The Foreclosure Times

Where do all the Disgraced Mortgage Executives Live?

2009-12-01T20:44:00.001-05:00

In Florida of Course.

But not only do they live in Florida, they live in a special neighborhood just for these types of bank executives. They all live in an upscale subdivision in beautiful, sunny Fort Lauderdale, Florida aptly named Shady Banks, where the homestead laws favor unsavory characters of this sort. Yes, this picture does not lie and many former mortgage executives live there. 21 of them to be exact.

Well, now it is 18. 3 are in Federal prison. As for the others - 7 are under indictment, 5 are under investigation and 6 are on house arrest.

Jason Donn
eRealEstate Social Media Group

Fannie Mae Gets Into The Home Rental Business

2009-11-22T21:57:00.000-05:00

Good News for foreclosure victims. Some homeowners will get an option to rent the home that they just lost. Its possible to stay in your home as a renter. Fannie Mae will give borrowers facing foreclosure an option to rent their homes for a year.

Foreclosed home owners will be able to sign a one year lease, with possible month to month extensions with Fannie Mae. Good for everybody.

Homeowners get a little relief and are able to remain in their homes for a year or more. This will buy them the time they need to regroup. It will also help keep neighborhoods from going missing. Rather than rows of abandoned homes with all the crime and destruction that vandals create.. Neighbors that have not lost their homes will not see more equity loss as squatters and criminals move into vacant homes. The banks are reluctant landlords and they are allowing property to decline.

It will keep supply off the market for at least another year and that is good for all the handlers, Fanne Mae because it can put off the expense of a foreclosure, the banks because less supply will protect equity in homes they are off loading and everyone one because it will help stabilize home prices. I dont think we can have a strong recovery without real estate.

To qualify, homeowners have to live in the home as the primary residence and prove that they can afford the market rent, which will be established by the management company running the program. In many cases, rents will be less than the mortgage because properties that are now worth far less than they originally paid.

The downside is seems to be that homes that might normally have been foreclosed and sold will now remain owned by taxpayers. Homes, according to Dr Shiller have risen faster in the last few months than he has ever seen. Perhaps Fannie will profit a little while doing a good thing for families that must be a little traumatized by it all.

And even if prices don't rebound quickly. Fannie Mae gets rental income, avoids foreclosure expenses gets to helps people.

Thanks for Reading
www.yourpropertypath.com

From Howard Bell's article on eRealEstate

Generation Y: Bullish on U.S. Housing Market

2009-04-14T13:30:00.001-04:00

NEWPORT BEACH, Calif.--(BUSINESS WIRE)--The first major survey into Generation Y’s perception of the U.S. housing crisis reveals a surprisingly strong sense of optimism about the future despite cautious near-term sentiment.
First major national housing survey during current downturn reveals surprising results

While the housing industry is readying for this wave of future homeowners (approximately 80 million strong), there is little data on what this influential buying group actually wants in their next home or how the current downturn has affected their future plans.

According to the national survey conducted by The Concord Group:

50% say they are likely to purchase a home within the next three years
50% say tax credits or lower interest rates would motivate them to purchase a residence sooner
70% believe home prices will be higher or at today’s levels in two years
62% say wealth creation is a very big advantage of real estate ownership
Although economic conditions factor strongly in their decision-making process, survey respondents say that lower home prices and/or a raise at work would be the top motivations for buying a home sooner than planned.

"Generation Y is going to have more impact on the national housing market than any group since the early Baby Boomers. We wanted to better understand their preferences and expectations especially as they will have such an impact on our future,” said Emma Tyaransen, Principal of The Concord Group, a national real estate advisory firm.

The majority of respondents to The Concord Group’s survey say they are:

Willing to pay a premium to live closer to their job
Seeking out a larger space for their next residence
Interested in living near alternative modes of transportation
Likely to put down less than 20% on their next residential purchase
Planning to eventually abandon the cities for a life in the suburbs
“What’s so interesting about this data is that it supports our prediction that transit-oriented development will command a premium in the near future. It also proves that suburban development will continue to play an important role in the housing market that emerges from the downturn,” said Tyaransen.

The Concord Group is a premiere national real estate advisory firm with offices in Newport Beach, CA; San Francisco, CA; Portland, OR and Boston, MA. The Concord Group provides developers, investors and public planning agencies with vital analytical input throughout all phases of real estate financing, development and operations. www.theconcordgroup.com

Jason Donn
AllStar Realty
954-892-6244

A shadow lurks in the housing market

2009-04-08T23:31:00.000-04:00

This is scary. The San Francisco Chronicle reports that lenders are sitting on hundreds of thousands of foreclosed homes that haven’t even been listed yet. If this “shadow inventory” hits the market, we’ll have a new definition of bottomless pit.

