Any questions about why Arnold listens when the CTA speaks? Any questions on why the state continues to hire people and dole out raises while Riverside County unemployment hits 15%?

You’re either at the table or …

Over $1 Billion Spent by 15 Special Interest Groups on Political Campaigns and Lobbying Efforts

Today the Fair Political Practices Commission (FPPC), the state’s political watchdog agency, released a new report detailing how 15 wealthy special interests spent more than $1 billion throughout the last ten years in an attempt to shape public policy by influencing California’s voters and public officials.

The report, “Big Money Talks,” details the staggering amounts of money these interest groups spent on candidates, ballot measures and lobbying efforts, since electronic filing went into effect in 2000.  Included in this list are six corporations, three Indian tribes, two labor unions and four business associations.

“This tsunami of special interest spending drowns out the voices of average voters, and intimidates political opponents and elected officials alike,” said FPPC Chairman Ross Johnson.

These five interests are responsible for over half of the $1 billion spent by the top 15:

• California Teachers Association—$211,849,298

• California State Council of Service Employees—$107,467,272
• Pharmaceutical Research and Manufacturers of America—$104,912,997
• Morongo Band of Mission Indians—$83,600,438
• Pechanga Band of Luiseño Indians—$69,298,909

“The message from special interests is unmistakable—that they’re willing to spend millions of dollars to protect their narrow interests,” Johnson continued.  “The spending also serves as a warning to officeholders:  ‘Don’t forget, we can use our money to help or hurt you.  Think about it.’”

The complete report is available on the Commission’s website and the list follows.

The Top 15 That Spent $1 Billion to Influence California Voters and Public Officials

1)    California Teachers Association                                                         $   211,849,298

2)    California State Council of Service Employees                                 $   107,467,272

3)    Pharmaceutical Research and Manufacturers of America              $   104,912,997

4)    Morongo Band of Mission Indians                                                      $     83,600,438

5)    Pechanga Band of Luiseño Indians                                                    $     69,298,909

6)    Pacific Gas & Electric Company                                                         $     69,240,759

7)    Chevron Corporation                                                                            $     66,257,132

8)    AT&T Inc.                                                                                               $     59,619,677

9)    Philip Morris USA Inc.                                                                          $     50,756,360

10)  Agua Caliente Band of Cahuilla Indians                                             $     49,078,448

11)  Southern California Edison                                                                 $     43,412,031

12)  California Hospital Association                                                           $     43,281,456

13)  California Chamber of Commerce                                                      $     39,065,861

14)  Western States Petroleum Association                                              $     35,214,325

15)  Aera Energy LLC                                                                                   $     34,671,163

Total of Top 15 $1,067,726,126

The Next Ten

16)  California Association of Realtors $     33,329,943

17)  California Correctional Peace Officers Association                         $     32,452,083

18)  California School Employees Association                                         $     31,861,749

19)  San Manuel Band of Mission Indians                                                 $     29,747,811

20)  Reynolds American Inc.                                                                       $     29,213,942

21)  Pala Band of Mission Indians                                                              $     24,021,356

22)  United Auburn Indian Community                                                      $     24,019,877

23)  California Medical Association                                                            $     23,064,218

24)  Anthem Blue Cross                                                                               $     21,993,466

25)  Consumer Attorneys of California                                                      $     21,294,921

Total of Next 10                                                                   $270,999,366

GRAND TOTAL OF ALL 25                                   $1,338,725,492

That same week, 2 local residents were arrested for taking photographs under womens dresses and up a girls skirt at local businesses. Yet even if convicted they would not appear on the roles as sexual predators. Their computers could be full of these home made photos and videos and they could distribute them to millions of viewers on the internet within seconds of taking them, but California doesn’t want them to register as sex offenders.

AB1688 was a bill Jeffries carried at the behest of Riverside County DA Rod Pacheco and was an attempt to bring the l;aw current with today’s wireless technology. “Every parent in California would want to know if an adult their child comes in contact with has been convicted of this type of lewd behavior” says Jeffries. “It’s a great big clue,” according to DA Pacheco. “I’d rather be safe than sorry. If they’re forced to register then the local police know they’re there.”

But not everybody agrees. Assembly Public Committee Chair Tom Ammiano (Democrat) believes skirt peekers and bathroom stall sneekers should continue to get a free pass. Why? Because there are too many people required to register as sex offenders as it is. Yeah, that’s what he said. He doesn’t want people stigmatized unfairly.

In other words, for Mr Ammiano, it’s OK for somebody to take a photo up his wifes skirt or down his daughters blouse (assuming he has either)and collect those pictures and/or send them all over on the internet but he doesn’t want to stigmatize that person for their little peccadillo. What a jackass. This was the same week the Democrats passed a resolution outlawing swearing in the legislature for the week. Otherwise I would have said he was a Goddamn jackass. Him and his Democrat majority on the committee – God forbid we stigmatize perv’s. Better we just let them roll on until they rape or kidnap or kill someone – like Chelsea King or Amber DuBois. Maybe then they’ll catch Mr Ammiano’s attention. Jeffries vows to fight on.

