SEBASTIAN DAVID NOLI

In the turn of what seems to be the end of the worst recession since the 30's, there is a mixed feeling about what this recovery will really look like, or even more so, feel like for Main Street.

Major indexes seem to have been showing signs of recovery, TARP funds have been partially returned, yet your average JOE SIXPACK (happily quoting S. Palin) seems to be worst than last year, or the year before. I love an ad from an automaker for their customer assurity program that states: 'The recovery hasn't arrived for any of us, until it arrives for all of us'.

Looking at this from our industry's perspective, and having had a major role in what turned out to be what it became, I think the true signs of recovery are going to come from the same place where it all started: Residential Real Estate.

The long run we had years before is not going to come back as we knew it anytime soon since it originated through funds that were non-existing (appreciating home equities); investments with rates of return in the double digits that were ultimately based on the same source (Mortgage Backed Securities); and the overall (high) consumer demand because of this excess of liquidity that the overall market experienced during the period. All these and related sources drove stock prices to non sustainable sales growth figures, with the yearly increments that made Wall Street traders look like superstars - we all know how that turned out though.

Now that things are starting to calm down (apparently), or at least people are getting unwillingly used to the current state of the economy, it is time to revise what it is being done to correct what got us to this point, aside to the efforts being made to get us back on track.

The regulatory actions taken so far surrounding availability of credit and risk assessment, I think are being structured with an out of touch and out of date view of the actual market, which in fact slowing recuperation of the Real Estate demand. Most decisions are being made with too much of a macro perspective, having for the most part little effect, due to the lack of flexibility to adjust to local markets and situations.

Different markets suffered from different factors, different reasons took us to the overall Real Estate and Credit crash; yet the solution can't be looked for by trying to correct everything with generic measures and all at once. Looking at global numbers there are corrections at the way banks can look at risk, yet to actually have a generic impact I think individual States or even Counties, should implement regulatory boards to assess the particular factors in each individual metro, and have some liberty to address them accordingly from within.

Federal measures are usually made on a fit-all fashion, allowing only a fraction of the metros to adjust enough to fit and truly take advantage of them. I think the previous idea applies to risk too: the way families approach their finances (including their home), varies too much by regions and cultures to implement measures that fit us all, or that would put us all at the same risk level on the grid.

I believe that if each State had more autonomy (to certain extent), to self regulate their banking and financial sectors, it would be easier to address credit risks for banks and spot potential financial products for consumers. The way the system currently works doesn't adjust fast enough to address potential problems and opportunities to fully take advantage of a given market. Measures that try to address financial issues on a Federal level are never going to be implemented fast or accurate enough, as they try to include in the same rule Wisconsin farming residents with fast changing New Yorkers.

Getting back to Joe S., the fact that we feel worst on our individual finances comes from the comparison to the run and over-purchasing power we had, to the tightening belt or even job loss of years after. We have to psychologically adjust to the idea that it wont be the same, that the run we had is not equal to a "healthy economy", the fact that you could purchase with easy credit something you couldn't really afford didn't really mean that you had more money or that the economy was healthier.

Yet this consumer perspective alone wont do anything unless specific issues are actually addressed, real measures to stop the foreclosure wave that calms at times but just wont stop, more access to Mortgages and even if stricter, more access to overall credit.

If the recession is really over and we are on recovery or not, only time can tell as indicators are usually at least 6 months behind. In reality though, I think that although painfully, we will come out of the recession with our heads up, with a more responsible view of our finances and hopefully with regulatory agencies focusing more on the effects that their actions have on the long term economy.

S.D. Noli
CFL Realty

We are having issues with Fidelity Bond and insurance coverages to meet new FHA guidelines. Several transactions are delayed because of increased requirements that have to go to the HOA boards for authorization. I urge all property managers to start getting their compex insurance and bond limits revised. The delays are running in the weeks and HOAs that not meet the requirements I think will suffer a serious loss in demand if they where previously FHA approved.

I am speaking as an agent, not a loan officer, ideas for whomever has been hitting these issues and found a way to correct fast is appreciated. We currently have about 10 transactions in different complexes delayed because of the same reason (San Diego, CA).