From the article:

“We believe there are in the neighborhood of 600,000 properties nationwide that banks have repossessed but not put on the market,” said Rick Sharga, vice president of RealtyTrac, which compiles nationwide statistics on foreclosures. “California probably represents 80,000 of those homes. It could be disastrous if the banks suddenly flooded the market with those distressed properties. You’d have further depreciation and carnage.”

The Chronicle suggests several reasons why banks might not be selling off their foreclosures:

— The “pig in the python”: Digesting all those foreclosures takes awhile. It’s time-consuming to get a home vacant, clean and ready for sale. “The system is overwhelmed by the volume,” Sharga said. “In a normal market, there are 160,000 (foreclosures for sale nationwide) over the course of a year. Right now, there are about 80,000 every month.”

— Accounting sleight-of-hand: Lenders could be deferring sales to put off having to acknowledge the actual extent of their loss. “With banks in the stress they’re in, I don’t think they’re anxious to show losses in assets on their balance sheets,” O’Toole said.

— Slowing the free-fall: Banks might be strategically holding back some foreclosures so prices don’t fall as fast. “They want to be careful about not releasing them too quickly so they don’t drive prices down and hurt the values,” O’Toole said.

And then, there are people scamming the system. Two dozen people have been indicted for “allegedly conducting a wide-ranging mortgage fraud based in San Diego and led by a street gang member.” From Reuters:

The defendants allegedly used straw buyers and inflated appraisals to purchase homes that had sat on the market for extended periods and had been reduced in price.

They submitted offers that exceeded the homes’ asking prices, and had the overage paid to a shell construction company that they claimed would make upgrades or handicap modifications to the properties, prosecutors said.

The defendants instead disbursed the “kickback amount” to members and associates of the enterprise as payments for their participation, the indictment said.

Lenders later foreclosed on the properties, taking “severe financial losses,” after the straw buyers failed to make payments, the indictment said.

Jason Donn - Real Estate Open Networkers

CREDIT REPAIR - Closing more deals with the right Credit Repair Company

2009-03-14T01:36:00.000-04:00

As many of you know Credit Repair Companies are a dime a dozen. Most of the credit repair companies I have come in contact with charge around $500 or some sort of monthly fee. From the feedback I have received, most of them are not very good.

In an effort to find a VERY GOOD credit repair company I started researching them and met with several. 1 or 2 seemed to be very good but charged an arm and a leg. I finally found one that was not only superb but were also reasonable in their pricing. In addition, they have a money back GUARANTEE. I have already referred them to many Real Estate Brokers and Mortgage companies with phenomenal results.

One of the reasons this company is so good is that the President of the company was a former high level executive with Experian.

I would love to share more information on this company with you. If you are interested, please email me at jason.donn@yahoo.com or call me @ 954-892-6244.

Jason Donn

Foreclosure nation

2009-03-08T22:20:00.001-04:00

Posted by Scott Van Voorhis

Looks like the foreclosure epidemic is getting its second wind.

The first wave of foreclosures featured homeowners duped into buying homes they couldn’t afford with goofy, subprime loans. Not to mention a whole lot of small-time investors who bought units in hopes of flipping them for big profits, as well as a just outright fraudsters who used straw buyers to create artificial sales.

But much of that first wave of crazy subprime mortgages gone bad has already crashed into the housing market and economy. Now we are starting to see the second wave, regular homeowners who are losing their jobs and their homes due to the economic downturn, of course triggered in part by the subprime fiasco.

Anyway, that is the way some are reading the latest foreclosure stats, with the number of troubled mortgages rising to 7.8 percent of all home loans, the highest since 1972, Bloomberg reports. Loans actually in foreclosure now amount to 3.3 percent of all mortgages in the country, an all-time high.

The Mortgage Bankers Association is pointing to the deepening recession and job losses as a key factor behind the growing number of bad loans.

Let’s just hope President Obama’s $75 billion lifeline to homeowners in trouble works a bit better than the now long list of previous multibillion-dollar rescue plans rolled out by the federal government and several states, including Massachusetts.

Still, even the president’s ambitious effort won’t help you if you’ve lost your job and have no money at all to pay your mortgage.

Jason Donn

Housing bailout details are released

2009-03-04T22:14:00.001-05:00

The Obama administration today is rolling out details of its plan to help as many as 9 million homeowners restructure their mortgage debts and avoid foreclosure.

Here's a link to the summary of guidelines for the program. There are plenty of additional details posted on the Treasury Department Web site.

To be sure, the effort has evoked mixed feelings.

