TAX BREAK FOR MORTGAGE DEBT FORGIVENESS

President Bush signed into law today a new measure giving tax breaks to homeowners who have mortgage debt forgiven. Under preexisting law, the debt forgiven by a lender, such as for short sales and refinances, was generally taxable to the borrower as debt discharge income. With the passage of the Mortgage Forgiveness Debt Relief Act of 2007, a taxpayer does not have to pay federal income tax on debt forgiven for a loan secured by a qualified principal residence.

This tax break applies to debts discharged from January 1, 2007 to December 31, 2009. Qualified principal residence indebtedness is debt incurred in acquiring, constructing, or substantially improving the residence (up to $2 million for refinances).

For purposes of calculating capital gains, any debts discharged excluded from income under the new law must be subtracted from the basis of the taxpayer's principal residence (but not below zero). However, taxpayers may generally exclude from capital gains income up to $250,000 (or $500,000 for married couples filing jointly) for properties owned and used as their principal residence for at least two of the last five years.

For a copy of the Mortgage Forgiveness Debt Relief Act of 2007, go to http://www.govtrack.us/congress/bill.xpd?bill=h110-3648.

Brought to you by the CALIFORNIA ASSOCIATION OF REALTORS®

MIT PHYSICS LECTURES AND MUCH MORE, FREE ONLINE!

Did you know about the free on-line lectures available from the Massachusetts Institute of Technology's OpenCourseWare program? Go take a look!

Click here to read Sara Rimer's article in the New York Times about Walter H. G. Lewin, one special physics professor who's "now emerged as an international Internet guru thanks to the global classroom."

Enjoy this video of the Indiana University men's a cappella group Straight No Chaser doing a special holiday medley!

THE COST OF STAND-BY POWER

Ever wonder exactly how much power is actually being used by appliances "that are always 'on' while seemingly 'off'," such as a television?

C. CLAIBORNE RAY of the New York Times has the answer right here, including a laboratory Web site of Standby Power Data that "provides tables of the minimum, average and maximum power used by appliances that cannot be switched off completely without being unplugged."

BEN STEIN'S "LESSONS FROM THE PITS"

When he isn't giving away his own money on Comedy Central or lending his talent to making memorable characters on the Big Screen, lawyer and economist Ben Stein has some pretty wise things to say about life.

Click here to read some of his thoughts on travel, investment, spending, and heroism--all with a good dose of his usual wit, of course.

The 53 Places To Go In 2008!

"What’s on your travel itinerary in the new year?"

From Laos to Hvar to Death Valley to Mozambique, click here to see beautiful photos from around the world and find out which destinations made the list!

List compiled by Denny Lee, courtesy of the New York Times.

INFORMATION FOR TAXPAYERS IN FORECLOSURE


Provided courtesy of the Internal Revenue Service

The IRS has developed information and Web resources to assist taxpayers with the tax issues presented by foreclosure.

Key Points:

*The Internal Revenue Service unveiled a special new section on www.IRS.gov for people who have lost their homes due to foreclosure.

*The IRS also reassured homeowners that although mortgage workouts and foreclosures can have tax consequences, special relief provisions can often reduce or eliminate the tax bite for financially strapped borrowers who lose their homes.

Resources:

*IRS 2007-159 – The news release IR 2007-159 provides additional background. The
news release and FAQs can also be found at http://www.irs.gov/newsroom/article/0,,id=174022,00.html

The direct link to the FAQ’s is http://www.irs.gov/newsroom/article/0,,id=174034,00.html

SURFING THE WEB FROM INSIDE YOUR CAR

Accessing email from your Blackberry or iPhone is soon to become only the most basic of high-tech activities for the car-bound commuter.

According to John R. Quain of the New York Times, major cellphone carriers such as AT&T, Verizon and Sprint now offer unlimited monthly subscriptions to high-speed wireless data services. Just slide the wireless data PC card into your laptop and you're on!

Granted, the picture quality for on-line video technologies is not the same as your cable connection, and the strength of the wireless signal depends on your proximity to the carrier's cellphone towers. Still, the technology can only get better.

Just remember to leave the web surfing to the passengers. Someone needs to get us there safely!

To read the entire article, with pricing and product details, click here.

2008 California Market Forecast & Statistics Galore!

That's right! On October 10, California Association of Realtor (CAR)'s Vice President and Chief Economist, Leslie Appleton-Young, released the 2008 Real Estate Market Forecast for all of California.

Click HERE to access regional and state-wide statistics, detailed charts and graphs, a 2008 forecast and 2008 market opportunities!

For more information on taking advantage of this forecast and more, be sure to call me at 831-457-5550 or shoot me an email at frank@frankmurphy.net!

Pin The Tail On The Bottom Of The Market!







All of us Realtors have been working with would be home buyers here in Santa Cruz. It seems all of them feel that they should wait until the housing market is at the bottom before they buy a home. Let’s look at an interesting take on "the bottom of the market" and how it will effect your buying decision....








This is a graph that represents the Santa Cruz housing market. The left side of the V represents the market going down, the right side represents the market going up, and of course the bottom of the V represents the bottom of the housing market.







If I asked you to plot on this

graph where you thought the housing market

was right now ...












... would you pick this spot or something close?

So you think that the market is going towards the bottom. If the market isn't at the bottom yet, how will you know when it does hit the bottom?

How will you know when the housing market hits the bottom?

Experience tells us you won't know that the housing market has hit the bottom until prices start to go back up. It will be difficult to be sure that the market has hit bottom for a few months. It’s not a sudden shift, it’s a gradual shift. You'll be able to tell that the market has turned when prices reach this point (green arrow).



What is the difference in housing prices between the red arrow and the green arrow?

Not much... but there is another difference: a major difference.

If you buy a home on the left side of the graph, it is considered a buyers market. You would be more likely to get concessions from a seller including price reductions, repairs, upgrades, closing costs, maybe even personal property.

If you wait until the market turns and you buy on the upswing, you and every other buyer that has been waiting for the market to hit bottom will be bidding on the same house.

There really is no better time to buy a house than now, and here are some reasons why:

1. There is a wonderful selection of homes to choose from right now.
2. Sellers are very willing to negotiate on price, terms and perks.
3. Interest rates are still at a historical low.

I'm suggesting we take a good look at the above examples and decide what percentage the prices will have to drop before a buyer thinks housing prices have hit bottom, and then offer that price. For example, if you think that prices will go down another 5%, then submit an offer at 5% below the asking price. Sellers will either counter, accept or decline. Then look at a loan payment based on current low interest rates. On an $875,000 home with an accepted offer 5% below asking, you'd end up at $831,250. Putting 20% down ($166,250) your loan would be $665,000. At 6% payments would run $3,325. If interest rates were to go up only half a point to 6.5%, the same home with the same $166,250 down would have to sell for $797,000 to end up with a similar loan payment.

The message here is to take advantage of the market today! Opportunity is knocking now!

