The Housing Bubble

It’s Friday desk clearing time. “Hawaii Island home sales dropped by 18.4 percent, from 527 sales in last year’s first quarter to 430 this year, according to statistics provided by the Hawaii Island Board of Realtors. Condominium sales were down by almost half. Overall, it’s a buyer’s market, and sellers should wake up to that fact, said Hawaii Island Board of Realtors President Mary Begier.”

“‘I’m telling sellers if they want to move their property, they have to offer value,’ Begier said. ‘People who have been listed for over a year didn’t take my advice, and now they’re chasing the market down. Sellers who still think it’s a seller’s market are only going to hurt themselves.’”

“Tulsa-area home sales hit a record in 2006, with 13,722 homes changing hands, for a total value of $2 billion. Toni Bales said Tulsa’s relatively low prices continue to attract investors and new residents from the West Coast, and Bales doesn’t see the trend slowing down any time soon.”

“‘I can’t tell you how many people I’ve sold to over the last year that have moved in from California, Arizona and other expensive places,’ she said. ‘Prices have gone so high there, and they’re very attractive here.’”

“Licking County home sales from January through March were down 8.4 percent versus the same period in 2006. However, Licking County Board of Realtors President Jim McKivergin said in a press release he is optimistic.”

“‘There’s a wonderful inventory of homes available, interest rates are good, sales prices are coming down, and there are plenty of buyers out there,’ McKivergin said.”

“Figures from a new housing benchmark introduced last week by Johannesburg-based mortgage risk management company Lightstone, suggest that leisure property buyers in coastal areas have dwindled dramatically.”

“So much so, that coastal house price growth dropped from a monumental 64% in November 2004 (year-on-year) to only 4,2% in December 2006.”

“The South Shore may have some of the state’s best bargains for house hunters this spring. The median price of a single-family home in the region fell 4.3 percent from a year ago to $335,000 in the first quarter of 2007. It was the biggest percentage decline of any region in the state, according to the Massachusetts Association of Realtors.”

“Price reductions of $25,000 and more on some properties have attracted new potential buyers, said Barbara Cohen of Pratt Realtors in Canton.”

“Foreclosure petitions rose 86 percent in Suffolk County and 72 percent in Middlesex County over the previous year during the first quarter. ‘A lot of those sellers are really fighting the clock,’ said Terry Egan, editor for The Warren Group.”

“One question my friends and colleagues have asked me repeatedly over the past six months is: Are you still renting? Yes! I sold my house over a year ago and continue to rent.”

“A year ago, I suspected housing prices were set to take a sharp turn for the worse and more ‘For Sale’ signs were coming. Based on the current outlook for housing, I will likely be renting for one to two more years.”

“Economist Christopher Thornberg is now predicting the hardest of hard landings for California real estate: a housing-induced recession. He laughs at the notion that the subprime mortgage meltdown is to blame for continued weakness in the housing market.”

“‘That’s ridiculous, subprime credit CREATED this bubble,’ Thorberg told LA Land this afternoon. ‘How could prices get so high in relation to income? Prices can only get this high when people have available to them ‘crazy credit.’ It allows them to gamble. It’s crazy credit!’”

“It’s increasingly clear that much of our standard economic vocabulary needs revising, supplementing or at least explaining. We’ve been conditioned to think of recessions as automatically undesirable. The labeling is simplistic.”

“Hardly anyone likes what happens in a recession. But the obvious drawbacks blind us to collateral benefits. Downturns check inflation, and low inflation has proved crucial to long-term prosperity. Downturns also punish and deter wasteful speculation.”

“When people begin to believe that an economic boom won’t ever end, they start to take foolish risks. Partly, that explains the high-tech and stock bubbles of the late 1990s and, possibly, the recent housing bubble. Almost no one wishes for a recession, but the consequences might not be all bad.”

“I was driving in my own neighborhood and noticed a real estate agent taking care of those balloons…where an open house is being held. He had a pen or other such implement and appeared to be angrily stabbing at the balloons to pop them.”

“Something about the rather violent manner in which he was popping them made me think of someone who’s not particularly enjoying his job these days. Barbecue chit-chat and busted balloons brought to mind the bursting bubble, as years of overheated prices, fast-and-loose lending practices, and (last but not least) some consumers’ own greed and irrationality have paved the way for a painful ‘pop.’”