On March 1, 2010, the Federal Housing Finance Agency (FHFA) announced the extension of the Home Affordable Refinance Program (HARP). FHFA is the regulator and conservator of Fannie Mae and Freddie Mac. HARP is a component of the Obama Administration’s Making Home Affordable Program. Borrowers with loans guaranteed or owned by Fannie or Freddie with loan-to-value ratios between 80 percent and 125 percent may be eligible to refinance their mortgages under HARP. In 2009, there were nearly 200,000 refinancings under HARP, far short of the original goal of helping up to 5 million homeowners.

FHFA Announcement

Making Home Affordable Program Website

The HFA Hardest-Hit Fund was designed to allow the maximum possible flexibility to Housing Finance Agencies in designing locally-focused programs that address the needs of a specific state or region within a state. All programs must have foreclosure prevention and housing market stability as their primary objectives.

CalHFA’s proposal, along with proposals from the four other states selected (Arizona, Nevada, Florida and Michigan) is due by April 16, 2010. The Treasury will then review each proposal for compliance with program objectives and other requirements. The Treasury expects that CalHFA may be in the position to begin drawing down funds within four to six weeks following submission of proposals, or mid-year.

With the exception of Lennar Homes, I’m not aware of any other local applcations of this type of tax – but as this recent update from NAR points out – it’s becoming more of an issue with local governments strapped for cash and profiteers looking to make an illicit buck of the unwary homeowner.

We all came away converts.

First, a few basics. Whitman is richer than God. As the former CEO of eBay, she is a billionaire and she has been spending a bunch of her own money on campaign ads since last year to get her message out. This is in contrast to the other Republican candidate who has done nothing but whine about what Whitman is doing, and Jerry Brown, who finally decided to throw his hat in the ring yesterday and about whom we know too much. I got no problem with her spending her own money because it’s a money game folks, and Jerry Brown’s already got the union money tied up.

Whitman looks better in person than she does on TV (you can’t trust my crappy little cell phone camera). She is poised, well-spoken and confident – she looks and sounds like what you want a political candidate to look and sound like. I know all candidates aspire to that but most come up way short. She sounds sincere because I think she really is sincere – like her TV moto says – ’say what you mean and mean what you say’. She also has a laser focus and is not easily jolted off-message –  which is a talent she will need in order to succeed.

She has three main platform issues and brings every other discussion around to how it relates to her big three:

• Jobs
• Spending
• Education

Whitman points out that jobs are her top priority. Without jobs there is no revenue, there is no recovery, there is no hope. One job killer? Eliminate AB 32 – which drew rousing applause from the house. Next – cut taxes across the board – but not first. First you need to create jobs to get the revenue stream, then you cut taxes to super-charge the momentum of creating more jobs, streamline regulations and make California competitive in the job market again..

Second – cut spending. Judicious and consistent use of the blue-line veto is one avenue she plans to utilize, along with actually reducing the state workforce rather than just reducing the increase. This years budget was ’slashed’ all the way down to $85 Billion. Whitman suggested this is not as draconian as liberals would have you believe since the last time we had an $85 Billion budget was just 6 years ago. 2004 was a pretty good year in California – it’s just that when the money was rolling in SOME people who should have known better figured it would go on forever. She is again promising, as did Arnie, to review the relevancy pf departments, commissions and regulations.

Third – fix education. There’s no reason, given the amount of money we spend per pupil, which is among the highest in the country, that our students should rank where they do nationally, which is among the lowest. Maybe the 40% going to administration instead of students has something to do with it. Maybe tenuring dead wood forever has something to do with it. Maybe rewarding teachers that do a good job might help.

On why she wants to put herself in the position to try to govern a state many are convinced is ungovernable, she is very upbeat. She knows it is a challenge and one that her background uniquely qualifies her to tackle. She cites her real world corporate experience at Disney, Hasbro, Procter & Gamble and, of course, the fact that she took eBay from 30 employees to 15,000. But in addition to the eBay experience, she also credits it with giving her a unique insight into the true job creation engine – small businesses showing how eBay helped create thousands of small businesses and created a cottage industry which she believes could be extended to the entire private sector.

She appears to be going into it with her eyes open – acknowledging the massive economic hurdles, legislative stalemate, union and special interest control, and the myriad of other problems we know exist in Sacramento. But she has a plan to deal with all of them – one at a time. She believes Arnold had the right idea when he started but he decided to tackle all the major issues right up front. He never fully recovered from the shellacking he took from the unions, teachers, nurses etc in the early days.

