The Housing Bubble

The Press Enterprise reports from California. “Inland home foreclosures this year have increased more than ninefold over the same period a year ago, driven by flat appreciation and sagging home sales. Ana Ibarra and her husband, Guillermo Macias, adore their five-bedroom house in a new tract of executive-style homes in north Fontana.”

“But Ibarra said the couple doesn’t have enough money to furnish the house. Ibarra said she and Macias, a 30-year-old commercial plumber, together earn about $5,400 a month after taxes. Since moving into their new house in December, they have spent $4,000 a month of that on the house’s interest-only mortgage, property taxes and homeowner insurance.”

“They have wiped out their savings. What’s more, they are responsible for a $2,000-a-month mortgage payment on another house they own in south Fontana. They rent that three-bedroom house.”

“Ibarra said after they signed an agreement with Lennar Homes for the house in north Fontana and made a deposit, they learned their first house had not appreciated enough to help them pay for a second one. She said they tried to back out of the purchase but were reminded they had signed a contract.”

“‘We are really not buying. We are just paying interest and we are in debt for almost $1 million,’ Ibarra said.”

“Ibarra said while she and her husband are responsible for their predicament, so is Lennar’s lender. ‘It was their fault. They just wanted to sell. They should not have approved us,’ Ibarra said. ‘We just jumped at the opportunity because we thought it was going to be easy, as easy as getting the loan.’”

The Napa Valley Register. “Are the 88 notices of foreclosure in the first quarter of this year in Napa, nearly twice as many as a year ago. John Mourraille, a mortgage broker/owner in St. Helena, said any foreclosure in any neighborhood affects values of surrounding homes.”

“Mourraille predicts things will get worse before getting better. ‘In the past five years everything was going up in value in the 20 percent plus range, nothing like it in real estate history and now that’s over. We have to pay the price for the great gains,’ Mourraille said.”

“‘The next seven years will be a time of correction. We are just beginning the cycle. Real estate pretty much runs in a seven-year cycle,’ Mourraille said. ‘And the correction will be across the board, including the multi-million dollar estates.’”

The Record Spotlight. “The number of homes in some stage of foreclosure in Shasta County in the first quarter of 2007 more than doubled from a year ago.”

“‘The subprime market has all but gone away. We are in such an uproar right now,’ north state mortgage loan officer Sue Gabrielson in Redding said. ‘I don’t know what they (subprime lenders) thought was going to happen.’”

“The subprime meltdown means 100 percent financing is likely to be available only to borrowers who have excellent credit, Gabrielson said. ‘Depending on the severity of the rate of loan defaults, it may have a significant impact on our local housing valuations,’ Gabrielson said.”

The San Francisco Chronicle. “Business is brisk for lawyer Pamela Simmons. The number of calls from desperate homeowners has reached about 100 a month, she said, as the rapid appreciation that fueled the housing market in the early part of the decade has slowed to a crawl and the adjustable interest rates on loans taken out in those heady times are starting to rise.”

“‘I used to do one of these cases every three months,’ Simmons said. ‘Now, it’s all I do.’”

“Melissa Pacheco and her husband, Carlos, wanted to own their own home, so much so that they were willing to take a subprime loan at about 9 percent interest and make $6,000-per-month payments to buy a three-bedroom house in Soquel for $475,000 in 2004. They put no money down.”

“The Pachecos decided to refinance. The appraisal for the new loan put the house’s worth at $760,000, nearly $300,000 more than the Pachecos paid a year earlier. They also wanted to take some cash out of the house.”

“By the time the Pachecos’ statement arrived last month, the loan balance was $629,406.84. The interest rate, which began rising just 38 days after the loan was issued, had climbed to 8.375 percent.”

The Union Tribune. “According to the FBI, 80 percent of all reported fraud losses involve collaboration by industry insiders, such as brokers, appraisers and agents. The lender typically is a victim.”

“‘A year and two years ago we had unnaturally low foreclosure activity because we had unnaturally high appreciation,’ researcher John Karevoll of DataQuick said. ‘As the tide goes out now, we are seeing a lot of nastiness that was below the surface.’”

“‘Last year we saw a lot of it,’ said David Cabot, president of the San Diego Association of Realtors, who oversees more than 100 Prudential real estate offices in Southern California. ‘There were a dozen times when I was getting calls from managers or agents in my company. You know on the surface that (the loan) doesn’t seem legitimate.’”

