A warning for homebuyers

   Paul Goldenbogen, a licensed real estate broker since 1982 and the recently appointed chairman of the Colorado Real Estate Commission, says he's no fan of what he considers homebuying gimmicks.

   Goldenbogen, president and part owner of Heritage Realty in Colorado Springs, remembers "buy down" programs during the area's last housing downturn 20 years ago; homeowners enjoyed low, subsidized mortgages to start, but then got in over their heads as their payments soared.

   He compares them with today's adjustable-rate mortgages, in which interest rates increase regularly - and rarely decrease, unlike ARMs of years ago - and leave many homeowners financially strapped.

   Those kinds of programs, along with home equity loans - used to pay off credit cards by some people, who then roll up more debt - put homeowners in a financial bind.

   "I'm one of the old-time conservative guys who don't have a mortgage on my house," said Goldenbogen, 66. "It's paid off. That should be everybody's goal."

   Raised in a town north of Detroit, Goldenbogen attended the Detroit Business Institute and Wayne State University, studying accounting.

   After school, he worked for 17 years as a production manager at a printing and mailing firm. Seeking something different, he joined a cousin and entered residential real estate in 1976, obtaining a sales license in Michigan.

   In 1981, he and his wife, Dora, moved to Colorado Springs, where her parents lived. After working six years for a Better Homes & Garden real estate franchise, Goldenbogen joined Heritage in early 1988. He and his wife have three grown children.

   Goldenbogen is in his second three-year term on the state Real Estate Commission. He served as the panel's chairman from 2004 to 2005.

   Question: What's the Colorado Real Estate Commission's role?

   Answer: The primary role is to protect the public.

   The commission is . . . made up of five people appointed by the governor to three-year terms. The commission consists of one public member and four real estate brokers. They set real estate policy and approve rules and new forms at rulemaking hearings. They make decisions on disciplinary action of licensees who are cited in complaints by the investigation section of the Division of Real Estate.

   Q: What's the difference between the Real Estate Commission and the state Division of Real Estate?

   A: The Division of Real Estate consists of a director hired by the head of the Department of Regulatory Agencies. The director is in charge of approximately 40 employees. They are the investigators, the auditors, the licensing staff and education section. The director also oversees appraisers and mortgage lenders. The division acts as the staff for the commission . .. They carry out the decisions made by the commission.

   Q: One local economist says Colorado Springs' real estate market is at, or near, the end of its slump. What do you think?

   A: There is likely more than one economist that thinks that, and I think they are right. But I would not call it the end of the slump. I would say that we are close to slow growth that will become a good market.

   Q: How does the current housing slump in Colorado Springs compare with the area's last major downturn in the late 1980s?

   A: The short answer is, it's not as bad. We have a much more diversified economy. We have much better mortgage rates. But a slump is never good.

   Q: Home prices in Colorado Springs have fallen, according to the Pikes Peak Association of Realtors and National Association of Realtors. When will they rebound?

   A: Prices will rise as soon as sales begin to increase. Sections of our MLS (multiple listing service area) are still realizing some appreciation in price, while a few others have declined. A much higher percentage of homes that sell are now lower-priced homes, and that brings down the average. The bottom line is that prices are soft.

   Q: How serious is the local foreclosure problem?

   A: It is serious. At the commission, we see many cases of loan fraud that lead to foreclosure. Most involve borrowers that made bad decisions on loans that had payments too high and had too little equity in the home. It will take some time to work through these.

   Q: What do prospective homebuyers and sellers need to know?

   A: Buyers should know that prices are low, and there are good buys. Investors are doing well.

   Buyers should not end up with a payment that will be too hard to meet each month. And if you are going to buy a short sale (generally involving a lender agreeing to accept a lower amount as a payoff than what's owed on a mortgage), it will take an extra month.

   Sellers need to compete in price and in condition. Buyers buy by comparison. If another seller has a better price and/or condition, they will sell first.

CONTACT THE WRITER: 636-0228 or rich.laden@gazette.com. Questions and answers are edited for space and clarity.