One thing you may not know – I’ve not seen it written about out here. Whitman is also an avowed conservationist and environmentalist. She recently purchased hundreds of acres around the Alta Mines outside Telluride Colorado, my home town. Previous owners were trying to keep the acreage out of the hands of developers and were encouraged by Whitmans commitment to leaving the land untouched. She also contributed nearly $1.5 million dollars to help the Town of Telluride purchase their Valley Floor a couple years ago – again making sure this land remained a natural asset rather than being heavily developed. If you’ve read my summer vacation posts, you’ve seen the pictures of the Elk herd that roams this land today instead of the condos and estate homes planned by the former owners. Whitman is taking some flack from the extreme enviro’s questioning how she can claim to be an environmentalist while advocating the overturn of AB32. But I think most reasonable people understand that there are true environmentalists on both sides of the political spectrum. They also understand that AB32 really has little to do with saving either the environment or jobs in this state. Whitman understands that.

I didn’t take any notes at the meet & greet – I just wanted to get the flavor of the event, a feel for the candidate. I’ve gotta tell you I was impressed as were my political hack friends. If she only accomplishes 1/4 of what she plans to it will mark a tremendous improvement for California. And look at it this way – our alternative is Jerry Brown. Nuff said.

A real estate broker’s commission may be determined using a percentage of the sales price, a flat fee, or a combination of both, according to a recent letter from HUD’s General Counsel Helen Kanovsky.  The January 22 letter clarifies the distinction between using a formula to calculate a legitimate commission, as opposed to an unearned fee that violates RESPA.  Under RESPA, a real estate broker cannot charge a fee if no, nominal, or duplicative work is done.

According to the letter from Ms. Kanovsky, the new HUD-1 simplifies the reporting of the broker’s commission because it is now reported in the 700-series as dollar amounts, rather than percentages.  If, however, the amount in the 700-series is more than the commission in the listing agreement or buyer’s broker agreement, then HUD may review whether additional services were provided for the excess amount charged.  As an example, a listing broker charging the buyer an administrative fee absent any contractual relationship between the listing broker and buyer may be evidence of a RESPA violation.

This HUD letter provides REALTORS® with some guidance after a federal district court in Alabama invalidated a $149 administrative brokerage commission last year in the case of Busby v. JRHBW Realty, Inc. (2009) 642 F.Supp.2d 1283.  For more information on that case, see C.A.R.’s Realegal dated April 27, 2009.

IRS issues new guidelines on obtaining home buyer tax credits
The Internal Revenue Service (IRS) recently issued new guidelines and clarified documentation that taxpayers must submit to successfully obtain the federal tax credit for home buyers.
KEEP THIS IN MIND
• The federal tax credit for home buyers was extended and expanded late last year. Qualified first-time buyers may be eligible to receive a tax credit of up to $8,000 on homes purchased before April 30, 2010. Repeat buyers may be eligible for a tax credit of up to $6,500. Visit http://www.irs.gov/newsroom/article/0,,id=187935,00.html for more information about the federal tax credit for home buyers, including eligibility requirements.
• To receive the tax credit, home buyers must comply with the IRS’s documentation requirements, including a fully executed IRS Form 5405. On the form, which is available on the IRS’s Web site, taxpayers provide information supporting their claim of eligibility, such as income and home purchase date.
• The IRS also requires home buyers to submit a copy of the closing or settlement statement that proves the transaction took place. The IRS previously said that the statement should show “all parties’ names and signatures, property address, sales price, and date of purchase.” However, since closing or settlement statements vary by state, and in some cases the form does not include both the seller’s and buyer’s signatures, the IRS has revised this requirement. As long as the closing or settlement statement conforms to prevailing local practices, the IRS will accept it.
• One stipulation for repeat buyers is they must provide documentation they lived in their former property for a consecutive five years out of the previous eight years. Accepted documentation may include property tax records, hazard insurance records, or copies of annual mortgage interest statements filed with their federal taxes.
To read the full story, please click here:
http://www.latimes.com/classified/realestate/news/la-fi-harney21-2010feb21,0,1254506.story

Want to build windmills to generate electrical power? CEQA compliance will add 6 years to the timetable. Want to put solar collectors out in the middle of the Mojave Desert? Sorry, CEQA says it might disrupt animal migration patterns. Want to add another lane to the I-215? Sorry, you need to re-do all the CEQA stuff you already complied with once even though nothing has changed. Want to build a hospital in Temecula? CEQA will keep you hopping from makework to paperwork in no time at all.

Finally some in our state capitol are growing cajones and saying ‘enough is enough’. We need infrastructure, we need dams and roads and disaster relief and we need JOBS. You’ll note with no great surprise that the Sierra Club bemoans this ‘attack on CEQA’ and ‘developers using the recession as an excuse for rollbacks.’ When the Sierra Club gets into the business of helping create jobs in the state, let me know and I’ll start caring about what they say.

