The entrance of the home opens into a shining white interior, with pristine marble floors stretching in all directions, framed by 30-foot ceilings above. Windows line the back wall of the living room, flooding it with natural light and giving a peek at the private gardens that lie immediately behind the house.

Now, the mansion can be yours — all 18,000 square feet, 12 bedrooms and 16 bathrooms of it.

List price: $14 million.

La Maison Des Jardins — French for “House of Gardens” — will be put on the auction block on Feb. 24 and is expected to draw bidders from around the world.

Packed with luxurious amenities, the property includes a dedicated guesthouse, a kitchen with commercial-grade equipment, ornate marble and granite surfaces throughout and space for live-in staff.

Outside, tall hedges shield the backyard from the adjacent golf course. Mature trees that provide shade across the sprawling lawn mix with dozens of varieties of colorful and aromatic flowers.

The 1,200-square-foot master bedroom comes with a natural gas fireplace and a wet bar, plus enormous his and hers walk-in closets and a lavish bathroom with pink and gray Icelandic marble, brass fixtures and custom wood cabinets.

Each of the bedrooms on the second floor is outfitted with a private balcony and bathroom, and each has its own unique décor.

The house manages to combine these extravagant elements into a final product that is simple, elegant and functional, blending wide-open spaces with more cozy rooms suited for relaxation or time with family.

“It has all the personal touches that make it intimate,” said Kristen Routh Silberman, a real estate agent with Sotheby’s International Realty, which is partnering in the sale. “It’s more than a mansion or an estate, it becomes a lifestyle.”

Built in the early 1990s, the home was owned by a prominent Las Vegas real estate developer who lived there with his wife and children. The owners, who asked for their identity to be withheld for privacy reasons, are looking to “downsize” now that their children are grown, said Laura Brady, vice president of marketing for Concierge Auctions, which is handling the sale.

The auction format allows the market to determine the true value of the house, Brady said, and also assures the seller that the home will be sold within a set timeframe.

“An auction is one of few ways to really separate your property from the rest of the market and place a spotlight on it to generate interest,” she said. “If you get a roomful of serious bidders and market the property heavily, the sellers can know they’re getting the best value.”

The property is being marketed globally and could be used as a permanent residence, a vacation home or an investment property, Brady said.

Although the list price is $14 million, there is no floor on the bidding, she said. Interested buyers need only to pony up a $250,000 deposit in advance of the auction to register and have a shot at owning the home.

Private showings of the home can be arranged from now until the Feb. 24 auction date by calling 866-822-8865.

source form: vegasinc

Freddie Mac, the taxpayer-owned mortgage giant, has placed multibillion-dollar bets that pay off if homeowners stay trapped in expensive mortgages with interest rates well above current rates.

Freddie began increasing these bets dramatically in late 2010, the same time the company was making it harder for homeowners to get out of such high-interest mortgages.

No evidence has emerged that these decisions were coordinated. The company is a key gatekeeper for home loans but says its traders are “walled off” from the officials who have restricted homeowners from taking advantage of historically low interest rates by imposing higher fees and new rules.

Freddie’s charter calls for the company to make home loans more accessible. Its CEO, Charles Haldeman Jr., recently told Congress that his company is “helping financially strapped families reduce their mortgage costs through refinancing their mortgages.”

But the trades, uncovered for the first time in an investigation by ProPublica and NPR, give Freddie a powerful incentive to do the opposite, highlighting a conflict of interest at the heart of the company. In addition to being an instrument of government policy dedicated to making home loans more accessible, Freddie also has giant investment portfolios and could lose substantial amounts of money if too many borrowers refinance.

“We were actually shocked they did this,” says Scott Simon, who as the head of the giant bond fund PIMCO’s mortgage-backed securities team is one of the world’s biggest mortgage bond traders. “It seemed so out of line with their mission.”

The trades “put them squarely against the homeowner,” he says.

Those homeowners have a lot at stake, too. Many of them could cut their interest payments by thousands of dollars a year.

Freddie Mac, along with its cousin Fannie Mae, was bailed out in 2008 and is now owned by taxpayers. The companies play a pivotal role in the mortgage business because they insure most home loans in the United States, making banks likelier to lend. The companies’ rules determine whether homeowners can get loans and on what terms.

The Federal Housing Finance Agency effectively serves as Freddie’s board of directors and is ultimately responsible for Freddie’s decisions. It is run by acting Director Edward DeMarco, who cannot be fired by the president except in extraordinary circumstances.

Freddie and the FHFA repeatedly declined to comment on the specific transactions.

