Short sales: taxes, 1099s, and relocation assistance

February 19, 2013 By Leave a Comment

by Melissa Zavala in Housing News -   

taxes money Short sales: taxes, 1099s, and relocation assistance

It’s Tax Season

I always know when tax season is just around the corner because I see Lady Liberty or Uncle Sam spinning signs that invite me into a local tax preparer’s office. Now is also a time when lots of questions arise about short sales and income taxes. If you or any of your clients participated in a short sale in 2012, then there are a number of things you will want to know about short sales and tax return preparation.

Mortgage Forgiveness Debt Relief Act of 2007

I received a 1099-MISC from the short sale lender. Is the income noted on the 1099-MISC taxable?

The Mortgage Forgiveness Debt Relief Act of 2007 provides tax forgiveness for certain short sale sellers, and such forgiveness depends on the taxpayer’s specific situation. Taxpayers who sold their home in a short sale during 2012 should seek the advice of an accountant in order to learn whether this Relief Act applies to their unique tax position.

What if the Mortgage Forgiveness Debt Relief Act doesn’t apply to my short sale?

Because the Mortgage Forgiveness Debt Relief Act of 2007 does not apply to everyone (e.g. if the home sold is not a qualified principal residence or due to bankruptcy), it is vital that taxpayers seek the advice of an accountant in order to learn about any other tax laws that may come into play in order to provide tax relief.

Is Relocation Assistance Money Taxable?

I received an incentive from the short sale lender? Do I have to pay taxes on the incentive?

According to the Internal Revenue Service, “Cash for Keys Program income, which is taxable, is income from a financial institution, offered to taxpayers to expedite the foreclosure process. Report this as ‘other income’ on Form 1040, line 21. The taxpayer should receive Form 1099-MISC with the income in box 3.”

I received an incentive from the short sale lender, but I did not receive a 1099-MISC. How should I proceed?

I’d bet dollars to doughnuts that short sale sellers often don’t receive the 1099-MISC because the short sale lender doesn’t have a record of the taxpayer’s new address. Speak with an accountant about how to proceed in this situation.

Common Problems with Relocation Assistance

My real estate agent told me that I was supposed to get relocation assistance money. We closed, and I received a 1099-MISC. However, I never got any relocation assistance money. What should I do?

All relocation assistance money is documented on the final settlement statement (also called a HUD-1) and payable to short sale sellers through the settlement agent at closing. If there is no line item for relocation assistance on the settlement statement and no notation on the short sale approval letter from the lender, then the bank did not approve the short sale assistance.

If there is a line item for relocation assistance and the seller did not receive the funds, contact the settlement agent for more information. In many cases, with prior written authorization of the short sale seller and the short sale lender, relocation assistance money is used in order to pay off non-institutional liens and clear the title for closing.

On the settlement statement, it shows that the buyer is paying the relocation assistance and not the short sale lender. Why would I receive a 1099-MISC from the short sale lender if the buyer paid the money?

Since any real estate sale requires that buyer funds be used to pay seller costs, the relocation assistance shows as a debit to the buyer and a credit to the seller. Of course, this is a credit to the seller from the short sale lender who retains all of the remaining funds at closing.

Short Sale Documentation

No matter when the short sale closes, all short sale sellers should retain copies of the short sale approval letters from the lenders and a final settlement statement from the closing agent. In this way, any questions that come up (no matter how far in the future) can be addressed quickly and efficiently.

Courtesy of your Arcadia Real Estate Agent

Filed Under: Brian Peralez, For Sale, Lending, Market, Mortgage Tagged With: , , , , , , , , , ,

U.S. Homeowners Are Repeating Their Mistakes

February 18, 2013 By 2 Comments
U.S. Homeowners Are Repeating Their MistakesPhoto illustration by 731: Hand: Getty Images

Global Economics

By Brendan Greeley on February 14, 2013

If there’s one thing Americans should have learned from the recession, it’s the importance of diversifying risk. Middle-class households had too much of their net worth tied up in their homes and were too exposed to stocks through 401(k)s and other investments.

Despite the hit many Americans took, there’s little sign they’ve changed their dependence on homes as the mainstay of their wealth. Last year, Christian Weller, a professor at the University of Massachusetts, looked at Federal Reserve data for households run by those over 50. The number of families with what Weller calls “very high risk exposure”—a low wealth-to-income ratio, more than three-quarters of their assets in housing or stocks, and debt greater than a quarter of their assets—had almost doubled between 1989 and 2010, to 18 percent. That number didn’t decline during the deleveraging years from 2007 to 2010; its growth just slowed to a crawl.