“Cabot said his employees were reporting offers where ‘the buyer would get a hunk of money directly from the seller after the close of escrow to inflate the purchase price, then get an appraiser to appraise at the higher amount. None of it included informing the lender.’”

“C. Robert Simpson, an attorney who specializes in recovering mortgage fraud loss, said underwriting standards need to be much tighter. ‘We, as an industry, have ceased telling people, ‘You are not qualified.’ he said. ‘We will give loans to anyone for any purpose.’”

The Daily Bulletin. “What’s really happening in the housing market, particularly in the Inland Empire? Is it a good time to buy? A good time to sell? A good time to wait, or just a good time to weep?”

“Bruce Norris, a veteran observer of the scene, points out that every down cycle in California’s real estate market started when affordability dipped to 17 percent. It happened in 1980 and it happened again in 1989, but Norris thinks the problem is even greater this time.”

“‘It’s bad enough that we’ve reached the 17percent affordability rate,’ he writes. ‘The real problem is how we got there this time.’”

“In 1980, affordability dipped to where it did because mortgage rates climbed to 16 percent. In 1989, mortgages cost 10 percent. This time, interest rates were low enough that people were spending nine times their annual income on the price of a house.”

“‘Unsold inventory has grown by more than 100 percent in one year,’ Norris writes. ‘Thus far, there has been limited price damage because almost all of the properties for sale have been privately owned.’”

“‘In 2007, that will change. The new inventory for sale will consist of lender-owned properties, builder auctions and short sales. All of these sellers will be selling to a less-motivated, smaller group of less-able-to-qualify buyers,’ Norris said.”

“Why is it that the market can feel like it’s dropping, with homes for sale for longer stretches and the number of sold homes down significantly, yet published prices either remain the same or continue climbing?”

“John Husing, a regional economist based in Redlands, says it’s possible home prices, at least in part of the market, might actually be declining.”

“‘We use the median to determine housing prices,’ Husing said. ‘There’s a feeling that averaging prices would distort things because of the high end of the market.’”

“‘What we have now is a market where the bottom half of the market is strong and the top half weaker,’ Husing said. ‘So the way we measure housing prices might actually be hiding a decline in the top end of the market.’”

The Bend Bulletin reports from Oregon. “A Portland developer proposed in January a nearly 300-unit, four-story hotel-condominium project. for Bend-based Brooks Resources Corp., which is developing the project. Brooks has seen a slowdown in Prineville’s market in the last year, said Randy Jones, project manager.”

“‘We’ve looked at the last year and what’s been selling and the price point of what’s available,’ he said. ‘A lot hasn’t sold because it’s been so bloody expensive.’”

“Local real estate broker Mark Southworth called 2007 a ‘regrouping year’ for investors who have lost the incentive of lower-priced properties in Prineville compared with other parts of Central Oregon.”

“‘It’s been a feeding frenzy the last two years,’ Southworth said. ‘Investors were getting 35 to 80 percent return on their money in a six-month period. Speculative buying was a driving force.’”

“‘A lot of people are waiting to see the impact of Brooks because they have the capability of going really low (on price),’ he said. ‘It’s hard to say what it’s going to do to the housing market because right now people aren’t buying.’”

“In Crook County, median housing prices rose to $198,000 in the first quarter of 2007, up 1.3 percent over the median price for all of last year. Meanwhile, residential housing has slowed year-to-date from 95 homes sold in 2006 to 40 homes sold in Prineville through Wednesday, according to Southworth.”

The Register Guard. “The housing market continues to be a bit of a mixed bag in Lane County. The supply of homes on the market continues to grow, with more homes being listed and sales lagging.”

“In March, 686 new Lane County listings appeared on the Regional Multiple Listing Service’s rolls, up from 599 for the same month a year ago. That brings to just under 1,800 the number of houses that have come on the market so far this year, an increase of 15 percent over the first quarter of 2006.”

“Deals closed on 347 home sales in March, down 9 percent from the same period a year ago. An additional 411 sales agreements were signed in March, also down from the year before, when 471 homes went under contract. That means buyers still enjoy more of an advantage in the market than they have for the past two or three years.”

“On the coast, the Florence area reports a total of 375 active residential listings with RMLS. The area added 67 new listings in March, with 28 pending sales and 30 closed sales during that period.”

The Tacoma Daily Index. “Though downtown Tacoma’s residential construction boom shows promise, it fails to target young and first-time homeowners, according to a study.” “The 120-page study notes that home buyers between 25- and 34-years-old represent a huge market segment, yet find it difficult to purchase homes that meet their taste and affordability standards.”

