Category: Money & Finance

Virgin On The Ridiculous

Richard Branson

We used to call it “mattress money”. Money not in banks and not accounted for in usual ways, used to fund home purchases, usually by ethnic groups not likely to trust banks or safety deposit boxes.

Now Richard Branson of Virgin Air fame has tried to legitimize this practice with his new company Virgin Money.

Their website offers “real estate loans” but is really only a servicing company for borrowers who have already arranged to borrow money from friends or relatives. Virgin Money makes their dough by servicing the loans.

“Full Closing with Escrow” includes escrow services in addition to a full closing. They formalize the loan, ensures that taxes and insurance are kept current, and transfers ownership to the buyer with an official closing in a flat fee of $2299 + $19 a month for each month one has the loan. Apparently, you go to them with the amount borrowed, the interest rate you’re paying and other terms of the loan already negotiated and they just handle the paperwork.

As you know, transactions between family and friends are increasingly being structured as private mortgages. In these situations, friends, family and home sellers act as a bank and finance part, or all, of the purchase.

Virgin Money provides proper loan documentation and professional repayment management that protects the emotional and financial interests of all parties involved, while still keeping wealth in the family. And, we handle the fun stuff like accounting, year-end reporting, and tracking down late or missing payments. Well, we think it’s fun.

In our MLS Purchase and Sale Agreements, we have a clause where the Buyer certifies that they are not relying on any contingent source of funds. When making one’s offer contingent upon a home loan, it’s usually not contingent on one from Aunt Sarah, but from a recognized commercial lender. Exactly how does one prove one is getting this loan? I suppose if they fund this private loan ahead of time and show proof of actual funds, that might fly. But I don’t want to be the first agent to try this….

And Virgin is a huge well-funded company, why would they dabble with these small potatoes? They’d have to have 100’s of new clients a month to compensate them for the trouble and liability.

The Bank of Mom and Dad

Crooked mortgage broker fined $29K for potty mouth


By all appearances, Aaron Wider is the chief executive of a flourishing mortgage bank in Garden City, issuing more than $33 million in home loans to buyers across Nassau and Suffolk counties over the past four years.

A closer look at his lending practices, however, reveals that many of these loans relied on faulty appraisals and exaggerated loan applications, leaving behind angry homeowners who are struggling to pay mortgages on overpriced homes.

Aaron Wilder, CEO of HTFC and a mortgage investor, gave a deposition to Robert Bodzin, a lawyer from GMAC Bank. In February, U.S. District Judge Eduardo Robreno declared the deposition a “spectacular failure”, ordered Wider to give a new deposition, and fined Wider and his lawyer $29K.

GMAC Bank has filed a lawsuit against HTFC alleging that the company sold loans that were not property underwritten.

ROBERT BODZIN: My question is: Where are you currently employed?
AARON WIDER: I’m not. I work for free
BODZIN: Okay. You’re not employed by HTFC Corporation?
WIDER: No, I own HTFC Corporation.
BODZIN: Okay. And what do the initials HTFC mean?
WIDER: Hit That Fuckin’ Clown.

From The Wall Street Journal “Curses! Client Swears His Way Through Deposition, Pays Price

Throughout the deposition, Robreno said, Wider “sought to intimidate opposing counsel by maintaining a persistently hostile demeanor, employing uncivil insults, and using profuse vulgarity.”

In one passage, GMAC’s lawyer, Robert B. Bodzin of Kleinbard Bell & Brecker in Philadelphia, asked Wider to open a file so that Bodzin could ask questions about certain documents.

According to the transcript, as quoted in Robreno’s opinion, Wider erupted, saying: “‘I’m taking a break. Fuck him. You open up the document. You want me to look at something, you get the document out. Earn your fucking money, asshole. Isn’t the law wonderful?'”

In another passage, Bodzin said: “We’re going to adjourn this deposition if this happens again because you are offending every single person.”

According to Robreno’s opinion, Wider responded: “‘Don’t speak for anybody in here except yourself fuck face.'”

