The Housing Bubble

The LA Times reports from California. “Major lenders are repossessing homes in Southern California much faster than they can sell them, a development that could set off a downward spiral of price cuts and more foreclosures. Lenders’ inventories in the counties of Los Angeles, Riverside and San Bernardino grew by 5,829 during the second quarter, according to data compiled for The Times by First American,”

“Jason Bosch, president of Home Center Realty, an Inland Empire firm that works with lenders…has put 42 lender-owned homes on the market since the beginning of the year. Only two have sold.”

“Bosch cited one house in Perris that a lender listed for $427,000. Home Center received an offer of $419,000, but the lender said it wouldn’t budge. The would-be buyer moved on to a more flexible seller.”

“Ten days later, the lender lowered the price to $417,000, where it still sits.”

“It’s got to get worse before it gets better, said Michael Davin, executive VP of Catalist Homes in Hermosa Beach, echoing the new mantra of the real estate business. ‘We need a shakeout to stabilize the market,’ he said. ‘Lenders are going to have to start cutting prices big time.’”

The Bakersfield Californian. “In February, the notice arrived.Christina Ramirez’s home of 16 years had been foreclosed upon. She had three days to pack up and get out. Statistics suggest that similar scenarios are playing out for hundreds of homeowners across Kern County. Foreclosure filings increased nearly six-fold this June, compared with the same month last year, according to RealtyTrac.”

“‘It’s everywhere,’ said Katy Hudson, CEO of the Consumer Credit Counseling Service of Kern & Tulare Counties. Hudson’s office is busy this year, as homeowners with adjustable rate mortgages find themselves unable to meet monthly payments once their interest rates rise.”

”They were made loans that they could barely afford in the first place,’ Hudson said.”

“Two years ago, Bakersfield homes were the fastest-appreciating in America. Eager home shoppers were lining up in lawn chairs outside model homes, just itching for their chance to buy.”

“Now sluggish home sales, falling prices and thousands of homeowners entering foreclosure are reminders that busts follow booms.”

“‘In the past, we never saw any great appreciation,’ said said Kym Moore, a construction lending veteran. ‘So we never saw great peaks and great valleys.’”

“‘The economy is still moving forward,’ said Leslie Appleton-Young, chief economist with the California Association of Realtors. ‘But the excesses in the housing market over the past couple of years were creating an environment where people were betting that prices would keep going up 15, 20 percent a year.’”

“‘There’s nothing that will compare to this,’ said Brian Dawson, who started selling real estate in Bakersfield in 1978. ‘The foreclosures are massive — way, way more than anything in the 1990s.”

“Appleton-Young is bullish on the long-term outlook for Bakersfield as well. But recovery will take time, she said. ‘We won’t be booming by 2008,’ Appleton-Young said.”

The San Francisco Chronicle. “The mortgage meltdown hit consumers square in the face last week. ‘You used to be able to do a stated-income loan (with no documentation) up to 100 percent (of the purchase price) if you had good credit scores. It just can’t be done any more,’ says Jason Bellevue, a mortgage broker in Berkeley.”

“Ernest Williams, a part-time Realtor in El Sobrante, has a client in escrow on a home in Vallejo. In late May, the client was prequalified for a loan up to $450,000 with nothing down and no income verification. The client has ‘impeccable credit’ and a FICO score over 750, Williams says.”

“On June 29, the client offered $417,000 for the house and his offer was accepted. When the mortgage broker submitted his application to a lender the last week in July, he was turned down. The application was submitted to two more lenders last week and was rejected.”

“‘He was declined because they wouldn’t do stated-income loans above 90 percent anymore,’ Williams says. ‘If he provided full documentation for his income, he wouldn’t qualify for the loan because he doesn’t make enough money,’ Williams says.”

“The client is willing to put 5 percent down. ‘If he can’t get the seller to carry a second (mortgage) or come down on the price, he will have to walk away,’ he says”.

The Modesto Bee. “As foreclosures mount and ‘for sale’ signs proliferate among Northern San Joaquin Valley homes, Realtors continue a refrain: ‘Now is the time to buy.’”

“‘Buyers have an enormous ability to haggle over costs,’ said Realtor Ken Kohler. ‘But the bottom line is that the seller has to make some money off the deal, so you can’t come in and lowball too much,’ he said.”