“The portion of U.S. homes empty and for sale rose for the 10th straight quarter at the end of March to a record rate of 2.8 percent, the Census Bureau said on Friday.”

“The number has been steadily climbing since the fourth quarter of 2004 when it was at 1.8 percent and indicates a housing market bloated with speculators, said William O’Donnell, head U.S. government bond strategist at UBS Securities.”

“‘This is more pressure on the housing market and shows that the path to recovery is going to be that much longer,’ he said. ‘We just think it speaks volumes for the speculative nature of the housing market.’”

“The United States is currently ‘in a housing recession,’ said Lawrence Yun, an economist with the National Association of Realtors, who said Friday’s data was ‘disconcerting’ but not surprising.”

The Associated Press reports on California. “Russ Valone, the CEO of (a) research firm, said speculators in San Diego were putting deposits on downtown condo units under construction, assuming they could sell them at a profit when they were finished. ‘There were guys out there that were rolling the dice just as if they were going to Las Vegas,’ Valone said.”

“When the market slowed, many buyers forfeited their deposits, or let their properties get repossessed by the banks. As a result, the inventory of unoccupied condo units downtown since early 2005 has soared fivefold, he said.”

“Jason Beaver, a Sunnyvale, Calif.-based Apple Inc. programmer, got caught up in the talk of the hot housing market from friends. His name was drawn in a buyers’ lottery in the Solera subdivision and he put $35,300 down on a $353,000 home in February 2004. The community is restricted to people age 55 or older; the 37-year-old Beaver had no intention of moving in.”

“That summer, the housing market began to soften. He nervously put the house on the market for a break-even price the same day escrow closed. He got no offers.”

“A tight market had suddenly become flush with resale homes as investors sought to cash out. Pulte was one of several builders to slash new home prices, in some cases by as much as $80,000 in a single day. Beaver and others are suing, but the company has said it was simply reacting to new conditions in an overheated market.”

“Beaver has been renting the home out for about a $1,000 a month, despite monthly expenses around $2,000. And the supply of available homes is growing.”

“Beaver figures he has spent $50,000 on his investment home, and will have to come up with $30,000 more to pay off the mortgage after he sells it at a loss.”

“While he’s not completely sworn off real estate investing, Beaver said next time he’ll try a more traditional approach, to buy and hold for the long term. ‘The fast-growth, make-a-quick-buck real estate investment, I don’t think I’ll try again,’ he said.”

The Union Tribune. “A record number of San Diego County residents lost their homes in the first three months of the year as default and foreclosure activity rose throughout the state.”

“In San Diego County, 1,182 foreclosures took place from January through March, according to DataQuick. The first quarter also recorded 3,931 notices of default, the first formal step in the foreclosure process, DataQuick reported.”

“Most loans that went into default in California during the first quarter were originated between April 2005 and May, as a peak of nearly 78 percent of all first trust-deeds were being financed with adjustable-rate mortgages.”

“First-quarter foreclosures in Riverside County rose 166 percent compared to same quarter last year. A total of 9,407 foreclosure filings were reported in Riverside County, compared to 3,539 in the first quarter of 2006, according to RealtyTrac.”

“Taken together, Riverside and San Bernardino counties represented the third-highest-ranked metropolitan area in the nation for foreclosure activity. Combined, the two counties experienced a total 17,499 property foreclosures between January and March, RealtyTrac said.”

“‘Certainly the surge in subprime defaults has contributed to the overall rise in foreclosures,’ RealtyTrac CEO James Saccacio said. ‘We estimate that more than 50 percent of the foreclosure activity we charted in the first quarter was from subprime loans. However, it’s not just low-end homes that are going into foreclosure; we’re seeing a rising percentage of foreclosures with an estimated market value of more than $750,000.’”

The Sun Post. “Foreclosures have picked up speed in San Joaquin County, where the number of homes to hit the auction block has reached more than 12 times last year’s levels. Through March 2007, 539 homes were sold in the county’s courthouse auctions. Compare that with just 44 in the same period in 2006, according to a tracking service based.”

“And with the biggest rise of the past two years coming in March, when auctioned homes jumped from 172 to 234 per month, a trend expected to continue. ‘We don’t see any signs of a peak at this point,’ said Sean O’Toole, a real estate consultant who has followed the foreclosure market the past five years.”

