Archive for October, 2011


Paragon Financial Limited, via Market Watch

The Paragon Report Provides Equity Research on PMI Group & Radian Group

NEW YORK, NY, Oct 25, 2011 (MARKETWIRE via COMTEX) — Mortgage Insurers continue to struggle as the aftermath of the recession and economic slowdown weighs on their recovery. Matthew Howlett, an analyst at Macquarie Group Ltd, argues that Mortgage Insurers probably won’t "be able to handle a sustained increase in delinquencies" that would come with another recession. The Paragon Report examines investing opportunities in the Property & Casualty Insurance Industry and provides equity research on PMI Group, Inc. PMI -14.58% and Radian Group, Inc. RDN -3.34% . Access to the full company reports can be found at:

http://www.paragonreport.com/PMI

http://www.paragonreport.com/RDN

Last month a report released by the Office of the Comptroller of the Currency revealed that the number of homeowners behind on their mortgages rose during the second quarter of 2011. Early-stage delinquencies, which count mortgages that are between 30 and 59 days delinquent, increased 0.4 percent in the second quarter, the report said. More serious delinquencies — mortgages that are 60 or more days delinquent — and delinquent mortgages to bankrupt borrowers also increased slightly in the second quarter after falling for the previous five quarters.

The Paragon Report provides investors with an excellent first step in their due diligence by providing daily trading ideas, and consolidating the public information available on them. For more investment research on the Property & Casualty Insurance industry register with us free at http://www.paragonreport.com and get exclusive access to our numerous stock reports and industry newsletters.

High delinquency rates have plagued Mortgage Insurers. PMI Group said on Saturday that the main subsidiary of the company has been seized by Arizona insurance regulators, and will begin paying only 50 percent of claims. Under a court order obtained by Arizona regulators, "the Arizona Department of Insurance now has full possession, management and control of PMI," the company said in a brief statement.

The seizure of Arizona-based PMI Mortgage Insurance Co comes two months after two PMI units were ordered to stop writing new business due to their failure to meet capital requirements.

The Paragon Report has not been compensated by any of the above-mentioned publicly traded companies. Paragon Report is compensated by other third party organizations for advertising services. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at http://www.paragonreport.com/disclaimer

SOURCE: Paragon Financial Limited

Copyright 2011 Marketwire, Inc., All rights reserved.

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Paul Gores, Journal Sentinel

Although the private mortgage insurance industry continues to lose money amid the lingering foreclosure crisis, Milwaukee’s MGIC Investment Corp. is in far better condition than a competitor that was seized by regulators last week, analysts said Monday.

Claims on mortgage defaults had sapped capital at Arizona-based PMI Mortgage Insurance Co. to the point that regulators in that state took control of the company and ordered it to pay claims at only 50 cents on the dollar.

Mortgage insurers pay lenders part of their costs when borrowers default.

MGIC, which has not had a profitable year since 2006 and last Friday reported a third-quarter loss of $165.2 million, nonetheless is prepared to handle losses, analysts said.

"MGIC is clearly in a better position than PMI was," said Thane Bublitz, a financial industry analyst for Thrivent Asset Management in Appleton.

MGIC raised about $1 billion in new capital in 2010, and the parent company intends to contribute $200 million to its insurance operations. Company investor relations spokesman Michael Zimmerman said Monday that even under a more stressful scenario, MGIC would expect to have resources to be able to pay its mortgage insurance policy obligations.

In addition, the company has – and is seeking an extension of – waivers to ease capital requirements needed to write new business if its risk-to-capital ratio would no longer meet normal standards. MGIC also has in place a subsidiary which, if needed, could issue new policies while the current one handles policies already in its portfolio.

PMI had been under regulatory scrutiny as its capital fell, and was ordered by regulators in August to stop selling new policies.

Jim Ryan, an analyst with Morningstar Inc. in Chicago, said MGIC is "certainly nowhere near as bad off as PMI was even three months ago."

