Mukesh Ambani’s $2 Billion Home

The 27 storey skyscraper being built in Mumbai by Mukesh Ambani, the richest person in India, could be the world’s largest and costliest home with a price-tag nearing two billion dollar, according to Forbes magazine.

When the Ambani residence is finished in January, completing a four-year process, it will be 550 feet high with 4,00,000 square feet of interior space. Mukesh Ambani was ranked as the fifth richest person in the world with a net worth of 43 billion dollars.  Ambani heads India’s most valuable firm Reliance Industries, an oil and petrochemicals giant.

Atop six stories of parking lots, Antilla’s living quarters begin at a lobby with nine elevators, as well as several storage rooms and lounges. Down dual stairways with silver-covered railings is a large ballroom with 80% of its ceiling covered in crystal chandeliers. The report said that Ambanis plan to use the residence occasionally for corporate entertainment also and they want its interiors to have a “distinctly Indian” look and feel. To get an idea of which floor is for what, click here.

Accelerating Price Declines in Most Big Cities

A Washington think tank is warning that housing prices are falling at an accelerating level, destroying wealth at a pace that will cost the average homeowner $85,000 in lost wealth this year alone.

At the same time, the price decline implies an incredibly rapid loss of wealth. In real terms, the rate of price decline in the 20-city index would imply a loss of almost $6 trillion in real housing wealth over the course of the year, an average of $85,000 per homeowner. The only time that many Americans have lost that much wealth in a short period of time would have been during the Great Depression.

The number of California homes lost to foreclosure in the first quarter surged 327% from year-ago levels — reaching an average of more than 500 foreclosures per day.

The Result: 517 foreclosures every day in the first quarter of 2008. The main factor behind this foreclosure surge remains the decline in home values. Additionally, a lot of the ‘loans-gone-wild’ activity happened in late 2005 and 2006 and that’s working its way through the system. The big ‘if’ right now is whether or not the economy is in recession. If it is, the foreclosure problem could spread beyond the current categories of dicey mortgages, and into mainstream home loans.

Greed does terrible things. People going through foreclosure don’t deserve any kind of sympathy. They should’ve read the fine print. Too many people living above their means to impress the guy next door who is also sinking.

To some, Larry Ellison’s $200 million reproduction 16th-century Japanese emperor’s estate in the hills above Silicon Valley sums up everything wrong with America’s out-of-control real estate market. Imagine how upset Ellison’s critics became this week when they found out that the the world’s 14th-wealthiest person had negotiated a 60% tax break on his property. As a result, his local assessor’s office is sending the 63-year old $3 million.

Ellison won the tax break by essentially arguing that he had squandered money on Larryland, and would never be able to get his investment back. Ellison said that the property had suffered from “significant functional obsolescence” and was therefore worth $64.7 million, not the $166.3 million on record (substantially less than the $200 million it cost to build).

Larry’s 23-acre Japanese emperor estate property ended up featuring a 2.3-acre man-made lake filled with drinkable water, 2,000 tons of imported Chinese granite, a waterfall with a built-in fog machine and an on/off switch, several miles of underground tunnels for domestic staff, a 30-ton boulder in the master bedroom shower, and a replica 16th-century bridge that was built by craftsmen in China.

Acknowledging A Loss Is The Most Difficult Thing To Do

Americans owe a staggering $1.1 trillion on home equity loans — and banks are increasingly worried they may not get some of that money back. To get it, many lenders are taking the extraordinary step of preventing some people from selling their homes or refinancing their mortgages unless they pay off all or part of their home equity loans first. In the past, when home prices were not falling, lenders did not resort to these measures.

Such tactics are impeding efforts by policy makers to help struggling homeowners get easier terms on their mortgages and stem the rising tide of foreclosures. But at a time when each day seems to bring more bad news for the financial industry, lenders defend the hard-nosed maneuvers as a way to keep their own losses from deepening.