The majority of folks who played by the old-fashioned rules of saving money and not buying more house than you can afford may feel a twinge of resentment at bailing out a lot of people who grasped beyond their economic reach.

Others contend that many of the folks who are in a foreclosure fix got there through no fault of their own other than an unlucky turn in the economy or falling victim to unscrupulous lenders and their Wall Street enablers.

The truth, as usual, lies somewhere in the middle. And the economy is already so weak that simply letting the housing market collapse could worsen the plight of everyone.

My preference, of course, would be for the feds to buy up enough mortgage-backed securities to drive down mortgage rates and enable even more folks to refinance at new lower fixed rates. The resulting cash flow tsunami cold float the entire economy.

Just a - modestly self-interested - thought.
Submitted by Chris Lester on March 4, 2009 - 12:22pm.
National Economy

Contact Jason Donn

Even Once-Strong Housing Markets Stumble

2009-01-31T20:44:00.002-05:00

by Prashant Gopal
Friday, January 30, 2009

Formerly resilient areas like Charlotte, N.C., and Boston are struggling, according to the latest S&P/Case-Shiller Home Price Index

Home prices in 20 major metro areas nationwide fell 18.2% in November -- a record annual pace -- as the deteriorating economy pulled down previously resilient markets, according to the S&P/Case-Shiller Home Price Index released Jan. 27.

All 20 metro areas in the index saw annual price declines, 14 of which were double-digit drops and 11 of which fell by record rates. Only Denver and Dallas experienced a drop of less than 5%.

The index, which is a three-month moving average ending in November, captures the impact of the financial crisis following Lehman Brothers' collapse in September. The November decline was terrible, but it wasn't much worse than the October drop, said Patrick Newport, U.S. Economist for HIS Global Insight.

"There is so much inventory," Newport said. "Prices are going to continue to drop for quite a while."

Bargains in Worst Markets

But in the worst markets, including Miami, Phoenix, Los Angeles, San Diego, and Las Vegas, the year-over-year price declines -- though deep -- have remained relatively flat since the summer. A wave of foreclosures has depressed prices so much in those markets that investors and other first-time home buyers have moved in to scoop up bargains. According to a survey released on Jan. 26 by the National Association of Realtors, sales of existing single-family homes jumped an unexpected 7% in December from November's seasonally adjusted annual rate.

In Los Angeles, for example, the annual decline has stayed between 25% and 27% since June, according to the index. In Miami, the annual declines since may have remained in the 28%-to-29% range.

"If you buy a home and rent it out in these markets, you can have a positive cash flow just because prices are so low," said Mike Larson, a real estate analyst with Weiss Research in Jupiter, Fla. "Even though the economy is crummy, some investors are willing to nibble when the price is right."

Other resilient markets were feeling the impact of the economic downturn. Year-over-year declines have been accelerating in Minneapolis, Boston, Chicago, Seattle, Atlanta, Washington, Detroit, San Francisco, and Charlotte, N.C.

Charlotte Market Stumbles on Banking Woes

In Atlanta, for example, the year-over-year declines increased steadily each month, from 2.12% in November 2007 to 11.25% in November 2008, according to the 20-city index. In Charlotte, the banking capital of the South, home prices fell 5.33% in November 2008. By comparison, prices jumped 2.9% in November 2007.

The Charlotte housing market was relatively stable until the summer because the area had benefited from a population boom and a strong job market. But buyers grew cautious as problems worsened in the financial sector. Charlotte-based Bank of America plans to eliminate up to 42,500 jobs worldwide as a result of mergers with Countrywide Financial and Merrill Lynch. And Wells Fargo also is expected to cut local jobs as a result of its acquisition of Charlotte-based Wachovia.

"People don't know how many layoffs there will be in Charlotte," said Professor Steven Ott, director of the Center for Real Estate, University of North Carolina at Charlotte. "There's a lot of uncertainty."

Charlotte appraiser Steven Stone said Charlotte's problems have worsened since November. Home sales were off 40% in December compared to the previous December. And prices are now down 15% to 20% for homes above $600,000 and down up to 20% for starter homes, he said.

The financial crisis is the "main reason Charlotte took the last punch compared with other markets," Stone said.

Gopal writes about real estate for BusinessWeek in New York.

Jason Donn

Radical cheap: $1,000 homes

2009-01-08T22:35:00.001-05:00

The real estate market is so awful that buyers are now scooping up homes for as little as $1,000.

There are 18 listings in Flint, Mich., for under $3,000, according to Realtor.com. There are 22 in Indianapolis, 46 in Cleveland and a whopping 709 in Detroit. All of these communities have been hit hard by foreclosures, and most of these homes are being sold by the lenders that repossessed them.