As competitors are restricted from issuing new mortgage insurance, a stronger company such as MGIC could benefit, Ryan said. New policies are desirable because they provide new revenue and, under today’s restrictions, are less risky than those from the mid-2000s that continue to go into default.

"These are all things that work in their favor," Ryan said.

Still, how MGIC fares in the long run depends on the duration of the downturn in housing, analysts said. MGIC doesn’t appear to need additional capital at the moment, but could down the road, they said.

"If the housing market doesn’t stabilize and start improving, then that’s when they may get into trouble," Bublitz said.

He noted, however, that "fundamental trends" have been improving for MGIC.

While Ryan stressed that MGIC isn’t in the same boat as PMI, he said the housing market remains in a malaise – something MGIC can’t control. He said "it’s possible, but it’s not inevitable" that MGIC would need to raise additional capital.

 

 

 

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David Reilly, Wall Street Journal

The government’s latest move to bolster housing marks yet another transfer from savers to borrowers.

Such transfers have been the norm since the Federal Reserve instituted its zero-interest-rate policy in late 2008—shifting funds away from the likes of depositors, bondholders and pension funds to debtors. The latest iteration came Monday, when the Federal Housing Finance Agency unveiled changes to a program meant to make it easier for underwater homeowners who are current on payments to refinance into a lower-rate mortgage.

The thinking is that this will reduce defaults. Or as FHFA said, "Such refinances bring benefits to borrowers, to housing markets, and to [Fannie Maeand Freddie Mac] and taxpayers."

Missing from that winners’ list: investors who finance housing markets by purchasing mortgage-backed bonds. They will fund this new effort. Here is how: As homeowners refinance, investors who bought mortgage bonds will be given back their money and will have little option but to reinvest at far lower yields. The transfer is the difference in yield.

Just how big that will be isn’t clear as it is tough to tell how effective the program will be. The original Home Affordable Refinance Program, or HARP, led to refinancings by 894,000 homeowners in about two years. Estimates for how many borrowers could now take part range from 500,000 to three million, while FHFA said it is "very difficult to project the number of mortgages that may be refinanced." Some mortgage bonds traded lower Monday on news of the plan.

Granted, prepayment risk is inherent to mortgage bonds. There is also likely to be little sympathy for bondholders having to give up money to shore up housing. But that ignores that the government is picking winners and losers. Effectively, it is deciding some losses on some things are acceptable, say on 401(k) retirement plans, yet aren’t on others, namely housing.

The government also potentially undermines its own effort to create a housing-finance market independent of Fannie and Freddie. Many mortgage investors may choose to reinvest elsewhere, ultimately shrinking the pool of lenders available to fund that market. In the short term, the Fed may well take their place. That isn’t the basis, though, for a functioning mortgage market underpinned by private capital.

Another unsettling wrinkle: The FHFA is adding an incentive for borrowers to refinance into shorter-maturity mortgages. But in many cases, this will mean a borrower’s monthly payment, including principal repayment, won’t decline. It may actually rise. That undermines the notion that these borrowers are unable to meet monthly payments and need government assistance.

Banks may also benefit depending on how FHFA decides to limit the risk that they could be forced under some circumstances to repurchase shoddily underwritten mortgages.

The biggest issue, though, isn’t necessarily with HARP or similar programs. It is that both parties in Washington are studiously avoiding any real effort to overhaul housing finance and decide what to do about Fannie and Freddie.

 

 

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John Walsh, via Mortgage Professional

The mortgage industry has dealt with sweeping changes over the past few years significantly impacting the mortgage broker and wholesale lending. As a result, the wholesale origination model has been largely redefined. Although many brokers and lenders have left the business, the wholesale channel now has a well-defined regulatory framework with higher-quality and better-skilled mortgage professionals to advise borrowers on their most important financial decision. This is why I believe the mortgage broker will thrive in the coming years.