“A high level of concern was reserved for the St. Helens neighborhood, where seven new developments with 596 apartments and condominiums are slated for 2007 and beyond. Deanna Sihon, principal and director of research and consulting at New Home Trends, said homes would need to be ‘carefully released so as not to create an oversupply.’”

“The study also seeks to explain the demand for downtown housing development, and points to a lack of affordable, market-rate housing in King County. ‘There was a shift 10 years ago due to affordability,’ explained Sihon. ‘People can no longer afford to live in King County.’”

“She pointed to statistics compiled in February that show the average list price for a detached home in King County equals $728,972; in Pierce County, the average list price is $415,047. Similarly, the average list price a condominium and townhome in King County is $513,438; in Pierce County, that figure is $372,900.”

Readers suggested a topic on bail-out details. “Perhaps we can talk a bit about the practicalities of a bailout. I work for a big company involved in the MBS business. How can current subprime loans be ‘restructured’ in any way when they are owned by MBS investors who purchased these securities assuming the loans will perform as originated?”

“In other words, they paid for loans with certain payment characteristics, any restructuring will certainly make them less valuable as the interest rates will be less than planned.”

“Almost all mortgage loans are part of an MBS transaction. The originator certainly has no right to restructure them (I’m thinking of WaMu’s recently announced $2BN plan).”

“If there is some kind of forced restructuring the MBS market will totally collapse. I work closely with most of the MBS underwriters on Wall Street, there are a lot of very unhappy people here right now. We can enjoy their discomfort (and frankly, I often do) but the MBS holders will be the losers in the end, and that is all of us one way or another.”

A reply, “I’m not sure this could work at all, but it could work like this. All the investors in all the tranches with their varying interests (good luck) would have to agree to swap some of the their bonds (matching the non-performing part of the portfolio) for new ones in one of two pools, the workout pool and the foreclosure pool.”

“To be eligible for a workout, a FB would have to be a legitimate purchaser who could have afforded their home at pre-bubble prices, but overpaid due to the frenzy, or someone who bought earlier but fell behind to due temporary hardship. They would get a 30 year fixed self-amortizing loan at current interest rates, but with the principal written down so the payment would be more than is traditional but not oppressive (say 38% not 30%).”

“And they would have to agree not to take on any more debts. Those investors who choose the workout option would take the loss on the write down up front.”

“Those investors who choose the foreclosure option would get the results of foreclosure proceeds.”

“Here is the problem. Once you have a workout options, what about the family eating Ramen noodles every night and paying 50% of their income to meet the higher payment? Once a workout at 38% is available, and if they were underwater, they would have every reason to default unless they had extensive other assets.”

“And it is possible that if not every investor chooses the ‘workout’ option the borrowers in each issue who would be eligible for a workout could be limited. In that case, it would be first come first serve, and everyone would have reason to rush into default before the only option left is foreclosure.”

“So the only think I can think of that works only works if a minority (the sharpest operators and most selfish people, most likely) figure out what to do.”

One saw immediate problems, “Any bail out will kill credibility for decades. If the governing ‘elite’ wants to try this option, they will have to take that as a consequence.”

One said, “Interesting, but substituting loans in the existing MBS pools would not work, it would fundamentally change the cashflow structure of the transaction.”

“Your idea does make me think though that it might work for CDO’s that have MBS in them since they are not designed to be static pools. Still, even in that case the MBS themselves would need to be reconstituted so you are back to square one. I can’t think of a single incidence in the past 15 years (as long as I’ve been in this business) where investors have got together to agree an MBS pool restructuring, just too cumbersome of an exercise.”

“I’m really interested to see how this bailout idea can possibly work given the existence of the MBS business. However, one thing I am sure about, it’s going to be a great time to be a securities lawyer!!”

Another saw irony, “It would be an amazing validation of the Law of Unintended Consequences if the MBS business by its very structure prevented bailout ideas from working.”

Another points to a bagholder, “The i-banks and anyone who originated these will have to come up with any shortfall from their pockets.”

A reply, “Like New Century? I don’t think they have the capital or the profits once this gets rolling. And the only way it doesn’t roll all the way down the hill is having a large share of Americans live in near poverty to keep paying their debts, which any workout would work against. They’d run like lemmings into default just as they ran like lemmings into debt peonage, if that’s what the people down the street are doing and what shows up on Oprah.”