“When prices stopped climbing last year, many buyers found themselves stuck with loans they could never afford in the long term. It’s a situation some lenders had ignored the past several years because the housing market was able to satisfy everyone, said local mortgage broker Deborah Romero.”

“‘A lot of common sense went out the window when real estate became so valuable,’ she said.”

“Judy Thompson, a housing counselor in Stockton, said that lack of common sense has meant that a lot more people show up at her office in a disastrous financial state. She said she now deals almost exclusively with people who took out sub-prime loans.”

“‘What I find is that people that have got into some of these predatory-type loans have no idea what they got in it,’ Thompson said. ‘They listened to their lenders, and their lenders say, ‘Don’t worry, you qualify for this loan.’ And they’re shocked when they find out they now owe thousands of dollars.’”

“Some of her clients face mortgage payments nearly equal to their income, while at the same time, their houses have gone down in value. At that point, there’s very little that can stop the property from going to auction, Thompson said.”

The Bakersfield Californian. “Local law enforcers and real estate professionals say mortgage fraud litters Bakersfield’s housing market.”

“‘It is very prevalent and it will become more prevalent,” said Detective Frank Wooldridge, who handles real estate fraud cases and other financial and white-collar crimes for the Bakersfield Police Department. ‘There is real estate and mortgage fraud going on in this town. To say it is not, you are just missing the boat.’”

“Last week, local appraiser Gary Crabtree told The Californian that he has documented about 20 suspicious local home sale transactions in the last year, and that the number has since grown to more than 50 as news of his allegations spread.”

“‘We’ve been presented with offers for well in excess of the sales price, asking for us to cut back to the buyer large amounts of cash,’ said J.R. Lewis, sales manager with Watson Realty ERA.”

“‘The lenders are totally unaware they were defrauded until the property goes into default,’ Crabtree said. He added that mortgage fraud has contributed to foreclosure activity that is now five times as common as it was last year in Kern County.”

“‘We get calls from a lot of people asking if we can do an appraisal and ‘hit’ a number for them,’ said local appraiser Michael Burger. Burger said he tells the callers his business won’t participate in such activity and they go elsewhere.”

“Kern County homebuyers are running into mortgage trouble at three times the national rate, the eighth-worst track record in the country, new data show.”

“‘We appreciated way too fast,’ said local appraiser Michael Burger. ‘We had too many flippers, too many investors coming into the market.’”

“Kern County had 2,779 properties enter some stage of foreclosure in the first quarter of 2007, RealtyTrac reported. That represents a 106 percent increase from the previous quarter’s totals and a 424 percent jump over the first quarter of 2006.”

“‘The last time we had something like this was in 1993, but it wasn’t like this,’ said Betty Byrom, owner of People Realty, who has been in the real estate business for 31 years. ‘We’re gonna have a lot more. It’s gonna get worse before it gets better.’”

“Leslie Appleton-Young, chief economist for the California Association of Realtors, said inland areas of the state, such as Kern County, experienced some of the highest levels of new construction during the boom.”

“But many bought with adjustable-rate mortgages that have since reset at higher interest rates. Some homebuyers who had planned on ‘flipping’ properties were caught when the market turned downward.”

“Appleton-Young said areas such as Bakersfield have too small a population base and lack an economy with sufficiently high-paying jobs to absorb the current oversupply of homes.”

“‘That is why we are seeing an adjustment,’ she said. ‘Right now there is an oversupply. Long term, we can be very bullish in areas like Bakersfield, but in the short term it is going to take time to absorb all the supply.’”

“There were about 3,520 houses for sale in the Bakersfield area in March, according to the most recent single-family housing report by local appraiser Gary Crabtree.”

“Byrom, the local broker, said there is now more than two years of inventory on the market. ‘There’s so many listings out there that you can pick what you want,’ she said.”

The Queens Chronicle reports from New York. “Foreclosures are rapidly rising in Queens, which has been the hardest hit of New York City’s five boroughs. As of March 19, some 1,223 homeowners lost their properties through foreclosure this year, up 57 percent over last year’s already abnormally high total, and up 91 percent from the last quarter of 2006.”

“‘It’s hugely spiking,’ said Sarah Ludwig, executive director of the Neighborhood Economic Development Advocacy Project. ‘What we’re seeing is that the way in which loans were being made wasn’t sustainable.’”

“Desperate to get out of debt, Marie Eduard put her house on the market four months ago. So far there have been no offers. ‘I pray to God to sell the house quickly,’ Eduard said. ‘Now I’m scared to go into foreclosure, because my credit will be ruined.’”