I see a compelling future for wholesale lending, one that plays a vital role and guarantees that borrowers have access to the most competitive rates and an array of responsible program options. In the absence of wholesale, there is no doubt that consumer choice would be significantly reduced, as the mortgage marketplace would be dominated by a handful of large national lenders. The mortgage broker-to-consumer option helps guarantee healthy competition in the marketplace.
Additionally, mortgage brokers provide borrowers with access to a mortgage professional who will act as their partner, trusted advisor and advocate throughout the lending process. Mortgage brokers are knowledgeable about multiple products from various lenders and can help borrowers navigate the myriad of options to find the loan that is best suited to their needs.

Wholesale lending plays a critical role in ensuring that the mortgage industry does not become too heavily reliant on a select few large lenders, so that borrowers will continue to have plenty of mortgage options for any purchase or refinance transaction. In the coming years, mortgage brokers and lenders need to be committed to ethical behavior, responsible lending, ongoing training and the highest levels of customer service. Together, we must continue to improve, practice responsible lending, and advocate for this important channel and solution for borrowers.

 

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Donal Griffin, via Bloomberg

U.S. regulators’ plan to expand aid to underwater mortgage borrowers may leave consumers with more spending money and boost the economy, said Wells Fargo & Co. (WFC) Chief Executive Officer John Stumpf.

“This could be really helpful,” Stumpf said today at a press club lunch in Atlanta. It may put “more money in people’s pockets. They’ll go out and spend, and get this economy going again.” San Francisco-based Wells Fargo is the nation’s biggest home lender.

Regulators will let qualified borrowers refinance mortgages regardless of how much their houses have dropped in value as the government expands relief efforts for homeowners. The Federal Housing Finance Agency will also enhance the Home Affordable Refinance Program by eliminating or reducing some fees and waiving some risk for lenders, Edward J. DeMarco, the agency’s acting director, said today.

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Obama, in first leg of three-day Western trip, offers mortgage relief in struggling Nevada.

Jim Kuhnhenn, via Associated Press

LAS VEGAS (AP) — President Barack Obama offered mortgage relief on Monday to hundreds of thousands of Americans, his latest attempt to ease the economic and political fallout of a housing crisis that has bedeviled him as he seeks a second term.

"I’m here to say that we can’t wait for an increasingly dysfunctional Congress to do its job," the president declared outside a family home in Las Vegas, the epicenter of foreclosures and joblessness. "Where they won’t act, I will."

Making a case for his policies and a new effort to circumvent roadblocks put up by Republican lawmakers, Obama also laid out a theme for his re-election, saying that there’s "no excuse for all the games and the gridlock that we’ve been seeing in Washington."

"People out here don’t have a lot of time or a lot of patience for some of that nonsense that’s been going on in Washington," he said.

The new rules for federally guaranteed loans represent a recognition that measures the administration has taken so far on housing have not worked as well as expected.

His jobs bill struggling in Congress, Obama tried a new catchphrase — "We can’t wait" — to highlight his administrative initiatives and to shift blame to congressional Republicans for lack of action to boost employment and stimulate an economic recovery.

Later in the week, Obama plans to announce measures to make it easier for college graduates to pay back federal loans. Such executive action allows Obama to address economic ills and other domestic challenges in spite of Republican opposition to most of his proposals.

While Obama has proposed prodding the economy with payroll tax cuts and increased spending on public works and aid to states, he has yet to offer a wholesale overhaul of the nation’s housing programs. Economists point to the burst housing bubble as the main culprit behind the 2008 financial crisis. Meanwhile, the combination of unemployment, depressed wages and mortgages that exceed house values has continued to put a strain on the economy.

While the White House tried to avoid predicting how many homeowners would benefit from the revamped refinancing program, the Federal Housing Finance Agency estimated an additional 1 million people would qualify. Moody’s Analytics say the figure could be as high as 1.6 million.

Under Obama’s proposal, homeowners who are still current on their mortgages would be able to refinance no matter how much their home value has dropped below what they still owe.