Fed Cuts Interest Rates by A Quarter Point

Interest rates have indeed been cut again, moving down from 4.75% to 4.5%.

While the cut was expected, it is now thought to be unlikely that rates will be cut again for quite sometime.

Fed Chairman Ben Bernanke was forced to make a decision in light of both a "faster-than-expected" growth in the economy and the threat of falling home prices and a falling dollar. And now, of course, the argument arises over whether Bernanke and the Fed are truly able to keep inflation under control.

To read about the Fed's decision in more detail and the controversy that surrounds it, go to the Wall Street Journal's article: Fed's Rate Cut Could Be Last For a While

24-Hour Hotline Available to Help Avoid Foreclosure

According to Sentinel Staff Writer Jondi Gumz, "A national survey released Monday by the AFL-CIO reports that 49 percent of homeowners with adjustable rate mortgages admit they do not know how their mortgage adjusts and 73 percent do not know how much their mortgage payment will be after the adjustment.

"'This survey shows that many homeowners simply are not prepared for the steep rise in mortgage payments that this market inflicts on ARM [adjustable-rate mortgage] holders,' said AFL-CIO President John Sweeney.

"To help union members, their parents and their children who are trying to avoid foreclosure, AFL-CIO officials have opened a 24-hour hotline staffed by Money Management International, a HUD-certified counseling agency."

The "Save My Home" hotline is at 1-866-490-5361

To read Jondi's article in its entirety, go to Union Homeowners Know Too Little About Their Mortgage Payment

WHY YOU SHOULD PRICE YOUR HOME REALISTICALLY

TIME Chances are that your home will sell at its fair market value. Pricing it realistically at the outset simply increases the likelihood of a timely sale with less inconvenience and greater monetary return.

COMPETITION Buyers educate themselves by viewing many homes. They know what is a fair price. If your home is not competitive in value with those they have already seen, it will not sell. Buyers typically look at homes within a $10,000 price range. If your home is not priced within the correct range, it very likely will not be exposed to its potential or targeted buyers.

REPUTATION Overpricing causes most homes to remain on the market for too long. Buyers who are aware of a long exposure period are often hesitant to make an offer because they fear "something is wrong" with the house. It often happens that homes that are on the market for a long time eventually sell for less than their fair market value.

INCONVENIENCE If overpricing keeps your home from selling promptly, you can end up owning two homes - the one you've already purchased and the one you're trying to sell. This can prove costly and worrisome, as well as inconvenient.

EIGHTY PERCENT OF THE MARKETING OF YOUR HOME IS DONE THE NIGHT WE DECIDE AT WHAT PRICE WE WILL LIST YOUR HOME.

IF YOU ARE UNWILLING TO LIST YOUR HOME AT, OR JUST BELOW, THE
CURRENT MARKET VALUE YOU ARE BETTER SERVED NOT PUTTING IT ON
THE MARKET AT ALL.

FRANK MURPHY

831-457-5550
email Frank@FrankMurphy.net www.LiveInSantaCruz.com

REVISING MORTGAGE RULES: CAN THERE BE AN AGREEMENT?

With the expectation that hundreds of thousands of homeowners are likely to lose their houses as subprime mortgages are scheduled to raise interest rates over the next 18 months, Democrats propose that "Fannie Mae and Freddie Mac, which guarantee conventional mortgages of up to $417,000, [be allowed to] buy and hold many billions of dollars’ worth of additional mortgages in their own portfolios."

The Bush administration has been, and still remains somewhat, opposed to such a move, reasoning that taxpayers everywhere are put at risk if the investments turn out to be bad for such government-sponsored companies.

To read about how the Bush administration and the Federal Reserve are moving closer to an agreement with House and Senate Democrats regarding this issue, click here.

FED CUTS RATE; MARKETS SOAR!


Fed cuts prime lending rate by 1/2 % from 5.25% to 4.75% in a dramatic move.

Stock market reacts with large gain.

Impact on mortgage rates and the housing market not clear at this time.

To read the whole article click here.

Fed Cuts Rate By Half A Point
by: Vikas Bajaj, NY Times

There was something for just about everyone in the Federal Reserve’s decision yesterday to cut its benchmark interest rate by half a point (from 5.25% to 4.75%).

For homeowners, it could lead to lower mortgage rates in the months to come. For investors, it could help stabilize and bolster volatile share prices. For Wall Street financiers and for companies across America, it could eventually make borrowing easier and cheaper.

“This is a bold move,” said James T. Swanson, chief investment strategist at MFS Investment Management, a mutual fund company in Boston. “It’s going to alleviate concerns that the credit market will kill the economy.”

The rate cut, to 4.75 percent, was twice as large as most investors had expected, and it showed in the market’s reaction. The Standard & Poor’s 500-stock index rose 2.92 percent, to 1,519.78, and the Dow Jones industrial average rose 335.97 points, or 2.51 percent, to 13,739.39. It was the biggest single-day gain for both indexes since early 2003.

Many commercial banks followed the Fed and cut the prime rate they charge their best customers for loans. In the commodity markets, gold and oil prices both surged yesterday afternoon. The dollar fell to a new low against the euro.

Investors in the futures market are now betting that the Fed will cut rates at least once more this year, to 4.5 percent, at the meeting in late October. But the central bank was more guarded. Noting that “some inflation risks remain,” the Fed said that its actions would have to balance concerns about slowing growth against the threat of inflation.

For the broader economy, changes in the Fed’s target short-term interest rate, which banks charge one another, usually takes several months to a year to have a noticeable impact.

The average rate for a 30-year fixed mortgage stood at 6.31 percent last week, down from its high for the year of 6.74 percent in June, Freddie Mac said. The rate could fall further if the Fed’s move and statement encourage investors to buy more mortgage-backed securities, which are used to finance loans.

To read the full article go to: http://www.nytimes.com/2007/09/19/business/19cnd-markets.html?_r=1&adxnnl=1&oref=slogin&adxnnlx=1190223776-8XlJtNOrYT07wNcOxCRmYA

7 FAST FIXES FOR YOUR CREDIT SCORE

By Liz Pulliam Weston

So you've had a few problems getting the bills paid lately, and you're wondering what you can do to repair the damage.

You've got plenty of company. There are more than 30 million people in the United States with credit blemishes severe enough (and credit scores under 620) to make obtaining loans and credit cards with reasonable terms difficult.

Or maybe your credit is OK, but you'd like to make it better. After all, the better your credit, the lower the interest rates you can secure on mortgages, car loans and credit cards. Know the score In order to improve your credit score, it's important to know where you stand currently. Despite all the media attention given to free credit reports, you still have to pay to find out your credit score, the three-digit number ranging from 300 to 850 that is the key to your borrowing costs. You can obtain your FICO credit scores, the ones lenders use, from MyFico.com. Or you can get Experian's "consumer education" version here.

