India admits to different, even sub-standard expectations from western countries. Makes you wonder about the standards in work quality delivered to real estate buyers and sellers in this country.

From The New York Times
By JIM YARDLEY
Published: September 24, 2010


NEW DELHI — Had the statement come from a non-Indian, especially a Westerner, it probably would have been angrily repudiated as an affront to Indian dignity. But the offending words came from a top Indian official trying to deflect criticism for the bureaucratic failings and lax preparations threatening the coming Commonwealth Games.

The issue was reports of unsanitary conditions inside the athletes’ village, a facility promoted by Indian organizers as world class. Officials of the New Zealand team, arriving early, had been horrified at dirt-caked bathrooms and soiled rooms. The explanation offered by Lalit Bhanot, the second-ranking official on the organizing committee? Indians and Westerners have different standards of hygiene.

“These rooms are clean to both you and us,” Mr. Bhanot told Indian reporters this week. Foreigners “want certain standards in hygiene and cleanliness which may differ from our perception,” he said.

India had hoped the Commonwealth Games, a quadrennial athletic competition among nations of the former British Empire, would serve as a public relations vehicle to show off the economic progress that has made the country a rising power. Instead, the world is witnessing an ugly spectacle of bureaucratic dysfunction that only confirms the image of governmental ineffectiveness that Indian leaders hoped to dispel.

Indians acknowledge that sanitation is woefully lacking in many parts of the country. But Mr. Bhanot’s suggestion that their government cannot, even under the glare of a global spotlight, deliver a high standard of hygiene in an expensive new facility fueled broad public indignation that rippled through television talk shows and Internet message boards.

“It is unbelievable that a person holding such a responsible position can make such a statement,” said J. Anand, vice president of a New Delhi travel agency. “Hygiene is hygiene, whether it is in India or anywhere else. I feel embarrassed by that statement.”

The dirty bathroom controversy is just the latest problem to plague the games. New Delhi has experienced record monsoon rains, causing periodic flooding in low-lying areas and amplifying the seasonal outbreak of mosquito-borne dengue fever. Missed deadlines have officials racing to finish work, and a pedestrian bridge under construction collapsed this week, injuring 27 people. Already, as many as nine athletes have dropped out of the Games.

Now the photographic leitmotif of the games is filthy bathrooms. Snapshots taken of an apartment in the athletes’ village with dirt-caked bathrooms and toilets, a mattress stained with dog paw prints and a sink smeared with the spittle of chewing tobacco have ricocheted across the Internet. On Friday, two leading Indian newspapers ran some of the photos on their front pages.

The dirty conditions have prompted several teams to delay their arrival into New Delhi, with only eight days before the Oct. 3 opening ceremony. If the situation has been embarrassing, it mostly reflected the abysmal management that has plagued the Games; some laborers had used the rooms during construction, and housekeepers had failed to clean up on time.

Anyone living in India is inevitably confronted by squalor, whether the slums and shantytowns that exist in most cities or the beggars, often children, who tap on car windows for change. Few Indians would argue that poverty is not a paramount national concern, and many domestic critics of the games argued that the country was still too poor to spend so much money on what is effectively a government prestige event.

Mr. Bhanot’s comments hit a raw nerve because many middle class Indians make a distinction between public and private standards. If public bathrooms in government buildings are usually dirty, private homes are usually immaculate. Most people pay close attention to their appearance and cleanliness, even as public roads are usually potholed and public buildings are often not well maintained.

“It’s not that somehow people don’t recognize the truth that there is a problem about public standards of hygiene in India,” said Pratap Bhanu Mehta, president of the Center for Policy Research in New Delhi. “But usually we have dealt with it by confining it to the public space. We think private standards are very high. And he seemed to be questioning that.”

Foreigners visiting India invariably run into the chaotic, often dirty public sphere throbbing outside their hotels, coloring their impressions of the country. Keshav R. Murugesh, chief executive of WNS Global Services, a Mumbai outsourcing company, said Indian companies needed to work hard to persuade international customers that Indians could do complicated work in a timely and exacting manner.

Mr. Murugesh worried that clients, having seen the controversy over the athletes’ village, would now wonder: “Is that how I’m being served?” He jokingly added: “I just wish they had outsourced it to us.”

The irony of the cleanliness controversy is that the bathrooms in the athletes’ village represent the sort of luxury most Indians never experience. The walls are made with marble, and the sinks and toilets appear equipped with expensive fixtures. For much of India, the lack of access to a toilet and the absence of adequate sanitation are widespread problems blamed for the spread of disease as well as the contamination of the country’s rivers and other water sources.

Bindeshwar Pathak, founder of the Sulabh International Social Service Organization, has spent 40 years promoting the need to expand sanitation in India. His group has placed more than 1.2 million household toilets around the country and operates a toilet museum in New Delhi to promote awareness about sanitation.

