Valerie Fitzgerald | Beverly Hills & West L.A. Real Estate

This year’s $8,000 federal tax credit for first-time home buyers was apparently so popular that it even attracted ineligible claimants – potentially more than 90,000 of them, including former homeowners and 4-year-old children.

A report from the Treasury inspector general for tax administration found that more than $600 million worth of tax credit claims were questionable. The $8,000 offer, enacted by the Obama administration in February and expanding a similar credit from 2008, was designed to boost housing demand.

Eligibility extended to those who had not owned a primary residence in the last three years and earned less than $75,000 as an individual or less than $150,000 as a married couple. The credit could be claimed after purchasing a home between Jan.1 and Dec. 1.

But on 19,351 electronically filed tax returns, taxpayers listed the credit for properties that hadn’t been purchased. An additional 73,799, claiming nearly $504 million, seemed to have already owned a home.

And 582 supposed first-time home buyers turned out to be younger than 18 years old, claiming nearly $4 million. Meanwhile, 48,580 taxpayers still working with the less-generous 2008 version of the credit may have claimed less than they were entitled to.

The Internal Revenue Service has so far discovered 167 criminal schemes, opened 115 criminal investigations and temporarily frozen more than 110,000 refunds. The IRS has also agreed to recommendations from the inspector general to take corrective action.

Through late August, more than 1.4 million claims have been made to some version of the home buyer’s credit.

-- Tiffany Hsu

From Los Angeles Times

The Valerie Fitzgerald Group specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of Heart and Sold: How to Survive and Build a Recession-Proof Business.

If interest rates on 15-year fixed mortgages have never been lower -- and rate trackers say that's the case -- why aren't 30-year loans setting records as well?

To be sure, 30-year fixed rates have fallen near all-time lows, well below 5% for borrowers willing to pay some upfront fees known as points -- a great deal if you're among the lucky borrowers who qualify. But they were lower still last spring, according to surveys by the Mortgage Bankers Assn., Freddie Mac and bankrate.com.

By contrast, all the surveys concur that rates for 15-year fixed mortgages have already reached their lowest point on record -- and keep falling.

Freddie Mac, for example, says 15-year rates fell to record territory the week ending Sept. 17, when they averaged 4.47%. They have continued falling in three subsequent surveys, including the one for the week that ended Thursday, when they averaged 4.33% for borrowers who paid on average 0.7% of the loan balance in points.

Greg McBride, a senior financial analyst, says you can see the difference in the "spread" between mortgage rates and the benchmark 10-year Treasury note.

Historically, interest rates for 30-year fixed home loans for borrowers who don't pay points have run about 1.7 percentage points above the yield on 10-year Treasuries. Rates on 15-year loans with no points have run about 1.3 percentage points higher.

These days, 15-year mortgage rates are close to their historical norm. (McBride says those borrowers were averaging 4.6% on their loans, while the 10-year Treasury was at 3.25% Thursday.)

But 30-year borrowers are paying 2 full percentage points more, he said -- significantly higher than the historical average.

So what's the difference? One reason is the different type of borrower.

The main users of 15-year loans, McBride said, are established homeowners refinancing mortgages -- people secure enough that they often take on larger monthly payments in order to pay off their loans before they retire. Lenders appear willing to apply the old rules to these borrowers.

People who take out 30-year loans, by contrast, are generally less well established, with smaller down payments, and require a bigger slice of their incomes to make their payments.

At a time when home prices have fallen, and unemployment and loan payment delinquencies continue to rise, such borrowers are just plain higher-risk. And the credit crunch remains real, McBride said -- the banks just don't want to take chances in this environment.

Hence, no fresh record lows just yet for the 30-year loan.

--E. Scott Reckard

Falling real estate prices are becoming as much a feature of high-end neighborhoods as ocean views, infinity pools and four-car garages.

While the latest data suggests prices for mainstream homes may be stabilizing after several years of pain, the news for luxury homes isn't looking as good.

That's bad news for sellers, naturally, but anyone in the market for a home listed for $2 million or more will find deeply discounted asking prices—and may be able to command even lower prices.

Last week, data from the Federal Housing Finance Agency showed that average home prices ticked up 0.3% nationwide between June and July, including a 1.6% bounce on the west coast. The gains are modest, and they are partly influenced by the season—higher-end homes tend to sell better in late spring and early summer, as families try to move before the school year. Analysts are disappointed the rise was not higher.

Nonetheless, prices have now risen three months in a row. And compared with the disastrous events of the past few years, anything other than Armageddon is apt to raise spirits.

But these numbers only relate to homes purchased with conforming loans backed by the FHFA—in most areas, that describes mortgages of up to $417,000, or up to $713,000 in the country's most expensive regions.

That overlooks luxury and high-end homes, where the outlook remains bleak.

"I would say we're 40% off 2007 prices for everything," says broker Chad Rogers, who covers the area from Malibu to Hollywood Hills for Hilton & Hyland, a Beverly Hills real-estate firm. "We're now seeing prices consistent with where we were back in 2003."

"The $10 million to $30 million properties are on the market for a very long time," says Cathy Wood, a real estate broker covering Beverly Hills and surrounding areas for realty firm Gibson International. "They're seeing a lot of price reductions."

Realtors, she says, "are now selling $500,000 condos, when they used to sell $5 million homes."