Now you're ready to take the seven steps to speedy credit repair:

1) Pay down your credit cards. Paying off your installment loans (mortgage, auto, student, etc.) can help your score, but typically not as dramatically as paying down -- or paying off -- revolving accounts like credit cards. The credit-scoring formulas like to see a nice, big gap between the amount of credit you're using and your available credit limits. Getting your balances below 30% of the credit limit on each card can really help. While most debt gurus recommend paying off the highest-rate card first, a better strategy here is to pay down the cards that are closest to their limits.

2) Use your cards lightly. Racking up big balances can hurt your score, regardless of whether you pay your bill in full each month. What's typically reported to the credit bureaus, and thus calculated into your score, is the balance reported on your last statement. (That doesn't mean paying off your balances each month isn't financially smart -- it is -- just that the credit score doesn't care.) You typically can increase your score by limiting your charges to 30% or less of a card's limit. If you're having trouble keeping track, consider using a check register to track your spending, logging into your account frequently at the issuer's Web site, or using personal finance software like Microsoft Money or Quicken, which can download your transactions and balances automatically.

3) Check your limits. Your score might be artificially depressed if your lender is showing a lower limit than you've actually got. Most credit-card issuers will quickly update this information if you ask. If your issuer makes it a policy not to report consumers' limits, however -- as is the usual case with American Express cards and those issued by Capital One -- the bureaus typically use your highest balance as a proxy for your credit limit. You may see the problem here: If you consistently charge the same amount each month -- say $2,000 to $2,500 -- it may look to the credit-scoring formula like you're regularly maxing out that card.You could go on a wild spending spree to raise the limit, but a more sober solution would simply be to pay your balance down or off before your statement period closes. Check your last statement to see which day of the month that typically is, then go to the issuer's Web site about a week in advance of closing and pay off what you owe. It won't raise your reported limit, but it will widen the gap between that limit and your closing balance, which should boost your score.

4) Dust off an old card. The older your credit history, the better. But if you stop using your oldest cards, the issuers may stop updating those accounts at the credit bureaus. The accounts will still appear, but they won't be given as much weight in the credit-scoring formula as your active accounts, said Craig Watts, an executive at Fair Isaac & Co., one of the leading credit scorers. That's why Ferguson often recommends to her clients that they use their oldest cards every few months to charge a small amount, paying it off in full when the statement arrives.

5) Get some goodwill. If you've been a good customer, a lender might agree to simply erase that one late payment from your credit history. You usually have to make the request in writing, and your chances for a "goodwill adjustment" improve the better your record with the company (and the better your credit in general). But it can't hurt to ask. A longer-term solution for more-troubled accounts is to ask that they be "re-aged." If the account is still open, the lender might erase previous delinquencies if you make a series of 12 or so on-time payments.

6) Dispute old negatives. Say that fight with your phone company over an unfair bill a few years ago resulted in a collections account. You can continue protesting that the charge was unjust, or you can try disputing the account with the credit bureaus as "not mine." The older and smaller a collection account, the more likely the collection agency won't bother to verify it when the credit bureau investigates your dispute. Some consumers also have had luck disputing old items with a lender that has merged with another company, which can leave lender records a real mess.

7) Blitz significant errors. Your credit score is calculated based on the information in your credit report, so certain errors there can really cost you. But not everything that's reported in your file matters to your score. Here's the stuff that's usually worth the effort of correcting with the bureaus:
-Late payments, charge-offs, collections or other negative items that aren't yours. -Credit limits reported as lower than they actually are-Accounts listed as "settled," "paid derogatory," "paid charge-off" or anything other than "current" or "paid as agreed" if you paid on time and in full.
-Accounts that are still listed as unpaid that were included in a bankruptcy.
-Negative items older than seven years (10 in the case of bankruptcy) that should have automatically fallen off your report.
You actually have to be a bit careful with this last one, because sometimes scores actually go down when bad items fall off your report. It's a quirk in the FICO credit-scoring software, and the potential effect of eliminating old negative items is difficult to predict in advance.

Some of the stuff that you typically shouldn't worry about includes:
-Various misspellings of your name.
-Outdated or incorrect address information.
-An old employer listed as current.
-Most inquiries.
-If the misspelled name or incorrect address is because of identity theft or because your file has been mixed with someone else's, that should be obvious when you look at your accounts. You'll see delinquencies or accounts that aren't yours and should report that immediately. However, if it's just a goof by the credit bureau or one of the companies reporting to it, it's usually not much to sweat about.

Two more items you don't need to correct:
-Accounts you closed listed as being open.
-Accounts you closed that don't say "closed by consumer." Closing accounts can't help your score, and may hurt it. If your goal is boosting your score, leave these alone. Once an account has been closed, though, it doesn't matter to the scoring formulas who did it -- you or the lender. If you messed up the account, it will be obvious from the late payments and other derogatory information included in the file.

4 other credit mistakes Other actions to beware when you're trying to improve your score:
-Asking a creditor to lower your credit limits. This will reduce that all-important gap between your balances and your available credit, which could hurt your score. If a lender asks you to close an account or get a limit lowered as a condition for getting a loan, you might have to do it -- but don't do so without being asked.
-Making a late payment. The irony here is that a late or missed payment will hurt a good score more than a bad one, dropping a 700-plus score by 100 points or more. If you've already got a string of negative items on your credit report, one more won't have a big impact, but it's still something you want to avoid if you're trying to improve your score.
-Consolidating your accounts. Applying for a new account can ding your score. So, too, can transferring balances from a high-limit card to a lower-limit one, or concentrating all or most of your credit-card balances onto a single card. In general, it's better to have smaller balances on a few cards than a big balance on one.
-Applying for new credit if you've already got plenty. On the other hand, applying for and getting an installment loan can help your score if you don't have any installment accounts, or you're trying to recover from a credit disaster like bankruptcy.

By the way, all these suggestions work best if you have poor or mediocre scores to begin with. Once you've hit the 700 mark, any tweaking you do will tend to have less of a positive impact.And if your scores are in the "excellent" category, 760 or above, you'll probably be able to eke out only a few extra points despite your best efforts. There's really no point, anyway, since you're already qualified for the best rates and terms. Here's one area where it's really OK to rest on your laurels and worry about something else.

Liz Pulliam Weston's column appears every Monday and Thursday, exclusively on MSN Money. She also answers reader questions in the Your Money message board

ON PREDICTING THE REAL ESTATE MARKET

Jeff Schoenfield, Frank's colleague and fellow member of the invitation only Allen Hainge CyberStars, offers this opinion about predicting the real estate market. I couldn’t agree more!

"The real question (whether you are a potential buyer or seller) of course is when will the market turn? While I don't have a crystal ball you can be assured of one thing: The turn of the market will NOT be announced by headlines in USA Today and other national and local publications stating 'Real Estate Market Bottom Reached - Now Time to Invest!'. Rather, the news reported will still be mainly negative even as the market turns. We also do know that prices are the best they've been in some time and there are bargains available. By the time the market actually turns and everybody knows about it the best values will be behind us and buyers will have missed their opportunity to get a true bargain."