When borrowers default on their mortgages, lenders foreclose and sell the homes to recoup their money. But when homes sell for less than the value of their mortgages and home equity loans (a situation known as a short sale) lenders with first liens must be compensated fully before holders of second or third liens get a dime. In places like California, Nevada, Arizona and Florida, where home prices have fallen significantly, second-lien holders can be left with little or nothing once first mortgages are paid.

People with weak, or subprime, credit could be hurt the most. More than a third of all subprime loans made in 2006 had associated second-lien debt, up from 17% in 2000. And many people added second loans after taking out first mortgages, so it is impossible to say for certain how many homeowners have multiple liens on their properties.

Many homeowners who were subject to predatory lending practices - including brokers who misrepresented payments - are trying to rework their loans. Few are having any luck.

Most mortgages aren’t owned by a single bank. Instead, they are packaged and sold to investors on the secondary market, which means that loan servicers are actually beholden to investors, not borrowers. Borrowers may be offered a temporary repayment plan, which keeps foreclosure at bay, but tacks the owed money onto to the back of the loan.

“The payments in this kind of workout are unaffordable to the homeowner,” said Diane Cipollone of the National Fair Housing Alliance. “And sometimes homeowners sign it anyway. They don’t know what to do. They know that if they don’t agree their home will go right into foreclosure. But soon they default on the repayment plan, and that’s counterproductive.”

And it’s much harder for troubled borrowers to get a deal that permanently lowers their mortgage payments. The Hope Now Alliance of mortgage lenders and servicers, including Citigroup, Bank of America and J.P. Morgan , says it has kept over one million borrowers out of foreclosure since July. But only about one quarter of them - 278,000 - have actually had the terms of their mortgages modified.

Once a buyer falls in love with a property, they actively collude in the whole fairy-tale process, swallowing whatever the seller says without thinking to question it.  

1. “My neighbors are wonderful!”  Really? Why not check it out for yourself? Knock on the wonderful neighbor’s door. Tell them you are thinking of buying the house next door and ask them what they think of the neighborhood.
2. “The roof leaked once, but we fixed it.”  The seller may not even think they are lying here, but if the repairs have been done in some half-baked way, you need to know. Get a professional home inspection. 
3. “I’ve only seen one termite on the deck.”  If there’s any hint that there might be problems with pests, you should get an insect inspection. These creatures are not wandering hobos dropping in on a house for a look around then moving on their merry way. They come in groups.
4. “There’s no radon — ever.”  Nearly one out of every 15 homes in the U.S. is estimated to have elevated radon levels. To find out about radon gas levels in your area, contact your local Environmental Protection Agency office.

5. “I didn’t know I should have told you about the foreclosure.” Get title insurance. Judgments, tax and mechanical liens are covered by title insurance.

6. “The planes from the airport don’t fly over this house.” You can find this out for sure by contacting the FAA.

7. “There’s never been any flooding.” Most older homes do have some flooding in the basement when there is excessive rain, so it is quite possible a seller could lie to you about this.

8. “Our schools are great!” For an objective view, get a free school report from HomeFair.com or GreatSchools.net.

9. “They can’t build on that lot across the street.” Why can’t they? If the lot is too small, they might get a variance. Talk to the planning board to find out.

A List Of Important Things You Should Do:

• Get a professional home inspection. Qualified home inspectors routinely uncover problems with houses that you can’t see. The most common problems involve plumbing, cooling and heating systems, leaky roofs, kitchen appliances and cracked foundations.

• Spring for extra inspections. These include insects, radon, leaky underground tanks and bad well-water.

• Visit the property during rush hour and on Friday or Saturday night. It’s the only way to see what the next-door kids are like, how traffic is on the weekends, and how noisy it really gets around the neighbor’s pool.

• Get a signed disclosure form from the seller or the broker representing the seller.  If they don’t disclose the defect, they’re subject to suit.

In a normal housing market they’d be able to sell, but now they are stuck.

Far from the housing crisis’ epicenter, high earners with good credit may be heading for trouble as their adjustable rate mortgages (ARMs) adjust beyond their means, local real estate agents and others say. In a normal housing market they’d be able to sell, but now they are stuck. The next wave of problems will come from prime borrowers who bought too much house or borrowed too much against it. A “prime” borrower is one with good credit.

