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OC realtors seek to silence free speech by accusing IrvineRenter of lying Posted: 07 Jun 2011 03:30 AM PDT The Orange County Association of realtors has accused IrvineRenter of "knowingly telling lies about competitors." They demand I appear in front of their grievance committee for disciplinary action.
Irvine Home Address ... 1 SOLANA Irvine, CA 92612
The Orange County Association of realtors is after me. They claim I am a liar. Today, I will present the facts and let you decide. Realtors go after blogger who says they lieJune 6th, 2011, 12:00 pm -- Marilyn Kalfus, real estate reporter
I sometimes do go over the top. It's part of my sense of humor, and It's one of the reasons I don't single out individuals. Sometimes it takes going over the top to draw attention to important issues and get people to think.
This is clearly an attempt to silence my free speech because OCAR does not like the content of my speech. Why else would they bring this complaint? The complaint filed by OCAR is “anonymous” -- nobody at OCAR has the guts to stand up and publicly accuse me. To make it worse, OCAR has not even notified me of what specific actions I took which violate their rules. They want to drag me before a biased kangaroo court made up of its own members and keep the hearing secret and non-public. Anonymous accusations, secret trials, and refusal to substantiate charges sound more like the political trials of the Soviet Union, Cuba or North Korea than American notions of due process. Joseph Stalin from the old Soviet Union would be proud of OCAR and their methods.
I don't focus on individuals. The behavior is the problem, not the person doing it. People make mistakes. I have. I don't seek to shame people, I try to point out what people do whether it be borrowers or realtors so people can see the wisdom or the foolishness in the behavior for themselves.
They want to call me in front of their Kangaroo court of realtors, keep me in the dark regarding their trumped up charges, find me guilty, then keep everything quiet.
Hallelujah! The IHB has always been an open forum. People are free to come here and put forward their ideas and opinions of the housing market. I have always encouraged differing points of view as evidenced in the daily astute observations. Ideas with merit are scrutinized, and the collective wisdom of the group separates the good ideas from nonsense. That's how a healthy debate should work. PDF of full attorney response letter What does OCAR think about free speech?The allegations brought against me include (1) knowingly lying about competitors, and (2) violating MLS rules. Yet OCAR won’t tell me how I did either. Isn't it obvious these are silly attempts to shut down one of the few truthful and accurate sources of real estate information and analysis in Orange County? They are pissed about my public comments, and they hope they can find some MLS violation to shut me down. In their complaint, they provided absolutely no evidence of any MLS violations. If there are any legitimate violations, they should tell me and give me the chance to correct them. Unfortunately, OCAR is more interested in keeping me in the dark, holding some secret proceeding and then trying to shut down the IHB and infringe on free speech. Do any of you believe the information presented on the IHB is inaccurate or misleading in any way? Does OCAR need to sue the IHB to ensure the data presented is accurate and useful? Who do you believe is more concerned with accuracy, the IHB or OCAR? This is really embarrassing for OCAR. I criticize the national association for knowingly providing inaccurate information to buyers -- which they did -- and the local association accuses me of lying and providing bad information. Unbelievable! I cringe when I think of the thought process that was behind this complaint. OCAR should be asking itself what the hell is going on. They want to call a non-member in front of their secret panel, and then make up bogus charges designed solely to infringe on someone's freedom of speech. Brilliant! Isn't this America? Perhaps OCAR might be more comfortable in Communist China? Oops, I better be careful. I wouldn't want to get called in front of a disciplinary board in China for my statements....
What is wrong with the association of realtors?My issues with the association of realtors is well documented: 5-23-2011 -- More self-serving bullshit from the National Association of realtors 3-26-2011 -- The future of IHB news and real estate analysis. 3-9-2011 -- The OC Register Says California had no real estate bubble. 2-24-2011 -- National Association of realtors caught lying about home sales I don't like how this trade association operates. As I stated in More self-serving bullshit from the National Association of realtors,
How many buyers from the bubble rally were soothed by the comforting advice of their expert realtors who were telling them house prices only go up? How many of those buyers relied on their realtor's statements and now find themselves financially destroyed by the purchase they made? Are realtors responsible for the financial ruin of those buyers who believed their representations of financial performance? On 3-23-2011, I wrote the post As trusted experts realtors are responsible for their bad financial advice. That post was a reprint of Dr. Brent White's paper, Trust, Expert Advice, and Realtor Responsibility. From the abstract:
My post is no longer on the IHB. As mentioned in the OC Register’s article, I emailed Dr. White when my post came out, and he requested I take it down because the paper was about to be published in a major journal, and he didn't want problems with his publisher. Since I was trying to help Dr. White by calling attention to his paper and not cause him grief, I took the post down per his request. The post containing Dr. White's paper is apparently part of the the OCAR complaint against me -- A post that was 90% someone else's writing. I was drawn to Dr. White's paper because he was making the same argument I was in The Great Housing Bubble and in many posts on the IHB: realtors should stop making representations of financial returns in real estate as an inducement to buy.