“Eduard told her broker she was uneasy taking out a loan for $495,000. ‘I told him I didn’t think I could afford the house because my income was too low. He said, ‘Don’t worry about it,’ that he’d take care of it.’”

“Eduard believes that her broker inflated her income by $60,000 to qualify her for the loan. Now it takes almost every dollar of her $30,000 salary to pay her $2,400 monthly mortgage bill.”

“‘These loans were created for savvy investors, they were a niche product,’ Ludwig said. ‘Now they have been broadly sold to the public.’”

“In Eduard’s case, she received a $99,000 piggy-back loan at 12 percent interest, with a balloon payment of $90,000 due at the end of 25 years. With such a loan, a borrower will never build equity and will virtually never be able to pay off the loan, Ludwig added.”

“‘All of this was foreseeable,’said Ludwig. ‘The regulators, the industry and Wall Street in particular have known about these problems for years.’”

“The good news was the recognition that there was a fundamental problem. ‘At this point, the whole subprime industry is a mess. I don’t think anybody really contests that,’ she concluded.”

The Sentinel Online from Pennsylvania. “It’s easier these days to sell a house in Cumberland County than most anywhere else in the United States. ‘The growth is cooling but we’re still growing,’ said Sherri Pursel, spokeswoman for Greater Harrisburg Association of Realtors.”

“‘It’s certainly not the seller’s market we had previously,’ said Karen Detwiler, owner of Help-U-Sell Detwiler Realty in South Middleton Township. ‘Buyers have a little more control of the market than during the selling market heyday.’”

“Lenders have tightened standards with the rising delinquencies in mortgages especially in the subprime market, where borrowers with weak credit histories obtained their loans. Detwiler said subprime lenders are scrutinizing the details of housing transactions, including appraisals and 100-percent financing purchases.”

“She added that lower interest rates and a sellers market favored subprime buyers. With the increase in the number of foreclosures, ‘banks are becoming more accountable.’”

“Locally, homes priced under $200,000 are ’still moving at a good clip’ but sellers with homes over $300,000 should choose their asking price carefully, she said.”

The Gazette from Maryland. “Industry experts use words such as ‘correction’ and ‘balanced’ to describe the ongoing housing slowdown. The insider jargon is little consolation to apprehensive homeowners who are tired of seeing ‘For Sale’ signs languish in their front yards.”

“Average time on the market for a Montgomery County home was 93 days in March, compared with just 50 days in March 2006. In Prince George’s County, time on the market increased from 40 to 76 days and in Frederick County from 65 to 110 days, according to data from Metropolitan Regional Information Systems Inc.”

“‘The drop in existing home sales in Maryland in the first quarter this year from a year ago was a ‘correction’ to a more normal homebuying market,’ said Ilene Kessler, president of the Maryland Association of Realtors.”

“‘In 2005 and 2006, there was a lot of interest in buying,’ Kessler said. ‘It’s now a more balanced market. A lot of people have already bought.’”

“The resale market is down by 15 percent in Maryland and 18 percent in Virginia from the same time last year, according to Metrostudy. ‘Flipping is over, but the good news is that homebuilders have slowed down, restricting sales,’ said Kenneth Wenhold, regional director of Metrostudy. ‘It is a great time to be a buyer.’”

“Maryland’s homebuilding industry, which slumped last year, has continued its slowdown this year. Building permits for new single-family homes fell 20 percent in 2006 from 2005 and continued to slide in January and February.”

“‘Some experts are saying we’ll reach the bottom later this year,” said John E. Kortecamp, executive VP of the Home Builders Association of Maryland. ‘But you never know when you will see the bottom until it’s over.’”

“‘The slump began some 18 months ago, said Dan Ryan, president and owner of Dan Ryan Builders of Frederick. ‘It was just a matter of time before it cooled off,’ Ryan said.”

“Prince George’s County led the state in foreclosures in 2006, and has continued that pattern for the first quarter of 2007. A total of 1,558 foreclosures were recorded in the county last year, with 590 in the first three months of this year, up 56 percent from the same period in 2006.”

“Darrell Carrington, a senior loan officer with Freestate Mortgage Services in Bowie, said high home prices in Prince George’s, in relation to other nearby counties, is a factor in its high foreclosure rate.”