Jeff Schoenfield
Broker/Owner
RE/MAX All Pro, Realtors, Inc.
Gatlinburg, TN
Jeff@Gatlinburg-Homes.com

Show Your Support: Please Join Us in the FLY THE FLAG Campaign

On Tuesday, September 11th, 2007, an American flag should be displayed outside every home, apartment, office, and store in the United States.

Every individual should make it their duty to display an American flag on this sixth anniversary of our country's worst tragedy. We do this in honor of those who lost their lives on 9/11, their families, friends, and loved ones who continue to endure the pain, and those who today are fighting at home and abroad to preserve our cherished freedoms.

In the days, weeks and months following 9/11, our country was bathed in American flags as citizens mourned the incredible losses and stood shoulder-to-shoulder against terrorism. Sadly, those flags have all but disappeared. Our patriotism pulled us through some tough times and it shouldn't take another attack to galvanize us in solidarity. Our American flag is the fabric of our country and together we can prevail over terrorism of all kinds.

Thank you for your participation.

BEN BERNANKE'S SPEECH

JACKSON HOLE, Wyo. -- The Federal Reserve must take the effects of recent financial market disruptions into account in setting monetary policy and is ready to act as needed to ease their impact on the economy, Fed Chairman Ben Bernanke said Friday.
Mr. Bernanke's prepared remarks to the Kansas City Fed's annual Jackson Hole seminar suggest the central bank is set to lower rates unless short-term credit market conditions improve.

"Developments in financial markets can have broad economic effects felt by many outside the markets, and the Federal Reserve must take those effects into account when determining policy," Mr. Bernanke said, The Fed "stands ready to take additional actions" to boost liquidity, "will act as needed to limit the adverse effects on the broader economy that may arise from the disruptions in financial markets."

Mr. Bernanke went further Friday, saying "the further tightening of credit conditions, if sustained, would increase the risk that the current weakness in housing could be deeper or more prolonged than previously expected, with possible adverse effects on consumer spending and the economy more generally." In fact, "global financial losses (triggered largely by subprime mortgage concerns) have far exceeded even the most pessimistic projections of credit losses on those loans," Mr. Bernanke said.

To be sure, Mr. Bernanke's words weren't entirely soothing to investors. "It is not the responsibility of the Federal Reserve -- nor would it be appropriate -- to protect lenders and investors from the consequences of their financial decisions," Mr. Bernanke said.
Still, there was little in Mr. Bernanke's speech that would cause investors to pull back from expectations for reductions in the Fed's primary tool, the federal-funds target rate, which has stood at 5.25% for more than one year. Futures markets are pricing in multiple fed-funds rate cuts by the end of the year.

To read the full article click on this link: http://online.wsj.com/public/article_print/SB118856681612814632.html

BUSH OFFERS RELIEF FOR SOME ON HOME LOANS

WASHINGTON, Aug. 31 — President Bush, in his first response to families hit by the subprime mortgage crisis, announced several steps today to help Americans who have credit problems meet the rising cost of their housing loans. First, to change the federal mortgage insurance program in a way that would let an additional 80,000 homeowners with spotty credit records sign up, beyond the 160,000 likely to use it this year and next. Second, to endorse proposals backed by Democrats in Congress that would raise the ceiling on the amount of a mortgage that can be refinanced with federal insurance and to support legislation that would provide tax breaks to homeowners whose mortgage debt is forgiven, in whole or in part, by lenders.

“It’s not the government’s job to bail out speculators or those who made the decision to buy a home they knew they could never afford,” Mr. Bush said. “Yet there are many American homeowners who can get through this difficult time with a little flexibility from their lenders or little help from their government.”

To read the full article click here: http://www.nytimes.com/2007/08/31/business/31home.html?pagewanted=2&_r=1&th&emc=th

FED CUTS DISCOUNT RATE, ADMITS CONCERN

Last Friday the Fed, acknowledging for the first time "the risk of an economic downturn," cut its discount rate from 6.25% to 5.75%, "encouraging the nation’s banks to borrow directly from the Fed." Following the announcement, the Dow Jones changed direction and shot up 1.8 percent on Friday morning.

The move came at the realization that even creditworthy homebuyers are now having trouble obtaining mortgages, and is particularly notable given that "the Fed’s standard practice, for more than a decade, has been to change rates and issue statements only at scheduled meetings of policy makers." But as the stock market continues to falter, the Fed's chairman Ben Bernanke scheduled a conference call during which the policy makers voted unanimously on the lowered discount rate.

While the cut signals that even the Fed has found it necessary to admit economic fears, at the consumer level, it seems people--for the moment--are more frustrated with the high prices of food and gas than they are suffering from a dread of economic crises, according to a recent study done by the University of Michigan.

To read the New York Times article in its entirety, go to Fearing Slide in the Economy, Fed Cuts Its Discount Rate

"THE MORTGAGE MAZE"

Perhaps you've heard of "securitization"? It goes something like this: "The process begins with the entity that originates the loan, either a mortgage broker or lender. The loan is assigned to a company that will service it — collecting borrowers’ payments and distributing them to investors. Sometimes the servicer is affiliated with the lender, creating potential conflicts if a loan goes bad. A Wall Street firm then pools thousands of loans to be sold to investors who want a steady stream of cash from loan payments. The underwriters separate them into segments based on risk. Once a trust is sold, a trustee bank oversees its operations on behalf of investors. The trustee makes sure that the terms of the pooling and servicing agreement are met; this document determines what a servicer can do to help distressed borrowers."

Maybe this is why so many distressed borrowers are finding it so difficult to get loan modifications, or even figure out simply who holds the mortgages. Dianne Brimmage of Alton, IL, refinanced her home's mortgage (the home she has lived in since 1998) in order to consolidate car and medical bills. Now she struggles with a high interest rate and would like to modify the terms of her loan.

Though in the past this might have been easy to do because it was in every one's best interest, the only concern now is making a profit and there are so many different parties involved in the mortgage process that each one can deny information and manage to put off a solution that is helpful to the homeowner indefinitely.

To read the article in its entirety, go to "The Mortgage Maze May Increase Foreclosures"

ADDICTED TO ONLINE REAL ESTATE INFORMATION?

Well, you're not alone. According to The New York Times' Michelle Slatalla, "in June... more than 39 million people visited the 20 most popular real estate Web sites, a 22.4 percent increase in visitors over the same period in the previous year, according to Nielsen/NetRatings Inc. Not only that, but a lot of those people are becoming addicted. At Zillow.com, for instance, 44 percent of the site’s users visited five or more times in June, and 25 percent of them 10 or more times, according to a spokeswoman for the site."

Unfortunately, the information one can glean from these sites often seems so contradictory that it's hardly worth the emotional stress or rash decisions that can be triggered by the numbers. For example, the difference between the highest and lowest values of Ms. Slatalla's home as stated by two different appraisal sites was $699,974. On top of that, when a real-life appraiser came to see her home he quoted her a value that was "$100,000 more than the highest online estimate."