Real estate agents warn that some high-income borrowers have already been forced to sell or leave their homes and more will follow. Especially those who used their homes as ATMs, withdrawing cash via home equity loans.  There are also signs some lenders are warily eyeing “prime” borrowers. JPMorgan Chase & Co. raised its reserves for possible home equity loan loss for subprime and prime borrowers by $635 million in the second and third quarters last year.

Getting into property during the boom was easy, with mortgages freely available for no money down. Then came the subprime crisis and the credit crunch, slowing the market, pushing prices down and home inventories up. Home owners who bought recently with no money down are the ones most likely to abandon a property when they fall behind on the mortgage.Real estate agents say speculative investors who bought to make a profit are also walking away as the rents they charge fall behind the mortgage payments as their adjustable-rate mortgages readjust. The home owners who find it harder to walk away are those who took out large home equity loans before prices started falling and now owe far more than their home is worth. Unlike subprime borrowers, however, wealthy home owners are more likely to try to cut a deal with their lender, rather than end up in foreclosure.The alternative solution available to them is to opt for a short sale. Under a short sale agreement, the borrower sells below the mortgage value and the lender writes off the difference. The lender gets less than originally anticipated, but is not stuck with a foreclosed property. The borrower’s credit rating is damaged, but not as badly as if they had lost the home.

Each of the following mistakes can cost you $100,000.

1.) Investing too conservatively during retirement. If you follow conventional wisdom and, as you approach retirement, shift money out of stocks into more stable investments you could miss many opportunities. Instead of parking too much of your assets in bonds, invest in an asset mix that leaves enough room for Standard & Poor’s 500 stock index.

2.) Launching a divorce war. A full courtroom showdown can easily cost $250,000. Try to soften the financial impact by using a lower-cost mediation option. Or try to work on saving your marriage.

3.) Underinsuring your home. If you’ve lived in the same house for at least 10 years, it’s probably worth 50% to 100% more than you paid for it. But if you haven’t updated your homeowners insurance, you could lose those gains if disaster strikes. Ask your insurer to reassess your home’s replacement cost and adjust coverage accordingly.

4.) Overpaying for your mortgage. The annual percentage rates on mortgages in a given area can vary by close to a percentage point. Over a typical 30-year term, this can cost you $27,000 on a $299,000 home. Shop for the best mortgage rate by checking local banks, your credit union, big-lender Web sites and mortgage-related sites.

5.) Maintaining an unhealthy lifestyle. Bad health habits not only catch up with you as you age but they can also hit you in the pocketbook in the form of higher life-insurance premiums. Before you apply for life insurance, consult your doctor about the best way to get your health status in line with the “preferred plus” underwriting requirements.

6.) Paying needless fund fees. If you buy mutual funds from a broker, you could pay a commission, or “load,” of up to 5.75%. Annual expenses can also vary among funds, from 1.5% or more a year to as little as 0.1%. Fix: Choose no-load mutual funds with low expense ratios. You can buy them directly from investment companies such as Fidelity, T. Rowe Price, and Vanguard.

Design Your Kitchen Cabinets, Dressers or Book Shelves as Miniature Buildings

Wouldn’t it be entertaining to have furniture in your home that is functional (storage chests, cupboards, TV cabinets…) yet interesting because it’s all shaped like miniature buildings? Love the idea, now bring it to the U.S.

A Nightmare Many Americans Face After The Housing Bust

In just three years Delia Toothman, 30, a former Navy officer and bioscience technician in San Diego, went from $18,000 in savings to $16,000 in credit-card debt. She once lived in a home she co-owned; now she lives in her father’s garage. Toothman is just one of thousands or even hundreds of thousands of Americans who find themselves homeless and broke in the aftermath of the housing bust. Hers is a cautionary tale of hard-working and well-intentioned young woman who got swept up in the real estate madness of Southern California, helped along by what she describes as bad advice from industry professionals. Read her story.

Here’s a list of calculators ranging from Mortgage APR to Auto Rebate vs. Low Interest Financing to Hourly Paycheck.