“The parents of many of today’s homebuyers needed to make a 20 percent down payment, ‘but those days are kind of gone,’ he said.”

“Such a down payment on a $350,000 house would be $70,000, and most people don’t have that much cash, he said. The result is that more of the purchase price is borrowed, resulting in higher mortgage payments.”

“Mortgage broker Kip S. Douglass in Upper Marlboro, said he has seen the rise in home loan defaults in Prince George’s County. In a listing he surveys, Douglass said, he noted 16 new notices of default filed on April 17.”

“That total, about double what he used to see, is no longer atypical, he said.”

“‘The trend is that the market has slowed nationally, said S. Lynne Pulford, senior vice president of Sandy Spring Mortgage in Columbia. ‘There is a large inventory of both new and resale homes. Consumer confidence due to energy prices is having an [adverse] affect on the overall market and pricing.’”

“The home mortgage market is nowhere near where it was two years ago, many say.”

“‘There’s been a tightening in the subprime market, and Wall Street is not buying loans as much as it did,’ said Charles DiPino, president of the Maryland Association of Mortgage Brokers. ‘That’s hurt some customers. It’s really based on the real estate business. People are nervous. They’re not willing to take on a riskier loan. They want facets that are locked down. Housing values are stabilizing now, and they’re scrutinizing values more.’”

“According to Michael Galeone, executive vice president of The Columbia Bank, the subprime market was ‘abused’ during the mortgage boom of two years ago.”

“‘The subprime market got into trouble as lenders began lending to people with less-than-sterling credit qualifications,’ he said. ‘Sub-prime lending lets you borrow based on the value of your home, maybe up to 125 percent of the value. The trouble happens when the market goes against those people.’”

“‘People bought more than they could afford,’ he said. ‘In the past, they could buy an $800,000 house at 3.5 or 4 percent interest. Then the market shifted and their monthly payments doubled. Many people didn’t have the cash to cover it, and they’re struggling.’”

“Galeone called subprime lending ‘a ticking time bomb. It creates a great potential for failure and can lead to high foreclosure rates.’”

“‘Foreclosures are accelerating,’ he said. ‘People have seen their monthly payments double or triple as rates have gone up, and they’re finding it hard to continue to meet their obligations.”

“Foreclosures in the first quarter of 2007 totaled 2,031 in Maryland, up 88 percent from last year’s first quarter, according to RealtyTrac.”

“‘In the last few years, you had a lot of people who were not really qualified to buy a house buy a house anyway,’ said Cary Reines, executive VP of Mason Dixon Funding in Rockville. ‘Now they’re finding out that they can’t afford to keep them. We’ve seen a lot of that in the last six to nine months.’”

“‘The refinancing market has declined, but not terribly,’ Reines said. ‘You’re seeing a decline in housing values. Houses just aren’t going for the same prices that we’ve seen in the last couple of years. The values have dropped, and that affects the refinancing value.’”

The News Herald reports from Florida. “In line with the rest of Florida, Panama City’s home sales declined in March as the state saw significant drops in most metropolitan-area housing markets. There were 814 sales spread across all Panama City MLS housing categories in the first three months. That compares to 984 sales in the first three months of 2006, said Association President Scott Bowman. ‘I just don’t see that sales have picked up,’ Bowman said.”

“Area real estate broker Evan Brusilow, said…some condos were selling for $305 to $310 per square foot, a figure he described as ‘2003 dollars.’”

The News Press. “Daphne and Randolph Sewell thought they were risking only $15,000 in the summer of 2005 when they took out $750,000 in construction loans for three First Home Builders houses in Lee County.”

“But in today’s market the houses are worth less than those loans and the tenants who were supposed to defray the Sewells’ mortgage payments never materialized.”

“‘We’re facing financial ruin,’ said Daphne Sewell.”

“On their combined income of less than $90,000 a year, the couple couldn’t afford to make the roughly $6,000 a month in payments on the houses if they bought them, she said. Now the couple, who live in Broward County, face foreclosure by First Florida Bank on two of the houses.”

“The Sewells’ lawyer, Gary Poliakoff of Fort Lauderdale, said his clients ‘kind of naively signed all these documents’ without realizing the consequences. ‘The Sewells are people who are hard-working individuals with family. They’re somewhat unsophisticated about making investments,’ Poliakoff said.”