So don't be sucked into the check-your-neighbor's-home-value-every-five-minutes spiral; and if you can't help yourself, remember to take it all with a grain of salt.

For a thoughtful, reliable, in-person estimate of your home's current market value, please email me, or give me a call at 831-457-5550.

To read Ms. Slatalla's article in its entirety, go to What's My House Worth? And Now...?

COUNTRYWIDE ACKNOWLEDGES HOUSING MARKET WOES

On July 24th Countrywide Financial acknowledged that the housing market "might not begin recovering until 2009 because of a decline in house prices," and that even borrowers with good credit are starting to fall behind on their loans. This announcement triggered a sell-off in the stock market, and signals a shift toward a more skeptical view of the future of the housing market than that to which many executives have previously held. According to Vikas Bajaj of the New York Times, Angelo Mozilo, Countrywide's chairman and chief executive, said that "because of a large number of homes on the market, the housing sector would continue to suffer until sometime in 2008 and not begin recovering until 2009."

As a result of the downturn, major lenders such as Countrywide, Wells Fargo, and others have stopped offering risky sub-prime mortgages. But it isn't just sub-prime borrowers who are struggling with payments. Even "credit-worthy" customers are showing the potential to default as home prices fall. "Countrywide said about 5.4 percent of the home equity loans to customers with good credit that it held an interest in were past due at the end of June, up from 2.2 percent at the end of June 2006."

To read the article in its entirety and see detailed statistics, go to Top Lender Sees Mortgage Woes for ‘Good’ Risks

LIBRARIES OF THE MASTERS

Harriet Rubin's recent article in the New York Times, entitled "C.E.O. Libraries Reveal Keys to Success," provides a fascinating glimpse into the sources of inspiration and wisdom for some of the most successful and innovative business persons of our time.

From Nike founder Phil Knight to Apple's Steven Jobs to Visa founder Dee Hock, it turns out that personal--and often very private--libraries seem to be the most valuable of treasures for these giants.

The libraries that Rubin's investigated combine to create quite the eclectic collection: Asian history, Aristotle, William Blake, T. E. Lawrence, Machiavelli, John Steinbeck, Omar Khayyam, and John Cornwall, just to name a few.

In addition to the most well known writers and thinkers throughout history, many of the articles featured librarians keep every book they've ever read. As Shelly Lazarus, the chairwoman and chief executive of Ogilvy & Mather, says: "Once I’ve read a book I keep it. It becomes a part of me."

To read the article in its entirety, go to "C.E.O. Libraries Reveal Keys to Success "

ONLY BILLIONAIRES NEED APPLY...

With 56,000 square feet, 95 acres, and a price tag of $135 million, Hala Ranch in Aspen, Colorado is the most expensive single-family residential property in the nation on the market, according to Kirk Johnson of the New York Times.

The property was built for the family of Prince Bandar bin Sultan who served as the ambassador to the United States for Saudi Arabia until 2005. Prince Bandar now works for the Saudi National Security Council and is selling the property as he will not be spending as much time in the States.

"Mere wealth" cannot afford the luxuries of Hala (the private barbershop and beauty salon just off the master suite, for example); Joshua Saslove, the real estate broker who's listing the property, will only consider billionaires. Since there are only 946 billionaires out there, according to Forbes, the pickings are rather slim.

But such is the story of Aspen's west side, where "an ordinary lot, 60 feet by 100 feet, costs $3.5 million."

To read the article in its entirety, go to "A $135 Million Home, but if You Have to Ask ..."

HOPEFUL FED WON'T CUT RATES

The Dow Jones fell more than 80 points on June 5th after a widespread realization that there is "almost no chance" that the Fed will cut interest rates by the end of the year.

The Fed chairman, Ben Bernanke, said "that the Fed expected the economy to pull out of its current funk and weather the slowdown in the housing market."

While investors have recently been expecting a rate cut by the end of the year, leading economists are noting that the slowly strengthening economy gives the Fed little reason to buffer against "a worse-than-expected slowdown" for now.

To read Jeremy Peters' article in its entirety, go to Fed Dims Hopes For A Rate Cut

THE NEW WAVE OF ONLINE REAL ESTATE

"What we’ve wanted to do, quietly, is amass the largest real estate position on the Internet...." Such is the ambition of Kelly P. Conlin, the chief executive of NameMedia, "a privately held owner and developer of Web sites based in Waltham, Massachusetts."

NameMedia represents the largest and latest success in the area of what Bob Tedeschi of the New York Times calls "online property development." The company owns 725,000 websites and gets its business from the 5-10% of Internet users who use direct navigation (typing in the hypothetical name of a website based on what they're looking to find) rather than search engines.

NameMedia either develops the content of more profitable domain names to include information that users are looking for, or fills the sites with search engine ads and receives a commission from the engines when someone clicks on a link. Independent website owners also add their sites to NameMedia's network, producing even more revenue for the company based on carefully chosen ads placed on those sites.

NameMedia's business represents a new wave in Internet investment, and remains at the forefront of its field. After all, web publishers are always more than happy to expose their content to as many people as possible and make more money in the process.

To read Bob Tedeschi's article in its entirety, go to Millions of Addresses and Thousands of Sites

EFFECTIVE REAL ESTATE SALES FOR WEB 2.0

Reality Magazine recently published an article describing the benefits of a group to which I belong called the Allen F. Hainge CyberStars. CyberStars includes 201 Realtors, both here in the States and abroad, who are at the top of their market and interested in conversing about the very latest technology that will help sell homes for the most amount of money in the least amount of time.

In the midst of Web 2.0--"the Internet’s progression of social-networking and media-sharing sites"--staying web-savvy for a Realtor no longer means simply having a website. Allen Hainge and his group are committed to finding the latest "technology tools," including the incorporation of digital video, podcasts, blogs and MySpace pages.

Because my fellow CyberStar members are "market leaders—the higher-power group" who are necessarily willing "to share ideas on how technology increases profit, and how we can make our Web sites better to contact buyers and sellers," my clients are truly the ones who benefit from this association.

To read more about how CyberStars got started and hear what other members have to say about the group, go to Techie Supernovae Explode in Real Estate Market

To take a look at my own website, go to www.LiveInSantaCruz.com

CAN AMERICA CATCH UP WITH EUROPE'S "GREEN" REVOLUTION?

Eco-friendly architecture is all the rage in Europe--especially Germany and the Netherlands--but it doesn't look like you'd expect.

After years of tightening government regulations, European architects are designing some of the most sustainable buildings in the world while at the same time moving past the "self-conscious," blatantly eco-friendly look of solar panels and sod roofs.

"Green" technology has become so common place in Europe that it no longer needs to be expressed by the architecture itself. Architects such as Willem Jan Neutelings and Michiel Riedijk of the Netherlands do not equate 'industrial' with "ugly." Technology has advanced in Europe in such a way that the design of a building can express, say, the history of the shipping docks of Rotterdam, or the feel of speed that's appropriate for the Mercedes-Benz Museum in Stuttgart, while employing the latest in sustainability techniques.