When Bodzin said he was speaking for himself and the court reporter, Wider said: “‘If she had a problem with me she would say something. She knows it’s [not] directed toward her. It’s directed to you because you’re a piece of shit and a piece of garbage and I’m the only person in your life that is fucking up your world and I enjoy it.'”

Robreno said the transcript showed that Wider “used the word ‘fuck’ and variants thereof no less than 73 times.”

Curses! from the WSJ blog

Lawyer and Client Sanctioned Over Client’s Conduct, Use of ‘F Word’ During Deposition from

Love Hotel bail-out

Love Hotel

It costs millions to renovate a decent love hotel. Patrons want the latest in love hotel accoutrements and decor. It’s expensive. All well and good in the roaring 80s when credit flowed like water, but not today. That’s when niche funds like MHS Capital Partners, an offshore private equity firm, and Tokyo’s Global Financial Support Co. (GFS) investment group come in and securitize them. At 8.4 percent annual returns, pink real estate funds are arousing interest in individual and institutional investors alike. Property managers can now update their facilities to attract even more business in what is generally recognized to be a recession-proof industry.

Sexy Pink Real Estate Funds

Bill’s in the house…

Bill Gates has stepped down as chief software architect at Microsoft Corp. and will slowly transition out of the company’s day-to-day work by 2008. Gates said he “will transition out of a day-to-day role in the company to spend more time on his global health and education work at the Bill & Melinda Gates Foundation,” officials at Redmond’s Microsoft said in a statement. He’ll remain as the company’s chairman and as adviser after June 2008. Chief Technical Officer Ray Ozzie has been named chief software architect and will “begin working side by side” with Gates on the Redmond company’s technical architecture “to ensure a smooth transition,” the company said.

This doesn’t have much to do with real estate, but it’s interesting that he waited until after the stock market had closed for the day to make his announcement. I wonder what effect, if any, this will have on the price of MS shares. There’s bound to be lots of chatter.

There’s still plenty of chatter and gossip about Bill’s house that he built a few years ago. When he makes his transition, will he begin to work at home? I wonder what will happen to that place once he’s gone. Will his kids keep it? Will it become a museum?

Photos of Bill’s house from the water.

Interview with Jim Cutler, the designer of Bill & Melinda’s house.

Like looking at waterfront mega-mansions? Slate’s interactive cyber-mansion tour

Bill Gate’s House Tidbits

Bill’s house from a satelite way up in the sky…..

Entertain the kids! Paper model toy of Bill’s house.

Wakey-wakey, eggs & bacey

Bacon and Eggs

Zillow presentation by the Realtor Referral Network
Marriot Courtyard, Wednesday, May 10th
Zillow presentation (by Jeff Somers, Director of Agent Services) meeting at the Realtor Referral Network on Wednesday, May 10, Marriott Courtyard, Lake Union, 925 Westlake Ave N from 9-10:00 AM. $10 Deluxe Breakfast Buffet. They encourage agents to bring listing flyers and buyer’s needs to share. Reserve now as they expect a large turnout. The whole RRN thing is put on by Julie McCullough Hale of Old Republic Title and Escrow.

Venture Breakfast – May 2006
Friday, May 12, 6:30 a.m.-9 a.m.
Bellevue Westin Hotel, 600 Bellevue Way

Topic: Pygmalion, The Wizard of Oz, and Chevy Chase
Speaker: Rich Barton, Chairman & CEO of, Founder of and Venture Partner at Benchmark Capital
Cost: $25 for pre-registered members, $40 for pre-registered nonmembers. Onsite registration available for an additional $5, as space permits.

Breakfast With The Publisher of PSBJ
Featuring a panel of CEOs from the 100 Fastest Growing Private Companies list of 2005. They’ll share their secrets for success in a Q & A format with PSBJ Publisher Emory Thomas Jr. at the Columbia Tower Club.
When: May 23rd, 7-9 a.m.
Location: Columbia Tower Club Columbia Center 701 5th Ave 75th Floor Seattle, WA 98104
Cost: $20 for Columbia Tower Club members and $25 for non-members.
To register or more information.