"Now, over the past two years, we’ve already taken some steps to help folks refinance their mortgages," Obama said, listing a series of measures. "But we can do more."

At the same time, Obama acknowledged that his latest proposal will not do all that’s not needed to get the housing market back on its feet. "Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges," he said.

In spelling out the plan to homeowners in a diverse, working-class Las Vegas neighborhood, Obama chose a state that provides the starkest example of the toll the housing crisis has exacted from Americans. One in every 118 homes in the state of Nevada received a foreclosure notice in September, the highest ratio in the country, according to the foreclosure listing firm RealtyTrac.

Obama visited the home of Jose and Lissette Bonilla, two grocery store workers whose house was refurbished under a program paid for by the original 2009 economic stimulus plan. The program was designed to stabilize communities hit by foreclosures or abandonment. Lissette Bonilla said she told the president that without his stimulus plan, the five members of her family would still be living in a one-bedroom apartment.

Presidential spokesman Jay Carney criticized Republican presidential candidate Mitt Romney for proposing last week while in Las Vegas that the government not interfere with foreclosures. "Don’t try to stop the foreclosure process," Romney told the Las Vegas Review-Journal. "Let it run its course and hit the bottom."

"That is not a solution," Carney told reporters on Air Force One. He said Romney would tell homeowners, "`You’re on your own, tough luck.’"

The president also was using his visit to Las Vegas to promote a $15 billion neighborhood revitalization plan contained in his current jobs proposal that would help redevelop abandoned and foreclosed properties and stabilize affected neighborhoods.

The Nevada stop was the first leg of a three-day tour of Western states, blending his pitch for boosting the economy with an aggressive hunt for campaign cash.

From Nevada, Obama will head for the glamor of Hollywood and the homes of movie stars Melanie Griffith and Antonio Banderas and producer James Lassiter for some high-dollar fundraising. On Tuesday, he will tape an appearance on "The Tonight Show" with Jay Leno. He will also raise money in San Francisco and in Denver.

Before the president addressed his mortgage refinancing plan, he attended a fundraiser at the luxurious Bellagio hotel, offering a sharp contrast between well-to-do who are fueling his campaign and the struggling homeowners hoping to benefit from his policies.

The mortgage assistance plan by the Federal Housing Finance Agency will help borrowers with little or no equity in their homes, many of whom are stuck with 6 or 7 percent mortgage rates, to seek refinancing and take advantage of lower rates. The FHFA plans to remove caps that had allowed homeowners to refinance only if they owed up to 25 percent more than their homes are worth.

The refinancing program is being extended until the end of 2013. It was originally scheduled to end in June 2012.

The administration’s incremental steps to help homeowners have prompted even the president’s allies to demand more aggressive action.

Rep. Dennis Cardoza, a moderate Democrat from California, gave voice to Democratic frustration on the housing front last week when he announced his decision not to seek re-election, blaming the Obama administration directly for not addressing the crisis.

"I am dismayed by the administration’s failure to understand and effectively address the current housing foreclosure crisis," Cardoza said in a statement that drew widespread attention. "Home foreclosures are destroying communities and crushing our economy, and the administration’s inaction is infuriating."

Obama’s new "We can’t wait" slogan is his latest in a string of stump-speech refrains he hopes will pressure Republicans who oppose his $447 billion jobs package. He initially exhorted Congress to "Pass this bill!" then demanded "I want it back," all in the face of unanimous Republican opposition in the Senate, though even some Democrats were unhappy with the plan.

Obama has now agreed to break the proposal into its component parts and seek congressional approval one measure at a time. The overall proposal would increase taxes on millionaires, lower payroll taxes on workers and businesses for a year, pay for bridge, road and school construction projects, and help states and local governments retain teachers and emergency workers.

The proposals with the best chance of passage are the payroll tax cuts and extensions in jobless insurance to the long-term unemployed.

Countering Obama’s criticism, GOP leaders say the sluggish economy and stubbornly high unemployment rate are the result of failed Obama administration policies.