A Bright Spot in California’s Real Estate Market

Solar-powered homes are starting to outsell traditionally electrified new homes in several markets, and developers are stepping up their use of the technology. The growing popularity of household solar power is an encouraging sign for the thousands of solar enthusiasts and vendors gathering in Long Beach this week.

“The increase in sales velocity is actually paying for the solar systems,” says Julie Blumden, a vice president of a San Jose-based manufacturer of solar roof tiles. “The last time we saw interest in solar that was anything close to this was back in the 1980s, the first time there were federal tax credits for solar energy,” said Julia Judd Hamm, executive director of the Solar Electric Power Assn. “But the numbers then aren’t even comparable to what we’re seeing now.” Solar power is hotter than ever, helped by California’s ambitious Million Solar Roofs rebate program, federal tax credits and growing public and political support for renewable power of all kinds.

Common Slips We All Make

Insurance is the product you buy in case the unthinkable happens. Unfortunately, by the time you need it, it’s too late to make sure you have the right type and amount of coverage. Make sure you don’t make any of the following seven mistakes while buying financial protection against disaster.

1. Not Shopping Around   The most common mistake is that people don’t shop around for insurance. They wind up going to one agent and letting that person handle all of their insurance needs. If you would just read the insurance buyers guides offered by their state insurance departments and then call around to a few companies, it could make a huge difference in the price they pay for insurance.
2. Comparing Only Rate Prices   When you’re shopping around, it’s best to look not only at prices but at companies’ reputations for paying claims. You can check out insurance companies by looking at how they rank with third-party insurance rating companies, such as A.M. Best, Fitch Ratings and Standard & Poor’s. Examine a company’s complaint ratio. State insurance departments sometime publish this information, and the Web site of the National Association of Insurance Commissioners publishes these numbers.
3. Not Comparing Agents   Not all agents are created equal. First, make sure an agent is properly licensed. Check with your state department of insurance. Then make sure to get referrals and ask each agent some questions. Ask them to explain the policy. Ask what value they’re going to bring to the table. How will they help you?
4. Not Understanding Your Policy   A consumer’s biggest mistake is not knowing what’s in the fine print of a policy. Many people don’t know what their deductibles are and don’t realize what’s not covered until disaster strikes.
5. Not Buying Enough   Don’t skimp on health insurance no matter how robust you feel today.  It’s really important so you don’t just go into such medical debt that you never can dig your way out. People think they don’t have to deal with it until they’re 50. You’re uninsurable at that point. Consider getting life insurance if you have dependents. It can help pay the bills after a working parent dies unexpectedly. Buy it when you’re young and healthy because it’s much cheaper and easier to obtain when you don’t have a chronic disease.
6. Buying Unncessary Insurance   You don’t need life insurance on children, only on people who have dependents. In terms of specialized insurance, don’t buy insurance from somebody you went to buy something else from. If you’re worried about identity theft, don’t rush out to buy identity-theft insurance. Check your homeowners policy. It might already include some identity-theft protection. Credit cards also offer some protection against unauthorized charges.
7. Not Updating Coverage   Evaluate your coverage whenever you go through a life change, such as birth, adoption, marriage or divorce, but at least once annually. If your home has gone up in value, make sure you increase your policy limits. If the kids have left home, you can get more-affordable auto insurance coverage.

Shanghai’s Jinmao Tower

The 101-story Shanghai World Financial Center, a 1,614 foot wedge-shaped tower with a rectangular hole at the very top, was topped out on Friday as its last beam was laid amid a drizzle that obscured the building’s panoramic view of endless high rises. After the Sept. 11, 2001, terrorist attacks in the United States, the building was redesigned into a so-called “megastructure,” with four huge pillars to make it stronger, said Japanese building tycoon Minoru Mori.

Taiwan’s Taipei 101, at 1,667 feet, beat the building’s height, taking the tallest sweepstakes in 2004. Developers of a skyscraper in oil-rich Dubai recently declared theirs the world’s tallest building when construction reached 1,680 feet — and the building is still far from finished.