The Fed will conduct a new wealth survey in 2013, but don’t look for a rational rebalancing. The same pressures that drove families to save less before the recession are still in place: low income growth, low interest rates, and high costs for health care, energy, and education. Families have been borrowing less since 2007, but the rate of the decline has slowed. As soon as banks start lending again, Weller says, people will put their money back into housing. “The trends look like they’re on autopilot,” he says. “They don’t suggest that people properly manage their risk.”

In a 2012 paper for the National Bureau of Economic Research, economist Edward Wolff concluded that from 2007 to 2010, the median American household lost 47 percent of its wealth. Average wealth—a number that includes the richest Americans—declined only 18 percent. Houses make up a smaller share of the wealth of a rich family. The wealthy also benefit from better financial advice, Weller says.

A home is what economists call a consumption good; you have to live somewhere. It’s also a store of wealth. Unlike other assets, you can’t buy a portion of a house. “You want to consume a big home,” says Sebastien Betermier, an assistant professor of finance at Desautels Faculty of Management at McGill University. “But if you want to buy that home, it’s a huge investment—probably more than you really want.” Betermier, who studies consumers’ financial decisions, says homeownership makes it harder to diversify risk. Since 1983, for the richest 20 percent of U.S. households, the principal residence as a share of net worth has been around 30 percent. For the next 60 percent—most of us—housing has risen from 62 percent to 67 percent of total wealth.

To compound the problem, home equity dropped for this middle group even as home values rose. Rising house values, low interest rates, and easy refinancing encouraged property owners to take out home equity loans. And Wolff’s analysis shows the middle class reducing their cash cushion from 21 percent of assets, starting in the early 1980s, to 8 percent just before the recession. Cash is bad luck insurance; you pay a premium because you don’t earn a return on it, but it’s available in case of an emergency. Americans borrowed against their homes, spent the cash, and were left only with risk.

How can the middle class manage risk better? Financial education would help. Olivia Mitchell, a professor at the Wharton School at the University of Pennsylvania, is alarmed at how few people understand basic principles. “What we do know is that people who are more financially literate … do accumulate more wealth,” she says.

The other option is for banks to devise ways to reduce housing risk. When Weller worked as a banker in Germany in the 1980s, the bank would set up a savings account with automatic deposit for every mortgage customer. That way, the client would build up a cash reserve to pay the mortgage in a bad month. This remains a common practice in Germany, where banks hold on to their mortgages rather than securitize and sell them.

Weller, Betermier, and Mitchell agree that the mortgage interest deduction contributes to the problem, as it encourages families to move their assets into housing. “When people think about renting vs. buying, the tax subsidy looms large,” says Wharton’s Mitchell. Weller endorses an approach suggested by Senator Barack Obama in 2008: Turn the deduction, which lowers taxable income, into a flat credit, which cuts your tax bill by a fixed amount. That would lead to slower growth in house prices, says Weller, since the credit wouldn’t rise even if people took on a bigger mortgage to buy a more expensive house. As the price of housing climbs more slowly, the shift of a family’s savings into housing would.

In 1999, Robert Shiller of Yale University proposed a way to hedge house values. New owners would buy an option with their mortgage, tied to an index of house prices (such as the one developed by Shiller and Karl Case). The option would function as home value insurance. But “when you buy insurance and you don’t die,” says Shiller, “you think how I spent all this money and got nothing. It takes sophistication.” The problem with his idea, he says, as with similar approaches by the Bank of Scotland and Bear Stearns, was that house prices were rising. People don’t buy insurance for a risk they don’t see.

This leaves Shiller, like Wharton’s Mitchell, pushing for education. At the Obama Treasury several years ago, he suggested the White House hold conferences on housing risk. “They would invite top financial organizations,” he says, “and ask them ‘What are you doing about this?’ ” At the time, Treasury and the banks had more pressing things to do. The federal government could also resort to regulation. Shiller points to the example of Franklin D. Roosevelt, who mandated that homeowners buy fire insurance with their mortgages. “I think it could be expanded to home value insurance,” he says.

The best remedy of all would be a higher savings rate. Mitchell tells her daughters, who are in their twenties, to hold off buying a house and save 25 percent of what they earn. But, she says, “They don’t find this very helpful.”

