Olympic Medal Count 2012: Early Day 5 Standings and Bold End-of-Play Predictions


Rob Schumacher-USA TODAY

The London Olympics are going strong, and Day 5 looks to continue the fun and excitement.

After the crowing of Michael Phelps’ Olympic record on Tuesday, we turn our heads to some different action.

Medals will be handed out in 11 different sports on Wednesday. From kayaking to weightlifting, athletes will rise to the occasion for their countries or falter and return home without realizing their Olympic dreams.

Most of the medals being earned today are not in the high-profile events, but they add to to the overall medal count all the same.

London Olympics Medal Count as of Aug. 1, 8 a.m. ET.

Olympic Medal Tracker Gold Silver Bronze
China Total: 23 13 6 4
United States Total: 23 9 8 6
Japan Total: 13 1 4 8
France Total: 11 4 3 4
South Korea Total: 8 3 2 3
For full medal results, check out Bleacher Report’s official leaderboard.


Quiet Day for Americans

Wednesday won’t be a day filled with medal upon medal for the USA. There are opportunities here and there to snag a few, most notably in the men’s individual all-around gymnastics finals and women’s 4×200-meter freestyle relay, but overall it should be fairly quiet on the American front.

The American contingent will be focused on preliminary action. Misty May-Treanor and Kerri Walsh-Jennings look to continue their Olympic set and match records in beach volleyball, and Team USA attempts to continue their domination in women’s basketball.

Don’t look for a big influx in gold on Wednesday.

Gymnastics Redemption

After a disappointment in the team competition, the men will go their separate ways and look for individual gold. This will be their chance to some sort of redemption after not claiming a medal as a group.

The men are talented and can come away with some individual hardware. Supposedly they have the best talent since the 1984 squad, but they have yet to live up to that potential in London.

It will be interesting to see what their mindset is entering the competition after their previous performances. As much as they were celebrated entering the Games, it is time for the men to step up. Maybe they can be inspired by what the women did on Tuesday.

China Will Extend Gold Lead

With the Americans only having a select few opportunities to close the gap on gold, look for the Chinese to extend their lead.

They already have one gold guaranteed as the gold-medal match in women’s table tennis features Ding Ning and Li Xiaoxia.

Their early grasp on gold may be difficult to overcome, but it’s still early in the Games, and the Americans have plenty of opportunities to close the gap as the days pass. But for today, it looks as if they will extend the lead and continue their firm grasp over the rest of the world.

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Growing Panes: Homeowners Go Big on Glass Walls

Anita and Bob Dethlefs wanted the new Portland, Ore. home they were building to really let the sunshine in. So, the couple installed 2,700 square feet of Marvin windows—about $300,000 worth—on nearly every wall of the property.

Giant spans of glass,once seen mainly in commercial construction, are now more common in residential homes. Wendy Bounds explains how technology has enabled glass makers to make these more affordable, safe (if tempered) and energy efficient.

And then they put up 12 security cameras.

“We’re getting about as much light as you can in the Northwest but with so many windows, safety was the No. 1 concern for me as a mommy with kids running around the house,” says 43-year-old Ms. Dethlefs, who has five children. Her husband started a leadership conference business, Evanta Inc., in 2003 and later sold it. Their 13,000-square-foot, $5 million Frank Lloyd Wright-inspired home even has a glass front door, letting visitors on the front stoop see through the family’s living room out to Mount Hood.

Forget about a room with a view. Today, homeowners want views from every room. As large expanses of glass have become architecturally acceptable for modern and traditional homes, new technology is making living in a fishbowl more practical—albeit sometimes challenging.

Homes That Let the Sun Shine In

Leah Nash for The Wall Street Journal

Anita and Bob Dethlefs moved into their new Portland 13,000-square-foot home in November. The Frank Lloyd Wright-inspired home has about $300,000 worth of windows to let in as much light as possible and help with the ‘gray sky’ malaise Ms. Dethlefs says she gets living in the Pacific Northwest.

Homeowners’ desire for more open floor plans with combined kitchen and living-room spaces has paved the way structurally for bigger spreads of glass. A growing appetite for more energy-efficient windows and associated tax incentives and rebates have also supported the trend.

“The open floor plan is predominant in almost everyone’s design now,” says builder Tim Wilkinson of Great Falls, Mont. “They want more light and bigger windows to take advantage of views.”

Today, thanks to technological advances, nearly all windows installed in new homes have special, invisible coatings that block heat and keep ultraviolet rays from fading furniture. Many also use double or triple-panes with argon or krypton gas sandwiched in between, which helps insulate in cold climates. Now standard on Andersen Windows glass: a titanium dioxide coating the company says sheds dirt and virtually eliminates water spots. Some glass makers are even marketing windows for residences that can tint and untint with the push of a button.

And for those put off by the prospect of raising and lowering so many blinds, companies such as Lutron Electronics sell window shades that can be controlled with an iPhone app.

“Across the board, people want more light,” says Mike Rogers, senior vice president of GreenHomes America Inc., a company specializing in energy-efficient home renovations, which has been incorporating more glass in its projects.