SRCAR has sent a letter to Senator Dennis Hollingsworth in SUPPORT of his bill SB X8-56, outlined below.

State’s main environmental law targeted on broad front in Capitol

The Southwest California Legislative Council, with whom SRCAR is an advocacy partner, today adopted the following positions on current/pending legislation:

Support – ACA 30 (Jeffries) To abolish the office of Lieutenant Governor.
Self explanatory – this largely ceremonial position requires salary & staff expenses and the duties could be consolidated with the Secretary of State.

Support – AB 1671 (Jeffries) To prevent the Governor from appointing vacancies on the County Board of Supervisors.
A recent example in Riverside County left us without the ability to pass certain bills at the county level while Sacramento played politics with us. Our local positions should not be state appointed.

Support – AB 1672 (Jeffries) To make the California Air Resources Board an elected rather than appointed body.
The CARB is one of the most egregious examples of the lack of accountability on state boards & commissions with the Chair stating publicly that if she had to worry about being elected she would worry about all the jobs cost by their recommendation – but she’s not so she doesn’t.

Oppose – AB 1594 (Huber) To prohibit construction of the peripheral canal.
An attempt to circumvent the wording and intent of the state water coalition recommendation and the Nov, ballot initiative.

Oppose – AB 518 (Lowenthal) Provides incentives for cities and counties to reduce or eliminate free or subsidized parking.
Would prove particularly costly to outlying areas like Southwest County where 60% of our residents commute and are forced to park either at work or when they go shopping.  Unintended consequence is a reduction in people going to the malls reducing revenue to shopowners and downstream job market.

Oppose – SB 657 (Steinberg) Require retail sellers and manufacturers to implement policies to eradicate slavery and human trafficking from their supply chain.
Legislation already exists prohibiting slavery and human trafficking. To expect your local grocery store or hardware store to be able to track it’s products back to their origin and potentially take action against some foreign source is ludicrous. Besides, doesn’t Darrell Steinberg have anything better to worry about – like our state budget?

Oppose – SB 810 (Leno) Single payer health care system
We are in agreement that the state should be the appropriate body to determine this issue – rather than the federal government, but this bill is not the answer and would only increase the debt load of the state.

Founded in 2004, the Southwest California Legislative Council is a regional advocacy coalition of the Temecula Valley Chamber of Commerce, Murrieta Chamber of Commerce, Lake Elsinore Valley Chamber of Commerce and the Wildomar Chamber of Commerce. Its mission is to provide a basis for the four chambers of commerce to act on local, state and federal legislative issues to secure a favorable and profitable business climate for our region.

Time and again people don’t listen to that little inner voice that tells us – if it sounds too good to be true, then it probably is. We know that has always been the case and continues to be the case but sometimes… sometimes we think – well, reality may have suspended itself just this one time, just on this occasion, just for me.

NOT!

We continue to warn people about loan mod fraud – yet people continue to be victimized. I know people are desperate but sometimes you also have to be just a little bit naive and/or stupid to buy into some of these scams.

But the coalition formed by our Attorney Generals office, the Department of Real Estate and the State Bar of California keep trying to protect us from these scamsters and ourselves. I posted here some months back when they initially formed the coalition and were effective in passing legislation that required loan mod specialists to register with the Attorney Generals office and post a $100,000 bond (SB 94 Calderon). The same bill made it illegal for anybody to charge an up-front fee to modify, or attempt to modify, a loan. Yet in spite of shutting down hundreds of these scam artists and acting on 1,000’s of complaints, the problem continues.

So once again, AG Brown, the DRE and the State Bar have today submitted the following press release:

Brown Warns Homeowners to Avoid Forensic Loan Audits

Los Angeles-Attorney General Edmund G. Brown Jr. today joined the California Department of Real Estate (DRE) and the State Bar of California in warning Californians to avoid forensic loan audits, the loan-modification industry’s latest “phony foreclosure-relief service,” in which homeowners pay up-front fees for a forensic review of their lender’s practices, but are provided no actual foreclosure relief.

For more information on Brown’s action against loan-modification fraud visit: http://ag.ca.gov/loanmod.

As a Realtor® you are part of one of the largest special interest groups in this country – the Realtor® Party, and you have a noble cause – preservation of the American Dream of home ownership. You may not like the idea of being a ‘special interest’ and you may disavow any inclination to participate in the political process that supports it, but that doesn’t change the facts.

Pericles summarized the concept in 500 BC when he said “Just because you don’t take an interest in politics doesn’t mean politics won’t take an interest in you.” I’ve updated that somewhat with the Wunderlich codicil “If you’re not at the table, you’ll probably be on the menu.”

If you think the business of real estate is just about buying and selling houses, you only know half the story. The National Association of Realtors® is the largest grassroots political action group in this country representing more than 1.1 million Realtors® in our nation’s Capitol. Last year we invested more money in candidate elections and special campaigns than almost any other group. That’s the other business of real estate – the part that allows you to stay in your business.

