Citi, which just eliminated its wholesale home equity division continues with the changes; announcing the consolidation of Citi Residential Lending with the CitiMortgage unit.  In an email to staff today Citi leadership announced that staff reductions would be imminent in the consolidation.

Here’s a clip of the email:

 As part of the next phase in creating an end-to-end U.S. residential mortgage business, we previously shared that the collective residential real estate businesses would operate under the CitiMortgage banner.  To support this strategy and current market realities, a key element is the coming together of Citi Residential Lending and CitiMortgage. Today, we are announcing high-level details of this integration, which will allow us to maintain our capability and expertise and leverage them to grow as market conditions improve. Specifically, the business alignment for the combined organization will be as follows.  

The Citi Residential sales organization, under the leadership of Joe Amoroso, will report to the CitiMortgage Wholesale organization under John Hummel, reporting to Fred Bolstad, Managing Director of CitiMortgage Wholesale Lending. The combined sales organizations will be reduced to a level to support current market conditions. 

As Citi regroups to meet market challenges expect a lot of news from competitors trying to do the same to make it through the wilderness.

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Citi, which just eliminated its wholesale home equity division continues with the changes; announcing the consolidation of Citi Residential Lending with the CitiMortgage unit.  In an email to staff today Citi leadership announced that staff reductions would be imminent in the consolidation.

Here’s a clip of the email:

 As part of the next phase in creating an end-to-end U.S. residential mortgage business, we previously shared that the collective residential real estate businesses would operate under the CitiMortgage banner.  To support this strategy and current market realities, a key element is the coming together of Citi Residential Lending and CitiMortgage. Today, we are announcing high-level details of this integration, which will allow us to maintain our capability and expertise and leverage them to grow as market conditions improve. Specifically, the business alignment for the combined organization will be as follows.  

The Citi Residential sales organization, under the leadership of Joe Amoroso, will report to the CitiMortgage Wholesale organization under John Hummel, reporting to Fred Bolstad, Managing Director of CitiMortgage Wholesale Lending. The combined sales organizations will be reduced to a level to support current market conditions. 

As Citi regroups to meet market challenges expect a lot of news from competitors trying to do the same to make it through the wilderness.

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The Fed cut interest rates to 2.25%, a nice 75 basis points whack to try to fend off long-lasting effects of a recession and another round of the credit freeze. The question stars to become - does the Fed have enough ammo (or the right kind of ammo)? And I think the answer has been well addressed across the blogosphere, and that answer is “No.”

From Market Watch on the Fed Rate Cut:

The Fed action takes the federal funds rate target down to 2.25%, the lowest since December 2004

The Fed said the size of the rate cut was enough to promote growth.

“Today’s policy action, combined with those taken earlier, including measures to foster market liquidity, should help to promote moderate growth over time and to mitigate the risks to economic activity,” the Fed said.

 

Former Fed officials are increasingly calling for Congress and the Bush Administration to do more to help the economy, especially by assisting homeowners struggling to stay in their homes.

The government may also have to take steps to provide more capital to the banking system. The Fed’s actions are essentially temporary.

 

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How apropos. Realtor magazine names their top 30 agents under 30 every year.  This year’s crop had at least one documented fraudster, now being indicted on all sorts of goodies like bank fraud and money laundering.  Hat tip to Jessica at Inman for the story which also appeared on CNBC.

From Inman News on the Realtor superstar who is really just a thief:

Eve Mazzarella, broker-owner of Distinctive Real Estate & Investments in Las Vegas, at age 29 was named in Realtor magazine’s “30 under 30” feature in June 2007.

Mazzarella is now linked to a mortgage fraud case reported by CNBC on Friday. From that story:

“A Las Vegas real estate broker and her husband are facing federal charges they made millions of dollars orchestrating a mortgage fraud scheme.

“U.S. Attorney for Nevada Gregory Brower says Eve Mazzarella, 30, and her husband, Steven Grimm, 45, were indicted Wednesday on bank fraud, money laundering and aiding and abetting charges.”

You have to love the irony here - the top of the Realtor species being dinged as a criminal.  Poetic, really.  Of course, we really shouldn’t be picking on the young lady.  After all, there are probably 14 other frauds on that top 30 list just waiting to be caught.  Interesting to note though that as a Realtor she’s being tried for mortgage fraud.  I’m sure she was a big proponent of the dual-representation “we do your sale and loan to save you money” camp.