Beyond privacy and safety—Ms. Dethlefs’s chief worries—there are maintenance issues, such as how to keep so much glass spotless. (The couple pay $850 to $950 for professional cleaning at least three times a year.) And despite technological improvements, glass still doesn’t typically insulate as well as a wall packed with insulation.

Then there is the bird problem: Anywhere from 100 million to 1 billion are killed in window collisions every year, according to the U.S. Fish and Wildlife Service.

While manufacturers such as Andersen Corp. and Marvin Windows and Doors say overall window sales have slowed amid a sluggish new-house market, the companies say they are seeing more and larger windows going into new homes.

In modern homes, “they are filling space between floor and ceiling with as much glass as they can,” says Jay Sandgren, an architectural representative for Andersen. He says builders are being “a lot smarter” about positioning a home and the roof overhang to capture the most sunlight in winter and to block much of the heat from the sun in summer.

Building with glass isn’t cheap. Mr. Wilkinson the Montana builder estimates the price is about double the cost of installing regular walls packed with insulation. His own 4,800-square-foot home that he completed last year has $85,000 worth of Andersen glass, giving him a 240-degree view of three mountain ranges and the Missouri River. Even the deck railings are glass panels.

Tempered safety glass is installed according to local building codes in areas of homes where breakage might be of particular concern, such as windows and doors close to the floor or near a stairway or landing. Glass can sometimes attract vandals in the construction phase, a headache for builders, Mr. Wilkinson says. But breakage for homeowners “is rarely a problem,” he says, although he cautions that people mowing the lawn should look out for rocks that the mower can kick out to crack a pane.

Architect Thomas Roszak took the fishbowl aesthetic to the extreme in his own Northfield, Ill. home, which features commercial curtain-wall glass around the entire building.The walls are constructed from two argon-filled glass panes covered with what’s called low-emissivity, or “low-e,” metallic coating to block heat flow through the window, keeping the home cooler in the summer and warmer in winter.

With little traditional wall space, art is suspended in front of windows from a floor-to-ceiling, museum-type wire hanging system, Mr. Roszak says. For privacy, he planted trees around his one-acre property and installed $60,000 worth of electronically operated blinds.

One low point of glass-house design: The day his 8-year-old son spied a dead bird that had hit home’s glass siding, likely mistaking the trees’ reflection for safe habitat. “He said, ‘Daddy, I don’t think that bird is sleeping, I think it’s broken,’” Mr. Roszak says.

Glass homeowners must be mindful of clutter, since the view goes both ways. When Beata and Brad Peters built their 3,900-square-foot brick home in Hawthorn Woods, Ill., they incorporated large panels of glass symmetrically throughout. While most windows have wood blinds, the family tends to leave them open for aesthetics.

“I don’t put a lot of stuff in front of the windows,” Ms. Peters says. In the kitchen, appliances like toasters get packed along a wall with no glass.

Window-treatment companies are pushing to make shade operation less of a chore. Rotterdam-based Hunter Douglas this spring added a “Solar Energy Sensor” that raises and lowers blinds based on the amount of sun detected. Despite the slump in the housing market, the company’s North American sales rose almost 5% last year. An electronically controlled Lutron shade sells for about $900 more than manual ones and can be controlled via remote control or an app for Apple Inc. or Android devices.

Some glass companies now make windows that reduce the need for blinds altogether. One is Sage Electrochromics Inc. of Faribault, Minn., whose product consists of clear panes that morph to a grayish-blue tint when a user flips a switch to send a low-voltage current across the window. The tint reduces glare and heat but not visibility. Sage began selling the glass for residential applications around 2005, though they are typically found in high-end homes due to cost. An installed window costs between one-and-a-half to two times as much as one with typical low-e glass.

“If you’re on the West Coast facing the ocean when the sun is beating on the glass, what people do is pull their blinds and shades to block the glare,” says Helen Sanders, Sage’s vice president of technical business development. “What that means is you’ve just lost your view you paid a huge amount of money for.”

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Joel Schumacher Lists California Estate for $9.5 Million


Filmmaker Joel Schumacher has listed his Carpinteria, Calif., home for $9.5 million. Candace Jackson has details on The News Hub. Photo: Jim Bartsch.

Filmmaker Joel Schumacher has listed his 7-acre Carpinteria, Calif., estate for $9.5 million.


Jim BartschFilmmaker Joel Schumacher has listed his 7-acre Carpinteria, Calif., estate for $9.5 million.

Just outside of Santa Barbara, the compound was built by Mr. Schumacher on four separate parcels and includes a 6,500-square-foot main house with three bedrooms. Built in 2000, it has both mountain and ocean views and was built in a modern-rustic style with reclaimed barn wood. The home’s large living room has vaulted ceilings, two fireplaces and a loft currently configured as an office. A rotunda-shaped dining room has large windows overlooking a swimming pool. The master suite has a fireplace and a terrace.

The property also includes a guesthouse and a home for a property manager, each of which has two bedrooms and two bathrooms, and a pool house.

Known for such movies as “Batman Forever” and “A Time to Kill,” Mr. Schumacher is selling because he’s no longer using the property as much as he used to, according to a listing agent.

Rebecca Riskin & Associates is handling the listing.