A few members have voiced concerns over the recent decision by the California Association of Realtors® to increase our dues by $49 to cover this vital piece of our business. But in reading through those comments (comment summary on $49 investment), I realized some of you are simply not aware of what these critical funds are used for and the direct benefit you derive. For less than the price of 1 latte a month, you are insuring your political survival and generating a real and measurable impact to your bottom line.

So let’s break down what YOU get for that $49 investment.

• Just last week we defeated a proposal from CA Senate President Darrell Steinberg that sought to impose a 3% accelerated withholding tax on independent  contractors – that’s you. If you sold a $100,000 condo, the withholding from your commission check would be $90. On a median price home in Temecula last year that would have taken an additional $260.89 out of your check – every check all year long. If it wasn’t for our successful lobbying efforts you’d be  paying that already because Darrell tried the same thing 3 times last year. Is that worth $49 to you?

• Have you sold a home to a first-time homebuyer in the past year? Over 1.2 million first-time prospects have become owners since the inception of the tax credit last year – 450,000 of those would not have jumped into the market without that incentive. Who do you think lobbied to get that measure passed last February and then worked extra hard to get it extended and expanded in November against long odds? Selling side commission on a median price home in Murrieta last year was about $8,133. Is that worth $49 to you?

• Last year Canyon Lake proposed an ordinance requiring every Realtor® to pay a $90 business license fee every year. If you worked in, advertised in, sold a home in, or even mentioned Canyon Lake in your website – you would get a bill for $90. We worked hard to modify that ordinance – not just for Canyon Lake but so that other Southwest California cities didn’t get the idea they could just reach into your pocket without a fight. Is that worth $49 to you?

• Last election cycle we supported candidates in 9 local city council races. 8 of our candidates won including 3 Realtors®. Do you think it might be helpful to have people serving on our local councils and water boards who understand property rights issues, eminent domain, sign ordinances, zoning and so forth? How about in Sacramento? Or Washington DC? If we had more legislators in place who understood real estate or banking or appraisal issues do you think we’d be having some of the problems we’re having today? Is that worth $49 to you?

• Would the loss of the mortgage interest tax deduction have any impact on home ownership? How about capital gains tax benefits for home owners? The  mortgage interest tax deduction and capital gains benefits are on the table every couple years in Washington DC as a source of potentially significant tax revenue. They will be again this year. Without your NAR lobby, these significant advantages to homeownership would have disappeared along with a chunk of your business during the past decade. It that worth $49 to you?

• Would your business be impacted if a buyer could walk into any bank and buy a home from the same salaried employee who gave them a loan? NAR fought an 8 year battle to eliminate a loophole banks were trying to exploit to do just that. We won that fight in 2009. Is that worth $49 to you?
  

Those are just a few of the things your $49 does. Here’s a few things it doesn’t do:

• Realtor Action Funds do not support a political party platform or agenda – they support the Realtor® Party. We support candidates who understand our issues at the local, state and national level regardless of party affiliation. Historically our expenditures are split almost down the middle at the federal level.

• Realtor Action Funds do not support issues or legislation that is not real estate related. At the state level our analysts comb through every one of the 3,300 bills submitted in an average session. About 1,500 of these may be flagged as having some potential impact on either Realtors® or property rights. Our state directors discuss each of those bills to determine whether the Association will support it, oppose it, maintain a neutral position or if it really isn’t real estate related at all. We also sponsor our own bills to address specific real estate issues of concern to our members. You can read about the eight bills CAR  authored for 2010 here.

• Realtor Action Funds do not support travel by Directors, they don’t pay for lobbyists salaries and they don’t pay for ‘pet projects’. If it doesn’t directly support a candidate or real estate related issue or campaign, it doesn’t come out of these funds. They are too precious to squander and the real need is growing exponentially.

I hope this gives you a better feel for why this latest move was made by our state association. It was not a capricious decision and was discussed in detail for more than a year. In order to continue to be effective at the level our members have come to demand, we
must have the support of all members. 10% or 20% can’t continue to pay for benefits demanded and enjoyed by 100% of the membership. That’s neither fair nor equitable.

We welcome your input and questions and I encourage you to visit http://gadblog.srcar.org/ to take part in the discussion.

O.C. Man Gets 15 Years for Fraud, Refusal to Account for Off-Shore Money

LOS ANGELES – A Downey woman who orchestrated a real estate fraud scheme that caused nearly $13 million in losses after falsely promising to help homeowners in default on their mortgages has been sentenced to 10 years in federal prison. A second person involved in the scheme was sentenced yesterday to 15 years in prison after a federal judge determined that he had refused to account for proceeds of the scheme in an off-shore bank account that he had agreed in his plea agreement to repatriate.