Some “highlights” of Mazzarella’s illustrious “career”:

 Where some see obstacles, Mazzarella sees challenges. She was a divorced mother with two sons and no savings when she moved from Seattle to Las Vegas seven years ago. She found sunshine and a strong real estate market. Over the next three years, she switched from a commercial auction company to a residential brokerage and then started her own company, Distinctive Real Estate & Investments. By focusing on the underserved downtown market, she closed $13.8 million in residential sales; this year she expects sales to hit at least $16 million.

Sum of the parts: Mazzarella attributes her company’s success to a congenial culture that encompasses a diversity of backgrounds. “Each of our 10 sales associates and four unlicensed assistants has special skills, but we mesh into something bigger than any one of us,” she says.

Crowning achievement: Already the owner of nine investment properties, Mazzarella says her next project—and her first development effort—is a 22,000-square-foot commercial office building in downtown Las Vegas. The City Council had rejected the project several times because it would require the destruction of a historic home on the site; Mazzarella finally won unanimous approval by agreeing to move the home atop the three-story building. In the process she’s creating a new city landmark.

I wish I could rewrite this: “Where some see laws, Mazzarella sees white-out and photocopiers…”  Also, anyone care to wager how those 9 investment property loans are done?  Can you say stated?

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The Fed cut interest rates to 2.25%, a nice 75 basis points whack to try to fend off long-lasting effects of a recession and another round of the credit freeze. The question stars to become - does the Fed have enough ammo (or the right kind of ammo)? And I think the answer has been well addressed across the blogosphere, and that answer is “No.”

From Market Watch on the Fed Rate Cut:

The Fed action takes the federal funds rate target down to 2.25%, the lowest since December 2004

The Fed said the size of the rate cut was enough to promote growth.

“Today’s policy action, combined with those taken earlier, including measures to foster market liquidity, should help to promote moderate growth over time and to mitigate the risks to economic activity,” the Fed said.

 

Former Fed officials are increasingly calling for Congress and the Bush Administration to do more to help the economy, especially by assisting homeowners struggling to stay in their homes.

The government may also have to take steps to provide more capital to the banking system. The Fed’s actions are essentially temporary.

 

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How apropos. Realtor magazine names their top 30 agents under 30 every year.  This year’s crop had at least one documented fraudster, now being indicted on all sorts of goodies like bank fraud and money laundering.  Hat tip to Jessica at Inman for the story which also appeared on CNBC.

From Inman News on the Realtor superstar who is really just a thief:

Eve Mazzarella, broker-owner of Distinctive Real Estate & Investments in Las Vegas, at age 29 was named in Realtor magazine’s “30 under 30” feature in June 2007.

Mazzarella is now linked to a mortgage fraud case reported by CNBC on Friday. From that story:

“A Las Vegas real estate broker and her husband are facing federal charges they made millions of dollars orchestrating a mortgage fraud scheme.

“U.S. Attorney for Nevada Gregory Brower says Eve Mazzarella, 30, and her husband, Steven Grimm, 45, were indicted Wednesday on bank fraud, money laundering and aiding and abetting charges.”

You have to love the irony here - the top of the Realtor species being dinged as a criminal.  Poetic, really.  Of course, we really shouldn’t be picking on the young lady.  After all, there are probably 14 other frauds on that top 30 list just waiting to be caught.  Interesting to note though that as a Realtor she’s being tried for mortgage fraud.  I’m sure she was a big proponent of the dual-representation “we do your sale and loan to save you money” camp.

Some “highlights” of Mazzarella’s illustrious “career”:

 Where some see obstacles, Mazzarella sees challenges. She was a divorced mother with two sons and no savings when she moved from Seattle to Las Vegas seven years ago. She found sunshine and a strong real estate market. Over the next three years, she switched from a commercial auction company to a residential brokerage and then started her own company, Distinctive Real Estate & Investments. By focusing on the underserved downtown market, she closed $13.8 million in residential sales; this year she expects sales to hit at least $16 million.

Sum of the parts: Mazzarella attributes her company’s success to a congenial culture that encompasses a diversity of backgrounds. “Each of our 10 sales associates and four unlicensed assistants has special skills, but we mesh into something bigger than any one of us,” she says.

Crowning achievement: Already the owner of nine investment properties, Mazzarella says her next project—and her first development effort—is a 22,000-square-foot commercial office building in downtown Las Vegas. The City Council had rejected the project several times because it would require the destruction of a historic home on the site; Mazzarella finally won unanimous approval by agreeing to move the home atop the three-story building. In the process she’s creating a new city landmark.

I wish I could rewrite this: “Where some see laws, Mazzarella sees white-out and photocopiers…”  Also, anyone care to wager how those 9 investment property loans are done?  Can you say stated?