A Miami, Fla., home has re-listed for $19 million, up from an original list price of $16.5 million. The seller is Dean Ziff, a private investor whose family founded and owned SunglassHut retail stores. Candace Jackson has details on The News Hub. Photo: Sotheby’s International Realty.

Miami Home Relists and Ups Its Price by 15% to $19 Million

A Miami home has relisted for $19 million, up from an original list price of $16.5 million. The seller is Dean Ziff, a private investor whose family founded and owned Sunglass Hut retail stores.

Built in 1990, the home is on 2½ acres of waterfront along Biscayne Bay. Located in a neighborhood with 24-hour security, the property is surrounded by tropical landscaping. The 14,400-square-foot main house, with Colonial Colombian architectural influences, has eight bedrooms and 10 bathrooms. The home is built around a central atrium, and includes a large master suite and a second-story loggia overlooking the water.

Outside, there’s a swimming pool with an island in the middle and a tennis court. There are also two one-bedroom casitas and a guesthouse with its own kitchen and living room.

The home’s listing agent, Mayi de la Vega of Sotheby’s International Realty, says the listing price was raised because home underwent restorations and updates when it was taken off the market. She shares the listing with Jorge Uribe, also of Sotheby’s.

A Southampton, N.Y. home has listed for $30 million. On more than five acres, the property is directly on the beach with about 200 feet of oceanfront. It includes a two-story, 5,000-square-foot contemporary home with five bedrooms and six bathrooms. Candace Jackson has details on The News Hub. Photo: Philip M. Stamm.

A Home in the Hamptons Lists for $30 Million

A Southampton, N.Y., home has listed for $30 million.

On more than 5 acres, the property is directly on the beach with about 200 feet of oceanfront. It includes a two-story, 5,000-square-foot contemporary home with five bedrooms and six bathrooms. The two-story home has two kitchens, one on each level. There’s a swimming pool surrounded by a glass atrium. It also has a gated entry and a tennis court.

Philip Stamm, an attorney for the owner, whom he described as an 83-year-old relative, says the owner is selling because he has had the property for more than 25 years and is looking to move on. Mr. Stamm is handling the listing; Ryan Podskoch and Matt Podskoch of Global Real Estate Network are also marketing the property.

—Candace Jackson—Email: privateproperties@wsj.com

A version of this article appeared July 27, 2012, on page D8 in the U.S. edition of The Wall Street Journal, with the headline: Private Properties.

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For Olympic Winners, Losing Track of a Medal Is a Personal Bust

Michael Phelps, Shaun White Had Prizes Go Missing; When an eBay Knockoff Will Do


Chicago White Sox shortstop Alexei Ramirez won gold for Cuba’s baseball team in 2004. But he lost the medal when he moved to Chicago. Losing an Olympic medal is more common than you might think, but getting a replacement can be an Olympian task.

When Dutch rower Diederik Simon arrived at an Athens beach party during the 2004 Olympics, he noticed something missing from his pocket: the silver medal he had just won. “I was panicking, and I didn’t tell anybody,” he says.

Mr. Simon spent the celebration quietly searching for his medal. Before midnight, though, he gave up and went to the police station. Filling out a lost-property report, the officer asked him, “What color was the lost item? Ah, yes, silver.”

In the coming days, Olympians at the London Games will win about 3,000 medals, each the culmination of years of hard work. And in a moment’s carelessness, a few of those medals will be lost, perhaps as soon as the medal celebration itself.


Chicago White SoxAlexei Ramirez’s gold medal replica.

After winning gold in the 1988 Seoul Games, Italian rower Davide Tizzano made the traditional leap into the water. Then a teammate jumped on him, jarring the medal from his hand. It sank to the muddy bottom of the Han River.

“I feel exactly like it was yesterday, the feeling of the medal going down, going down,” he says. For the team picture, he borrowed a medal from another Italian rowing team that won gold. A security guard who was also a diver eventually recovered the hardware.

It is up to the Olympic host countries to make the medals, which are typically alloys. Organizers of the London Games say their gold medals, which weigh just under a pound, are actually 92.5% silver and just 1.34% gold. The remainder is copper.

Journal Report

Read the complete Olympics Preview report.

Losing a medal happens more often than one might think. Snowboarder Shaun White once found one of his gold medals, which he has admitted to misplacing a few times, in a seat pocket of his mother’s car. Another time, his mom had taken the medal to the dry cleaner—the ribbon was dirty—and had forgotten about it.

It can be harder to keep track of multiple medals. Swimmer Michael Phelps recently admitted that he was a little foggy about where one of his 16 medals was located. “There are a couple of options of where it could be, but I think when we were traveling—uh, somebody was holding on to it,” he said in an interview on “60 Minutes.”

The police can sometimes solve medal mysteries. Tristan Gale, a skeleton-racing champion at the 2002 Salt Lake City Games, had her gold stolen by burglars last year. She recalls visiting San Diego-area pawn shops and asking, “Hi, I’m looking for an Olympic gold medal.” It took police a week to recover the medal. They busted three thieves, who pleaded guilty.

Mr. Simon, the Dutch rower, grew nervous with each passing day about a planned photo-op with Queen Beatrix of the Netherlands. “I didn’t want to be standing there without a medal,” he says.