This brave new design is possible, of course, because of Europe's strict nationwide standards for sustainability. Unfortunately, the United States finds itself far behind in this area. In fact, the eco-friendly regulations set up by the U.S. government (the LEED guidelines) are totally voluntary and more than a decade old.

Mark Wigley, of Columbia's Graduate School of Architecture, claims that a new generation of architects in the United States is coming that assumes the importance of sustainability and is ready to take an "ecologically radical point of view."

This issue for the U.S. seems to be the consumer. Many clients do not want to pay for sustainable design, despite existing government regulations or the concerns of the architect or builder. Wigley believes things are changing, though, and that we will see the architectural world change at the hands of willing clients.


To read this article in its entirety, go to Why Are They Greener Than We Are?

FED REFUSES TO LOWER INTEREST RATES FOR NOW

Almost one year ago the Fed set the interest rate on overnight loans at 5.25% in response to rising inflation rates. Today, not much has changed.

As of May 9th, the Fed has decided to keep the same interest rate of 5.25%, saying that inflation is still a "predominant policy concern." While many note that lack of job creation and the "meltdowns" of the housing and auto markets signal slow economic growth, the Fed contends that overall the economy is growing at a rate that continues to create inflation pressures.

Because of these mixed signals, and due to a lack of long-term evidence, the Fed has made it clear that it wants to keep its options open and maintain flexibility.

To read the New York Times article in its entirety, go to Fed Gives No Signal of Rate Shift.

TECHNOLOGY TRENDS: POCKET PROJECTORS THAT WORK WONDERS

Weighing just 1.5 pounds and using L.E.D.s that last about 10,000 hours, Samsung's Pocket Imager SP-P310MEMX is an example of the latest in projector technology. "Pocket projectors" cast a smaller image than the usual arc-lamp projectors but are perfect for giving presentations outside of conference rooms (as long as there is a nearby wall available) and prove much more effective than three or four people huddling around a laptop screen to see PowerPoint slides.

Should you want to use the pocket projector for movie watching or gaming, the image--though smaller--appears just as crisp as those cast from full-size projectors, according to the experience of Annie Eisenberg of the New York Times. In addition, the L.E.D.s require no cooling fan so less background noise is created by the projector itself.

For sales people who must travel with their own projectors capable of generating a larger image for larger audiences, the great news is that projectors in general are decreasing in size while image quality continues to rise.

The newest lightweight projectors are under 4 pounds and use arc-bulbs that can last up to 2,000 hours. The NEC Corporation, for example, offers the NP60, which puts out a 100-inch diagonal image that is clearly visible even when all of the lights in the room are on.

For more information on the latest products and pricing for portable projectors, go to The Little Projectors That Pack A Punch.

THE COMMUTING LIFE

“Drive until you qualify” is a phrase that real-estate agents use to describe a central tenet of the commuting life: you travel away from the workplace until you reach an exit where you can afford to buy a house that meets your standards. The size of the wallet determines that of the mortgage, and therefore the length of the commute. Although there are other variables (schools, spouse, status, climate, race, religion, taxes, taste) and occasional exceptions (inner cities, Princeton), in this equation you’re trading time for space, miles for square feet. Sometimes contentment figures in, and sometimes it does not.

For a thoughtful reflection on the lives of commuters both here and around the world, I recommend reading Nick Paumgarten's article in The New Yorker, There and Back Again: The Soul of the Commuter.

HOUSES IN UNUSUAL PLACES!

HOME DEPOT GOES GREEN

Home Depot, the nation's second-largest retailer, recently unveiled their "Eco Options" label that identifies environmentally friendly products for customers. The company hopes to have 12% of their products labeled as such by 2009. According to Michael Barbaro of the New York Times, this is the largest green labeling program in United States retail.

Although Home Depot's efforts may seem to hold the potential for large-scale impact, environmental advocates point out that consumers in the United States tend to forgo purchasing "green" products due to higher cost and a fear that they will not work as well as the products they are meant to replace. Still, Eco Options products have been going strong in Home Depot's Canadian stores where the label was introduced three years ago.

In addition to this new labeling program, Home Depot has responded to past criticisms from environmentalists by promising "to eliminate sales of lumber from environmentally sensitive areas" and instituting a program to offset carbon emissions with tree planting.

Regardless of sales, Home Depot expects Eco Options products to raise environmental awareness on a large scale. "We see educating the consumer as being the highest impact of this process," says Ron Jarvis, Vice President for Environmental Innovation.

To read the article in its entirety, please go to Home Depot to Display an Environmental Label

GOVERNMENT PROGRAM HELPS FAMILIES STAY IN THEIR HOMES

WASHINGTON - More than 36,500 families have been able to stay in their homes and avoid foreclosure this year thanks to the U.S. Department of Housing and Urban Development's Federal Housing Administration (FHA) comprehensive lending relief measures. The FHA's Loss Mitigation Program gives lenders who provide FHA-insured mortgages the authority and responsibility to assist homeowners who have fallen into financial difficulties with their home mortgages.

"Owning a home is the American Dream, and the last thing we want is for families to see their dream turned into a nightmare. FHA lending relief measures continues to help families around the nation work through difficult times, stay in their homes and avoid foreclosure," said HUD Secretary Alphonso Jackson.

Since last October, the FHA Loss Mitigation Program has helped 36,512 families, who are behind on their mortgage payments, keep their homes. In Fiscal Year 2006, this program helped 75,000 families with FHA-insured loans continue to enjoy the benefits of homeownership. In total, there are currently nearly 4 million homeowners in FHA homes.

The potential loss of a home, due to unexpected events such as unemployment or illness, can be financially and personally devastating. But it can be avoided by taking the right steps. Under the FHA Loss Mitigation Program, lenders have the ability to offer borrowers a number of HUD-approved options for avoiding foreclosure, including:

• Special Forbearance: This option can include a temporary reduction or suspension of a mortgage payment until the borrower can reestablish financial stability, or a permanent revision in the payment amount to reflect a borrower's new and reduced financial status.
• Modifications: The lender can rewrite the mortgage note in order to roll delinquent amounts into the principal or extend the term of the loan to reduce monthly payments.
• Partial Claim: FHA's insurance fund makes a one-time payment to bring the mortgage current, which becomes an interest-free subordinate mortgage due when the insurance is terminated.
• Pre-Foreclosure Sale: The borrower avoids foreclosure by selling the property for its appraised value even if the proceeds are not enough to pay off the mortgage.
• Deed-in-Lieu of Foreclosure: This option is a negotiated settlement where the borrower deeds the house back to the lender, saving the borrower all of the credit ramifications of a foreclosure while also saving the government some legal costs.

For more information on how families with FHA-insured mortgages can avoid foreclosure, visit www.hud.gov/foreclosure/ or call 1-800-CALL-FHA.

Article courtesy of the Santa Cruz Association of Realtors.