"It’s another day in the campaign life of President Obama, and he’s bringing his re-election tour to Nevada, ground zero for the damaging effects of his failed economic policies," Republican National Committee Chairman Reince Priebus said Monday.

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Laura Vecsey, Zillow

Dobermans released every two hours to patrol the property. Underground streets lined with a restaurant, bars and a barber shop. A private beach and marina sculpted into the shores of Lake Erie. Helicopter pad. Rotating garage floor made of marble so no one had to back out that rare Ducati.

These are just a few of the unique features found in the Waterwood Estate, a fascinating Ohio property owned by the late Don Brown, an inventor who gave the world the drop ceiling.

“It takes four-and-a-half hours to show this property,” said Scott Street of Sotheby’s, the listing agent for the Waterwood Estate, which is now listed on the Vermilion real estate market for $19.5 million.

The property sits on 160 acres, boasts three-quarter miles of frontage on Lake Erie and contains a series of “pods” connected by glass corridors that were navigated by scooters and golf carts.

When Brown and his wife, Shirley, were killed in a plane crash in 2010, their two living sons (their third son, Kevin, died in a speed boat race in 1989) decided to sell the sensationally unique property. But to who?

So far, Street said the listing has attracted a ministry group and a group of Colorado helicopter pilots have expressed interest in turning the property into a fly-in, fly-out resort (Waterwood comes with an FAA-approved helicopter pad). Then there’s a couple who, perhaps like the octogenarian Browns, wants to grow old in an amenity-laden house.

“This was a very forward-thinking house when it was built in 1990 in terms of systems and functionality,” said Randal Darwin, vice president of CB Richard Ellis, the firm brought in to help market Waterwood.

“It was 20 years ahead of its time because of its features and unique characteristics. Mr. Brown literally broke the mold on this house. I know he had the white brick specially fabricated for this project and when it was done, he had the molds destroyed so no one else would ever use them,” Darwin said.

These few details only begin to tell the story of Brown’s Waterwood Estate. One other important fact? The listed size of Brown’s dream house is off — by about 30,000 square feet.

The Inventor and the Architect

“They’ve got the square-footage listed wrong,” said architect Hugh Newell Jacobsen. “It’s not 38,000 square feet. It’s 60,000 square feet. The underground floor is the same size as the main floor. They forgot to count that.”

Jacobsen would know about the true size and intricacy of the Brown estate. The world-acclaimed architect was hired by Brown to deliver the visionary design, just as Jacobsen has done for more than 400 private homes for clients that included Jackie Onassis, Meryl Streep and members of the Mellon family. But the collaboration ended when the secretive Brown fired Jacobsen.

“We were a year-and-a-half into the project and he sacked me. I’ve never been fired before,” Jacobsen said from his Washington D.C. office, still bemused about the turn of events.

“He kept a secret of his life. He thought everyone wanted him. He’d say, ‘Hugh, jealousy is a terrible thing.’ I asked him, ‘Don, do you think I’m jealous of you?’ I think he was offended,” Jacobsen said.

At 81, Jacobsen has been at the forefront of American architecture for sixty years, ever since he attended Yale and apprenticed with Philip Johnson. The rich and famous are Jacobsen’s clients. He delivers uniquely landscaped structures that reference the Quaker-simple lines of the American barn, smokehouses and farmhouses. He has won many awards and published three books cataloging his work, but his first look at the Waterwood Estate came when he saw listing photos after the property was put up for sale.

“About two months before he died, after 20 years since I’d heard from him, he called and said,  ‘I guess you’d like to see the place.’ I said, yes, I’d like to see it. My homes are like my children. But then he died in the crash,” Jacobsen said.

Jacobsen used his trademark “pod” style design to give the design more flexibility and allow it to evolve as Brown wanted other things added. The entire home is a series of 20 castle-like concrete buildings connected by glass corridors and each structure is topped with a slate pyramid.