A taxi driver found the award in his cab and, after taking photos with it, turned it in. Athens officials gave him his own medal ceremony with Mr. Simon, as well as a set of commemorative stamps.

It is hard for thieves to pawn a medal since it is easy to identify the award’s rightful owner. Athletes can sell their own medals, but Olympic officials frown on the idea. In a 2010 sale from Heritage Auctions, of Dallas, a gold medal from the 1980 “Miracle on Ice” hockey team fetched $310,700.

For athletes who don’t find their missing awards, the International Olympic Committee does offer replicas.



The IOC keeps medal molds from modern Games in the Olympic Museum in Lausanne, Switzerland, a spokeswoman says. She adds the organization, which has 34,237 medalists in its database, gets one or two replacement requests every year. The replacements have the word replica on them, usually in tiny print on the bottom edge.

The U.S. Olympic Committee says replicas generally cost the athlete between $500 and $1,200, depending on the intricacy of the design.

Getting an Olympic replica takes months. Alexei Ramirez, a Chicago White Sox shortstop who won gold for Cuba’s baseball team in 2004, says someone stole his medal as he and his wife relocated to the U.S. The White Sox sent the IOC a police report and payment this past spring. Two months later, the team received the new medal—without a strap, since the IOC doesn’t supply replica ribbons—via DHL and surprised Mr. Ramirez with an on-field presentation.

Mr. Ramirez says he keeps his replica in a safe place, but he won’t say exactly where. “That’s a secret,” he says. “I’m not going to tell anybody to make sure it doesn’t get stolen again.”

Some Olympians don’t like talking about their absent-minded moment. Glenn Eller, a shotgun shooter who won gold in Beijing, says only that someone took it while he was out with colleagues in Fort Worth, Texas, in late 2008. “I put myself in a situation that I probably shouldn’t have been in, and someone stole it out of my pocket,” he says. “I’m trying to forget it and go ahead.” He has since received a replica.

Olympic officials warn it can be tough to replicate certain medals if they contain materials other than metal. U.S. water polo goalie Merrill Moses, who had his silver from the 2008 Beijing Games stolen in a burglary of his parents’ house, says his replica medal contained jade that looked painted on, rather than a piece embedded in the back.

Mr. Moses returned that replica to Olympic officials, who told him they found a way to make a better one. In the meantime, he is toting around something else: a $75 knockoff silver medal he bought on eBay. “I do a lot of camps and clinics…and the kids want to see a medal,” Mr. Moses says, adding that he tells them it isn’t the real thing.

Before there was an official process for getting replacement medals, athletes made do with makeshift ones. Olympics historian David Wallechinsky says Canadian high jumper Duncan McNaughton lost his 1932 gold medal. So his friend Bob Van Osdel—the high-jump runner-up who happened to be a dentist—made a mold from his silver medal, filled it with gold and sent the replica to Mr. McNaughton, the historian says.

Corey Codgell, a shotgun shooter who won bronze in Beijing, doesn’t take any chances. She usually keeps her nicked-up medal in her front pocket when she travels. Before letting an audience at an event handle it, she warns everybody: “No one leaves this room until I get my medal back.”


Streaming Coverage: Get the latest Journal coverage of the 2012 Games right here – every story, video, photo or tweet related to the competition and all news off the field.

Plus, watch videosee photos and view a schedule of events at WSJ.com/Olympics.

Write to Stu Woo at Stu.Woo@wsj.com and Geoffrey A. Fowler atgeoffrey.fowler@wsj.com

Enjoy the Games! -


Olympics social media: Get as connected as the rings for 2012 Games

Olympic FacesThe International Olympic Committee is enhancing its social media hub to include Instagram photos from the Olympic Village (IOC / July 19, 2012)
By Michelle MaltaisJuly 19, 2012, 1:20 p.m.

This summer’s Olympics will be more connected than the five rings of its emblem. It’s on Twitter,FacebookGoogle+, Instagram (@Olympics) and foursquare.

And the International Olympic Committee is building up an Olympic Village online by integrating these social media to help connect a worldwide audience with the athletes in the London 2012 Games.

“When I went to the Games for the first time it was back in Barcelona in 1992—those games had an internal email system, and it was groundbreaking,” six-time Olympic British archer Allison Williamson told a press conference unveiling the hub. “In London, I will be sharing photos of the Athletes’ Village and other fun things.”

Through the IOC’s Olympic Athletes’ Hub, you can virtually enter the exclusive Olympic Village to connect with your favorite competitor’s Facebook and Twitter profiles, get Instagram portraits of the athletes and chat directly with a featured athlete in a Twitter #asknathlete Q&A.

“Social media has been a great way to connect with fans and share not just my stories but the stories of other amazing people and athletes,” said South African Paralympic sprinter Oscar Pistorius at the press conference. “I am truly blessed and thrilled to be participating in the 2012 London Olympics and look forward to sharing my Olympic experiences with the social media community and inspiring young athletes to do amazing things.”

Since we all like to pretend we are as informed as the judges, the IOC will soon launch the Olympic Challenge in the Athletes’ Hub, a social game that lets fans compete to predict the outcome of various Olympic events and see how they rank on the leaderboard against their friends and fans around the world.