 

The bottom line: Americans still have too much of their net worth tied up in their homes. There are limited options to encourage diversification.

 

Courtesy of your Arcadia Real Estate Agent

Filed Under: Arcadia Real Estate Agent, Brettany Harrison, Bussiness, Market, Trending Topics Tagged With: , , , , , , , , ,

The Latest Real Estate Buzzwords

February 14, 2013 By Leave a Comment

 / By Zillow.com 
Top Real Esate Buzzwords

Winter is considered “off season” in the real estate world, but that doesn’t mean that buyers aren’t still out there.

Even in December, when everybody was busy racing around to get ready for the holidays, the number of home sales — including existing homes, foreclosure resales and new home sales — was 8.7 percent higher than in the same month in 2011.

One way to make your home stand out from others during the winter doldrums is to choose words that jump out at potential home buyers when they’re searching through real estate listings.

Desirable features vary depending on price and city, but there are a few universally golden terms at the moment. Daniel Beer, a real estate agent and marketing expert in San Diego, says “open floor plan” and “downstairs master” are popular features everywhere.

“A downstairs master bedroom has long been standard in luxury homes,” Beer said. “But now that requirement has moved down into the middle market, and home builders are responding.”

He says this is especially true among aging baby boomers, who are now focusing on smaller homes with fewer levels and fewer, if any, stairs.

Similarly, the “walkability” of a neighborhood is rising in stature. Green terms such as “solar” and “energy efficient” are red hot. “Low HOA fee” continues to be a popular term in listings all over the U.S. because an estimated 63.4 million — and counting — Americans live under the governance of homeowners associations.

On a more local level, the term “No Mello-Roos” is a welcome phrase in California because it means that a particular property is not subject to a special property tax that’s often levied in newer communities to pay for parks, roads and other infrastructure.

In coastal Southern California “new construction” jumps out because there is currently so little of it while demand is strong.

Seeing the light

“Light and bright” or words to that effect are huge in Manhattan. “I can’t stress enough how important lighting is in New York,” Leslie Lazarus, an agent with DJK Residential, told the Wall Street Journal.

Lighting isn’t as important, of course, in a fair-weather city such as Miami, but a “sunny breakfast room” or nook seems to appeal to people everywhere.

Being as specific as possible with adjectives tends to result in higher sale prices, according to the National Bureau of Economic Research. Instead of “wood floors,” for example, say “oak floors.”

How about “stainless” and “granite”? Not so hot anymore or even necessary: Those are givens these days if you’ve noted that your kitchen has been “updated,” says Beer, who pointed out that “updated” is a word that always gets attention.

Stainless may not be king much longer anyway, according to Beer. A current hot buzzword in design material, he says, is “Caesarstone,” which is high-quality quartz.

Dropping high-end appliance brand names continues to be an effective “look-at-me!” lure. The biggies are still Sub-Zero, Viking, Bosch and G.E. Monogram, and “anybody considered a chef will demand a kitchen with a Wolf range,” Beer said.

In the bathroom, the coolest brand name is now Toto. “Actually, it has become the Sub-Zero of the toilet world,” Leonard Steinberg, managing director of Douglas Elliman in New York, recently told the New York Times.

Be cautious with the ‘F’ word

People tense up when they see the word “fixer,” and readers often translate the term “investor,” as in “investor special,” as “needs lots of work” (use “income property” instead, Beer counsels).

“The mood of the market right now is for a ‘turn-key’ or ‘move-in-ready’ property,” Beer said.

At times, however, a term like “needs work” is advantageous. First-time buyers are often looking for a fixer-upper in a desirable neighborhood or coveted school district in which they would otherwise be priced out.

Buyers are often put off by hardcore sales lingo such as “Hurry, won’t last!” Some phrases have been so overused that they now put buyers to sleep.

“Gourmet kitchen” and “luxury bath” are also in that category. And the word “rare” is anything but rare in real estate listings — “rare jewel,” “rare opportunity.”

Be careful with vague superlatives, too. Some people believe “charming” means “small.” Others consider “classic” a euphemism for “completely out of date.”

Finally, Laura Lothian, a Pacific Sotheby’s agent in La Mesa, CA, says she has seen the words “open house” more and more frequently in listings all over the U.S.

“It’s a trend I love,” she said. “People are having more open houses, and those open houses are attracting bigger crowds.”