“He said…the prospectus included language that adds up to securities fraud. For example, it states: ‘Investors will receive a gross return of 14 percent of the sales price of the home. The 14 percent is contractually agreed upon by the tenant before occupancy.’”

“In addition, Poliakoff said, ‘There’s a word in there that jumps off the page — that they will ‘coach’ the tenant on how to qualify for a mortgage. What the hell does that mean? It sounds like mortgage fraud.’”

The Star Banner. “While existing-home sales in the Ocala area last month continued to rebound, the number of homes sold was down 33 percent from the same month a year ago when the local real estate market was still red hot.”

“(Realtor) Bert Meadows said the real estate boom of the last couple of years was an anomaly, and said most Realtors would be happy to see sales figures similar to those witnessed in 2003 or 2004.”

“‘I think it was an unusual time in the market,’ he said of the frenzied sales period.”

“There’s still lots of inventory on the market. Realtor Judy Disney-DiFranco said she’s seeing more homes are being listed than are being sold and prices are falling. Buyers have the advantage, she said.”

“‘It’s still a buyer’s market,’ Disney-DiFranco said.”

The News Journal. “Volusia foreclosure filings have averaged 450 a month since January, compared with a 175 monthly average during 2006. In Flagler, the caseload growth has been even sharper: 90 a month since January, up from a 36 monthly average during 2006, the RealtyTrac figures show.”

“Social service agencies say area foreclosures have risen significantly over the past year, and the worst may be yet to come.”

“‘There’s over $1 trillion in adjustable mortgage debt that’s going to readjust this year around the nation, and that’s going to create havoc,’ said Richard N. Schram, spokesman for the Consumer Counseling Credit Service of Central Florida & Tampa Bay.”

“Higher interest charges are just part of the problem, Schram said. Rising insurance and property-tax bills are pumping up monthly escrow payments by hundreds of dollars. ‘We have seen cases of some monthly payments jumping by $800 to $900 a month,’ Schram said.”

The Palm Beach Post. “With home prices still falling and mortgage foreclosures rising, builders won’t see better days until the end of the year, industry economists said Thursday.”

“‘We’re definitely looking for further price erosion,’ David Seiders, chief economist for the National Association of Home Builders, said at the trade group’s Spring Construction Forecast Conference.”

“The key problem is the glut of unsold homes and rental properties choking the market. ‘Both are running very high,’ he said. ‘We’re heavily oversupplied.’”

“The construction plunge is far more severe in South Florida than in most other areas, because the boom there was greater in 2003 and 2004. In the Miami-Fort Lauderdale region, housing starts this year will decline nearly 35 percent from the previous year, to just 20,200, according to association data.”

“South Florida home building will recover eventually, but ‘there is a big overhang, so it’s going to take a while,’ said Patrick Lawler, chief economist for the Office of Federal Housing Enterprise Oversight.”

“With South Florida’s hot economy, many Baby Boomers hurried to buy condos before prices rose he said. ‘You start to see prices rising, so you think, ‘I better do this quick,’ but that clearly bred some speculation,’ he said. With the accelerated demand, builders too got carried away and flooded the market, he said.”

The Herald Tribune. “Joseph Pufta, the former CEO of a home building company that abandoned 50 home sites in North Port after taking money for construction work that was never completed, has turned himself in to authorities.”

“Avalon is one of three area home builders to have collapsed since the real estate bubble burst last year, but Pufta is the only local building executive to face criminal charges.”

“‘I hope the charges stick,’ said Sheila Schaller, a massage therapist from Michigan who contracted with Avalon in March 2005 to build her family’s home on San Mateo Drive. ‘I hope he doesn’t plead out. I don’t want it to be a slap on the wrist.’”

“Schaller, like many of Avalon’s customers, knew something was wrong when subcontractors started levying liens on her home because they were not paid.”

“Pufta’s grand theft charge stems from a case where police say a New Jersey woman wrote Avalon Homes a check for $42,180, yet no work was done. According to an arrest affidavit, Avalon Homes cashed Isabel Soto-Mercado’s personal check Aug. 16, 2005.”

“When Detective Lenny Hills visited her home site in February of this year, 18 months later, it was still an overgrown vacant lot.”

“‘It was very awful,’ Soto-Mercado, said in a telephone interview from New Jersey, where she and her husband remain while they figure out what to do with their abandoned home site. ‘Not only did we give him money, but we paid for the lot and have no house.’”

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