"Foreclosures have turned banks into property management companies," said Heather Fernandez, a spokeswoman for Trulia.com, the real estate Web site. "And it's often cheaper for them to give these homes away rather than try to get market value for them."

In Detroit for instance, Century 21 Villa owner Randy Eissa has a three-bedroom, one-bath bungalow of about 1,000 square feet listed at just $500. It's a nice place with lots of light, but it needs a total rehabilitation inside, which Eissa estimates will cost between $15,000 and $20,000. But that's not bad, considering that the home last sold for $72,000 in late 2007, according to Zillow.com.

With prices this low, lenders aren't looking to make any money on these deals. They just want to get these houses off their books, so they don't have to bear the cost of maintaining them and paying property taxes.

In fact, the $500, $1,000 or $3,000 that a buyer forks over often goes straight to the real estate brokers as a commission. And often the lenders have to kick in extra cash to make it worthwhile for a realtor even take the listings, according to Eissa.

"Usually these homes are bank repossessions that the lenders have already tried to sell on the market, perhaps then put up for auction without success and then re-listed," he said.

Fixer uppers

These houses are almost always small fixer-uppers. Wiring, plumbing and heating systems have to be replaced, walls and ceilings sheet-rocked, plumbing and light fixtures installed and new kitchen cabinets and counters put in. Few come with working appliances.

Often buyers are legally required to rehab these homes to bring them up to code. In Detroit, buyers are required to sign Affidavits of Compliance Responsibility, which obligates them to make repairs outlined in an inspection report. Only after that can a certificate of occupancy will be issued, which makes the house legal to live in.

But even factoring in these costs, they're still bargains.

And as the housing crisis drags on, there are more and more four-figure listings popping up, as lenders try to unload their repossessed properties.

Cleveland is another city with many incredibly inexpensive homes. On Ardenall Avenue, in East Cleveland, McMullen Realty has a listing for a four-bedroom, one-and-a-half bath house for $1,900. It's been vandalized inside, but the outside is in good shape.

It features a deep front porch with Doric columns, double dormer windows and a separate garage. It's an excellent opportunity, according to agent Tonya Stoudamire. The last time it sold was in March of 2008 when it went for $16,677, according to Zillow.

"East Cleveland has a beautiful housing stock," she said. "These houses just need someone to come in and love them a little."

Another property for sale in Birmingham Ala. is priced at $1,900. The one-bedroom, one bathroom home was built in 1923 and has major fire damage, according to its listing broker, Tom Murphy Realty. The listing states that "Rooms are hard to distinguish."

But it's on a nice-sized lot, about 0.38 acre, close to downtown and transportation and has all utilities. Nearby, comparable homes in good condition sell for about $100,000, according to Zillow.

Rehab money

Most of these $1,000 homes can be renovated relatively inexpensively, and buyers can actually get government help to finance these repairs. The U.S. Department of Housing and Urban Development (HUD) has a special loan program for just such purchases.

Its rehabilitation mortgage insurance, available through FHA-approved lenders, was designed to encourage banks to issue a single, long-term loan to buyers that covers both the acquisition and rehabilitation of a property, according to HUD spokesman Brian Sullivan.

He adds that there may also be grant money available from the $4 billion Neighborhood Stabilization Program, which was a part of the massive housing rescue bill passed by Congress in July, to assist buyers with grants for down payments.

Buying homes like these is certainly a leap of faith; they're generally not in the best of neighborhoods and they're often surrounded by many other vacant and deteriorating homes. Still, some of these neighborhoods may turn around and provide residents with good, dirt-cheap housing.

"It's a sad time," said Stoudamire. "But it's also a time of opportunity, especially for low and moderate income people."

Contact Jason Donn

Closings better than expected for new Miami high-rise condos

2008-11-28T17:32:00.000-05:00

The number of closings at new downtown Miami condos has been better than many expected, a survey showed, but a big test still looms for the revitalizing urban center.

Miami's latest building boom is creating 22,000 condominium units in the city's urban core, more than double the number built in the last 40 years. But a long-standing question remains: How long will it take for all the condos to actually sell?

The answer: 70 percent have found a buyer, according to a new study by condovultures.com, a real estate consultancy. So far, 17,299 condos have been delivered with 12,169 closed at an average price of $405,966 per unit, according to the condovultures.com report. It amounts to a sales total of nearly $5 billion.

By year's end, 3,999 units are set to hit the market. Another 1,439 after that.

The sales have been better than many observers expected for a downtown area held out by some as ground zero for speculation and excess. And it underlines Miami's ongoing urban revitalization, fueled by people, builders and investors returning to the city center.