Freddie’s moves to limit refinancing affect not only individual homeowners but the entire economy. An expansive refinancing program could help millions of homeowners, some economists say. Such an effort would “help the economy and put tens of billions of dollars back in consumers’ pockets, the equivalent of a very long-term tax cut,” says real estate economist Christopher Mayer of the Columbia Business School. “It also is likely to reduce foreclosures and benefit the U.S. government” because Freddie and Fannie, which guarantee most mortgages in the country, would have lower losses over the long run.

Freddie Mac’s trades, while perfectly legal, came during a period when the company was supposed to be reducing its investment portfolio, according to the terms of its government takeover agreement. But these trades escalate the risk of its portfolio, because the securities Freddie has purchased are volatile and hard to sell, mortgage securities experts say.

The financial crisis in 2008 was made worse when Wall Street traders made bets against their customers and the American public. Now, some see similar behavior, only this time by traders at a government-owned company who are using leverage, which increases the potential profits but also the risk of big losses, and other Wall Street stratagems. “More than three years into the government takeover, we have Freddie Mac pursuing highly levered, complicated transactions seemingly with the purpose of trading against homeowners,” says Mayer. “These are the kinds of things that got us into trouble in the first place.”

‘We’re in financial jail’

Freddie Mac is betting against, among others, Jay and Bonnie Silverstein. The Silversteins live in an unfinished development of cul-de-sacs and yellow stucco houses about 20 miles north of Philadelphia, in a house decorated with Bonnie’s orchids and their Rose Bowl parade pin collection. The developer went bankrupt, leaving orange plastic construction fencing around some empty lots. The community clubhouse isn’t complete.

The Silversteins have a 30-year fixed mortgage with an interest rate of 6.875 percent, much higher than the going rate of less than 4 percent. They have borrowed from family members and are living paycheck to paycheck. If they could refinance, they would save about $500 a month. He says the extra money would help them pay back some of their family members and visit their grandchildren more often.

But brokers have told the Silversteins that they cannot refinance, thanks to a Freddie Mac rule.

The Silversteins used to live in a larger house 15 minutes from their current place, in a more upscale development. They had always planned to downsize as they approached retirement. In 2005, they made the mistake of buying their new house before selling the larger one. As the housing market plummeted, they couldn’t sell their old house, so they carried two mortgages for 2 1/2 years, wiping out their savings and 401(k). “It just drained us,” Jay Silverstein says.

Finally, they were advised to try a short sale, in which the house is sold for less than the value of the underlying mortgage. They stopped making payments on the big house for it to go through. The sale was finally completed in 2009.

Such debacles hurt a borrower’s credit rating. But Bonnie has a solid job at a doctor’s office, and Jay has a pension from working for more than two decades for Johnson & Johnson. They say they haven’t missed a payment on their current mortgage.

But the Silversteins haven’t been able to get their refi. Freddie Mac won’t insure a new loan for people who had a short sale in the last two to four years, depending on their financial condition. While the company’s previous rules prohibited some short sales, in October 2010 the company changed its criteria to include all short sales. It is unclear whether the Silverstein mortgage would have been barred from a short sale under the previous Freddie rules.

Short-term, Freddie’s trades benefit from the high-interest mortgage in which the Silversteins are trapped. But in the long run, Freddie could benefit if the Silversteins refinanced to a more affordable loan. Freddie guarantees the Silversteins’ mortgage, so if the couple defaults, Freddie — and the taxpayers who own the company — are on the hook. Getting the Silversteins into a more affordable mortgage would make a default less likely.

If millions of homeowners like the Silversteins default, the economy would be harmed. But if they switch to loans with lower interest rates, they would have more money to spend, which could boost the economy.

“We’re in financial jail,” says Jay, “and we’ve never been there before.”

How Freddie’s investments work

Here’s how Freddie Mac’s trades profit from the Silversteins staying in “financial jail.” The couple’s mortgage is sitting in a big pile of other mortgages, most of which are also guaranteed by Freddie and have high interest rates. Those mortgages underpin securities that get divided into two basic categories.

One portion is backed mainly by principal, pays a low return, and was sold to investors who wanted a safe place to park their money. The other part, the inverse floater, is backed mainly by the interest payments on the mortgages, such as the high rate that the Silversteins pay. So this portion of the security can pay a much higher return, and this is what Freddie retained.

In 2010 and ’11, Freddie purchased $3.4 billion worth of inverse floater portions — their value based mostly on interest payments on $19.5 billion in mortgage-backed securities, according to prospectuses for the deals. They covered tens of thousands of homeowners. Most of the mortgages backing these transactions have high rates of about 6.5 to 7 percent, according to the deal documents.