Marble, Glass, Polar Bears and Dobermans

On the lower level of the house, there are a series of streets built to scale and named after streets in cities like Georgetown, Paris and Savannah.

“There were five bars in the house, one with a full-mounted polar bear. There’s a barber shop with a pole where Don would go every morning for a shave. At one end of the house, he had cages that would open every hour on the hour and two Dobermans trained to run the perimeter of the property would run out. The next hour, another pair would take off,” Jacobsen said.

He also used tons of sand and dirt from the lake shoreline, where cliffs were graded to build a beach and the harbor, to shape hills into the flat, Midwestern terrain. From the road, the house is not visible behind those hills. But from the lake, boaters can see the modernist white castle.

If it sounds wild, Jacobsen disagrees.

“No, it’s not wild. It’s your dream. This house is the house of an inventor. It has a space where, inside eight white columns, there are chairs and a couch. This floor lifts up through the ceiling to a pergola so guests can look out over the lake. The floor also goes down to the ground floor, where there’s a piano so the family can sing Christmas carols,” Jacobsen said.

“Near the main entrance, there is a 10-by-10-foot room behind the closet. You slide the door, remove the clothes’ pole and there’s a fully decorated Christmas tree. The room had its own air filter and air conditioner to keep the dust off the ornaments. He was so embarrassed about having a fake tree he had it sprayed so that it smelled like pine needles,” he said.

What amuses Jacobsen is that despite being fired, his plans were fully executed. Brown brought in another renowned and innovative architect, the late Hideo Sasaki.

“Don told Sasaki, ‘Don’t change Jacobsen’s plan.’ And they didn’t change a thing. Sasaki would call and tell me,” Jacobsen said.

During his lifetime, Don Brown never allowed the property to be photographed. It was a sanctuary for his family, lacking for nothing. Now, with the house listed for sale and photographs to prove its splendid fruition, the architect who designed Don Brown’s house is curious.

“He was building his dream, he had money and he hired me. We bought the furniture, the art, we did the landscape, then I was fired. I’d like to see it, but I’ve  never paid my own airfare to see a home I built for a client,” Jacobsen said.

And if you’re wondering whether the home has a drop ceiling, it does — in a workshop.

 

 

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Daniel Fisher, Forbes.com

The media business must be nerve-wracking, what with its up-and-down fortunes and constant threat of being outflanked by the next iPad-delivered Internet service. Maybe that explains why Liberty Media’s John Malone pours so much of his extra cash into land.

Earlier this year Malone passed fellow media mogul Ted Turner to become America’s Biggest Landowner with 2.2 million acres, thanks to a giant investment in New England timberland. It capped a quick ascent for the cable-television magnate, who joined the list of the nation’s land barons last year, shoving aside ranchers and timber magnates, some of whom have owned their acreage for generations. He entered the list at No. 5 after buying New Mexico’s 453-square-mile Bell Ranch in 2010, then passed Turner earlier this year after buying 1 million acres in New Hampshire and Maine from private equity firm GMO Renewable Resources.

Malone blamed heritage, not nerves, for his love of the asset whose supply will never increase. As he told Forbes writer Monte Burke in March: “My wife says it’s the Irish gene. A certain land hunger comes from being denied property ownership for so many generations.” Turner, contacted by The Land Report magazine for its annual list of the nation’s largest landowners, said he was happy to hand over the title. “I consider John a good friend and have great respect for him,” Turner said.

This list of powerful landowners is compiled by Land Report researchers with the assistance of Fay Ranches, a Western land brokerage, the list includes the usual family timber dynasties as well as the owners of the King Ranch in Texas , once considered unimaginably huge but now, at 911,000 acres dwarfed by the holdings of Turner and Malone.

No. 2, of course, is Turner, the CNN founder who began buying ranches in the 1970s and now controls 2 million acres in New Mexico, Colorado , Montana , Florida and several other states. If $1 billion separates the men from the boys in terms of raw wealth, the new land barons can judge themselves by the number of Rhode Islands they own. Turner has almost three, including the spectacular Vermejo Park Ranch straddling the border of New Mexico and Colorado which is nearly as large as the Ocean State all by itself. Malone credits his fellow media magnate for giving him “this land-buying disease.”