Meanwhile, the effort to scrub the athletes’ village moved into extra high gear on Friday. Prime Minister Manmohan Singh ordered organizers to intensify cleaning efforts at the village immediately, while the Indian news media reported that the government had asked several of the country’s elite private hotels to complement the cleaning effort.

Athletes trickling into the city were reportedly being put up temporarily in hotels, though international sports officials, who have blasted the lack of preparations, sounded more optimistic on Friday.

“Conditions at the Commonwealth Games Village are acceptable,” said Perry Crosswhite, head of Australia’s delegation, according to The Associated Press. “Things are getting better every time.”

For his part, Mr. Bhanot has backpedaled, trying to argue that his comments were taken out of context. But he is not the only local official who has offended the public.

When the hurriedly built pedestrian bridge near the main stadium collapsed during construction this week, a senior official, Jaipal Reddy, tried to dismiss the accident as a “minor matter,” even though many people thought it symbolized the risks of delaying preparations until the last minute. Sheila Dikshit, chief minister of New Delhi, also initially described the collapse as “minor.”

The Times of India ran photographs of the dirty bathrooms on Friday and denounced the “criminal unconcern” of games officials. “They must be made to pay,” it blared, “so that India’s name is not dragged so willfully into the mud ever again.”

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HUD Sends a Message to Brokerages

HUD decided it was time to put out an interpretive ruling to clarify the situation. In other words, HUD asked, what is legal in regards to referral fees paid to brokerages for Home Warranty business? As it turns out the answer is very little.

We all know that the paying of referral fees with the flimsiest of justification has been going on not just with Home Warranty, but with all settlement services for a long time. It has become one of the dirty little secrets of our industry that periodically pops up and gives a public black eye to all involved. Sadly it is usually the brokerage which is perceived to be violating the public trust more than the services paying the referral fees. Not a good thing for any brokerage’s public image.

So what should we take from this? Those that want to walk the tight rope of what is legal and what is not for accepting referral fees from Home Warranty companies should read HUD’s new interpretive rule on this subject here: http://www.hud.gov/offices/hsg/rmra/res/homewar625.pdf

While you could talk to your Home Warranty representative to pick the path that is legal, but experience tells us that most of the time the advice you get is more directed to securing your business rather than observing RESPA. It sure seems that if you want to avoid a lawsuit, the safest course is to assume that referral fees based on the number of orders is going to be risky.

I think HUD is sending a message to the real estate community that is telling us that Home Warranty referral income is going to be looked at a lot more carefully in the future. I believe that the smart course is to assume that what goes for one settlement service will be applied to all settlement services.

Perhaps it is time to just pick your settlement service providers based on the quality of the products and the service you receive. Leave the minimal income along with the inherent legal problems that comes with it on the table.

FEMA: Hundreds of levees no longer reliable

By Peter Eisler, USA TODAY

WASHINGTON — The government has determined that hundreds of levees nationwide no longer meet its standards that ensure protection during major floods, a decision that forces thousands of property owners to buy federal flood insurance.

The Federal Emergency Management Agency (FEMA) has revoked its accreditation of the levees as part of an effort to update the government’s flood hazard maps, which guide state, local and federal decisions on development in flood-prone areas. Properties protected by the levees now are in flood hazard zones, which means owners who have federally backed mortgages are required by banking laws to carry flood insurance.

Flood insurance, based on property value and risk, ranges from less than $200 to more than $1,000 a year. National average: $500.
FEMA has not accredited 300 levees, mostly in California and Arizona, on the maps it has updated so far. Those maps, most of which have taken effect since 2008, cover 65% of the U.S. population. Maps for the rest of the country are due to be finished over the next three years.

“There’s a lot of real money and real consequences to this,” said Rob Vining, adviser to Congress’ National Committee on Levee Safety and former chief of civil works programs for the Army Corps of Engineers. Some of the suspect levees protect prime commercial and residential real estate, said Vining, a vice president of HNTB, a firm that helps cities manage infrastructure projects.

“If you require flood insurance for all that property, you get a very big price tag,” he said.

To keep a levee accredited, local governments or other responsible parties must certify that it can handle a flood so severe that it has a 1% chance of occurring each year. Some communities where levees have deteriorated face tens of millions of dollars in rehabilitation to meet that standard.

There’s been no net gain in the number of properties in flood zones, because other properties have been removed as protections have been built or conditions have changed, FEMA says. “Flood hazards are constantly changing due to natural as well as man-made factors,” spokesman Brad Carroll said.