Photos from various angles of the events will be available on Tumblr: an aggregation of existing social feeds, live from inside the Village with the Instagram portraitsGetty Images shots as well as shots and commentary on the fashion scene.

Enjoy the Games! -



The Top 5 Things Buyers Love

The Top 5 Things Buyers Love

This week’s blogs are chock-full of ways to translate what buyers love into strategies for selling your home this spring. 
Here are the top five things potential buyers want in a brand-new house, according to a recent survey by trade publisher Hanley Wood:
  • Everything is new
  • Less maintenance
  • More energy-efficient
  • Opportunity to customize
  • Contemporary floor plan

And here are the top five things potential buyers like about existing homes:

  • More affordable
  • Established community
  • Opportunity to remodel
  • Character
  • Better neighborhood

Now you know what to emphasize in your listing, whether you are selling a new house or an existing house.

Image courtesy of Morguefile contributor Taliesin


Rosenthal Wine Estate in Malibu Is Listed for $59.5 Million


A 235-acre Malibu, Calif. wine estate has listed for $59.5 million. Candace Jackson has details on Lunch Break. (Photo: Simon Berlyn)

A 235-acre Malibu, Calif., wine estate has listed for $59.5 million. The seller is George I. Rosenthal, the chairman of Raleigh Enterprise, which owns and operates commercial real estate, hotels, and movie and TV studio complexes.

Mr. Rosenthal assembled the Rosenthal Wine Estate beginning in 1977. The property includes a 12,000-square-foot hacienda-style main residence with two swimming pools. There are also horse stables and two guesthouses, including one with an additional pool.

Photos: Private Properties

Nick SpringettA 235-acre Malibu, Calif., wine estate has listed for $59.5 million. The main house has two swimming pools.

The property includes 25 acres of hillside vineyards as well as a wine-tasting room, banquet room and office. The home’s furnishings are included in the purchase price.

“It’s been a great joy in my life but it’s time to take on other things,” says Mr. Rosenthal. His 90-acre Aspen, Colo., property, known as Jigsaw Ranch, is also on the market in two separate parcels, one asking $36 million and the other $22 million.

Irene Dazzan-Palmer and Sandro Dazzan of Coldwell Banker Previews International have the Malibu listing. Joshua Saslove of Joshua & Co. has the Aspen listings.

Former Congressman William Stuckey has listed his Washington, D.C. home for $6.25 million. Candace Jackson has details The News Hub. (Photo: Tom Schweda/Matt and Ryan Podskoch Global Real Estate Network)

Williamson Stuckey Asks $6.25 Million for Washington, D.C., Home

Former Rep. Williamson Stuckey and his wife, Ethelynn, have listed their Washington, D.C., home for $6.25 million.

Located on an acre in the Spring Valley neighborhood, the 8,000-square-foot house has six bedrooms and seven bathrooms. The 1920s-era home has a stone exterior and a slate roof, and there are extensive gardens. Inside, there’s a large dining room, a sunroom and a library. The home was extensively renovated and updated in 2006, though the original windows and exterior features were kept intact.

Mr. Stuckey, who is the chairman of Stuckey’s, a large chain of highway rest stops, purchased the home with his wife 45 years ago from then-Commerce Secretary John T. Connor. According to Mrs. Stuckey, Mr. Connor told Mr. Stuckey about the home over dinner at the White House and he decided then to buy it. They paid about $180,000 for it, says Mrs. Stuckey.

Mrs. Stuckey says they are selling because they plan to return to Georgia, where they are from. “I really have a lot of my heart in the house and the garden,” she said. Cathie Gill of Cathie Gill Inc. Realtors has the listing.

An Evergreen, Colo. home has listed for $18.95 million. Candace Jackson has details on The News Hub. (Photo: Cathie Gill, Inc./HomeVisit)

Home on 160 Acres Near Denver Is Listed for $18.95 Million

An Evergreen, Colo., home has listed for $18.95 million.

The property, about 40 minutes from downtown Denver, includes 160 acres on five separate parcels adjacent to a national forest. It includes a 9,500-square-foot stone and stucco main house, a 3,000-square-foot caretaker’s residence and two barns. The main house has a terrace along the back with mountain views.

The seller is Robert Truscheit, the owner of a private investment firm, who is based in Washington state. Mr. Truscheit assembled the property in 2004 and built the home in 2009. “Admittedly, it’s a high price,” says Mr. Truscheit. “The right person has to come along who wants the privacy.” Matt Podskoch and Ryan Podskoch of Global Real Estate Network have the listing.

—Candace Jackson—Email: privateproperties@wsj.com.

Corrections & Amplifications
Former Rep. Williamson Stuckey’s first name was incorrectly given as William in an earlier version of this article.


Buffett Extends Real-Estate Bet With ResCap Pursuit: Mortgages

By Noah Buhayar and Dakin Campbell - Jun 18, 2012 11:26 AM PM

Buffett Bets Big on Housing with $3.8B ResCap Bid

Warren Buffett, whose prediction last year of a housing recovery was premature, is raising his bet on a rebound with his $3.85 billion bid for a mortgage business and loan portfolio from bankrupt Residential Capital LLC.