At his customary spot in the Top 5 at No. 3 is Archie “Red” Emmerson, whose Sierra Pacific Industries boosted its holdings to almost 1.9 million acres this year. The forest products company , now entering its third generation of Emmerson management, is the second largest U.S. timber producer and works closely with the U.S. Fish and Wildlife Service to preserve species on its land. Emmerson and his father, Curly, began their march into the ranks of big time landowners in 1949 when they leased a California sawmill. Emmerson later borrowed $460 million to buy 522,000 acres in northern California, holdings that have since spread into Washington .

At No. 4 is recent entrant Brad Kelley, a Tennessee cigarette magnate who poured the profit from the $1 billion sale of his company into 1.7 million acres of land in Florida, Texas and New Mexico. Below him by half a million acres is the Irving family of Canada, who own a little less than 1/20th of the state of Maine (plus a bunch more in Canada). The descendants of thrifty Scottish immigrants, the Irving’s are in lumber for the long haul; they’ll plant some 28 million seedlings in their forests this year.

Here are America’s five largest landowners:

#5 Irving family Owns: 1.2 million acres in Maine.

These Canadian descendants of a Scottish sawmill operator are secretive and all business. They’ve amassed roughly a 20th of the state of Maine and will plant 28 million seedlings this year to keep the timber coming.

#4 Brad Kelley Owns: 1.7 million acres in Texas, New Mexico and Florida

This Nashville, Tenn., farmer’s son sold his Commonwealth Brands cigarette company for $1 billion in 2001 and began investing in land. Big time. The Land Report estimates the tightlipped Kelley owns 1.7 million acres. Most recently he’s reported to have bulked up his holdings with ranchland in the Big Bend region of Texas.

#3 Archie "Red" Emmerson Owns: 1.87 million acres in California and Washington

In 1949 Emmerson and his father, Curly, leased a sawmill and built the business into Sierra Pacific Industries. Red borrowed $460 million to buy 522,000 acres in California, a position since increased to almost 2 million acres. When he was briefly the nation’s largest private landowner, Red joked that Ted Turner "will probably go out and buy more land." He was right, but Emmerson is close behind.

#2 Ted Turner Owns: 2 million acres in New Mexico, Colorado, Montana , Florida and several other states.

An ardent conservationist, Turner began buying ranches in the 1970s and revived the nation’s bison herd to 55,000 head on his ranches across the upper Great Plains. No regrets about losing the title as the nation’s No. 1 land baron to John Malone: "I consider John a good friend and have great respect for him," Turner said.

#1 John Malone Owns: 2.2 million acres in Colorado, New Mexico, Wyoming, Maine and New Hampshire.

The cable-television billionaire was outed as one of the nation’s largest property owners by The Land Report two years ago and dramatically increased his holdings last year with the purchase of New Mexico’s 453-square-mile Bell Ranch. Now he passes longtime No. 1 Ted Turner with the purchase of 1 million acres of timberland in New Hampshire and Maine from an investment firm.

 

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Strange Houses & Weird Homes

A Home Can Be So Much More Than A House

via You Live Where

house507a

This house sure is a doozy, or at least the fall from it is. The archway at the bottom, while sacrificing some stability, is a nice touch. Do you think that the designer of this house likes roofs? As if this house needed to be more top-heavy. My real question is: Where is the electricity coming from to operate that lift? I imagine that it would be a little windy all the way up there. A great little detail that just proves the amazing things people can do with Photoshop these days.