Battle of the Barristers

Breakfast with some of Seattle’s top real estate lawyers.
Thursday, June 1st, 2006
Program: 9:00 – 11:00 AM
Marriott Courtyard in Bellevue
11010 NE 8th St.
Bellevue, WA 98004
Tickets: $30, Includes Continental Breakfast
Online Registration
Moderator: Russ Cofano of Cofano Law PLLC, John Demco of Demco Law Firm P.S. , Jordan Hecker of Hecker, Wakefield & Fielberg, Chris Osborn of Foster Pepper and Doug Tingvall of RE-LAW.

And don’t forget to see Carleton Sheets or The Donald in Seattle this month too!

Trump coming to Seattle

Donald Trump

Halleluiah! Donald Trump has deigned, in his superior intellect and magnanimous selflessness, to share with us tips and techniques to greater wealth, here in Seattle.

He’s coming in a few weeks, to share with us the secrets of his success. Or maybe he’s just coming to sell us a $300 tape course.

Doesn’t this guy have enough money, for chrissakes?

Estimated to be worth at least $250 million bucks (though he’s currently suing Warner Books for misstating this, as he claims he’s worth at least $2.7 billion), you’d think he had enough dough, even for a high-roller, to last a lifetime. How many cars can you drive at one time or how many swimming pools can you swim in at once? Of course, at this level, this is not about the money with him. This is his reason d’etre, his mantra, his MO, his reason for living. At this point, it’s truly whoever dies with the most money, wins.

So, Trump will be making appearances at the Red Lion in Seattle on 5/16 and a few other hotels in Bellevue, Tacoma and Everett. It might be worth a laugh, just to go see him. Donald Trump Seminar Registration

Marlow Harris

I’m not immune to the Trump allure…. here’s me ‘n’ the boys before our vist to the Trump Tower in New York.

Trump’s not the only one hawking get-rich-quick schemes in Seattle….

Carlton Sheets pays us a visit too…..

Bag Borrow or Steal (or “More Gender Politics”)


Bag Borrow or Steal, just received a $8.25 million dollar cash infusion from Madrona Partners.

Bag Borrow or Steal is an online business that rents high-end designer handbags to women. Is this an incredible concept or what? I’m sure this could only succeed in America.

The reason this news caught my eye is because Madrona Partners are the same venture capitalists who gave Redfin $1.25 million last month.

Both businesses were founded by men. Madrona Partners are all men.

Women own about 40 percent of all businesses in the U.S. but receive only 2.3 percent of the available equity capital needed for growth. Male-owned companies receive the other 97.7. percent.

In 2001 in the U.S. women held only 2.5 percent of the top jobs at American companies and only 10.9 percent of the board of directors’ seats at Fortune 1000 companies.

This not about men. This is about women and what makes them afraid, unwilling and unable to make the decisions about their lives that would get them into these kind of positions.

Women often don’t know the market value of their work. According to Linda Babcock in “Women Don’t Ask: Negotiation and the Gender Divide” , women report salary expectations between 3 and 32 percent lower than those of men for the same jobs; men expect to earn 13 percent more than women during their first year of full-time work and 32 percent more at their career peaks.

39 Jobs Where Women Make More than Men

Quotations on Women’s Issues


Seattle aerial View Redfin Cash Infusion

Redfin announced today that it just received a $1.25 million dollar cash infusion from Madrona Venture Group today.

In case you haven’t heard of them before, Redfin is a real estate agency with a website that has an interactive aerial search function.

It started out trying to hook up buyers with independant agents, but then moved to having their own in-house agents. Over time, it became almost hostile to other real estate agents and burned some bridges in the process. They now have one broker and one real estate agent to handle incoming leads from their website.

Founded by techies, they realized they had a nice search function, but were feeling around for ways to make money with it. Obviously, neither approach pulled in the dough that they wanted. They turned to finding a big name to bring on board, and then to getting some venture capital to keep the business up and running.