The original poster said, “No, the originators or IB’s have no contractual obligation to make up any shortfall to MBS holders so why would they. These entities are taken out by the MBS trust, they no longer own the loans - a true sale to the trust has taken place.”

And one saw a governmental role, “I am guessing the subprime bailout will come in the form of some kind of taxpayer-provided insurance. This is a good way to get taxpayers to assume the costs, as few taxpayers understand that loading up the balance sheet of explicitly-guaranteed government agencies like the FHA or implicitly-guaranteed (too-big-to-fail) government sponsored enterprises like Fannie Mae or Freddie Mac with toxic mortgage debt is a form of taxation.”

“However, one would have to pay premiums to a private insurer to assume the risk. In lieue of premiums, the cost assumes the form of a time bomb that will go off at some indeterminate point in the future when one of these debt-burdened agencies blows up and taxpayers are billed for the cleanup costs.”

The San Francisco Chronicle. “Dumb: Buying a house you can’t afford with no down payment and a loan whose monthly payments will explode in a few years. Dumber: Lending money to people who can’t afford a traditional mortgage, especially when they have lousy credit ratings and don’t substantiate their income.”

“Dumbest: Bailing out dumb and dumber, especially with taxpayer money.”

“Keeping people in homes they had no business buying is wrong in many ways. For starters, there’s no easy way to bail out homeowners without bailing out the lenders and investors who were largely responsible for the subprime mess.”

“Many experts say we are in the early innings of the foreclosure cycle. If we bail out people today, will we be willing and able to help people who fail later in the game?”

“Propping up borrowers who took a gamble on a house and lost reinforces gambling. ‘If people think they can take out a bad mortgage and they get bailed out, that’s called moral hazard in social insurance and it’s a very bad thing,’ says Thomas Davidoff, an assistant professor in the Haas Real Estate Group at UC Berkeley.”

“For California, ‘we have proposed a $1 billion loss mitigation fund,’ says Bob Gnaizda, general counsel for an advocacy group. And who should finance this fund? ‘It’s up to a combination of the investment bankers and the banking industry and the state government if necessary to provide the funding or the guarantees of the funding,’ Gnaizda says.”

“‘We’ve asked (state Treasurer) Bill Lockyer to use his persuasive power to convince the six to eight largest investment banks, all of (which) do business with the state, that they have a stake in California’s growth and economy. Since they helped finance the subprime fiasco,’ he says, they ought to help solve it.”

“What governments can do is prevent another subprime disaster by enforcing good underwriting guidelines and requiring clear, plain-English disclosures of the risks of exotic mortgages. What’s more, society could stop demonizing renters.”

“With or without bailouts, the subprime crisis is going to hurt many people. But it could have a silver lining. If it brings down home prices, more families could afford homes with realistic mortgages. And if it reminds everyone that buying a home is a risky proposition, so much the better.”

The Times Herald Record reports from New York. “When it comes to housing, the hottest town in Orange County last year was ‘none of the above.’ The highest median price last year was boasted by Woodbury ($419,250), but that was down 4.5 percent from 2005, and the number of sales in Woodbury plunged more than 25 percent, according to the Greater Hudson Valley MLS. Around the county, results were similarly tepid.”

“The number of homes sold fell last year in 30 of the 37 Orange County municipalities covered by the GHVMLS. The median sale price slipped in 15 of 37. Some of Orange’s steepest price declines came in previously red-hot markets like the towns of Hamptonburgh and Goshen, two of the region’s priciest locales in recent years. Each town’s median price fell more than $40,000 last year, although it’s hard to pinpoint why.”

“Sunset Ridge debuted a couple of years ago with prices starting a hundred bucks shy of $700,000. When Roz Novick took over the project a year ago, one of the first things she did was drop the starting price to $579,000. She’s sold three of the homes since.”

“‘It was just a matter of offering a wider variety of prices,’ said Novick. ‘The market is the market. If you’re positioned right, you’re going to sell.’”

The Press Herald from Maine. “Mainers are finding it harder to keep their homes, as many people become squeezed between loans they cannot repay and lenders who are offering fewer financing options.”

“‘You have loans happen that should not happen,’ said Will Lund, who heads Maine’s Office of Consumer Credit Regulation. ‘There’s no doubt that we will see an increase in foreclosures.’”