Between late 2010 and early 2011, Freddie Mac’s purchases of inverse floater securities rose dramatically. Freddie purchased inverse floater portions of 29 deals in 2010 and 2011, with 26 bought between October 2010 and April 2011. That compares with seven for all of 2009 and five in 2008.

In these transactions, Freddie has sold off most of the principal, but it hasn’t reduced its risk.

First, if borrowers default, Freddie pays the entire value of the mortgages underpinning the securities, because it insures the loans.

It’s also a big problem if people like the Silversteins refinance their mortgages. That’s because a refi is a new loan; the borrower pays off the first loan early, stopping the interest payments. Since the security Freddie owns is backed mainly by those interest payments, Freddie loses.

And these inverse floaters burden Freddie with entirely new risks. With these deals, Freddie has taken mortgage-backed securities that are easy to sell and traded them for ones that are harder and possibly more expensive to offload, according to mortgage market experts.

The inverse floaters carry another risk. Freddie gets paid the difference between the high mortgages rates, such as the Silversteins are paying, and a key global interest rate that right now is very low. If that rate rises, Freddie’s profits will fall.

It is unclear what kinds of hedging, if any, Freddie has done to offset its risks.

At the end of 2011, Freddie’s portfolio of mortgages was just over $663 billion, down more than 6 percent from the previous year. But that $43 billion drop in the portfolio overstates the risk reduction, because the company retained risk through the inverse floaters. The company is well below the cap of $729 billion required by its government takeover agreement.

How Freddie tightened credit

Restricting credit for people who have done short sales isn’t the only way that Freddie Mac and Fannie Mae have tightened their lending criteria in the wake of the financial crisis, making it harder for borrowers to get housing loans.

Some tightening is justified because, in the years leading up to the financial crisis, Freddie and Fannie were too willing to insure mortgages taken out by people who couldn’t afford them.

In a statement, Freddie contends it is “actively supporting efforts for borrowers to realize the benefits of refinancing their mortgages to lower rates.”

The company said in a statement: “During the first three quarters of 2011, we refinanced more than $170 billion in mortgages, helping nearly 835,000 borrowers save an average of $2,500 in interest payments during the next year.” As part of that effort, the company is participating in an Obama administration plan, called the Home Affordable Refinance Program, or HARP. But critics say HARP could be reaching millions more people if Fannie and Freddie implemented the program more effectively.

Indeed, just as it was escalating its inverse floater deals, it was also introducing new fees on borrowers, including those wanting to refinance. During Thanksgiving week in 2010, Freddie quietly announced that it was raising charges, called post-settlement delivery fees.

In a recent white paper on remedies for the stalled housing market, the Federal Reserve criticized Fannie and Freddie for the fees they have charged for refinancing. Such fees are “another possible reason for low rates of refinancing” and are “difficult to justify,” the Fed wrote.

A former Freddie employee, who spoke on condition he not be named, was even blunter: “Generally, it makes no sense whatsoever” for Freddie “to restrict refinancing” from expensive loans to ones borrowers can more easily pay, since the company remains on the hook if homeowners default.

In November, the FHFA announced that Fannie and Freddie were eliminating or reducing some fees. The Fed, however, said that “more might be done.”

The regulator as owner

The trades raise questions about the FHFA’s oversight of Fannie and Freddie. But the FHFA is not just a regulator. With the two companies in government conservatorship, the FHFA now plays the role of their board of directors and shareholders, responsible for the companies’ major decisions.

Under acting Director DeMarco, the FHFA has emphasized that its main goal is to limit taxpayer losses by managing the two companies’ giant investment portfolios to make profits. To cover their previous losses and ongoing operations, Fannie and Freddie already had received $169 billion from taxpayers through the third quarter of last year.

The FHFA has frustrated the administration because the agency has made preserving the value of the companies’ investment portfolios a priority over helping homeowners in expensive mortgages. In 2010, President Barack Obama nominated a permanent replacement for acting Director DeMarco, but Republicans in Congress blocked him. Obama has not nominated anyone else to replace DeMarco.

Even though Freddie is a ward of the state, top executives are highly compensated. Peter Federico, who’s in charge of the company’s investment portfolio, made $2.5 million in 2010, and he had target compensation of $2.6 million for last year, when most of these leveraged investments were made.

One of Federico’s responsibilities — tied to his bonuses — is to “support and provide liquidity and stability in the mortgage market,” according to Freddie’s annual filing with the Securities and Exchange Commission. Mortgage experts contend that the inverse floater trades don’t further that goal.

ProPublica and NPR made numerous attempts to reach Federico. A woman who answered his home phone said he declined to comment.