THE DRAWBACKS OF MULTITASKING REVEALED

Although checking email while listening to your iPod and trying to study or talking on you cellphone with a hands-free headset and driving at the same time might seem save you valuable minutes throughout the day, New York Times columnist Steve Lohr says that recent studies reveal the opposite effect.

Vanderbilt University published findings last December that show the brain's ultimate loss of efficiency when trying to handle two tasks at once. Though the delays may be only seconds long, the difference is crucial when considering response time while driving at high speeds.

Oxford University recently completed a study demonstrating that young people have equal difficulty to older adults when it comes to remaining efficient while multitasking.

While there is a point at which multitasking creates an optimum work efficiency, more intense multitasking--constantly checking emails, answering every phone call--will ultimately lead to a loss in productivity.

To read the article in its entirety, please go to Slow Down, Brave Multitasker.

MAKING SUMMER TRAVEL PLANS? TRY PRAGUE!

Prague is a romantic and delightful city, and I say get over there if you can!

For information on cafes that only locals know about, the best restaurants, the most exclusive bars and even a prime rock climbing spot, check out Evan Rail's 36 Hours in Prague.

FIRESIDE GATHERINGS MOVE TO THE BACKYARD

That's right. It's the latest trend in backyard landscaping: the outdoor fireplace. And we don't just mean a wood-burning pit in the ground. The Weintraubs of Bath, Ohio, recently spent $60,000 on a gas-burning outdoor fireplace that stands 16 feet tall and features a built-in stereo system.

Backyard fireplaces are springing up in the backyards of a growing number of homeowners who have the means to afford their rising price tags. Interestingly enough, the demand for backyard fireplaces seems strongest in the Northern and mid-Western states in which the winters are just too cold to even stay outside and enjoy the fire.

Theories vary as to why this trend has taken off: Jim Weidner of Weidner Group Landscaping thinks that with the real estate market slowing, home owners are deciding to stick around and invest in their homes. Others postulate that multiple electronic "entertainment options," such as iPods, TVs, TiVo, computers and video games, leave little room for quality family time. The fireplace provides a peaceful gathering place to reconnect.

Of course, there's always the idea that these tall-standing, high-priced fireplaces can serve as a conspicuous status symbol.

In any case, a lot of people just want to "enjoy a fire."

To read Christopher Maag's article in its entirety, go to Family Hearth Moves to the Backyard

RISE IN FORECLOSURES IMPACTS STOCK MARKET

Stocks fell last Tuesday in the wake of a report indicating that things will get worse before they get better when it comes to the housing market. A record number of homes were in foreclosure in the fourth quarter, and even strong markets like California showed a growth in default rates.

While the economy remains relatively strong and unemployment drops, subprime lenders are feeling the squeeze as their shares fall. New Century Financial had to stop making loans last week, and even Countrywide Financial--the nation's largest mortgage lender--is deciding on more strict standards.

Some mortgage company executives stress that there is nothing to worry about--that the streak of credit problems is contained within the subprime category--but Senator Christopher Dodd of Connecticut says that there is a possibility the government will need to step in and provide aid to struggling homeowners or those who have lost housing.

To read the entire article by the New York Times' Vikas Bajaj, please go to Bad Loans Put Wall St. In A Swoon

MOUNT RAINIER REBUILDS BUT CLIMATE CHANGE CONTINUES

Back in November the Nisqually River blew out its banks, washing out parts of roads, destroying footbridges and nearly sweeping away the historic buildings of Mount Rainier National Park in Washington State.

Now in the process of re-enforcing the main road, officials now need to be concerned not with reopening the park but predicting the future activity of the rivers in the face of climate change.
Paul Kennard, a geomorphologist at the park, says that the glaciers are "by far at their historic
minimum."

The focus of the current repairs is "access and safety." In addition, there is of course the preservation of the park's landscape and wildlife--a concern that makes it harder to balance the desire for public access with preparation for changing environments.

To read this article in its entirety, please go to Park Tries To Balance Access and Nature As It Rebuilds.

THE LOUVRE OF THE ARAB WORLD?

How much does it cost to rent the Louvre's name? $520 million for 30 years, apparently. That's how much the Abu Dhabi, the capital of the United Arab Emirates, is paying.

The Louvre Abu Dhabi is scheduled to open in 2012 as part of a "tourist and cultural development" on Saadiyat Island and will be overseen by the International Agency for French Museums.

In addition to the $520 million price tag put on the museum's name, Abu Dhabi has also agreed to donate$32.5 million to help refurbish a wing of the original Louvre in Paris. France will also rotate hundreds of pieces of art through the Louvre Abu Dhabi, and offer "management expertise" to the new museum.

Though leaders from both France and Abu Dhabi seem hopeful about this new relationship, many French traditionalists critique their government for "selling" its museums.

To read the article in its entirety, please go to The Louvre's Art: Priceless. The Louvre's Name: Expensive.

HIDDEN TAX BREAKS & THE PHONE-TAX REBATE

By Kevin McCormally


You can count on getting at least a $30 to $40 fatter tax refund this spring – or you'll owe that much less when you file – thanks to the government's effort to redress an error that has its roots in the 19th century.

At issue is a levy on long-distance telephone calls born in 1898 as a 1% luxury tax to help finance the Spanish-American War. Last year, the government conceded that collecting the tax was, well, illegal.

The problem was that tax applied to charges based on the time and distance of the call. Although your grandkids might not remember, you know that's the way things used to work. The farther away you called, the more you paid for each minute you talked. In recent years, though, the distance part of the equation has disappeared. And that's the rub.

Over the past few years, some big companies, including Home Depot and Hewlett-Packard, challenged the government and won case after case. Finally, the government gave up and hung up on the long-distance tax effective August 1, 2006. Uncle Sam promised refunds of money collected since March 1, 2003. (The IRS says the statute of limitations won't let it refund taxes collected before that date.)

How to Get Your Money

The IRS has come up with an easy way for most of us to claim a refund. You'll find a line in the payment sections of your tax return to claim your credit, so you get the benefit even if you don't itemize deductions. For those of you who don't file a return, the IRS has created a special form, the 1040EZ-T, to request a tax refund.

Don't want to plow through 41 months' worth of old phone bills? You can claim a standard credit based on the number of exemptions you take. A single person who claims one exemption gets $30, while a couple gets $40. A couple with one dependent child gets a $50 credit and couples with two or more children get $60 – the top credit allowed. The IRS says it came up with the figures based on telephone usage data, and that the amounts include interest back to the time the money was collected.

If you spent an average of more than $25 a month for long-distance service during the refund period, you can seek more than the standard credit. But you might decide it's not the worth the effort once you see the new Form 8913. Basically, you need to tote up the federal tax you paid on long-distance calls between March 2003 and August 2006, group the payments in three-month increments and then figure the interest you're due on each quarter's tax.

There's no one-size-fits-all refund for business owners. Businesses can use a formula that bases their credit on total phone charges during the refund period rather than the actual tax paid. For more details, visit the Telephone Tax Refunds section of the IRS website.