The problem is, do they have a sound business model?

At this point, they’re just another small real estate firm with an average sales record.

According to NWMLS records for 2005, last year Redfin had 24 home sales. Based on an average 6% commission (or 3% to the sales office), that is approximately $270,000 income for the year. It may have even been less, as they’ve been known to discount their listing fees. According to their website, they have 4 managers. They also have two real estate agents licensed by the State of Washington, for a total of 6 people. I’m assuming they also have additional staff, but just going on their listed 6 employees, at $270K a year, that’s about $45K a year income per person. That’s not counting overhead such as office rental, computers and such. That probably brings it down closer to $35K a year income per person. Wow. And now they’re talking about moving down into California. WHY? If they’re not making any money here in Seattle, why expand? If it won’t work here, who go down there?

How on earth did they talk Madrona Venture Group out of a million bucks? If their income was what I’ve surmised, then I’m guessing most of that $1.25 million is going to pay the new CEO’s salary.

Glenn Kelman, co-founder of Plumtree Software, has been hired as the chief executive officer, and Brian Marsh, a senior manager from Amazon’s community group, is the chief technology officer. Redfin founder David Eraker will continue to lead the company in business development and product strategy.

Glenn mentions in the Seattle Times 1/9/06 “when looking for a home, he used” He may have seen the listing there, however, records indicate it was listed and sold with Windermere, not Redfin. I won’t mention the sales price (though it IS a matter of public record), but I will say that it sold for almost $30,000.00 more than asking price. You can draw your own conclusions about all this. But if Windermere was the listing and the sales agent, exactly how did Redfin make any money on this sale? I think the answer was, they didn’t. As this illustrates, just having a fancy website does not guarantee one will make money from it.

On an interesting side note, a press release from the company dated 1/9/06 states that “After more than a year as Seattle’s most popular site for residential real estate…..” I thought that this statement didn’t ring true, so I thought I’d try to check. Though I don’t have access to a specific number of hits, I can make some inferences using some web tools. For instance, using the Link Pop check on, Winderemere comes in at 133,076, Coldwell Banker Bain at 5747, at 4769, and Redfin at only 1770.

Using their Search Engine Saturation function, I found Windermere to be at 14,640, to be at 2,684, Coldwell Banker Bain to be at 1,378 and Redfin trailing at 393.

One can use the Alexa rating, but that it very limited in scope as it only tracks those that have the toolbar. They look at all of the traffic numbers and then put all the websites that are out there in order. So if you are #1 that would mean you had more traffic than any other site out there per the numbers Alexa collected (again limited data).

Here are a couple of examples:

Redfin has a ranking of 49,636

Windermere has a ranking of 3,343

So, this would mean Windermere is more than 10 times more popular than Redfin.

These numbers are really easy to manipulate as it tracks such a small amount of websurfers that one person could spend an hours on their site clicking on a bunch of pages and push themselves to a pretty high number. Worse you can use a bots to visit your site and boost the numbers. But, with that said, it is a way to get a very general idea of the traffic a site might be getting.

So is Redfin the “most popular site for residential real estate”? Hardly. Hyperbole and puffery is not new in the world of real estate!

Here’s a great interview with the new CEO of Redfin by John Cook. Be sure to click on the audio interview! John Cook’s Venture Blog

Updated Redfin News 5/31-6/2



David Brunelle



The Future of Real Estate Marketing

Silicon Beat

More TechCrunch

New Policy Brief —Housing Supply: Local Actions

Housing Supply: Local Actions,” by the Washington Research Council, has been prepared as part of the latest Quality of Life series examining the availability and affordability of housing in Washington State. The housing supply in Washington State is ultimately determined by local government: cities and counties approve and record every new plat and issue every building permit. Local zoning and development regulations govern density and building envelopes. This brief describes actions that should be taken at the city and county level to increase the housing supply.

Ways to Boost Housing Supply: Local Actions