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With the recent seize up in the credit markets, Bear failing, seconds being eliminated, stated income being eliminated, how far will prices fall? Be heard!

Testing out the new BuzzDash site with this poll. Let me know what you think!

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During this weekend as the Bear Stearns saga was unfolding, CNBC did an unusual thing and switched over to their world feed as the global markets opened on Sunday night. Ironically the scheduled show was American Greed but why not just show world markets busting into a Pavlovian response speculating on a Fed move, either way the title of the supplanted show seemed appropriate for the live feed. The JP Morgan joint venture with the Fed was sure to cause a stir in the markets so the Fed also added a .25 cut for the discount window just for good measure.

It seems to have stopped the market from roiling downward early in the week. One thing struck me from the world CNBC feed aside from them being better straight shooters than our counterparts (aka Jim Cramer saying “don’t sell Bear!”) was how little they really know about the magnitude of the problem from the trenches. They are simply relying on what is on their books and extrapolating this data onto future projections assuming their risk models are correct. Have they ever been to Oakland? Will they ever set foot in Detroit? Maybe a trip to Compton or Huntington Park might make them think twice about jumping back into the credit markets? What about empty condos in Florida? I’m sure these analyst really have an idea of whats truly going on. Oh yeah, and many of these areas have employment contracting.

The reason I bring this up is not to denigrate any of these cities but these so-called experts, kept reiterating that this is the bottom and prices on certain areas will be recovering soon! The only way things can recover is if foreclosures abate and home prices bottom, which they are not. In addition, these so-called low income areas had median selling prices of $400 to $500 thousand during the boom times in California. How is a half million dollar home a “poor” home? The sheer amount and volume of bad loans out there is incredible, many which have not been marked to market. Once the reality sinks in that areas that are immense such as California and Florida show no semblance of recovery, the other shoe will drop. We are only roiling from subprime issues but just wait until Alt-A and the option ARM waves start hitting in full force.

It is easy to get caught up in the Bear Stearns debacle and the Fed throwing the dollar under the bus, but let us remind the world once again why and how this bubble went into another dimension. Remember everyone, we are talking about $13 trillion in mortgage debt here. Today we salute you Lynwood with our Real Home of Genius Award.

Real Home of Genius - Lynwood CA

Today’s home takes us to Lynwood California. This 597 square foot home has 1 bedroom and 1 bathroom. You also get a garage large enough for a Vespa. Not only will you be able to have 1 full bedroom to your self, but you also get a back door free of charge:

*Click and gaze at the epicenter of option ARM and subprime land.

Now before you run out and go dialing on your iPhone to your agent, you may want to understand the dynamics of this housing market and area. The market is tanking. In these areas in Southern California the bottom has completely fallen out like the ride Supreme Scream at Knotts Berry Farm. But how many places offer you a back door? Come on people! We are hitting bottom and now Boom Boom has lowered rates again and if all things go bad, you can always take your mortgage to the discount window for some freshly printed Treasurys. Good times.

You may say, what’s the big deal? What is the current market price of this place? The current listing price is $224,900. And look how close you are to Beverly Hills! This is the massive delusion that folks that aren’t from the region keep on missing. Just because you are in Los Angeles County does not imply that you are in a good area. Like any large metropolis, the working classes need a place to live and usually it is near by their work. What we have is a lack of affordable housing here in California. Now with gas going through the roof, if you are to work minimum wage which many in Los Angeles County do, that additional 20 percent in fuel costs really eats at your bottom line. Given many of these people won’t buy these homes but who will? Investors? The income won’t even cover your principal and interest let alone other costs in being a landlord. A flipper? Who are you going to flip to? Let us take a look at the sales history here:

Sale History

01/23/2008: $288,000

01/30/2007: $395,000

This place is now bank owned so the price in January was essentially the bank taking the place onto its books. This is what we call mark to market. In one year, this place has “lost”, assuming there was something there to begin with, $170,100 in nominal value or 43 percent. Weren’t all these predictions telling us that 20 to 30 percent drops over four years were the ultimate bottom? This place got marked down like Bear Stearns did, fast and furious. Nothing sticky about this correction. We are seeing this more and more on a daily basis. Even at $224,900 this place is still overvalued since a 500 square foot apartment would run you about $700 to $800 a month. The local area income for a household is $47,000 so you can imagine what a budget like that can afford. The entire United States is being marked to market. There are more Real Home of Genius popping up in Southern California. Take a look at the following table:

You may think that we are cherry picking but I assure you, there are plenty of homes hitting the market that are ridiculously overpriced. The first shoe to drop of course was in lower to middle class income areas since the income base is first hurt here. But even now, prime location are starting to come under fire. Frankly, I believe that this will be the larger and more pervasive psychological break for the market. It is one thing when we hear about fraud or an area in Michigan that has homeowners in subprime mortgages struggling to make a payment on a $125,000 mortgage. Yet what about those that got into jumbo option ARM mortgages at say $500,000 to $700,000 in so-called prime areas in Southern California? People are quickly going to find out how much real income people have in this large metropolis.