Martha Rodriguez, 38, who pleaded guilty to mail fraud and money laundering charges in relation to the scheme that ran from May 2003 until November 2005, was sentenced yesterday morning to 120 months in prison by United States District Judge George H. King. In issuing the decade-long sentence, Judge King noted that Rodriguez perpetrated the mortgage fraud scheme while she was free on bond after being charged in another real estate fraud scheme.

Edward Seung Ok, 44, of Huntington Beach, who pleaded guilty to mail fraud, was sentenced yesterday afternoon to 15 years in prison. Before issuing the sentence, Judge King ruled that Ok violated his plea agreement by failing to provide investigators with access to an account in the Bank of Nevis on the Caribbean island of St. Kitts into which Ok had transferred more than $1.6 million during the course of the fraudulent scheme. In his plea agreement, Ok had agreed to repatriate and transfer to the government all of the funds in that account. In addition to continuing to conceal the money, Ok transferred more than $1 million of the off-shore money into a secret account in the United States, where he could access the funds for his personal expenses, which included golf club memberships, illegal drugs and a $235,000 Lamborghini Gallardo, prosecutors told Judge King during yesterday’s hearing. Addressing the court during yesterday’s hearing, Ok admitted that he spent more than $1 million of the money he had hidden in the off-shore account during a two-year period when he was free on bond in this case.

The prison sentences stem from a fraud case in which Rodriguez, Ok and three others used computerized databases that list homes going into foreclosure to locate victims, who were promised refinancing services. The scheme was operated through Rodriguez’s real estate and escrow agencies, Silvernet Properties in Downey and Bellasi Escrow in Seal Beach. Instead of obtaining refinancing, Rodriguez and her co-schemers submitted loan applications in the names of “straw buyers” who were purportedly buying the properties. In some cases, the defendants paid the straw buyers for the use of their personal information. In other cases, the defendants used personal information of people without their knowledge. The loan applications for the straw buyers – which always contained false information – caused a series of lenders to fund more than 100 mortgages worth more than $40 million. The loan proceeds were used to pay off the loans in default, sometimes to make a few mortgage payments on the new loans, and to provide some instant cash to homeowners. However, the remaining proceeds, typically representing the bulk of the homeowner’s equity, were skimmed off by Rodriguez and her co-schemers.

Even though they were promised that they would be able to keep their homes, the victim homeowners usually lost title to their homes. The lenders suffered losses when the straw buyers then failed to make loan payments and the new loans went into default.  Lenders were often unable to foreclose because the straw buyers did not know the properties were in their names. The scheme targeted commercial lenders and more than 100 homeowners across the Southland.

Three other defendants in this case were sentenced late yesterday by Judge King. They are:

Cynthia Valenzuela, a 27-year-old Orange resident who pleaded guilty to mail fraud, was sentenced to one year and one day in prison;
Vladimir Stefanovic, 38, of Huntington Beach, was sentenced to 18 months in prison; and
Maria G. Juarez, 39, of Canoga Park, was sentenced to three years in prison, in part because, after she was arrested on the case, she continued to perpetrate loan fraud while she was free on bond.

This case is the result of an investigation by the Federal Bureau of Investigation and IRS – Criminal Investigation. The Los Angeles County Department of Consumer Affairs, Real Estate Fraud Section, provided substantial assistance during the investigation.

CONTACT:        Assistant United States Attorney Gregory A. Lesser

In case you’ve been in a post-holiday siesta or simply water-logged, you’re already aware that four of our six cities in Southwest California have women Mayors this year, joining six other cities throughout the Inland Empire. Media outlets have had a field day dubbing our area ‘Estrogen Alley’ and talking about ‘Women Taking Charge’. But the fact is that in most cases our Mayors are not elected to that post, they’re simply chosen by their fellow council members, typically in a set rotation schedule. As Lake Elsinore Mayor Melissa Melendez characterized the situation, “… it’s not some staged take-over, it’s just a unique set of circumstances. It’s more indicative of the fact that women in general are getting more involved in the political process, being elected to city councils in
greater numbers and being elevated to this position with more frequency than we’ve seen in the past.”

Indeed while some, including Murrieta Mayor Kelly Bennett and Wildomar’s Bridgette Moore are serving their first term on the council, Temecula had Mayor Pat Birdsall as far back as 1992 (& 1997) and Mary Ann Edwards in 2009. Canyon Lake’s Nancy Horton follows Mary Craton into the seat and Corona Mayor Karen Spiegel served that city previously in 2006.

The Valley Business Journal recently spoke with some of these ladies about the job and what they plan to bring to the business community and economic development during their tenure. The overwhelming response was that Southwest California cities are ‘Open For Business’.