 

 

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BY BRIAN C. COESTER

REQUIRED READING: Here is the scenario: A homeowner spends $20,000 turning his home from an energy-sucking abode into an efficient, cost-savings oasis. This individual installs solar panels, ultra-efficient appliances, a tank-less water heater, energy-efficient windows and blinds, and paints the roof white. As a result, the property can now reap the rewards of almost no monthly utility bills while helping to improve the environment.
But what happens when the homeowner brings in an appraiser to value all of these new features? Do not be surprised if the appraiser tells the homeowner that the house isn’t worth any more than what it was originally.
This scenario is happening more frequently as homeowners and builders ride the atmospheric green wave to make homes more energy-efficient. There is a big problem here: The mortgage industry has not yet caught up with the green wave. It is going to take the support of both the mortgage and appraisal industries to ensure energy efficiency is valuable to the market and not just to the homeowner.
Admittedly, this is still a relatively new trend. Thus, the cost of building green is relatively high, and to a certain extent, the cost outweighs the short-term benefits. The average cost of installing solar panels on a home is $35,000 – and with an average savings of $1,700 a year, it would take approximately 20 years to recoup the total cost.
Furthermore, due to the lack of comparable sales and unknown actual cost savings by appraisers, it would be relatively difficult to evaluate the home’s energy efficiency. So what needs to be done to green up collateral valuations? There are several considerations that need to be addressed.
First, utility-bill data must be available on multiple listing services (MLS). Appraisers cannot take into account information they do not have. An MLS indicating a home is "green" means nothing to appraisers, thus making it very difficult for them to make adjustments due to unknown information.
In most states, home sellers are required to put 12 months of utility bills in the addendum of the contract. Having this information available for the appraiser on the MLS would enable an apples-to-apples comparison of the subject’s home and comparable. If a home that is "green" has utility bills that total only $1,000 a year versus a typical house that averages $4,000 a year, an appraiser is able to make tangible adjustments and give tangible value to the home.
Next, mortgage-backed securities need to give better pricing to green homes. The U.S. Department of Housing and Urban Development’s (HUD) Energy Efficient Mortgage (EEM) is a step in the right direction, but conventional lenders and the secondary market need to catch on. If lenders are concerned about the qualified residential mortgage requirements and the homeowner’s ability to pay the mortgage on a monthly basis, they should also be concerned with the utility costs.
The principal-and-interest payments on home loans do not change month to month, but utility bills do. Depending on the harshness of the weather, these monthly bills can skyrocket. 
Homeowners will default on their mortgage before they will have their heat or electricity cut off. Having homeowners with lower overall utility costs will make a significant impact on their monthly ability to pay the mortgage. For this reason, homes that are built with green items should get special pricing for being lower-risk. This would give homeowners an incentive to make the green upgrades – not only for a better mortgage product, but also monthly savings and a better environmental footprint.
Go green!
Furthermore, the appraisal industry needs to recognize the benefits of green improvements. The appraisal industry is quick to adapt to what lenders want and require, but it will not make the first move to create the curve. The industry needs to ensure that the market has clearly recognized that there is tangible value in energy-efficient homes before value will be given to them. 
Currently, there are no standards for valuing green homes. This makes it difficult to place a value on the property – after all, what are you comparing it to? Until the appraisers are supported with MLS information on recognized standards for the valuation of green homes and tangible evidence that the mortgage community places weight on green homes, appraisers will not be able to do anything.
Finally, green technology needs to be easily accessible to homeowners. Of course, this is outside of the control of lenders and appraisers, but it needs to be addressed. Energy-efficient technology is still fairly pricey, but over the next two to three years, it is likely that favorable price developments will be witnessed in solar power, solar thermal, geothermal and small wind solutions, as well as energy-efficient household appliances. If the price point is friendlier to the average homeowner’s budget, more homeowners will adopt the green home solution.
None of this will happen overnight, of course, but it is coming down the road. Lenders and appraisers need to recognize that this issue needs to be resolved before tomorrow’s solutions become more commonplace today.
Brian C. Coester is CEO of Coester Appraisal Group, based in Rockville, Md. He can be reached at (888) 485-1999.

(Photo courtesy of USPS)

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