The stark reality is that even with a slight down tick, we are already on the verge of a statewide collapse. As we wrote about the California budget: California Budget Woes: Balance the Budget by Gambling and Letting Inmates Out! We are in uncharted territory here. Of course a large part of our economy was based on a perpetual housing shell game. That is, you buy a home, an agent gets a cut, a broker gets his percent, the title company gets there fee, the escrow company gets paid, and finally the seller gets a check. Then you load up your home with granite countertops (big jump for Home Depot) and put in a flat screen plasma (Best Buy says thanks!). And given we have an aversion to savings as a culture, which lowering rates only reinforces more spending, all this extra money was pumped into consumer spending thus keeping us in this vicious feedback loop. Now that the game has gone into reverse, people are realizing that their personal ATM machine is now malfunctioning. We still have subprime mortgages resetting each month at the rate of $35 to $45 billion a month all the way until early 2009! Then we’ll have our second wave of option ARMs hitting in late 2009 through 2011. Unless housing settles down, which it will not, we are going to see how exposed a debt society can unravel.

I’ll do my own favorite pundit impersonation and say “don’t buy housing NOW!!!”

Today we salute you Lynwood with our Real Home of Genius Award.

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Related Posts:
■Real Homes of Genius: 675 square foot home in Lynwood California at $425,000?!
■Real Homes of Genius: Today we Salute Lynwood. 597 Square Feet for $319,000.
■Real Homes of Genius: Today We Salute El Monte. 624 Square Feet for $440,000.
■Real Homes of Genius: Today we Salute you Stanton.
■Real Homes of Genius: Today we Salute you Maywood. 853 Square feet for $385,000.

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Filed under: Marketing and advertising, Small business

The general sentiment is that online advertising is immune from the travails of the economy (obviously, this ignores the depression for the category in the wake of the dot-com bust). The argument is that the consumers’ “eyeballs” are moving more to Web-based media.

No doubt, this is true. But, this doesn’t mean advertisers won’t still get skittish.

As a result, eMarketer is toning down its forecast for online ad spending in 2008. Instead of coming to $27.5 billion, the revised figure is now $25.8 billion.

OK, that doesn’t sound like much. However, it could be brutal for many companies (especially small ones that rely heavily on ad spending).

Oh, and social networking sites may come under pressure too. Simply put, these sites are having a tough time getting people to click on ads (even though there are many “eyeballs”).

Something else: eMarketer’s revision shows how fragile the economy has become. In other words, things can certainly get worse — and quickly.

Tom Taulli is the author of various books, including The Complete M&A Handbook and The Edgar Online Guide to Decoding Financial Statements. He also operates DealProfiles.com.

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Filed under: Internet, Blogs, Google (GOOG), About the stock bloggers, Next big thing, Entrepreneurs, Serious Money, Lehman Br Holdings (LEH), Bear Stearns Cos (BSC)

Even though I just recently started blogging in October 2007– after I closed my hedge fund — I first began to understand that there was some real money to be made when Jeremy Schoemaker of Shoemoney.com posted THIS picture of a check for $132,994.97 from Google Inc. (NASDAQ: GOOG) as his AdSense income in August 2005.

Later that year, John Chow of JohnChow.com also started blogging about ways to make money online and now he, too, regularly earns $30,000 per month from blogging, all broken down and detailed on his site. Since my monthly blog income on my own personal blog is just a few thousand dollars, I decided to ask John Chow for some pearls of wisdom, here’s the interview:

1. What have been some of the keys to your success?

I think one of the biggest reasons for my blogging success has been consistency. There has never been a single day that has gone by where I did not have a new blog post for people to read. One of the biggest mistakes a new blogger makes is by being an on again off again blogger. You can’t build a blog this way.

Another key is just being myself. I show the good and the bad and let the chips fall where they may. A blog is not CNN or News.com. Your readers are there to read your opinion. You should give it to them instead of just giving the news without an opinion.

Continue reading A $30,000 per month blogger shares his secrets

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