But it also comes with a big caveat: Nearly a quarter of new downtown condos produced by the boom are just being delivered and starting closings now, including many of the largest projects.

''South Florida developers have to be excited by the fact that more than two out of three downtown condo units have closed successfully,'' said Peter Zalewski, principal at condovultures.com in Bal Harbour. ``But the giants are coming.''

The massive projects include the three-tower, 1,800-unit Icon Brickell pinched between Biscayne Bay and Brickell Avenue, which starts closings this month. The 342-unit Epic, rising along the Miami River, is poised to start closings. So too, 530-unit Mint at Riverfront, 459-unit Infinity at Brickell and 346-unit Paramount Bay.

''We are bullish,'' said Miroslav Mladenovic, vice president of Cabi Development, which started closings Thursday on its 848-unit Everglades on the Bay project along Biscayne Boulevard. ``Comparable projects to ours have fared well, we don't see why we can't fare the same.''

The new batch of condos are hitting the market as credit remains tight, consumers are increasingly cash-strapped and existing home prices continue to fall due to an outsized inventory of unsold homes throughout South Florida. Sales, however, have picked up in recent months.

Zalewski's report, culled from a review of property records ending Sept. 30, covers the greater downtown area between the Julia Tuttle and Rickenbacker causeways and Interstate 95 to Biscayne Bay.

The swath of land -- which includes the Brickell, central business district and Midtown neighborhoods -- has seen more development than any corner in Florida. The area is closely watched due to its significant construction and its implications for the broader housing market, but also because policy makers and many builders view redevelopment in the urban core as a key element to the region's overall economic success.

Meanwhile, the overall downtown closings have been solid so far, Zalewski said.

''We're like in the sixth or seventh inning of this,'' said the Bal Harbour analyst. ``We had a good starting pitcher, and some decent middle relievers, now the question is if it's going to be a blown save.''

BY MATTHEW HAGGMAN

For bailout to work, housing market needs to mend

2008-10-05T08:15:00.002-04:00

Washington's financial bailout plan is now law. So the credit spigot will start flowing again, banks will resume lending, and an economic recovery can begin, right?

Wrong. Experts say the most important thing that needs to happen before the $700 billion bailout even has a chance of working: Home prices must stop falling. That would send a signal to banks that the worst has passed and it's safe to start doling out money again.

The problem is the lending freeze has made getting a mortgage loan tough for everyone except those with sterling credit. That means it will take several months or longer to pare down the glut of houses built when times were good — and those that have come on the market because of soaring foreclosures — before home prices start appreciating.

Housing is a critical component to the U.S. economy and by extension the availability of credit. Roughly one in eight U.S. jobs depends on housing directly or indirectly — from construction workers to bank loan officers to big brokers on Wall Street. A turnaround in housing prices would boost confidence in the wider economy and, experts hope, goad banks into lending again.

"Housing traditionally does lead the economy through a recovery. I think it's going to be critical for a sustained recovery in this cycle, too," said Gary Thayer, senior economist at Wachovia Securities.

In the meantime, people like Alicia Elliott are adjusting to a new American reality: Life without credit.

The 21-year old Morgantown, W. Va., resident just bought a used mobile home, borrowing $4,000 from friends and family because she couldn't get a bank loan.

"I tried to. Couldn't do it. It's just hard to get a loan," said Elliott, who works as a cashier at a Lowe's Cos. store.

She used to get bombarded with offers for credit cards. Now she can't even get one. "I get denied one after another after another. It doesn't matter if you have a co-signer or not," she said.

Trey Simmons, a 31-year-old barber at a Dallas hair salon, said he worries tighter lending standard will squash his goal of buying a home next year.

"Credit is a privilege everybody can't get," Simmons said. "I had credit at a young age and messed up."

He now operates on a strictly cash basis. "If I don't have it," he said, referring to cash, "I don't spend it."

The dilemma boils down to a matter of trust.

"Credit, by definition, means trust and faith, and for many reasons trust and faith have been damaged," said Sung Won Sohn, an economics professor at California State University, Channel Islands.

Sohn said the near certainty of a recession makes it too risky for the thousands of small and medium-sized banks across the country to lend to people like Elliot.

"Banks know the economy is getting worse, so ... they will keep being cautious," said Sohn, a former banking executive.

Still, the government hopes that by scooping up billions of dollars in bad mortgage debt and other toxic assets, banks eventually can clean up their shaky balance sheets, crack open the vaults and send money washing through the system again.

The rescue plan also raises the federally insured deposit limit from $100,000 to $250,000, a move that could boost banks' reserves and further grease the lending wheels.