In The Great Housing Bubble, I wrote this:
Some people mistakenly believe that realtors are regulated by the SEC and need a securities license to make representations about returns in real estate. Not true. They say whatever they want, and if a buyer relies on that information, too bad for the buyer.
In the complaint against me, the post with Dr. White's paper is singled out as evidence that I "knowingly lied about my competitors." In an amazing example of cognitive dissonance, OCAr is accusing me of lying. I believe this is an attempt to silence my voice and undermine my business. What other explanation could there be? OCAR should leave me aloneIs spending OCAR resources on this complaint in the best interest of the organization? If OCAR is trying to vault me to national attention through its frivolous lawsuit, they just might succeed if they don't let their complaint drop. Dr. Brent White, the author of the paper that was the subject of the post they objected to, was on 60 minutes for his controversial stance on strategic default. My attorneys represented Tyler Hamilton on his recent 60 Minutes appearance. Producers at 60 Minutes are contacts of both Dr. White and my attorneys. Is attacking my freedom of speech on the issue of realtor responsibility newsworthy enough for 60 minutes? If they keep pushing, we might find out. I am not looking for a fight. Personally, I would rather focus my energy on developing my own business and holding to a higher standard. If the people behind the complaint against me were to put a fraction of that energy toward raising their own standards and creating their own success, they might serve their clients better and make more sales. Shevy is a personal friend and we speak regularly about the market and ways that real estate services can be improved. Shevy is a member of OCAr, NAr, and participates in LGrS through OCAr. He participates in these groups to bring perspective and hopes of influencing positive change for consumers through OCAr and NAr policy improvement. He was very surprised and disappointed that OCAr chose this path. Open forums like the IHB should be embraced by groups like OCAr and NAr as an opportunity to gain insight and address important real issues. What is a lie?First, let's dispense with their allegations. In order to tell a lie, someone must know the facts of a situation and knowingly state something contrary to fact. Let's look at my statements and contrast that with statements of some realtors and representatives of their association. I have stated uncomfortable truths (see links above), but I have not lied about anything. Like Dr. White and Barry Ritholtz, I happen to believe that realtors do at times make misleading statements about house price appreciation to induce a buyer to act. My statement is my reality. If I am mistaken, and if no realtor has ever made an intentionally misleading statement as to future value of a house, then I am mistaken, not a liar. That being said, I don't think I am mistaken:
In the video above featuring NAr representative Tom Adkins above from 2008, he is embarrassingly wrong, and as Peter Schiff points out, he was just as wrong the year before. But why does he keep saying it? Does he know better and chooses to lie? Is he ignorant to the truth and merely passing on his foolish opinion? Not every instance of a realtor making representations of financial rewards is intentionally misleading. Sometimes they are merely delusional and genuinely believe what they are saying. The post The OC Register Says California had no real estate bubble documents that phenomenon rather clearly. As I pointed out in Urgency Versus Reality: realtors Win, Buyers Lose,
The lack of concern for the truth is the defining characteristic of bullshit. When the bullshit is being offered to obtain a sales commission, the bullshit is self serving. How would you characterize the ad below from the peak of the housing bubble in 2006? It was the worst possible time to buy real estate as an investment. Everyone who did so lost money, yet the NAr claimed real estate was a great investment in 2006.
How would you characterize the behavior of the NAr when they put out advertising like this? They were obviously totally wrong.
And are any of those answers acceptable to you?