The FHFA knew about the trades before ProPublica and NPR approached the regulatory agency about them, according to an FHFA official. The FHFA has the power to approve and disapprove trades, though it doesn’t involve itself in day-to-day decisions. The official declined to comment on whether the FHFA knew about them as Freddie was conducting them or whether the FHFA had explicitly approved them.

source form: lasvegassun

Panel members said housing prices could return to 2002-03 levels within a decade, but only if the market would begin steadily producing an annual appreciation rate of 3 percent. Meanwhile, current sales volume for residential units is being driven by cash-rich investors snapping up homes, 80 percent of which are vacant.

Seventy-five percent of all residential resales are distressed, or in some state of foreclosure. Fifty percent of those homes are bank-owned.

“The distressed properties define the market today,” said housing analyst Larry Murphy of Las Vegas-based SalesTraq, who predicted the market would continue “bouncing along bottom several more years.”

Murphy joined Realtor Devin Reiss of Coldwell Bank Premier Realty and Nasser Daneshvary, director of UNLV’s Lied Institute for Real Estate Studies, to discuss residential market trends during a panel discussion sponsored by VEGAS INC. A group of 40 Realtors and business executives attended the breakfast gathering Friday at P.J. Clarke’s at The Forum Shops at Caesars Palace.

The numbers remain stunning for even the most experienced market watchers: 5,500 new homes were sold in the region last year, for instance, compared with 36,000 new units five years ago at the height of the housing bubble. The median price for a new home hovers at $200,000, down from about $320,000 in 2006. The median price of a resold home sits at $100,000, down from about $280,000. Four years earlier, both new and used homes hovered around the $200,000 mark.

“We’re seeing folks who were priced out (of the market) now priced in,” Reiss noted.

Despite tight mortgage markets, some potential buyers are arranging financing, although the money comes with caveats. A significant percentage of foreclosed homes require repairs before financing can be arranged. Assessors, many of whom since have been criticized for questionable practices during the boom years, are reluctant to value homes at desired levels. Potential buyers plagued by credit troubles often fail to meet lending requirements, while demands for down payments sometimes approaching 50 percent of the purchase price of a unit have further thinned the market of potential buyers.

Yet, it’s those cash-rich investors — domestic and foreign — who continue to drive sales of about 4,000 units per month, Murphy noted. “Sales velocity is tremendous … cutting through toxic inventory … (amid a) continued depression in prices.”

Meantime, an all-too-familiar dilemma continues for a significant percentage of the region’s population, with many pondering whether to continue to pay their mortgages or simply walk away from homes on which they owe more than the units are worth. An estimated 100,000 homes have been foreclosed upon within Southern Nevada during the past four years. This year has experienced a slight decline in the foreclosure rate, with lenders taking action on 20,000 homes.

“Somebody in this room has asked … ‘Should I sit tight and do nothing or should I do something?’ ” Murphy said. “A lot of people are saying this is not a moral decision. This is a business decision.”

Days before President Barack Obama used a Las Vegas neighborhood to illustrate the need for a new program providing aid to homeowners who are underwater in their mortgages, the panel members agreed Obama’s previous mortgage relief program failed to grasp the depth of the local housing market meltdown and provided little help to tens of thousands of homeowners. Republican presidential front-runner Mitt Romney has spoken in recent days of simply letting the marketplace resolve the problem.

“This is a complex problem, and it can’t be solved with sound bites or a cute headline,” Murphy noted.

Daneshvary said that what has been largely missing, particularly when it comes to the news media’s coverage of the issue, is an in-depth analysis of what caused the housing collapse — readily available mortgages to buyers who lacked the necessary income, inflated home assessments, record low interest rates, Realtors and mortgage brokers who drove sales simply to earn commissions, homebuyers who agreed to loans they could not afford, lenders who repackaged those loans into collateralized debt obligations that were overvalued by the major credit ratings agencies and then sold to foreign investors, who assumed record financial losses, driving much of the world financial crisis and the nearly four-year recession.

Nonetheless, Reiss, a true salesman, offered a pitch when asked what he would say to a residential real estate investor with lots of cash: “Get in my car. I have a place to show you.”

source from: vegasinc

Las Vegas is famous as the Gambling Capital of the world. This city of casinos and gambling parlous is one of the most exciting destinations in the world. Hence, it comes as no surprise that Las Vegas also has a very bustling real estate market. An increasing number of people are investing in the city of Vegas to be a part of the upsurge in the real estate market. Experts attribute this upsurge to a specific fundamental. Investors were driven to the real estate market in Vegas because the prices of real estate in California market skyrocketed. Due to increase in prices, the real estate market in California hit a ceiling. This resulted the shift of investments from California to the Nevada capital.