Berkshire Hathaway Chairman Warren Buffett

Berkshire Hathaway Inc. Chairman Warren Buffett. Photographer: Andrew Harrer/Bloomberg

The offer “certainly indicates that he thinks the worst is behind us,” Jeff Matthews, author of “Secrets in Plain Sight: Business & Investing Secrets of Warren Buffett,” said in a phone interview. “Yes, he’s been wrong about housing before. But if you look at any credit metric, if you look at any of the banks and what’s happening in their loan portfolios, it’s getting better.”

Foreclosure filings in the U.S. have fallen on an annual basis for 20 straight months, according to RealtyTrac Inc., and home prices jumped 1.8 percent in March, the biggest monthly increase in at least two decades, as record-low mortgage ratesand a dwindling inventory of properties available for sale strengthened demand.

Buffett’s Berkshire Hathaway Inc. (BRK/A) has prepared for a turnaround by buying a brickmaker, expanding its real estate brokerage and wagering on commercial property through a company jointly owned with Leucadia National Corp. (LUK) The venture, called Berkadia Commercial Mortgage LLC, was formed from a loan- servicing and mortgage business purchased out of bankruptcy in 2009 and once owned by ResCap’s parent.

Berkshire was little changed today at $123,656 as of 2:15 p.m. in New York trading. It’s risen 7.8 percent this year.

Auction Approval

Ally Financial Inc. (ALLY), a Detroit-based auto lender majority owned by U.S. taxpayers, put its ResCap unit into bankruptcy last month to distance itself from the mortgage lenders’ losses and help repay its 2008 bailout following the U.S. housing crash and subsequent credit crisis.

U.S. Bankruptcy Court Judge Martin Glenn is considering approving auctions for the assets at a hearing today in Manhattan. Berkshire said in a June 11 court filing that it’s seeking to replaceFortress Investment Group LLC (FIG)’s Nationstar Mortgage Holdings Inc. as the stalking-horse, or initial, bidder at an auction for ResCap’s mortgage business. Berkshire has also proposed replacing Ally as the first bidder for the lender’s loan portfolio.

The billionaire’s Omaha, Nebraska-based firm, which is a ResCap bondholder, offered to match Fortress’s price of about $2.4 billion for the mortgage operations. It’s also proposing fees that are about $60 million lower than Nationstar’s if it’s outbid. Berkshire said it’s prepared to pay $1.45 billion for the loan portfolio, compared with Ally’s $1.4 billion for a sale outside the bankruptcy plan backed by the car lender.

‘Real Offer’

At the hearing today, Glenn asked ResCap’s lawyers to explain why an affiliate of Fortress deserves to be the lead bidder when Berkshire’s offer has a lower breakup fee. ResCap, Berkshire and Nationstar will return to court later today to argue about who should be named the first bidder for a court- supervised auction of ResCap’s mortgage-servicing unit.

The judge can either accept Nationstar as the stalking horse for the mortgage unit, name Berkshire in its place, or refuse to grant any company the protections, such as the breakup fee, that come with being the initial bidder.

Buffett has “come out with what appears to be a very real offer to buy the assets,” said John McKenna, a managing director at Miller Buckfire & Co., a New York-based financial advisory firm. “The court will ferret out whether it is a tactic or a legitimate interest in acquiring the assets.” A buyer can’t “just show up and feign interest in order to generate a better return.”

Stalking Horse

Nationstar said Berkshire’s request shouldn’t be granted because it may discourage potential investors in future bankruptcies from devoting the time and money required to be a stalking-horse, according to a June 14 court document. Susan Fitzpatrick, a ResCap spokeswoman, Fortress’s Gordon Runte and Ally’s Gina Proia declined to comment. Buffett didn’t respond to a request for comment sent to an assistant.

ResCap rejected Buffett’s offer to be the initial bidder and asked the court to approve the Nationstar and Ally proposal on June 14. Should Glenn approve ResCap’s plan, Berkshire still could bid in the auctions. It wouldn’t have the advantages given to the stalking horse, including any breakup fee.

The court will probably affirm Nationstar as the initial bidder for the mortgage assets, beginning a three-month auction process, Douglas Harter, a Credit Suisse Group AG analyst, wrote in a June 13 note after meeting with the firm’s management. He said he expects other bidders to emerge.

Funding Advantage

Acquiring ResCap’s mortgage business would give Berkshire contracts to service loans, a function Berkadia provides for commercial real-estate investors. It would also give Buffett another platform to originate mortgages, which his firm already does for buyers of its Clayton unit’s pre-fabricated homes.

Berkshire, which holds the second-highest credit rating from Standard & Poor’s, can access funding cheaper than almost any company in the U.S. It sold $750 million of five-year bonds paying a 1.6 percent coupon last month.

ResCap, once among the largest subprime mortgage originators, reduced its assets to $15.7 billion in the first quarter from more than $130 billion in 2006. The firm is the fifth-largest U.S. mortgage servicer, handling the billing and collections on about $369 billion mortgages in the first quarter, according to Inside Mortgage Finance, a trade journal.

Lenders Retreat

Some of the largest home lenders including Bank of America Corp. (BAC) have retreated from servicing and underwriting loans as new international rules designed to avert another financial crisis force banks to raise capital. That’s creating an opportunity for investors like Buffett to scoop up assets at discounted prices and benefit from the rebound in housing, said David Lykken, the managing partner of consultant Mortgage Banking Solutions.