She speculates that there are two reasons behind this trend. Most real estate photos are now taken by professional photographers, she says, so photos are looking more and more alike.

Images can be easily “enhanced,” so people want to get a more realistic look at a place with the electric wires in place and without a Technicolor blue sky.

The second reason open houses are increasing in popularity, Lothian believes, is that people are getting antsy about spending so much of their social lives online in places such as Facebook. “They want to connect with real flesh!”

Courtesy of your Arcadia Real Estate Agent

Filed Under: Brian Peralez, Bussiness, Make Over, Market Tagged With: , , , , , , , , ,

Fannie Mae and Freddie Mac Conforming Loan Limits For 2013

February 7, 2013 By Leave a Comment

By  on February 5, 2013

 

The Federal Housing Finance Agency has announced that the conforming loan limit will remain at $417,000 for single family homes for 2013 for most areas of the U.S. The conforming limit is the maximum size mortgage that is eligible for purchase by Fannie Mae or Freddie Mac.  The maximum loan sizes for multi-unit properties are as follows:

  • 1-unit: $417,000
  • 2-unit: $533,850
  • 3-unit: $645,300
  • 4-unit: $801,950

In certain “high-cost” areas (e.g. Bergen County, NJ, Montgomery County, MD,  Nassau County, NY, etc.) where the median home price exceeds the standard conforming limit, the conforming loan limit is increased.  The loans are referred to variously as “high-balance,” “super-conforming,” and “high-balance jumbo” mortgages.  The conforming limit in high cost areas ranges up to $625,500 for 2013.  This is down from the previous high-balance limit of $729,750.  The maximum loan sizes for multi-unit homes in high balance areas are as follows:

  • 1-unit: $625,500
  • 2-unit: $800,775
  • 3-unit: $967,950
  • 4-unit: $1,202,925

Courtesy of your Arcadia Real Estate Agent

Filed Under: Bussiness, Market, Mortgage Tagged With: , , , , , , , , , ,

4 reasons your home isn’t selling

January 22, 2013 By Leave a Comment

Even in recovering markets, listings must be priced right and properly marketed

BY DIAN HYMER, MONDAY, JANUARY 21, 2013.

Inman News®

<a href="http://www.shutterstock.com/pic.mhtml?id=32385181" target="_blank">Price reduced</a> image via Shutterstock.
Price reduced image via Shutterstock.

There’s a buzz in the air. The real estate market has improved and may be on the road to recovery.

But the improvement in the housing market is not treating all home sellers equally. Some well-priced listings in prime locations are selling within a couple of weeks. In other areas, it still takes months to sell, and prices haven’t fully stabilized.

There are several factors that could be keeping your home from selling. One is the state of the local housing market. Residential real estate is a local business. National trends, while informative, don’t necessarily apply to the state of the market in your neighborhood.

Other factors include: the list price; the condition of your property; or lack of broad marketing exposure.

HOUSE HUNTING TIP: Today’s buyers don’t overpay. They need to be convinced that the price you’re asking for your home is a fair market value.

The housing market is pulling out of the worst recession since the Great Depression. This is fresh in buyers’ minds. There are plenty of buyers who think this is the right time to buy, but they’re not inclined to make offers on overpriced listings.

Sellers often wonder why buyers won’t make an offer at a lower price if they think the list price is high. Buyers don’t want to waste their time making an offer if the seller is unrealistic. Making an offer takes a lot of time and emotional energy. Most buyers who have the wherewithal to buy a home don’t have time to waste.

There are “bottom feeders” who give sellers lowball offers below market value hoping to get lucky. These buyers also won’t pay over the asking price. They want a bargain. You can do better than that if you price your home right for the market.

Here are clues that your listing might be priced too high. You don’t receive any showings, or you receive showings but no repeat showings. Buyers usually look at a listing more than once before making an offer. Another possibility is that buyers look at your home and then buy another listing that is priced more in line with the market.

Let your real estate agent know that you want to hear feedback from buyers who have seen your home. If they like the house but not at the price you’re asking, that’s a clear indication that you should adjust the price if you want to sell.

Some sellers have false expectations about the current picked-up market. In some areas, the improved market means that homes are taking less time to sell, not that prices have increased.

In other markets, like Phoenix, prices have jumped approximately 25 percent from a year ago but are still way below where they were at the peak of the market. If prices dropped 50 percent in your area, they need to increase 100 percent to get back to where they were before the decline.

