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THOUGHT FOR THE DAY
 | | Short and sweet Mr. Burke |
This from Buddy Burke: "It is better to burnout than to rust!" Neil Young
GUESTS AND VISITING ROTARIANS
Mike Henderson - Neighbor of Bob Riegg
Alicia Cragholm - Noon club member but she likes us too
BIRTHDAYS AND ANNIVERSARIES
Ken Kosich - March sixth was Patty's
 | | Still basking in the glow Ken? |
birthday. They celebrated with a trip to Tahoe and a wonderful dinner at Evans. Ken contributed $20 to the cause and $100 toward a Paul Harris award for Patty.
Rich Shearer and Valerie celebrated their first wedding anniversary with a weekend in
 | | Easy come, easy go sez Rich |
Inverness at Pt. Reyes. Valerie received a lovely jewelry gift with some help from Ware Designs. Rich seriously tapped the bank account with $20 for the club, $50 for the Endowment and $100 for the RI Japan Relief Effort.
SPEAKING OF JAPAN RELIEF
Prez Thomas Peeks announced that John Fazel will be leading this effort for our Club, possibly other clubs in the area and very likely the District, in the next few weeks. Rotary International will use 50 cents of every dollar contributed
 | | Fazel, the master fund raiser! |
immediately, and return the other 50 cents to the District for matching grants. This money will then be directed to the Districts in Japan who will distribute the funds in the area where major help is needed. Said another way, the $100 contributed by Rich will grow to $150 in total relief aid. Of course, every single dollar contributed will find its way to an appropriate destination. Donations will be publically solicited in Lafayette at Diablo Foods and other locations, the time and place to be announced later. Notices will also be placed in such publications as the Lamorinda Weekly. Fazel added that the aforementioned Mr. Shearer is the co-chair of this operation. Rich says, "send the money to John." Checks should be made out to Rotary Foundation. The memo line should read Japan Relief #G10005.
MOTORAMA
 | | Nice work, Jim |
Jim Brencic displayed a draft of the poster to be displayed in as many Lamorinda business establishments as possible. He is soliciting foot soldiers to get the job done. Skip McCowan suggested that anyone in need of tires please give Ed Anderson of Big O Tires a try because he is the first Motorama Sponsor. Skip did and so did Spike Speicher. Ed is realizing an instant return on his investment and Skip and Spike are pleased new tire owners!
LEARN PHOTOGRAPHY ANYONE?
 | | Paul teaches too! Will wonders never cease. |
Our own Paul Fillinger is teaching an adult education class in beginning and intermediate photography starting with this Tuesday evenings, and Friday mornings, for 12 weeks, at the Del Valle Adult Education Center. Contact Paul for details. You can count on a good dose of humor being packed into this learning experience.
PROGRAM
After his rousing call to arms for program speakers last week Walt Nelson had to look no further than David Waal to come through for him this week. David admitted that "The Business of Residential Foreclosures" is hardly an uplifting topic, but nevertheless timely.
 | | Mr.Waal knows whereof he speaks |
David is a Principal of Presidio Realty Advisors. He supports individual and corporate clients in planning, development and execution of their real estate strategies. He is also a Principal at Presidio Exchange Advisers, a branch office of Omni Brokerage, Inc. David has advised 1031 exchange and direct investment clients in the acquisition of over $340 million of investment grade commercial real estate. He is a graduate of St. Mary's College and has a Certificate in Financial Planning from the University of California. David served on the St. Mary's College Alumni Board of Directors for ten years.
He summarized the mess we are in thusly. As of January 2011 the banks had 44 months of inventory. Healthy banks (Chase) can afford to take losses on their books, but the difficulty is determining current price of homes. Inventory is flooding into the markets. Selling through brokers with the onerous, time consuming steps in the foreclosure process are too much for them to handle. And the bank servicers vs. the portfolio managers have different motivations in dealing with the problem.
David moved on to describing the Lingo of the business, specifically asking if we knew the definition of a "short sale." When Steve Ware responded with answer "Paul Fillinger selling his house" bedlam ensued. That was David's first clue he was in for a rough day.
Nevertheless he quickly got back on track and took us through definitions for short sale, loan modification, the process (judicial through the courts) and non-judicial (trustee sale, 200 year old English law, courthouse steps, crier and bidding process) and REO (bank owned).
He had two very sobering slides, the first showing locations of 500 houses under the forclosure process in the Fairfield area and the second within a five mile radius of Lafayette. There are actually 1,172 homes in Fairfield and 580 homes in the Lafayette area undergoing the foreclosure process this week. An interesting statistic regarding the emotions of these homeowners shows that 38% are scared, 35% depressed, 9% angry and 8% embarrassed. These statistics hold true for Fairfield, but not Lafayette where a much higher percentage are embarrassed and don't want to talk about it.
In areas where there are a high number of foreclosures the people do talk about it and have figured out ways to do things, such as stay in their houses as long as possible. The facts are that these people have absolutely no rights and can be evicted at any time with the household effects seized. But they have also learned that until the actual time when the house is sold, or otherwise disposed of, nobody is doing anything about getting them out. The foreclosure process can be completed in as little time as two months. However, the process is so tedious and time consuming that it often takes up to nine months and beyond.
Another interesting point concerns loan modification. Banks such as Chase own the properties and are willing to negotiate. Banks such as BofA and Wells Fargo do not own the properties. They are servicing agents, collect a fee and have no incentive to consider loan modifications.
 | | This is a daily massive undertaking |
David's company looks at 2000 foreclosure notices every night, gets down to 400 by the morning and sends out 40 drivers every day to inspect these properties for such things as required renovation, in order to help establish a maximum bid for each one. This is all highly automated and they are well prepared to engage in the bidding for these properties as they come up that day on the court house steps.
They are not interested in houses that will sell for over $400,000.
So...who's buying? Low to mid-end is selling well and there is no shortage of buyers. The high end is much more difficult. What's selling are fully renovated properties.
Where do we go from here? Buying from the banks will become more common. The financing that got us into this mess will take us out of it. Mortgages will be written down by one lender and financed by another lender. Finally, consumer credit won't be affected too badly. New rules will come as a result of the worst financial crisis in 80 years, plus the banks want and need people that can borrow.
David's final word of advice: "Don't sell if you don't have to. Your competition is somebody who is underwater."
CALENDAR
Friday, 3/25 - Postinos 7:30 am - Program: Literacy
TGITLFOTM - Yeager's 5:30 pm
Tuesday, 4/12 - Board Meeting - 7:00 am
Friday, 4/29 - TGITLFOTM - 5:30 - Black's 5:30 pm
Tuesday, 5/10 - Board Meeting - 7:00 am
Friday, May 27 - TGITLFOTM - Robert's 5:30 pm
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