Since the collapse of the housing market, investors have been asking, “When’s the time to catch this falling knife?” he said. If Berkshire wins the auction for the loan portfolio, the firm may be able to increase the assets’ value by modifying some of the mortgages, he said.

Buffett has said the real-estate market will rebound because a growing number of households will need properties while supply has dropped after builders retreated following the collapse. U.S. housing starts have plunged about two-thirds since 2006 and property prices are more than 35 percent below their peak that year.

Market Rebound

“Housing will come back — you can be sure of that,” Buffett wrote in a February letter to Berkshire shareholders. “Every day we are creating more households than housing units. People may postpone hitching up during uncertain times, but eventually hormones take over. And while ‘doubling-up’ may be the initial reaction of some during a recession, living with in- laws can quickly lose its allure.”

Berkshire is the largest investor in Wells Fargo & Co. (WFC), the biggest U.S. home-loan originator, and has a preferred stake in Bank of America, the fourth-largest U.S. mortgage lender. Buffett’s firm also has subsidiaries that make carpet, building insulation and roofing materials. Its subsidiary Acme Brick Co. last year bought Montgomery, Alabama-based Jenkins Brick Co.

The HomeServices of America Inc. unit has struck deals to acquire real-estate brokerages inConnecticutOregon and the state of Washington this year on the expectation that home sales will rebound as banks liquidate seized properties after settling foreclosure-misconduct claims. The housing market is “starting to show a pulse,” HomeServices Chief Executive Officer Ron Peltier said in an April interview.

$1 Offer

Berkshire attempted to buy ResCap for $1 before the bankruptcy last month, the mortgage lender said in a June 14 court document. “Neither ResCap entering into bankruptcy nor a sale of ResCap’s mortgage production platform is in the best interests of Ally, the U.S. Treasury, Berkshire and other significant stakeholders in both Ally and ResCap,” Berkshire said in a May 3 letter, according to the filing.

Buffett’s firm proposed taking on ResCap’s potential liabilities, such as mounting litigation costs, according to three people familiar with the matter who requested anonymity because talks were private. Berkshire wanted to avoid a ResCap bankruptcy because it held unsecured debt, the people said. Ally rejected the proposal after deciding that a bankruptcy filing and sale better protected the company from future liabilities, the people said.

Debt Investments

Buffett’s firm invested in ResCap’s secured and unsecured bonds more than two years ago, according to a June 4 court filing, in which Berkshire called for a probe of the mortgage lender’s pre-bankruptcy deals. Prices for three of ResCap’s unsecured bonds climbed after the document was filed, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority.

Two days later, Berkshire had sold its unsecured debt, which had a face value of more than $500 million, according to court documents. Berkshire said in a court filing it holds more than $900 million in ResCap’s junior secured bonds. ResCap’s 9.625 percent junior secured notes, which Berkshire’s General Re unit owned as of Dec. 31, added 0.3 cent to 95.3 cents on the dollar at 1:48 p.m. in New York, according to Trace. They’ve risen from 56.9 cents in November.

To contact the reporters on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net; Dakin Campbell in San Francisco at dcampbell27@bloomberg.net

Why Your Bank Wants You to Refinance


By Karen Weise on June 18, 2012

Nearly 80 percent of all mortgage applications are for refinancing now, according to the Mortgage Bankers Association, a near-record level. Why is the figure so high? Two reasons. First, demand for refinancings is up because homeowners want to take advantage of thehistoric low interest rates to reduce their monthly payments. Second, there are still very few new purchases as the housing market tries to recover. “When rates go down, it doesn’t spur homebuying, it spurs refinancing,” says Guy Cecala, publisher of Inside Mortgage Finance.

The Mortgage Bankers Association says nearly 30 percent of refinancings are part of the federal program HARP 2.0, designed to let borrowers who are current on their mortgages refi even if they owe more than their home is worth. Under HARP 2.0, borrowers don’t have to go through a new application process if they refinance with the bank that already services the mortgage, and if the loan is guaranteed by Fannie Mae or Freddie Mac, explains Cecala.

Lenders have an added incentive to offer refinancings to existing customers—Fannie Mae and Freddie Mac don’t require lenders to vouch for the quality of the new mortgages, making it less likely that the lenders will be forced to buy back soured loans. That incentive has lenders scouring the databases of their customers to find borrowers who are eligible for the program, says Frank Donnelly, president of the Mortgage Bankers Association of Metropolitan Washington.

HARP refinances could lower monthly payments by 26 percent, estimate economists at the Federal Reserve Bank of New York. The White House bills refinancing as part of its effort to “heal the housing market.” When HARP 2.0 was announced last fall, the housing data firm CoreLogic explained that the program would have “little direct and immediate benefit” to distressed borrowers and housing markets. Instead, CoreLogic said, the benefit of lowering monthly payments for borrowers is more like an economic stimulus “on the order of several billion dollars.” Of course, the economy can use all the help it can get—whatever form it takes.

Weise is a reporter for Bloomberg Businessweek.