For instance, if your home was worth $100,000 in 2006 and dropped 50 percent in value and then increased 50 percent of the lower value, it would be worth $75,000. It needs to increase 100 percent ($50,000 plus $50,000) to recoup your loss.

The condition of your home will influence the market value. You need to lower the price to account for deferred maintenance or a dated decor, or take care of these issues so that you can present your home in move-in condition. You’ll then attract more buyers and sell for more.

It’s always possible that your home has not been properly marketed. Ask your listing agent to provide you with copies of all advertising. More than 88 percent of today’s homebuyers use the Internet to find a home.

THE CLOSING: Make sure your listing is receiving wide Internet exposure, including a lot of good-quality photographs.

Dian Hymer, a real estate broker with more than 30 years’ experience, is a nationally syndicated real estate columnist and author of “House Hunting: The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide.”

Courtesy of your Arcadia Real Estate Agent

Filed Under: For Sale, Lending, Market Tagged With: , , , , , , ,

4 Reasons to List or Buy a Home in December

December 14, 2012 By Leave a Comment

 / By Zillow.com / Comments
Home For Sale Real Estate Sign in Front of Beautiful New House.

Tis the season to sell and buy! Here are the top four reasons sellers should list and buyers should purchase prior to ringing in the New Year.

The commitment factor

Buyers searching for homes over the holidays are serious, committed and ready to go, often motivated by a deadline-oriented relocation brought on by a career switch or an unexpected change in housing situation.

Furthermore, with vacation time during the season, local buyers generally have more time during the weekdays to look.

Emotional buying

The holiday season also brings out emotions and feelings of nostalgia in buyers, which may help push their decision making to quickly move forward with the purchase.

When staging homes, sellers and agents should try to make the house feel as holiday-homey as possible. Let the buyers picture themselves there.

How about some tasteful greenery, the gentle glow of twinkly lights, a little golden holiday bling and the scent of baking cookies wafting through your open house?

The low inventory advantage

Inventory of homes for sale is excruciatingly low. Buyers have fewer choices, which means sellers’ homes will be in demand — and greater demand equals more money.

Low inventory isn’t necessarily a bad thing for buyers, especially for those who must make a decision quickly.

However, both buyers and sellers must be realistic about desired purchase and sale pricing.

Tax advantages

Purchasing prior to the end of the year can be advantageous and motivating to buyers for tax reasons.

Closing on a home before the end of the year allows you to deduct property taxes, mortgage interest, and loan points on this year’s tax return.

If you can buy your dream home AND save money, why wouldn’t you?

“4 Reasons to List or Buy a Home in December” was provided by Zillow.com. 

Courtesy of your Arcadia Real Estate Agent

Filed Under: Arcadia News, Brian Peralez, For Sale, Pasadena News Tagged With: , , , , , , ,

Zillow to show homes in foreclosure, before they are listed

October 25, 2012 By 2 Comments

Company expects some criticism for putting personal data at consumers’ fingertips

ForeclosureA Cook COunty sheriff’s deputy puts a foreclosure notice on the door of a Chicago home. (Nancy Stone/Chicago Tribune photo / October 24, 2012)
By Mary Ellen PodmolikTribune staff reporter8:12 a.m. CDT, October 25, 2012

Zillow will display detailed information on approximately 1.5 million homes that are in foreclosure but are not yet for sale, in a bid to position itself as the go-to web site for homebuyers.All of the data that Zillow is making available is public information but until now, accessing it typically required buying a subscription to a website or a trip to county courthouses, digging through individual case records. By putting such personal data at consumers’ fingertips, the Seattle-based realty website acknowledges it may face criticism regarding privacy concerns.However, the Seattle-based company views its latest site enhancement, which went live late Wednesday night, similarly to when it shook up the real estate market in 2006 by debuting a site that listing individual home values, called ‘Zestimates,’ of for-sale and not-for-sale homes. The site today has information on more than 110 million properties. Back in 2006, the stated goal was to make potential homebuyers more market-savvy shoppers. It doesn’t see the addition of foreclosure data any differently.”It’s all part of the public record and what the buyer chooses to do with information is up to them and their real estate agent,” said Amy Bohutinsky, Zillow’s chief marketing officer. “Ultimately, what we’re trying to do is help buyers get a better picture.”