Across the country in hedge-fund haven Greenwich, Conn., local broker Eric Bjork at Prudential Real Estate finds a similar effect. "There's a new level of value being set," he says. "The $8 million [homes] are selling for $6 million, and the $10 millions are selling for $8 million. When you do the math, it looks like an adjustment of 20% to 30%."

You'll find similar anecdotal data in several high-end markets. But real estate Web site Trulia.com, which tracks listing prices on multiple listing services across the country, took a look at what's happening to listing prices for homes over the $2 million mark.

Such homes only account for about 2% of the properties listed on the site, but represent 25% of the total price reductions by value. Overall, sellers listing homes for more than $2 million have dropped their asking prices by a total of $7 billion, with an average price reduction of 14%. The average for all properties tracked by Trulia is only 10%

Data for individual Zip codes is intriguing, whether you're in the market or you just like to rubberneck. According to Trulia data, 28% of the homes currently for sale in Beverly Hills (Zip code 90210) have dropped their price, with an average discount of 11%. In Aspen, Colo., (81611), 39% of the homes have cut their price, by an average of 16%.

On New York's Upper East Side (10065), no less than 40% of the homes have slashed prices—and by an average of 18%. In California, some of the most exclusive areas in Newport Beach, Big Sur and Monterey have seen a third of the sellers reduct prices, by an average of about 15%. Malibu? More than half have cut prices.

Chip Case, economics professor at Wellesley College and one half of the Case-Shiller index duo, says that some of these markets may be finally catching up to the wider housing market crash. "That level was more in the hold-out category," Mr. Case says. "Up until recently the foreclosures weren't hitting that level.

But they are now. There's no question about that. You're seeing some contagion from the prime level to the luxury end."

Bottom line: At the high end, it's a good time to be shopping for that dream home.

During—and after—a bubble, investors often hope that "quality assets" will hold value. It's usually a vain hope. Just ask people who owned luxury condos in Tokyo after 1990, or investors in Cisco Systems (CSCO) after the tech-stock bubble popped. Real estate is not that different.

Sooner or later, even rich homeowners need to sell. They get divorced. Their company collapses. They relocate or retire. And, when they get tired of waiting, they cut their price. Factoring in taxes, upkeep and the opportunity cost of keeping money in a non-performing asset, an empty luxury home may be costing owners a lot just by sitting there. That gives them a powerful incentive to make a deal.

From the Wall Street Journal

The Valerie Fitzgerald Group specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of Heart and Sold: How to Survive and Build a Recession-Proof Business.

Heart and Sold, written by top selling Los Angeles real estate broker Valerie Fitzgerald, takes you on a journey through the emotional and tangible challenges of regaining one's personal power while building and maintaining a successful business.

The book recounts Fitzgerald’s personal journey from unemployed single parent to entrepreneur, philanthropist and corporate executive in the competitive L.A. real estate metropolis.

From beginners just getting started to seasoned agents -- or anyone in business looking to take their game to the next level -- this step-by-step guide teaches readers the art of selling.

Start reading Heart and Sold on your Kindle right now Click here. Order it on Amazon.com.

Heart and Sold shows readers how to:

• Manage clients with style
• Choose the right company and the best mentor
• Establish a stellar reputation in their field
• Develop a daily schedule for running a home office
• Maintain a successful attitude every day

Heart and Sold shares the mind-set of a respected businesswoman who gracefully balances the demands of real estate with the intimacy of her family.

What people are saying…

“I’ve been thinking about getting into real estate for years now and keep letting myself get side-tracked. I have been working on studying for the State Licensing exam, but was having a few doubts about my capability to make the jump and change my career.

After reading this book, I am now very excited. This book is both inspirational and informative. It’s full of helpful advice and references that can be used. Once I started reading the book, I couldn’t put it down and I plan to go through it again and highlight useful information. This will be a great desk reference as I move forward.

Thank you Valerie, for a great book.

I highly recommend it to anyone thinking about getting into Real Estate or already working in the field.” – Tania Brown

“I am a Real Estate Broker and since completing this book, I have asked my Director of Education for my office to read this book as well. I’m thinking of making it required reading for any new agent coming to our Company.

I enjoyed the book for several reasons. The first, it is inspirational, and agents need inspiration more now than ever these days. The transparency of Valerie’s early life is highly admirable and endears a reader to her personally.

Secondly, the book is pragmatic in teaching agents the basics and human side of the real estate business, in addition to pointing out the need for business systems. I often disagree with the “Selling Philosophy” of some real estate trainers, but with this book, Valerie is right on. Valerie’s philosophy and mine are similar in that we both consider real estate sales more about building relationships and helping people achieve their dreams. The agent’s role is very crucial because they act as both the “Coach” and the “Quarterback” of the transaction.

Thirdly, this book is expansive because it is good for new agents entering the business, for agents that want to improve their business, and for seasoned agents that want to build a team. Great Book.” – A. May

Valerie Fitzgerald specializes in luxury residential real estate in Beverly Hills, Bel Air, Brentwood, Santa Monica and Malibu. Valerie has more than 20 years of real estate experience and is known for her solid reputation in the West Los Angeles brokerage community. She’s also the author of Heart and Sold: How to Survive and Build a Recession-Proof Business. Find it at Amazon.com