Homeowner Aid Boosts Big Banks


A government program that helps struggling homeowners take advantage of low interest rates to cut monthly mortgage payments is providing an unexpected revenue boost to large banks such as Wells Fargo WFC +0.43% & Co. and J.P. Morgan ChaseJPM -0.91% & Co.

[refinance]European Pressphoto AgencyHUD Secretary Shaun Donovan says there is ‘essentially a monopoly on refinancings’ among the largest banks.

Banks that collect those payments, known as mortgage servicers, could get as much as $12 billion in revenue this year refinancing mortgages under the federal Home Affordable Refinance Program, or HARP, according to data compiled by Nomura Holdings Inc.

A government program that helps struggling homeowners take advantage of low interest rates to cut monthly mortgage payments is providing an unexpected revenue boost to large banks. Christian Berthelsen has details on The News Hub. Photo: Reuters.

Borrowers who refinance mortgages through HARP, on the other hand, stand to save between $2.5 billion and $5 billion this year, according to an analysis by The Wall Street Journal of Nomura’s figures.

The contrast is the latest illustration of the competing demands policy makers must juggle when they devise responses to the housing bust, now in its sixth year. Federal officials last year revised the HARP program in a bid to encourage banks to refinance borrowers who were current on their payments but owed more than their properties were worth.

The revisions have driven a sharp increase in refinancings, following years in which the program fell short of government projections. But some critics, including members of the Obama administration, say the changes risk making HARP a giveaway to big banks.


That is because the new HARP rules make it easier for borrowers to refinance their loans with existing lenders. That, the critics say, allows large lenders to charge a captive customer base above-market interest rates on the refinanced loans. Borrowers refinancing through their existing lender make up about 75% of HARP refinancings, according to government figures.

“There’s essentially a monopoly on refinancing,” Housing and Urban Development Secretary Shaun Donovan said at a Senate hearing last month. For borrowers, Mr. Donovan said, “Whoever holds their current loan, whoever is the servicer, they can charge them—and we’re seeing this—very high fees.”

The Obama administration and some mortgage-industry participants say this arrangement leaves the lion’s share of refinancing activity with giant banks. Among the biggest beneficiaries: Wells Fargo, which held a third of the market as of March, and J.P. Morgan, with more than 10%, according to Inside Mortgage Finance. U.S. BancorpUSB +0.09% Bank of America Corp.BAC -1.22% and Citigroup Inc. C -2.12% rounded out the top five, which together hold 58% of the market.

Banks have been charging HARP borrowers as much as 0.53 percentage point more than the market rate on the refinanced mortgages, according to Amherst Securities. Officials at the Federal Housing Finance Agency, the independent regulator that runs the program, said the premium is far smaller, around 0.1 percentage point on average, for Fannie Mae borrowers.

A Wells Fargo spokeswoman said the bank’s rates are “competitive with our traditional refinancing loan options.” A J.P. Morgan spokeswoman declined to comment on the rates it is charging borrowers but said “demand from customers has exceeded our expectations.” A Bank of America spokeswoman said, “We offer market-driven pricing for both HARP and traditional refinances.” A spokesman for Citi said the bank is offering market rates. A U.S. Bancorp spokesman couldn’t be reached for comment.

The administration is pressing lawmakers to make it easier for consumers to refinance with different lenders. A senior administration official said the administration tried to get the FHFA to change the policy last year but was unable to do so.

The FHFA, which oversees Fannie Mae and Freddie Mac, which finance the lion’s share of home mortgages, defends the program’s structure. Officials there say that any lack of competition is a problem felt in the overall mortgage market, which has shrunk for years with the collapse of many nonbank lenders and the retreat of large banks such as Bank of America, and not a result of HARP.

“We feel very comfortable that lenders are offering borrowers the HARP product at the going market rate,” said Meg Burns, the FHFA’s senior associate director for housing policy.

Wells Fargo Chief Financial Officer Timothy Sloan told analysts in an April 13 conference call that HARP refinancings made up 15% of new mortgages during the first quarter. At J.P. Morgan, Chief Executive James Dimon told analysts on a conference call April 13 that profit margins “were several hundred million [dollars] higher than what we would call normal for a whole bunch of different reasons, including HARP” and mortgage-industry dynamics such as supply and demand.

Banks also can reap gains as the mortgages are securitized and sold, because of reduced risk that borrowers will repay their mortgages early. Margins on the sale of securitized mortgages averaged 2.1 percentage points higher in the first quarter this year than last year among the top five servicers, an analysis of data from investment bank Keefe, Bruyette & Woods shows.

The original HARP, rolled out in 2009, blocked borrowers from refinancing if they owed more than 125% of their home’s value. Fewer than 900,000 borrowers had used the program when President Barack Obama announced changes last fall. The revamped program removed that loan-to-value cap and made other tweaks.

Mortgage rates have hit the lowest levels on record, sinking to an average of 3.71% for a 30-year fixed rate loan last week, according to Freddie Mac.

Nomura analyst Glenn Schorr said in a research note that most borrowers seeking HARP loans are paying interest rates of 5%-6%. Those borrowers, he said, “would certainly prefer a 3.75% mortgage, but they will happily take a 4%, 4.25% or even a 4.5% loan as well.”