It was in 2004, that the influx of real estate investors began. People made a deliberate shift from California to Nevada. In fact, the influx was to such a great extent that it forced the real estate prices to increase by extraordinary 35%. There was a clear drain of capital from California to Vegas, especially after 2004. In fact, there were several investors who sold their properties in California, got higher returns and re-invested the returns in Vegas real estate market. Some of the most sought-after properties in Vegas include luxury homes, luxury condominiums, penthouse condos and luxurious apartments.

Reasons for Vegas Upsurge:

The real estate industry experienced a great boom after 2004.

There are some significant reasons for this rise in investments that are as follows:

1) The market in Las Vegas experienced a boom as builders started experiencing severe shortage of vacant land in the region. Also, the influx of people increased to almost 6,000 per month. This made the real estate industry extremely active and rewarding.

2) Las Vegas has become one of the premier real estate destinations for major investors and developers across the world. Investments by these people fuelled the growth in the real estate market in the region.

3) People consider Vegas as one of the best places to invest in luxury condos and penthouse condos.

4) For several people, Las Vegas is still the best post-retirement destination to settle down. This notion is still in vogue greatly. Hence, the real estate market is looking very bright and promising in the city.

5) Apart from being the gambling capital of the world, Las Vegas has greater attributes to its name. The city is one of the best places for people to reside in the entire nation. The city provides some of the most excellent amenities like reputed schools, beautiful gardens and parks, friendly neighborhood and an excellent quality of life.

Features of Real Estate Investments in Vegas:

Like in every region, real estate investment in Las Vegas has its own special features.

Some of the prominent features of Real estate investments in Las Vegas are as follows:

1) Las Vegas has a comprehensive and well-developed real estate market. Apart from having the conventional properties, Vegas also has pre-construction properties to boast for. This gives Vegas an added advantage, as real estate investors highly prefer pre-construction properties. This is because pre-construction properties provide greater returns in the long run than the usual properties. Hence, this is more beneficial a proposal for the investors as compared to the conventional developed properties.

2) There is great scope for investing in Las Vegas as the property can be used for various purposes. It can be used as a holiday rent-out for the tourists or it can also be used for leasing out to any commercial establishments. Las Vegas has growth prospects in all the industries and hence the property can be used for diverse purposes.

3) It is important that investors make their investments as soon as possible. This is because Vegas is growing and expanding at a scorching pace. Hence, to enjoy the best results, it is necessary that the investors invest in the real estate market at the earliest.

Tips for Real Estate Investments in Vegas:

For any real estate investment professional help has become indispensable. Along with it, the investors must also follow some basic tips while they indulge in Real estate investments in Vegas.

Following are some significant tips:

1) Las Vegas enjoys benefits like tax holidays and exemptions as far as real estate investments are concerned. Hence, it is necessary that the investors have the complete information about the tax benefits and on that basis invest in Las Vegas real estate.

2) It is difficult for people outside of Vegas to indulge in real estate on their own abilities. Hence, it is necessary that they take the help of a creditable real estate investment guide and broker while investing in a property.

3) While choosing a real estate investment advisor or broker, it is important for the investor to ensure that the advisor and broker have expertise mainly in the Las Vegas real estate market. This specialization provides that extra credibility to the advisor and broker.

4) When investing in Vegas, the investor must carefully consider those areas whose prices have escalated the most as compared to the areas that have steady or low price increase. On the basis of this information, the investor must make his investments.

5) It is important for the investors not to consider Vegas only a gaming city. Vegas has witnessed all round growth to its credit.

Las Vegas has now transformed from a purely entertainment and gaming destination to an important business hub. Hence, the real estate industry too is growing rapidly and investors must take this advantage and maximize their returns.

Source novinite.com

The Greater Las Vegas Association of Realtors says a turnaround may already be underway in Southern Nevada. GLVAR reports Southern Nevada had, on average, about 8,500 foreclosures on the market in the first quarter of 2009. For the first quarter of this year, that number fell to about 1,800.

Bell says the reason is that investors are buying foreclosed properties in great numbers. “Beginning last March, we had an upsurge in the number of buyers for foreclosure properties. Many were investors paying cash,” he said. “The foreclosures, when coming on the market, typically get multiple offers. It’s very competitive.”

I am also one to believe we will survive the next wave of foreclosures.  Banks may be releasing their inventory but just a trickle.  They are not dumb, they are going to collect every dime they can and they will!!  I do hope prices remain somewhat steady and affordable to help folks get into homes that are not investors.   We need homes for first time homebuyers more than anything else.   We have great down payment assistance programs in Las Vegas with up to $30,000 dollars in assistance in North Las Vegas.