As the market continues to slow, builders continue to look for ways to generate more interest in their developments. Last night, I saw an ad (and yes, I was watching sports) for D.R. Horton's new Man Cave promotion. Granite counters might help sell homes, but some of us are looking for a space to nurture our I.T.A (Inner Tim Allen). The idea reminds me of The Pub in my local Nordstrom. Give a guy a place to eat fried foods, drink beer and watch sports, and you have him as a customer for life.

I have always known that I reside in the Halloween "Capitol" of Seattle, but until now I have not had scientific proof.

In a move of utter brilliance, Capitol Hill Seattle blog has published this Ultimate Guide: Fancy Pants Capitol Hill Trick-or-Treating.  By using Zillow Heatmaps and a childhood theory that North Capitol Hill is one of the best places to score candy, they have translated the Zillow spectrum to a sugar acquisition model they call the Capitol Hill Seattle Candy Action scale.

For this handy guide, children all over the city will be eternally grateful.

-- Marlow Harris, 360Digest

Lenders participating in a Bush administration initiative to help troubled borrowers avoid foreclosure are planning their first concerted action: a mass mailing of more than 200,000 letters that will offer a toll free number to call for financial counseling. The letters will go out on Nov. 19 -- more than a month after the "Hope Now" initiative was announced by Treasury Secretary Henry Paulson.

In a press release, Paulson said Hope Now participants are "doing a lot of great work" making contact with borrowers and determining if they qualify for more affordable loans.

Most loan servicers participating in Hope Now already have "aggressive programs" to reach troubled borrowers, Paulson said, but are finding the response rate isn't high enough.

Paulson said he views the housing market and mortgage troubles "as the most significant current risk to our economy," but that new numbers showing the economy grew at an annual rate of 3.9 percent during the third quarter "reinforce my belief that we have a healthy, diversified economy that will continue to grow."

Meanwhile, in testimony before a subcommittee of the House Judiciary Committee this week, Mark Zandi, chief economist for Moody's Economy.com, said the efforts loan servicers have managed so far to engage in workouts "are unlikely to prove effective in forestalling the increase in foreclosures." Zandi warned of a "substantial risk" that the housing slump and related foreclosures will produce a recession.

Last month, Moody's Investors Service reported that when it surveyed subprime mortgage servicers, it found most had modified no more than 1 percent of loans that experienced a reset in January, April and July. The survey prompted FDIC Chairwoman Sheila Bair to admonish loan servicers to stop sitting on their hands, and start engaging in wholesale conversions of ARM loans into fixed-rate mortgages.

"We have a huge problem on our hands. We can't just sit here doing this kind of case-by-case, laborious restructuring process with all these millions of subprime hybrid ARMs," Bair said at an investment conference in New York City.

So, assuming these 200,000 letters going out next month don't fix everything, what next?

Zandi was testifying in favor of a bill that would allow bankruptcy courts to rewrite the terms of mortgages held by borrowers when they file for Chapter 13 protection, which the Mortgage Bankers Association says will make it a lot more expensive for everyone to take out loans with down payments of less than 20 percent (see Inman News story).

... You've done nothing for me.

You said someday I'd have a whole lotta money,
I'd be a millionaire
But when that didnt happen over night
I found out how much you really cared
Well, all you want is a whole lotta money
All the rest is just jivin' honey

Countrywide Financial chief Angelo Mozilo (that's him pictured at left, and not Rick Springfield, author of the ditty quoted above) says the government has done "zero" to help troubled borrowers (and, by inference, the entire mortgage lending industry) get back on their feet.

Rising delinquencies and defaults have produced a crisis of faith among international investors who once poured billions into mortgage lending. That's forced lenders like Countrywide that once depended on borrowed money to mostly limit production to loans that are eligible for purchase or guarantee by Fannie Mae and Freddie Mac.

Mozilo's solution? Lift the $1.4 trillion cap on Fannie and Freddie's loan portfolios, and raise the $417,000 conforming loan limit so that more loans are eligible.

“In terms of tangible effort from the federal government...there has been no program, no federal effort, no legislative assistance – zero,” the Financial Times of London reports Mozilo as saying at a conference put on today by -- get this -- the Milken Institute in Beverly Hills.