“Donna Gillette said she started looking for a house in early 2006 and quickly found one that she liked in Sanford. The price was $165,000. The loan officer said she could get an adjustable-rate mortgage, with no money down and a starting interest rate of 8 percent. A few days before the closing, though, the loan officer told her that the rate had to go up, to 10 percent.”

“After a few years, Gillette learned, the interest would rise to between 11 and 16 percent. ‘I was already emotionally tied to this house,’ she said, and went along with what the loan officer told her.”

“It turns out (that) included a note for $30,000, due in six months, unless she paid $900 twice a year to renew the note. Gillette said she had no idea why she needed the note and was further amazed when her loan officer said she could get some cash back at the closing.”

“She later found out that the loan papers had listed her income as $60,000 a year, when it was half that, and that she was putting $21,000 down on the house, when she wasn’t putting anything down. Gillette said she ended up with initial payments of $1,274 a month, which she could barely make, that would soon jump to $1,400 and then $1,500.”

“Gillette eventually found help at Legal Services for the Elderly in Scarborough, where staff attorney Mary Kathryn Brennan said it was difficult for even a lawyer to sort out what Gillette had for a mortgage. ‘It took me two weeks to figure out what had actually happened,’ Brennan said. ‘I was sitting here with these loan documents, thinking ‘Where did this money come from? How did they come up with this figure?’”

“James Seely, CEO of RMS, said he subsequently fired the loan officer, has reworked another 10 mortgages that the officer wrote and is working to refinance two others because the terms were so poor.”

“‘The essence of the problem in our industry (is that) in good times, bad loans are made,’ said Seely.”

The Boston Globe from Massachusetts. “Tyrone Lobo quit his job last month as a deputy in the Barnstable Sheriff’s Department so he could cash in his pension and use the roughly $30,000 to…prevent their four-bedroom Cape-style home in Falmouth from being auctioned off.”

“Lobo and his fiancee had seen their monthly mortgage payment jump from just under $800 in 2002 to $2,700 last fall because of previous refinancing to stave off a previous foreclosure, they said.”

“They said they were able to hold off the foreclosure by refinancing at 12.8 percent interest, double what they were charged before, but bumping their monthly mortgage to $2,700. They couldn’t afford it.”

“‘It was the only deal on the table to save the house in that amount of time,’ Lobo said. ‘It’s been a struggle every month.’”

The Times from New Jersey. “Two years ago, when the housing market was booming, William Soodul figured he would reduce his costs with a ‘creative mortgage.’ He took out a $226,500 adjustable-rate mortgage on his A-frame home in Allentown with a 1.8 percent interest rate and monthly payments that were not applied to either the principal or the interest.”

“His plan was to refinance before his interest rate rose and higher payments kicked in. But Soodul got the surprise of his life when he tried to line up a conventional mortgage last month. Not only would his costs rise $7,000 a year if he kept the mortgage, he would have to pay a $10,000 prepayment penalty just to get out of the deal.”

“In county offices throughout the state, foreclosure filings are rising sharply. ‘We’ve seen a 30 percent increase in our foreclosures in the last five or six months,’ said Mercer County Clerk Paula Solami-Covello. ‘Some lending institutions made it easier for people to get mortgages, and maybe they don’t make the salary to pay for them. People are getting into situations where they just can’t pay.’”

“All towns in the county, even wealthier areas where homes carry price tags of $500,000, have seen increases in foreclosure filings, Solami-Covello said. In 1998 and 1999, there were about 1,000 new foreclosure filings in Mercer County for the entire year. This year, 421 were filed through the end of March.”

“Statewide, the figures are even more dramatic. There was a 70 percent increase in new foreclosure filings statewide from the third quarter of 2005 to the third quarter of 2006, said Jeff Posner, owner of a Web site that tracks the filings. In January, the state filings more than doubled over the same month last year; in March, filings were up 22 percent.”

“Experts believe boom-time credit practices are accelerating the pace this time around. ‘A lot of cheap money out there was fueling the real estate market,’ said Timothy Duggan, who chairs the bankruptcy and creditor’s rights group for (a) law firm. ‘Wages haven’t kept up with the increase in the housing costs. People, over time, have taken on too much debt,’ he added.”

“There was ‘an easing of underwriting standards, where we provided loans for people with poor credit, who maybe in the past wouldn’t have gotten loans, people who wouldn’t have been able to purchase homes in the past,’ said E. Robert Levy of the Mortgage Bankers Association. ‘There’s no question credit will tighten now,’ Levy said.”

