $3,400. www.saazs.com

Clean Driving Machine

Belgian-based Ecover began marketing phosphate-free washing powder more than 25 years ago, long before most people even realized that phosphates were an environmental hazard. Today, the company’s extensive indoor cleaning product line, designed to safely sanitize everything from glass to toilet bowls, has been expanded to include a plant- and mineral-based car wash and wax. The product, which includes coconut, citric acid, and carnauba wax, will help your hybrid or hot rod shine naturally. The packaging is 100 percent recyclable as well. Cost: $5.70 for 500 milliliters. www.Ecover.com

Biodegradable Furniture

These plush pieces may look like family heirlooms in the making, but the swanky chairs and couches from Montauk Sofa are, in effect, built for the compost heap. Using lumber harvested from sustainably run forests, uncoated screws and nails, latex foam derived from rubber plants, and organic fabric coverings, Montauk uses manufacturing and distribution principles dedicated to limiting the company’s environmental footprint. When you’re ready to redecorate, Montauk will take back its old pieces, strip them, and recycle the wood frame and spring systems. The lumber will be reused in new sofas. Cost: Chairs start at $2,600, sofas at $3,800. www.montauksofa.com
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What would it take to get home buyers off the fence?

Stuck with bulging inventories of homes, builders might offer packages of special financing, price concessions, lower down payments and perhaps application guarantees.
By: Kenneth R. Harney: LATimes.com
If you'd love to purchase a new house but you're sitting on the fence, what exactly would it take to get you to buy?
Mortgage rates lower than today's 5% range? Smaller down payments? Below-market value pricing? Special amenity packages? Or a big tax credit?

What's the magic mix that will get you motivated? Or is it unlikely you'll get off the fence as long as you're worried about the economy and further drops in real estate values?

Questions like these are at the core of the housing industry's problem: Builders are stuck with bulging inventories of homes - most of them priced lower than six months or a year ago - that are still not selling. Strategies to bring buyers back into the market dominated the recent weeklong annual convention of the National Assn. of Home Builders in Las Vegas. It was also the key subject of a consumer opinion survey conducted by the association's research subsidiary.

The study, conducted in early January, polled more than 700 self-described "on-the-fence" buyers. Asked why they hadn't yet committed to a purchase, 44% said they were holding out for lower mortgage rates, 41% said they weren't sure they could qualify for financing and 38% said they expected to see lower house prices (some had more than one reason, bringing the total above 100%).

Researchers asked what individual enticements - financial or otherwise - would motivate them most to get past their worries and buy.

The mortgage rate that consumers said would be most effective in persuading them to buy now: a 30-year loan with a fixed 3% interest rate. Whether by coincidence or design, one of the largest home builders for high-end buyers, Toll Bros. Inc., announced a 3.99%, 30-year, fixed-rate loan on new houses nationwide during the convention, which ended last Sunday.

A 30-year, fixed-rate loan at 3% was ranked twice as effective an enticement as a 3% loan fixed for five years, with an adjustment to 5.25%, fixed for the remainder of the loan term. Not surprisingly at a time when Fannie Mae and Freddie Mac require substantial down payments for the best interest rates, the study found that a zero-down option would be highly attractive to potential buyers - more than twice as effective as 10% down.

Guarantees by builders that loan applications will be accepted if buyers verify their income and have a "fair" credit score ranked high in the survey. Such a guarantee was rated far more effective than standard application procedures, where applicants can be rejected at the underwriting, appraisal review or other stages.

Price concessions also are compelling to would-be buyers. Most effective of all: a 10% discount below true market value - in other words, instant equity for the purchaser upfront.

Among other findings in the study that some builders found sobering: Their traditional approach of offering "incentive packages" of free upgrades and amenities may not be all that effective. The same may be true for "green" features - energy efficiency certifications and environmentally sensitive designs. If a new house comes with a green certification but costs $2,000 more than a standard model, this doesn't motivate shoppers to buy, researchers found. Even if the house costs the same as a standard house, that won't do the trick.

Bottom line: Look for builders to offer combination packages of special financing, price concessions, lower down payments and perhaps application guarantees.
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