Mozilo apparently doesn't count the ongoing Securities and Exchange Commission probe of insider trading by executives at publicly-owned lenders as tangible effort from the federal government. Then again, most of the 2 million families said to be facing foreclosure probably aren't that impressed either, as any fruits of that effort would presumably benefit shareholders in the companies, not the people they loaned money to.

Democrats have introduced bills that would make Mozilo's (and Fannie and Freddie's) dreams come true, while the Bush administration has put most of its foreclosure relief eggs in the FHASecure basket.

A couple of interesting blog posts on how to use some social media applications effectively cropped up today:

What Can You Do With MyBlogLog: Tips from 18 Members (Online Marketing Blog)

How To Write Kickass Twitter Posts (Whatsnextblog)

I remember at the height of the housing boom many people joking that you know you're in a real estate bubble when hair dressers and restaurant wait staff talk openly about their real estate investment careers.

Well, my hair dresser unfortunately is now talking about the condo she bought during the madness, can no longer afford due to ballooning payments and can't seem to get rid of. (Perhaps this is a sign that the bottom is near?)

Like many others she has turned to renting the property while she continues to seek a buyer. Some have called this a case of "the accidental landlord," in which property owners turn into landlords as a sort of last resort to mitigate losses from a drawn-out sales process.

"Accidental landlords" can actually lead to income opportunities for real estate agents, a subject Inman News is covering in a special three-part series to be released to subscribers this week. Stay tuned.

Here's a tidbit from Sunday's San Francisco Chronicle on the benefits of sellers offering a higher commission for the sale of their home. It makes sense; money motivates in a work setting so it comes as no surprise that real estate agents would be more motivated to show a house offering a higher commission than one offering a lower or no commission.

However, is there a gray ethical area here for buyers agents? If the buyer rep gravitates toward homes with higher commission splits, is the buyer getting the best representation in his own interest? Some Inman News readers have said before that this very situation points to the need for buyers to pay their own agents separately.

Any predictions on where commissions and brokerage business models are headed as the downturn continues to shake out the loads of people who entered during boom years? Will more sellers motivate with cash or brave the new world of Internet offerings for less? Will brokerage models take on new shapes? Tell us what you're seeing.

One sign that the housing downturn has bottomed out in a given market is when investors start snatching up homes they consider bargains.

A similar phenomenon is expected in the market for mortgage-backed securities (MBS) and collateralized debt obligations (CDOs). It's an eagerly awaited development by those who see an end to the credit crunch as a necessary precursor to a housing recovery.

CNNMoney staff writer Grace Wong writes today that while billions of investment capital has been rounded up to snatch up MBS and CDOs at bargain prices, the feeding frenzy has yet to begin. Investors don't think the prices on these "illiquid" investments have hit bottom, Wong writes. The recent creation by banks of a fund that would buy up structured investment vehicles (SIVs) used by buy such securities (see Inman News story) may be artificially propping up prices, former Fed chairman Alan Greenspan has said.

The cliche is that investors are afraid of "catching a falling knife." In the mean time, to trot out another cliche, stocks continue to "climb a wall of fear" on hopes that the Federal Reserve will make another bold move on short-term rates this week. 

Mortgage broker and Inman News columnist Lou Barnes says even more important are the employment numbers coming out Friday, because job gains are "the only thing holding mortgages above 6 percent."

Barnes agrees that we can expect to see much bigger losses on CDOs than Wall Street firms have reported to far, and sees efforts by banks to prop up SIVs as "Freddie Krueger dressed up as a nice-looking kid."

IF MBS and CDO markets are in fact a "canary in the coal mine" predictor of the future health of housing markets, sounds like a good time to make sure the oxygen masks are working.

Rich Barton, CEO of Zillow has reportedly invested in a new, anti-aging focused Web site called RealSelf.com. Featuring consumer reviews, a community based Q&A, and it's own blog, RealSelf's Web 2.0 nature reflects that employed by Zillow itself.

One can only muse at the connection between the relatively high average age of real estate agents and Zillow's continued effort to court more of them.

--Todd Carpenter - Lenderama