“Agent Yolanda Esparza Winters said she’s seen some neighborhoods with multiple bank-owned homes. She suspects that on those streets, the former owners may have had subprime loans with conditions that eventually caused defaults.”

“‘If a buyer who seeks a home has the financing all arranged, that makes the process go that much faster,’ she said. ‘Sellers look for that.’”

“Bob Nowak and Jan Carrico run a monthly meeting in Salida for people to discuss real estate investing. ‘It’s very hard to buy something now and expect it to be worth more in 30 days,’ Nowak said, describing a practice known as ‘flipping.’”

“Lana Dyer, an independent Modesto Realtor and appraiser, said she has seen two deals fall through in recent weeks because the buyers didn’t know their own ability to pay. When one couple realized the mortgage payment would be $2,400 a month, she said, weeks of negotiations stopped.”

“Eventually the oversupply of houses will stop, and prices will head upward again, though no one’s predicting when that will happen. ‘It can’t go down forever,’ Dyer said. ‘It wouldn’t scare me, if I could, to make an offer and buy a house now.’”

The Orange County Register. “An Orange County Register investigation found that lenders targeting Hispanic buyers wrote $19 million in loans on this modest Santa Ana block of 1920s bungalows. Those loans helped nearly triple sales prices from $182,000 to $600,000 over five years.”

“Then the credit stopped. And home values crashed.”

“Lenders seized the homes at 920 and 946 after owners failed to keep up with payments. 946 sold at a loss, and 920 is in escrow at a loss. Lenders also filed default notices against the owners of 926 in April and 937 in June. ‘For Sale’ signs hang outside five of the remaining 48 homes.”

“Desperate to escape escalating payments, the owners of 937 and 1033 have slashed prices.”

“With neighbors asking $150,000 less than Medina Albarran borrowed a year ago, the situation has become almost hopeless. ‘La droga,’ Albarran said. That’s Spanish for ‘drug’ – Mexican slang for a crippling debt. The people of West Camile Street, she said, are ‘endrogados’ – hooked on debt.”

“The only ones who seem content are longtime residents like Rafael Zambrano, who moved to 930 W. Camile St. in 1988. The chef and father of four said he has nearly paid off his $177,000 mortgage.”

“‘I never sell. I never refinance,’ Zambrano said. ‘I don’t take money out of my house to buy a car or take a vacation. I’m not stupid.’”

The Billings Gazette reports from Montana. “Chuck Pointer has been burned once and hopes he doesn’t get burned again. Pointer moved to Billings from Boston more than a year ago. With the East Coast market already in a tailspin, he had missed his window of opportunity for selling his property there. ‘If I had sold that (Boston) house a year before, it would have sold in the first week for $30,000 more than I’d get now,’ he said.”

“Meanwhile, he started looking at places in Boise. Then, in late July, Pointer noticed asking prices in Boise beginning to falter. A house listed for $299,000 two months ago was recently reduced to $269,000, he said.”

“But Pointer wasn’t biting. His Billings home still hasn’t sold. After a couple of offers that didn’t pan out, he’s dropped his asking price by $10,000. ‘At what point do you just say ‘What’s it going to take to sell the house?’ he said. ‘I wish they could come to me with that answer.’”

“With the national housing market in a dive that threatens to drag the economy down with it, the Billings market seems to be chugging along nicely, even if it’s at a slower pace.”

“‘It’s more of a normal market,’ said broker Laura Odegaard. ‘The past five years haven’t seen the normal market of good times and bad times. Everything was good.’”

“Several local real estate agents point to a pause last fall when Billings-area buyers turned cautious. ‘People were nervous,’ said Rod Wilson, the president of the Billings Association of Realtors. ‘All of the sudden there’s a spin out there.’”

“Billings, like some of the hotter markets, has witnessed an uptick in foreclosures. Until recently, said Wayne Nelson, president of Stockman Bank’s Heights office, foreclosures were virtually nonexistent. ‘It was hard to make a bad loan, things were cruising along so good,’ he said.”

The Idaho Statesman. “Unconventional loans designed to give people a shot at home ownership appear to be coming back to haunt some Idahoans, industry experts say. The number of Idaho homes in foreclosure during the first half of 2007 rose 21 percent to 1,418, compared with 1,174 during the same period a year ago.”

“The number of filings against those properties rose 91 percent from a year ago, according to RealtyTrac.”

“One local attorney said that some foreclosures were the result of what is referred to as ‘flippers.’ ‘Now that the gold rush market we were experiencing is over, these people are falling on their bottoms,’ said Boise attorney Holger Uhl.”