Mayor of one of Southwest California’s newest cities, Wildomar, Bridgette Moore said their new City Manager Frank Oviedo has been tasked with economic development and growth as a priority. According to Moore, Wildomar has more undeveloped land that many of their neighboring cities along with a real need for business growth in the area. “We recently surveyed our citizens and found that bringing restaurants to the city was first on a lot of lists. We are also encouraging other retail partners, technology firms and medical manufacturers to locate here not just for the tax revenue but to serve the needs of our residents.” …and a hotel.
Moore’s Arizona family had to stay in another city when they came over to attend her inaugural meeting. “Yes, a hotel would be very welcomed here.”

“We’ve also reduced some of our developer fees in line with WRCOG recommendation and we’re streamlining our application and permitting process so there’s no surprises and no delays. You’ll find a real ‘make it happen’ attitude in Wildomar. If it’s a good business, it’s good for Wildomar.”

Lake Elsinore Mayor Melissa Melendez emphasizes the unique attraction of the lake to their community. They currently have a very aggressive specific plan to develop the area around Diamond Stadium and another marina and resort plan for further up the lake. “Unfortunately those plans are on hold right now due to the economy but they’re still solidly in place.”

“We need jobs for our residents right now – that’s our priority. We love the CostCo’s and Target’s, our auto dealers have been terrific but we need an Abbott, somebody with hundreds of jobs to keep our people off the freeways to Orange County every day.” To accomplish that, the city has worked with a corporate recruiter to introduce Lake Elsinore to prospective businesses. The Mayor is also instituting monthly ‘Coffee with the Mayor’ meetings. One series will be in conjunction with the Chamber of Commerce focusing on existing businesses – what they need to succeed and grow and how the city can help. Another series will join city staff and planners with developers and prospective business targets to talk about planning issue, fee structures and what the city can do to make Lake Elsinore a more attractive destination.

“I know we compete, to a degree, with the established master plan communities like Temecula, Murrieta and Corona,” says Melendez, “but we can all work together. We share more than boundaries, we share goals and we share our successes throughout the region. Lake Elsinore is a very different city than it was just 10 or 15 years ago. I would encourage businesses to take a second look at us through new eyes.”

In nearly 20 years as a city, Kelly Bennett is the first women to be elected to the Murrieta city council, thus its first Mayor as well, although she hesitates to put much significance to that. “It simply allows me the opportunity to represent my city in what for me, is extraordinarily important – the attraction and support of viable businesses in the city.”

“I have the opportunity to work very closely with several great groups that help us get the word out. City Staff, including Economic Development Director, Bruce Coleman, the Chamber of Commerce, the EDC and WRCOG. We also attend conferences like the ICSC (International Council of Shopping Centers) and the World Trade Center, San Diego, a group that positions San Diego and regional businesses for international recognition and global market success.’ Bennett noted that Murrieta is focused on three objectives: manufacturing, including nourishing ‘green’ companies; expanding education opportunities, including establishing a local 4 year under-graduate curriculum; and health care. The new physician-owned-Loma Linda healthcare campus, under construction in North Murrieta, is an endangered species under the current federal healthcare proposal. Yet we desperately need medical services and the professional and ancillary jobs it will create. The City is also aggressive in creating outreach programs for businesses. Their Broker Work Group regularly attracts 100 or more local commercial and residential Brokers, developers and planners to its meetings. The City recently introduced the Business Roundtable, and Visionary Workshops to solicit comments on the new general plan review.

“One thing I’m particularly excited about is the potential under AB 811, the Energy Efficiency for Cities and Counties Act. We are developing a program to attract green tech  manufacturers providing energy efficient/cost effective products for our homeowners. You’ll be hearing a lot more about that this year.”

While the Mayors readily acknowledge they don’t have any ‘special powers’, they do get to conduct council meetings, sign mountains of paperwork, spend a lot more time on the job, and generally be the public face of city government at numerous events throughout the region and state. One Mayor I spoke to was picking up children from school while another was grabbing late evening dinner at a local (healthful) drive-thru. As with any Mayor, male or female, there’s a delicate balance.

Our Mayors are also united in hoping the state recovers soon, without ‘borrowing’ any more City cash. They are all facing constrained budgets while maintaining services. They are similarly committed to bringing jobs to the region, to retain and grow our existing business base and to keep more of our citizens off the freeway. And they all have a huge ‘Open House’ sign in front of their cities.

Southwest California appears to be off to a good beginning as we enter this second decade of a new century, and in capable hands.

Ahhhh another great headline. This one about a 33 year old guy by the name of Jon James who scammed as many as 50 people out of their savings and IRA’s in his get-rich-quick scheme.

See if this sounds familiar – James would often meet his marks face-to-face or at presentations hosted at restaurants. He’d promise them returns way better than those available elsewhere by investing in his real estate investment operation. He actually invested in a few properties but made absolutely no money – he paid off a few early investors with income from later investors and then used over $11 million for personal expenses including his wedding and a recording studio between 2003 and 2006.