“Frank Mancino, of Gateway Funding in Hamilton, said mortgage companies are already tightening their lending practices. While it was possible two months ago to get a mortgage without proof of income or a good credit score, that is no longer viable, Mancino said.”

“‘The money was flowing very freely and everybody wanted to get in on that lending,’ Mancino said.”

“Posner blamed lenders for the foreclosure surge. ‘It’s the loose lending,’ Posner said. ‘Not just subprime loans, there are also a lot of prime loans in foreclosure.’”

“People have been offered 100 percent financing, he added. ‘Three or four years ago, you could never get a loan like that,’ Posner said. ‘Even people with good credit want to put down less money if they can get away with it.’”

“From 2000 to 2005 housing prices in New Jersey rose 85 percent, said Pat O’Keefe, the CEO of the New Jersey Homebuilder’s Association. But beginning in 2006, the ‘housing market stalled,’ he said. ‘Particularly in the resale sector. It ground to a halt.’”

“Sales are down 20 percent since 2005, he said. This spring, prospective sellers are becoming more realistic and lowering their prices, he said. But sales are still ‘very sluggish.’”

The Record from New Jersey. “When Iraj and Michele Hastings began searching for a house in North Jersey recently, they were happy to find a lot of choices in their price range of around $500,000.”

“‘We saw at least 25 houses,’ said Iraj Hastings, who works in New York. ‘We thought it best to take our time.’”

“‘We had a remarkable six or seven years. We might be going into a more typical time,’ said Harry Collis of Collis Realty in Bogota. ‘We’re in a state of transition. Two springs ago, that was hysteria. Multiple bidding, that’s a thing of the past.’”

“‘I’m not optimistic about the spring home buying season,’ said economist Celia Chen. ‘Affordability still remains an issue for many people, particularly in markets that previously were hot, which would include the New York City metropolitan area. On top of that is concern about what’s going on in the subprime lending market…there are definite risks that conditions will get much worse.’”

“Many sellers are getting used to the idea of lower prices. Jay Noriega and Tara Voss Noriega first tried to sell their Rochelle Park Cape Cod by themselves, asking $415,000. They got a couple of low offers, including one for $330,000,- and then listed the property for $404,000.”

“‘I’m asking a little bit less than what the peak price was, and I feel we can get it,’ said Voss Noriega.”

“Not all sellers have gotten the message about lower prices, according to many real estate agents. ‘Sellers still believe that the old prices are the right prices, and buyers obviously don’t,’ said Robin Malley in River Vale.”

“‘The sellers who think they can get what they got two years ago for houses, their houses are not selling,’ said Joe Boreale in Wayne.”

What do you see in your housing market this weekend? Incentives? “Sellers are getting more creative, aggressive, and sometimes desperate with incentives to lure buyers to a massive supply of unsold homes in a bleak housing market.”

“Buy a house in Rancho Cucamonga, Calif., listed for $925,000 and the seller will toss in four sixth-row tickets facing the Lakers bench, VIP parking, and use of the ‘Royal Room’ private lounge.”

“Builders are reporting slow sales for the spring season, when warming weather usually spurs home shopping. More applications are being turned down by lenders or canceled by customers. ‘They are using everything in their arsenal’ to pull in buyers, said Steve Melman, economic services director at the National Association of Home Builders.”

Public Sentiment? “In one of my recent online discussions, several people expressed outrage at those moves to assist distressed borrowers.”

“‘Are we really going to bail out people who are about to get foreclosed upon?’ one reader asked. ‘Why should they get help when there are those of us who will never own homes if the prices don’t come down, and they won’t come down if they continue to be artificially inflated by people who couldn’t afford what they bought.’”

“Ken Wade, CEO of NeighborWorks America, said in a survey of Chicago homeowners, almost 50 percent of borrowers who ended up going into foreclosure had no contact at all with their lenders even after the lenders made numerous attempts to contact them.”

“‘When you think about it that’s a pretty remarkable number,’ Wade said.”

Polling results? “Orange County homebuyers are clearly taking a wait-and-see-approach. By DataQuick’s count, the pace of purchases of newly built homes (or converted apartments) hasn’t been this slow in more than a decade.”

“We asked visitors when buyers will return to the market with vigor. ‘Until the market returns to norms supported by underlying fundamentals we are in for stagnation.’”

“‘When TIME magazine runs a headline stating ‘Real estate is dead!’”

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