So what does the general public think of OCAR's complaint?The following comments were culled from the many on Marilyn Kalfus's post yesterday:
And my favorite:
I challenge the NAr to raise their standardsThere is a simple reason the local realtor association wants to harm the IHB: Their customers prefer the higher standard we set, and we are taking their business. I offer a series of challenges to the association of realtors. 1. Stop presenting inaccurate data to suit your purposes.Back in 2007, realtors changed their methods of data collection to get the data they wanted to present rather than be accurate to what really occurred in the market. I documented this in National Association of realtors caught lying about home sales. This behavior needs to stop. 2. Stop manipulating accurate data with spin and bullshit to influence buyers.In the post, The future of IHB news and real estate analysis, I called out the NAr for their intentional manipulation of data to influence buyer psychology. I challenge them to stop. Zillow's Stan Humphries among other real estate economists, has demonstrated a willingness to tell a dark truth about home prices or sales regardless of how this will impact Zillow's business in the short term. Telling potential customers the truth generates more sales in the long term than ceaseless bullshit. 3. Stop encouraging agents to create a false sense of urgency.In Urgency Versus Reality: realtors Win, Buyers Lose, I documented what everyone already knows -- realtors rely on creating false urgency to sell homes. Shouldn't people be given accurate information and be encouraged to make their own decisions? I think so. And so do the customers we have served. realtors need to stop creating false urgency in buyers. 4. Place the needs of your clients above your own.Since I announced the IHB would help people buy and sell real estate, I have remained truthful to my view of the housing market. The IHB has consistently advised caution, while realtors were consistently calling the bottom and telling people they have nothing to fear. Many people have chosen to rent because of our advice, and since prices are still falling five years after the peak, our advice has served clients well. The IHB could have generated more sales if we had "gone realtor" and put our own financial interests above our clients. We chose not to do that because we believe it is the right thing to do. I challenge realtors to do the same. 5. Admit the sales techniques encouraged by the organization hurt millions of customers -- and apologize.Some lenders feel bad about their role in the housing bubble and the millions of resulting foreclosures, but realtors don't feel responsible. realtors encouraged millions of people to buy houses they couldn't afford, and now those buyers are financially ruined. I haven't read a remorseful confession from any realtors acknowledging their role in the bubble. Is that too much to ask? realtors can serve their clients betterMost realtors who read this -- and they all will with the attention this issue is getting -- will dismiss my challenges as the ravings of a hater. Nothing could be further from the truth. I would rather see everyone who buys real estate be treated the way IHB treats its clients. I rant and rave to foster change, not hate. Many good agents don't like how their trade association works, but they feel powerless against the machine. They aren't powerless. Many secretly agree with me, but feel compelled by the pressure of the group to say nothing. Now is the time to stand up and be heard. Good agents need to raise their standards and demand the same of everyone else in the organization. Clients everywhere would benefit from that. Better and more useful dataThe property profile below is typical of an IHB post. It has two links to MLS sources for more information than is presented here. From the MLS data, which gets much of its information from the County Assessor's office and other public records, I break down the cost of ownership and acquisition. It's a shortened version of an IHB Fundamental Value Report. The data presented is accurate, and I provide more information that is useful to borrowers than other sites. Learning what not to doIn addition to the basic property data, I provide purchase and loan information on the property from public records. Prior to the housing bubble, this information was dry data, but with the mass financial insanity that became common during the bubble, the public records now contain interesting stories of foolish borrowing that cost people their homes. When I first began writing about this behavior, people didn't believe me, and for the first several posts, most dismissed it as cherry picking. Over the last four years I have profiled hundreds of HELOC abuse cases to show how widespread this activity really was. And for the record, I don't print the owner's names. It is public record, but I want to expose the behavior, not the person caught up in it. Understanding HELOC abuse is important. It's a behavior that cost thousands of people their homes, hundreds here in Irvine alone. The desire for mortgage equity withdrawal was the primary motivator for buyers during the bubble. Borrowers who don't understand this will repeat the mistakes of the past, and they may end up a foreclosure statistic themselves.
How to make $140,000 and still be a short saleThe owners of today's featured property paid $377,000 on 12/14/2001. The first mortgage information is missing, but they needed a $75,000 second to close the deal. Their down payment probably wasn't very large. It doesn't really matter because on 4/16/2003 they obtained a new first mortgage for $436,500 which refinanced their previous mortgages, got back their down payment, plus gave them over $50,000 for spending money. Over then next four years they took out various loans and refinances, and ended up with $674,260 in property debt. Hence, we have a short sale. The total mortgage equity withdrawal was around $300,000. Not bad for doing nothing.
Irvine House Address ... 1 SOLANA Irvine, CA 92612
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