Rep. Barney Frank, D-Mass., the Financial Services Committee chairman and a key negotiator over the past weeks, said the measure was just the beginning of a much larger task Congress will tackle next year: overhauling housing policy and financial regulation in a legislative effort comparable to the New Deal.

In the meantime, the Treasury Department is moving swiftly to get the plan started. Treasury Secretary Henry Paulson said Friday he did not wait for final approval of the measure to begin preparation. He has been lining up outside advisers as his staff works out details on a multitude of complex issues.

But several hurdles could trip up the plan. For starters, even when the Treasury starts buying bad assets, some banks may hoard the cash they receive in return until they see how the plan pans out. That has the potential to make the lending logjam worse, said Vincent R. Reinhart, former director of the Federal Reserve's monetary affairs division.

"They may sit on the sidelines and wait to see (the bailout) get some traction. The problem is if everybody sits on the sidelines, nobody gets in the game. It's a risk," he said.

It also creates a vicious cycle: No trust means no lending; tight credit means it's harder to buy a home; the more difficult it is to buy or sell a home, the further home prices will fall; and the further prices drop, the more foreclosures there will be.

U.S. home prices — down 20 percent from their peak in July 2006 — still have further to fall, and must hit bottom before demand picks up. The long-awaited bottom in prices could be a year or more away.

But Jim Gillespie, chief executive of Coldwell Banker Real Estate, said he hopes that lower prices, combined with the government's actions will jump-start stagnant demand. The federal bailout plan, he said, "will give people reassurance that mortgage money is available."

Jobs are another big concern. The stranglehold on credit has choked companies big and small that depend on regular inflows of borrowed money to pay employees and stay afloat.

The Labor Department said Friday that employers cut 159,000 jobs in September, the fastest pace of losses in more than five years. Experts say that number will grow as the effects of the credit gridlock course through the economy in coming days and weeks.

The nation's unemployment rate is now 6.1 percent, up from 4.7 percent a year ago. Over the last year, the number of unemployed people has risen by 2.2 million to 9.5 million.

The unemployment rate could rise to as high as 7.5 percent by late 2009, economists predict. If that happens, it would mark the highest since after the 1990-91 recession.

Boosting employment is critical to kick-starting lending because "if jobs are growing, then incomes are a growing, and if incomes are growing then people are consuming," Reinhart said.

Consumers and businesses have retrenched so much that some analysts fear the economy stalled or shrank in the third quarter that ended last week. The Labor Department report Friday showed wage growth for workers is slowing, meaning they'll be more hard-pressed to spend, especially for something as expensive as a home.

Many economists predict the economy will contract in the final quarter of 2008 and the first quarter of next year. That would meet the classic definition of a recession — two consecutive quarters of a shrinking economy.

One bright spot: optimism hasn't been totally squashed yet.

Morgan Cavanaugh, proprietor of Moriarty's Pub in downtown Cleveland, has been trying to sell another bar he owns to ease his workload, but the prospective buyer hasn't been able to raise the money.

Now that the bailout legislation has the green light, he's hopeful he'll get a deal done.

"It passed. Let's work something out," Cavanaugh told the man over a cell phone Friday just after the House approved the plan.

He flipped the phone shut and smiled from behind the weathered mahogany bar of his 75-year-old Irish pub.

"He's going to put the loan request in again. It's looking up," Cavanaugh said.

By STEVENSON JACOBS

South Florida Houses Take Longer Than Anywhere Else in the Country to Sell

2008-08-08T12:39:00.000-04:00

Houses in Palm Beach, Broward and Miami-Dade counties take 156 days to sell on average, longer than anywhere else in the country.

That's according to a report released this week on July sales by two national real estate firms.

Inundated with homes for sale, the tri-county region has topped the survey results since Altos Research and Real IQ started it last September.

South Florida's days-on-market barometer has increased to 154 in June from 152 in May, even though the number of houses for sale has declined slightly over the same period. There were 48,362 for sale in July, down from 48,662 in June and 48,949 in May.

Austin, Texas, was the easiest place to sell, at 78 days. Sellers in greater San Francisco needed 79 days. The report does not measure sales of condominiums.

Buy and Bail

2008-06-14T00:15:00.001-04:00

A NEW TWIST ON WALKING AWAY FROM A MORTGAGE

In the hardest hit housing markets, some borrowers with a mortgage worth much more than their home are buying a second home before walking away from their primary residence - a strategy known as Buy and Bail.

How It Works: Borrowers can qualify for a second loan by proposing to rent out their existing residence to cover the second mortgage payments. Once they are approved for a loan, they walk away from the existing home instead of renting it out.

Consequences: Homeowners with a foreclosure will take a big hit to their credit and won't be able to purchase a home for five years under new Fannie Mae guidelines. Also, lenders might sue for personal assets and for fraud.