Investigated by the FBI, James scheme has been prosecuted by the US Attorneys office. He is scheduled to be sentenced in May when he faces a statutory maximum of 20 years at Club Fed.
Keep the perp walk going folks. There’s plenty more where he came from. After all, there’s a sucker born every minute and 2 grifters to separate them from their money.

Yesterday the Senate Budget Committee, in its wisdom, decided not to bring up independent contractor withholding for a vote at its meeting. For the time being, we’ve won, but Steinberg is expected to push it again later in the year as the budget fight heats up.

For those members concerned about their $49 investment in political survival, you might ask them if they would rather have paid the extra 3% ($90 out of pocket on a $3,000 commission). This is what the $49 does – not travel for Directors, not salaries for lobbyists and not to pay for Chief Economist Lawrence Yun.

If you would like to read my earlier post on the subject, click here: Political Survival Investment No Longer Voluntary

If you are interested in CAR’s 2010 legislative activities, click here: CAR Sponsors 8 bill in session

So here are a few of the comments we received along with my responses to them. I suspect those folks won’t read this since they obviously didn’t read my earlier post on the topic – but we keep trying.

MS – Good Move. It’s for a damn good cause. Thanks!!
Thank you.
CR – I think it is totally reasonable to require $49 a year to support our political agenda.
Thank you.
PM – I doubt you want to hear what I have to say to your strong arm tactics.
Yes we do.
AF – Why can’t some of our meeting/convention people stay home for a change.
Well, we could do that but it really doesn’t have anything to do with this topic. Political survival will be necessary regardless of who travels where and this money is not spent for that.
BK – I will never give a penny to support CAR’s political activities. In addition I will recommend all Realtors opt over to an alternative account.
That’s why we created it as an opt-over. You don’t have to support Realtor® political activities even though you benefit from them.
KJ – It’s good to see socialism alive and well. I will be looking for a law group to make money fighting you.
Well, CAR already has law groups who have made money advising us this is OK but we anticipate there will be members who would rather spend thousands fighting this than invest $49 on their political survival.
JF – Apparently once a lobbyist is hired they can’t be fired so tax people more to keep them employed.
Our lobbyists can be hired or fired, although fortunately for our members our senior lobbyists have been around for years and are very effective on our behalf. But again, this money doesn’t go to pay our lobbyists so they’ll keep working for you regardless. Oh, and it’s not a tax – it’s a dues increase pure and simple. It’s the cost of doing business being shared equally by all who benefit rather than a few of us paying for most of you.
DA – Believe the board is treading in uncharted waters here and putting a lot more at risk than their pet political projects.
Well, these waters are hardly uncharted – numerous groups have been here, done that – it’s just new for us. As for our ‘pet political projects’, those are called Realtors® and our clients. If you look at the legislation we sponsor and support from the local to the federal level, every single piece is either for the benefit of Realtors® or to protect the property rights of your clients.
LM – I resent it!!!!!!!!
Sorry!!!!!!!!
LC – This is completely out of line. You have stepped beyond your authority!!!!!!!!
It’s actually right in line with what needs to be accomplished for the Realtor® party and, no, it is within our authority!!!!!!!!
RD – Then you will not get the other $349 from me in 2011!
Then you will not be a Realtor® in California.
DD – Your lobbying at the beginning of the decade plus dictating to Lawrence Yun to disclose only optimistic news contributed strongly to what we are going through now.
Again, these funds have nothing to do with Lawrence Yun (NAR Chief Economist), who is widely regarded as one of the leading economists in the country, not just by NAR but by most economists and scholars. Not sure what lobbying we did that resulted in the sub-prime melt-down. Had our lobbying been more effective against the Barney Frank’s and Maxine Water’s of the world, GSE loan limits would have been raised 8 years ago and the whole sub-prime debacle could have been avoided. We also had nothing to do with Fed monetary policy or with the banks greed – but I’m certainly open to hearing where we went wrong.

Please feel free to chime in. We welcome your ideas and thoughts whether you agree with the decision or not. But keep a couple things in mind. Money raised for political action IS NOT SPENT for other purposes. It does not pay for salaries or travel or lobbyists. PAC funds are either spent on issues campaigns such as the extension of the 1st Time Homebuyer Tax Credit, or to defeat onerous legislation like last years ACWA sponsored home energy audit bill. PAC funds are also spent supporting local, state and federal candidates that have demonstrated an understanding of Realtor® issues and private property rights. In the 2008 election cycle that included supporting 9 local city council and/or water board candidates, 8 of whom were successful.

Pericles understood the concept in 500 BC when he said “Just because you don’t take an interest in politics doesn’t mean politics won’t take an interest in you.” Like it or not, as a Realtor® you are part of one of the largest special interest groups in the country, and one with a noble cause – preservation of the American Dream of homeownership. If you think the only business of real estate is buying and selling houses, you’re working with only half the picture.

Posted: 16 Feb 2010 12:58 PM PST