Anyone who logs in with a free account will have access to the information, which will also include completed foreclosures that have not been listed for sale.

The homes listed in ‘pre-market’ inventory will be properties where a foreclosure has been filed against the borrower but the action is not resolved. Among the details available for each property will be the address, the date and amount of the original mortgage, the unpaid balance and the dollar amount past due. It also will show the party that initiated the foreclosure action, an estimate of what the foreclosure sales price might be, based on the sales prices of nearby foreclosures, and details of where it is in the process. If the home was previously listed on Zillow as a for-sale home, that picture will be used. Otherwise, there will be a satellite view of the neighborhood.

The borrower’s names will not be listed.

When the additional information was added to the site late Wednesday night, it included 11,000 pre-market single-family homes and condominiums just within the city of Chicago.

Home shoppers have a need for the extra information, according to Bohutinsky, because the dearth of available homes listed for sale is constraining the housing market at a time when there are indications that the market has bottomed nationally and mortgage rates remain well under 4 percent for a 30-year, fixed-rate loan.

“What buyers can learn from this is what homes might be listed for sale soon, or they can actually try and buy the home out of the foreclosure process by making an offer to the owner or the bank,” she said. “It opens up a whole new category of inventory to people that they didn’t know existed.”

That so-called shadow inventory has been on the mind of real estate agents for years, as they waited for properties in foreclosure to make their way through the process and return to the market for resale. Foreclosure proceedings first slowed because of the volume of cases and more recently because of various state and federal investigations into how banks handled the cases. With many of those probes behind the mortgage lending industry, lenders are again seeking to push foreclosure cases through the system.

Still, according to RealtyTrac, it takes an average of almost two years to foreclose on a home in the Chicago area, so a property listed in Zillow’s pre-market inventory could be there a while before it’s officially listed for sale. On Thursday, RealtyTrac reported that foreclosure activity in the Chicago area rose 34 percent from 2011′s third quarter. During the past three months, notices of default, the first step in the foreclosure process were filed against 18,923 homes locally.

As information on those properties is entered in court databases, it would be added to Zillow’s site, which will be updated daily.

The company calls the addition of pre-market inventory a step forward in ‘consumer empowerment.”  Housing advocacy groups and counselors aren’t so sure.

“While, generally speaking, we support disclosure of public data, there is a big leap from the general case to a specific one,” said Katie Buitrago, a senior policy associate at Woodstock Institute, a Chicago-based research and public policy group. “It’s important to look at Zillow’s methodology, data coverage, and compliance with privacy laws before coming to any conclusions. Given that it’s not Zillow’s goal to help observers understand foreclosure trends but to facilitate real estate transactions, I would be concerned that they are not providing sufficient context for the general public to put foreclosure trends into perspective

Debra Olson, executive director of the DuPage Homeownership Center, worries that the easy access to personal data on homeowners’ financial problems not only makes them more likely to receive low-ball offers on homes but may also make them a target for mortgage-related scams.

“Many of the families that come in here that are in pre-foreclosure are able to get it turned around, either through the Illinois Hardest Hit program or through mortgage modifications or other means,” Olson said. “I understand that the information is already available through public court records but it takes some real digging. This just seems much too easy for predators.”

mepodmolik@tribune.com
Twitter @mepodmolik

 

COURTESY OF YOUR NUMBER ONE ARCADIA REAL ESTATE AGENT

Filed Under: Market Tagged With: , , , ,

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

July 25, 2012 By Leave a Comment

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

By STU WOO and GEOFFREY A. FOWLER

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.

image

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.

image

BEIJING GAMES GOLD MEDAL

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.”

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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 video, see 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! -

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Filed Under: Olympic Games 2012, Trending Topics, Worldwide Tagged With: , , , , , , , , , , , , , , , , ,

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

July 19, 2012 By Leave a Comment

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,Facebook, Google+, 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 portraits, Getty Images shots as well as shots and commentary on the fashion scene.

Enjoy the Games! -

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Filed Under: Athletes, Brettany Harrison, Community, Olympic Games 2012, Trending Topics, Uncategorized, Worldwide Tagged With: , , , , , , , , , , , , , , , ,

Buffett Extends Real-Estate Bet With ResCap Pursuit: Mortgages

June 19, 2012 By Leave a Comment

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 inConnecticut, Oregon 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

Filed Under: Lending, Market, Mortgage, Trending Topics Tagged With: , , , , , , , , , , , , ,
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