Lenders Respond: Fannie Mae says that later this month, it will release tougher loan qualification guidelines designed to ensure that individuals who plan to rent their first home after buying a second home show proof that they can make both payments.

Visit the Real Estate Open Networkers

Foreclosure Capital Hit With Wildfires

2008-06-10T18:26:00.003-04:00

Stockton, California has the highest foreclosure rates per capita of any city in the United States. As if that weren't enough, four wildfires destroyed 7 houses, 20 condominium units and a small apartment building today.

Two firefighters suffered minor injuries battling the blaze. The number of people displaced is unknown at this time.

Real Estate Open Networkers

May Foreclosure Report for Broward County

2008-06-06T12:41:00.003-04:00

In May of 2007 there were 1299 foreclosure actions filed. This May, the court reported that 3090 foreclosure actions filed.

Miami Dade county to the south and Palm Beach county to the north were reporting similar numbers.

Saint Lucie County is being hit harder than most counties in the state.

With all these foreclosures, the real estate market is being flooded with inventory that is driving down real estate prices by the week. According to one Realtor, "50 to 75 per cent of the houses I show are short sales or foreclosures." "These type of properties are in low end housing developments as well as million dollar neighborhoods as well," he added.

Real Estate Open Networkers

Foreclosures Filings Jump in 2008

2008-06-01T00:01:00.002-04:00

Real Estate filings across the nation have jump substantially in 2008.

Fort Lauderdale and Broward County Expecting Continued Slump in Prices

2008-05-31T09:38:00.000-04:00

According to the Sun Sentinel, the value of Broward County property dropped by more than 5 percent in the past year, one of the largest dips ever recorded and a dramatic reversal after years of double-digit gains, according to a county estimate used to set property taxes.

Preliminary figures released Thursday by Property Appraiser Lori Parrish peg the total tax value of all property in Broward at $166 billion, down about $10 billion from a year ago. The number includes the $50,000 tax exemption on residential property mandated by Amendment One, which voters approved earlier this year.

Parrish warned residents — and municipal number-crunchers — to brace for a far greater drop next year, when foreclosures and reduced real estate prices will take full effect.

Setting appraisal rates was more challenging this year because so few houses are selling, Parrish said. The assessments are done on the neighborhood level, based on home sales the prior year.

Often, entire neighborhoods had no sales, making comparisons difficult. If a neighborhood had none, Parrish's office found an analogous neighborhood, based on historical statistics, and used sales information there, she said.

Based on current figures, Parrish expects the downward trend to continue for the next 18 months. The good news is prices are starting to reach more reasonable levels, she said.

"The sales were so overinflated because of the feeding frenzy of 2005, now we're seeing things start to shake out," Parrish said. "Prices are getting back to about where they should be. Buyers are out there, they just don't want to jump in until they're sure prices have stopped dropping."

Source: John Holland and Juan Ortega | South Florida Sun-Sentinel

Fort Lauderdale Foreclosures Triple in April

2008-05-24T12:46:00.003-04:00

Florida has been hit harder than most states in the country with foreclosures. Broward county is one of the leading counties in Florida in this area.

The foreclosures in Broward tripled this April from the same time last year. In April of 2007 there were 1385 foreclosure actions filed. This April, the court reported that 4124 foreclosure actions filed.

Miami Dade county to the south and Palm Beach county to the north were reporting similar increases.

With all these foreclosures, the real estate market is being flooded with inventory that is driving down real estate prices by the week. According to one Realtor, "50 to 75 per cent of the houses I show are short sales or foreclosures." "These type of properties are in low end housing developments as well as million dollar neighborhoods as well," he added.

There doesn't seem to be any end in sight with foreclosures in South Florida. We have another 18-36 months with these kind of foreclosure numbers ahead of us.

Soaring Foreclosure Numbers Mean More Prey for Vulture Funds

2008-05-22T12:28:00.001-04:00

Banks Desperate to Unload Distressed Properties Turn to Private Equity Firms

By NED RANDOLPH
San Diego Business Journal Staff

As more homes fall into foreclosure, banks are packaging pools of foreclosed homes and wholesaling them to private equity “vulture funds” for pennies on the dollar.

While the phrase vulture fund conjures up cold-blooded opportunists, the funds are buying assets that banks are desperately trying to move off their books to free up capital.

Basically, anyone in the market with $3 million to $100 million or more to buy a block of REO, or real estate owned, properties could be called a vulture fund.

National investors such as The Blackstone Group and Lehman Bros. Inc. have reportedly purchased billions of dollars of foreclosed properties through private equity funds.