Hidden Tax Breaks

Although the telephone tax credit is easy to find on the tax forms, that's not the case for three tax savers that Congress revived in December – after the IRS sent the forms to the printer. These tax breaks were set to expire without action by lawmakers. You're affected if:

• You qualify to deduct state sales taxes (which you surely do if you itemize and live in a state that does not have its own income tax).
  
• You qualify to deduct college tuition paid during 2006.
  
• You qualify to claim the special $250 deduction for expenses paid for classroom materials by teachers and teachers' aides.
  

Although none of these breaks is mentioned on the forms, all are available for 2006. You can find information on how to claim your deductions at http://www.irs.gov/ or by calling 800-829-1040.

Reprinted with permission. All contents © 2007 The Kiplinger Washington Editors, Inc.

YOUR GATEWAY TO INFORMATION ON HOW TO CHOOSE ENERGY-EFFICIENT WINDOWS

Efficient Windows Collaborative (EWC) members have made a commitment to manufacture and promote energy-efficient windows. This site provides unbiased information on the benefits of energy-efficient windows, descriptions of how they work, and recommendations for their selection and use. Take a look to learn more!

http://www.efficientwindows.org/

OLYMPIC ATHLETE FIGHTS FOR LIFE ONCE AGAIN

Never give up! That is the resounding lesson to be taken from former Olympic wrestler Rulon Gardner's life of passionate perseverance in the midst of impossible odds and near-death experiences, such as last weekend's plane crash that might have taken his life.

Gardner's inspirational win over Russia's Aleksandr Karelin at the 2000 Olympic Games in Sydney was "one of the greatest upsets in Olympic history," according to New York Times sports writer Lynn Zinser. The match was Karelin's single defeat in a career spanning 13 years. Still, the 2000 Olympic Games proved to be only a taste of the struggles yet to come for Gardner.

In 2002, Gardner was separated from his friends while snowmobiling in Wyoming and was forced to spend the night alone in the wilderness. After being rescued, Gardner had one toe amputated due to frostbite.

In 2004--the same year he won Olympic bronze despite the loss of one toe--Gardner was hit by a car while riding his motorcycle in Colorado.

As of last Saturday, Gardner has one more miraculous survival experience to add to the list. While flying over Utah's Lake Powell to look at a houseboat, the single-engine plane that carried Gardner and two pilots suddenly crashed into the 44-degree water. All three escaped the plane before it sank and made the one-hour swim to shore where they spent the night huddled together before being rescued by a local fisherman.

One of the pilots, Leslie Brooks, was treated for frostbite; no other injuries were sustained.

Since retiring from Olympic competition in 2004, Gardner works as a motivational speaker and wrestling coach. Despite the recent ordeal, he's not been deterred from the pursuit of his pilot's license.

His attitude says it all: "You just take life as it comes to you and do your best."

To read the New York Times article in its entirety, go to Former Olympian Adds A Harrowing Tale To List

CRUCIAL INFORMATION ABOUT DAYLIGHT SAVINGS TIME

You may have heard about the change in Daylight Savings starting this year: DST will start three weeks earlier on March 11, 2007, and end one week later on November 4, 2007.

This could affect machines & computer programs that are set to coordinate time/date using Daylight Savings. The first step is to ensure that your computer is prepared.

For Windows XP users, click the below link to download and install the Daylight Savings patch:

http://www.microsoft.com/downloads/details.aspx?familyid=66F1420C-DF2D-400B-A8A9-EF9061A9A3CA&displaylang=en

Scheduling software, such as Microsoft Outlook, could also be affected. If you use the calendar feature in Outlook, and have version 2000, 2002, or 2003, you will want to download and install the Time Zone Data Update Tool by using the below link:

http://www.microsoft.com/downloads/details.aspx?FamilyId=E343A233-B9C8-4652-9DD8-AE0F1AF62568&displaylang=en

You will also want to ensure that any fax machines that you use are changed to the correct time, as well as your digital phone at home, mobile phone, PDA, portable music player, programmable thermostat, digital camera, DVR, etc.

For other scheduling software, Smartphone's, & PDA's, check with the manufacturer to determine if you need to install updates to prepare for the new Daylight Savings rules.

To access accurate time and date information for anywhere in the world, add The World Clock to your list of "Favorites."

TROUBLE IN THE MOUNTAINS

Although a recent enthusiasm over the Big Sky region of Montana has made for a "construction and employment boom," the resulting rise in land prices have put all those resort and construction workers in a bind when it comes to finding affordable housing.

Located just North of one entrance to Yellowstone National Park, Big Sky is also 32 miles southwest of Bozeman and isolated by the dangerous nature of the icy 2-lane road that runs between the towns. With the choice between a treacherous commute from Bozeman or unaffordable housing in Big Sky, what are the workers to do?

The resort companies seem to have found a workable solution: buy up local motels and rent rooms to employees as well as guests. Although the workers often cram into small spaces to save money, sometimes four to a room, things seem to be working out well. Bob Sumpter of the Yellowstone Club calls this new setup "a good strategic buy," and Isabella Silva, an employee of Big Sky Resorts, says the situation is "O.K."

To read the full article by Jim Robbins, go to Boom In The Mountains Creates a Housing Shortage

NATIONWIDE MARKET UPDATE: PRICES DROP AT THE END OF 2006

The last three months of 2006 saw home prices fall in over half of the country's biggest metropolitan areas, according to the National Association of Realtors (NAR). In addition, the number of homes sold fell in 40 states plus the District of Colombia. As prices and sales drop, the number of homes on the market rises. Is there any hope for the market in the near future?

NAR believes so, saying that it expects sales and prices to rise in the Spring. David Lereah, NAR's chief economist, says that "home sales are leveling at historically high levels." Data from the Office of Federal Housing Enterprise Oversight shows that prices were in fact rising overall in the third quarter of 2006.

To read the full article by Vikas Bajaj, go to Home Prices Fall In More Than Half of Nation's Biggest Markets

To find out more about specific market trends in Santa Cruz County and what you can do to get your home sold for the most money in the least amount of time, please contact me at 831-457-5550 or frank@frankmurphy.net

FED CONTINUES TO DEBATE INFLATION TARGET

This week marks one year since Ben Bernanke took over as chairman of the Federal Reserve Board, but the Fed has yet to act on his main proposal: "an explicit target for inflation."

Mr. Bernanke argues that a public commitment to an inflation target of 1 to 2 percent a year would be helpful to investors and boost consumer confidence.

His opponents, however, are wary of making changes while things are going well: despite a slight economic slowdown over the last year, wages have increased and unemployment continues to be low. There is also a concern that Mr. Bernanke's policy is too rigid and that a focus on inflation will overshadow the issue of unemployment.

Based on the cautious attitudes of the Fed's governors and staff, and the objections of Congress, Edmund Andrews of the New York Times predicts that "the Fed is unlikely to change gears this year."

To read the full article, go to: Fed Has Yet to Set Target on Inflation