In Sacramento, levees protecting about 20,000 properties in the city’s fast-growing Notomos area were deemed insufficient when new FEMA maps took effect at the start of last year. “There was a big outcry,” said Dave Brent, the city’s engineering manager. To build in the newly designated flood zone, structures must be elevated as much as 20 feet to remain above the flood plain, he says. “It was a new growth area for us, and development has been pretty much shut down.”

In Woonsocket, R.I., levees that lost their accreditation on maps issued in March 2009 put nearly 1,500 properties into flood zones. “I’ve heard from people complaining about the (insurance) charges,” said local Realtor Kate Duggan of Essex Properties. “But no one’s saying they want to sell their house because of it.”

The map updates are mandated by Congress so banks can be sure that people who need flood insurance are required to buy it.
But lawmakers from areas where property is being added to flood zones are pushing a bill to give communities more time to improve flood protections and grant property owners a five-year grace period to buy insurance.

“Local jurisdictions need time to address the impact … and the costs for individuals,” said Rep. Jerry Costello, D-Ill.

http://www.usatoday.com/news/nation/2010-09-09-levees_N.htm

The SEC knows, do you?


I’ve been on a tear lately about how the real estate industry needs to work together to help solve our economic crisis.  Let’s face it.

The economy went south when the housing crisis exploded. And until we get our business back in shape, no one should expect a recovery.

And it all starts with jobs. Too darn many of which have been shipped overseas.

Then low and behold, right there in the public records is this interesting factoid from First American. http://www.sec.gov/Archives/edgar/data/1472787/000119312510063299/d1012ba.htm

They tell the Securities and Exchange Commission in the March 22, 2010 public filing (since they are a publicly traded company on the New York Stock Exchange on page 15 that:

“We utilize lower cost labor in foreign countries, such as India and the Philippines, among others.”

They go on to write:

“Furthermore, the practice of utilizing labor based in foreign countries has come under increased scrutiny in the United States and, as a result, some of FinCo’s  customers may require it to use labor based in the United States. FinCo may not be able to pass on the increased costs of higher priced United States-based labor to its customers.”

Now here’s the kicker: Some folks are requiring First American to provide work done by workers in the US!! Alright!  Can you count yourself among them?  I hope so.

Got questions – don’t take my word for it, read it yourself!

(BTW – First American Financial Corporation, refers to themselves in the filing as “FinCo”)

The company’s full language appears on Page 15 of their filing under their table of Contents and can be read here:

http://www.sec.gov/Archives/edgar/data/1472787/000119312510063299/dex99a.htm#ex99atoc65237_3

FinCo may not be able to realize the benefits of its offshore strategy

We utilize lower cost labor in foreign countries, such as India and the Philippines, among others. These countries are subject to relatively high degrees of political and social instability and may lack the infrastructure to withstand natural disasters. Such disruptions could decrease efficiency and increase FinCo’s costs in these countries. Weakness of the U.S. dollar in relation to the currencies used in these foreign countries may also reduce the savings achievable through this strategy. Furthermore, the practice of utilizing labor based in foreign countries has come under increased scrutiny in the United States and, as a result, some of FinCo’s customers may require it to use labor based in the United States. FinCo may not be able to pass on the increased costs of higher priced United States-based labor to its customers.

The Feds are Sticking Banks With the Bill for Bad Loans – Will Brokers and Agents be Next??

No doubt you may have heard Freddie Mac and Fannie Mae are requiring the banks to repurchase $9.8 billion on bad mortgages.  Some folks think that number will rise to $20 – $30 billion before the wave is over.

Read about it in the New York Times here: http://www.nytimes.com/2010/08/20/business/20norris.html?_r=1&ref=high_and_low_finance

Wells Fargo recently repurchased $530 million of mortgage loans. It concluded, according to the NY Times, “…that those loans were worth, on average, a little less than half their face value.”

Think about it. Bad news, like trouble, runs down hill. Is anyone naïve enough to think that banks will go down this path alone? Chances are that if Freddie Mac and Fannie Mae are demanding that banks eat bad loans, they may also decide to demand that the brokers and agents who delivered these “deals” also cough up!

Freddie, in its quarterly report filed this month, said it was now requiring banks “to commit to plans for completing repurchases, with financial consequences or with stated remedies for noncompliance, as part of the annual renewals of our contracts with them.”

Might be time to consult a lawyer, check your insurance, and make sure that if you are a broker or agent, you are protected if the government makes this kind of demand on you.

What do you think?  We’d like to hear your opinion.

Real Estate Jobs are Out There!

Are you looking for a job in real estate? Do you know someone who is?

These companies may be hiring, please check them out:

http://www.firstam.co.in/Web/Careers/CurrentOpportunities.aspx

http://www.youtube.com/watch?v=nYheGyiZTOA

Oh. Did you want to stay in California?

Save American Jobs. Buy American products and services. People without a paycheck can’t pay their mortgage.

Sincerely,

RE-Insider

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