They haven’t, however, left much of a paper trail for local players who are sorting through the chatter to find legitimate deals, says Lorne Polger, managing partner of San Diego-based Pathfinder Partners LLC.

“We’ve been chasing it for six months. There’s all kinds of fluff on the Internet, but you find that it’s brokers tied to brokers,” said Polger, who says he has access to $400 million in institutional money to buy pools of REO properties.

“Unfortunately, we’ve got the money ready to go, but so far it’s a fruitless endeavor,” he said.

Plenty Of Distressed Properties

In May, foreclosed homes in San Diego County owned by lenders reached 5,463; an additional 3,413 foreclosed homes were scheduled for auction; and 12,320 homes were in default and headed to foreclosure, says Brian Yui, founder of HouseRebate.com in San Diego.

San Diego County auction sales increased by 50 percent from March to April. Statewide, auction sales of foreclosed homes averaged 1,000 a day in April — four times the rate of April 2007, according to Northern California-based ForeclosureRadar.com.

Banks amassing foreclosed properties need help moving them off their books. That’s where vulture funds assist, says Mark Goldman, a lecturer at San Diego State University and residential mortgage broker with San Diego-based Windsor Capital Mortgage Corp.

“(They) have to get that liquidity, which has been a problem in this market. So, many lenders are doing fire sales on their portfolios of mortgages,” said Goldman, whose firm is not considered a vulture fund but has funded more than $20 billion in loans, according to its Web site.

Hedge funds buying up “distressed credit” such as default mortgages attracted $8 billion in the first quarter of 2008, according to Chicago-based Hedge Fund Research Inc.
Local investor Michael Zau has been looking at packages of foreclosed homes in San Diego for months, but says the offers are overpriced.

“There was a firm in San Diego that sold a bulk package for $3 million,” he said. “I saw the package; I was looking at buying it, but I thought it was too expensive.”
The firm was selling the assets for 75 cents on the dollar, Zau says.

“There’s a pretty good chance that if you can buy in bulk, you’ll be able to get a rate of return that is desirable, but you’ve got to find the right property,” he said. “If you’re buying in bulk, it’s harder to do.”

Many properties are bought sight unseen, Zau says.

Buying In Bulk

Broker Michael Byrd with Windsor Capital Mortgage says that he’s seen a lot of pitches for bulk home sales but has yet to see offers that make sense.

“In the six months I was looking, not only was I not able to get a deal done, but I didn’t know anyone else that got a deal done,” said Byrd, who was researching packages between $5 million and $40 million for a potential buyer.

“It’s definitively seen as a big opportunity and attracting a lot of interest and capital,” said Sean O’Toole, founder of ForeclosureRadar.com in the Bay Area.

“When it comes to buying houses, cleaning them up and getting them resold or rented, it’s a lot of work,” O’Toole said. “My guess is we’ll start reading about a lot of failures as well as successes.”

Real Estate Open Networkers

Florida still racking up foreclosures in April

2008-05-22T12:12:00.001-04:00

Foreclosures are back on the upswing in Florida in month-over-month data, but there is good news. The Sunshine State has been passed by Arizona in the rate of foreclosures, and now has the fourth-highest rate in the country, according to a new report from RealtyTrac.
The Irvine, Calif.-based company said Florida had 35,264 properties in some type of foreclosure in April, up 16.6 percent from March and more than 146 percent from a year ago. That is the second-highest number of total foreclosures in the nation, behind only California, and represents one home in foreclosure for every 242 homes.
Nationwide, foreclosures were up 4 percent from the previous month and 65 percent from April 2007, affecting 243,000 properties. That is the highest number of foreclosures RealtyTrac has counted since it started the report in January 2005.
"Although only about 2 percent of households nationwide are in foreclosure, these properties contribute to already bloated inventories of homes for sale and put downward pressure on home values," RealtyTrac Chief Executive Officer James J. Saccacio said in a release. "Areas of California, Florida, Nevada and Arizona continue to be particularly hard hit. Property taxes are eroding, putting municipal budgets in peril."
Vallejo, Calif., for example, had to file for bankruptcy after reporting the sixth-highest foreclosure rate in the nation, Saccacio said.
Florida and California continue to account for nine of the top 10 metropolitan areas with high foreclosure rates, with Fort Lauderdale at No. 10. Other Florida metro areas listed are Cape Coral-Fort Myers, at No. 5, and Port St. Lucie-Fort Pierce, at No. 9.
Numbers were a bit different from Foreclosures.com, which reported 44,825 households in foreclosure in April, up 2.4 percent over March, and up 22 percent since the beginning of the year. For the first four months of 2008, Florida had 162,316 filings, the most in the nation.
South Florida Business Journal

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