The Olympian from Washington. “Nate and Lee Szczublewski of Olympia experienced firsthand the rapidly changing requirements of qualifying for a home loan when they bought their first house in May. The Szczublewskis, who have good credit, first qualified for a mortgage that didn’t require a down payment, said real estate agent Ted Leland.”

“But that didn’t last long, he said. Suddenly, the Szczublewskis needed to come up with a down payment of five percent, he said. ‘Another week and they would’ve had to put 10 percent down,’ Leland said.”

“Vaughn Marston, owner of Versata Home Loans of Lacey, said he has never seen changes this dramatic in the mortgage business. ‘It has been years since we worked this hard,’ Marston said. This year business is expected to be down about 50 percent, he said. ‘My hunch is that we may not have seen the worst of it yet,’ said Marston.”

“To make other home loans work, it might simply mean good credit, combined with a large down payment, said senior loan officer Randy Luke of Olympia. ‘If you get too far outside those parameters, it may not work,’ Luke said.”

The Winnipeg Sun from Canada. “It has smashed records, defied expectations and baffled buyers. But experts say Winnipeg’s sizzling housing market won’t cool off any time soon.”

“Wes Schollenberg, president of the Winnipeg Realtors Association, said…the association looks set to reach a record annual sales total of $2 billion for 2007. ‘We’re shooting for $2 billion and we don’t expect any drop-off,’ said Schollenberg.”

“Gary Bachman of Century 21 Canada agreed the hot market has defied tradition. ‘It’s hard to imagine but every month gets better,’ said Bachman. ‘This is now the seventh year and in the past housing would go through cycles every five years. A house is now a good, solid investment.’”

The Edmonton Journal from Canada. “Flattening prices and a record inventory of unsold homes are giving new power to buyers in Edmonton’s changing housing market. ‘The advantage has definitely moved from the seller to the buyer,’ Richard Goatcher, senior analyst at Canada Mortgage and Housing Corp., said Tuesday.”

“The relative stability, after prices rose 46 per cent in the previous 12 months, reflects a dramatic reversal of supply and demand.”

“July saw 4,463 new listings and only 1,565 sales — the lowest July sales in five years. Inventory of unsold homes soared to a record of 8,183 units, more than four times the 1,856 unsold units in July 2006.”

“The supply of resale homes is swollen by sellers moving to new homes, Goatcher said. Supply also may be bloated by speculators who are trying to flip for quick profits, and by longer-term investors whose rental incomes are relatively low compared to housing prices.”

“Outside of MLS, ComFree reported Tuesday an inventory of 2,696 homes listed for sale by owner, compared to 277 sales in July.”

“ComFree presidents Travis and Erin Holowach reported ‘unnecessary panic’ among would-be sellers. ‘Ultimately, Edmonton home sellers will be successful but they do need to be a bit more patient in the current market,’ they said.”

The Anchorage Daily News from Alaska. “Two years ago, at the height of the building boom in the Matanuska-Susitna Borough, Rex Turner launched a sprawling housing development just outside Wasilla.”

“Today, The Ranch occupies the center of a real estate slump. Turner targeted the market for homes priced from $240,000 to $450,000, now the slowest segment of the Mat-Su residential market. Instead of hundreds of homes, there are just three dozen, with a dozen more under way. Stop signs and fire hydrants rise from empty lots and dirt roads.”

“In June 2005, Turner marketing director Gary Gearhart said the developer hoped to start work that summer on 108 homes, with another 84 under way by early 2006.”

“‘Obviously, that’s not happened,’ said Gearhart. ‘It just slowed down. There was so much inventory came on the market.’”

“Gearhart blamed the slowdown on a glut of new construction. But he also cited an inventory of existing homes that flooded the market two years ago, when homeowners took advantage of low interest rates and skyrocketing home values to ‘make a ton of money’ on resale.”

“Private appraisers have certainly seen home prices decline in the last year, said Appraiser Pat Check in Wasilla. Check recently reviewed a home the borough assessed last year at $240,000, an amount she couldn’t justify today as an asking price. Usually, assessed value falls at or below appraised values.”

“‘We’re all seeing sales where the price is below the assessment,’ Check said. ‘That’s scary.’”

“One Realtor described homes over $225,000 as ‘death’ in the current market, but others said that $250,000 was a better cutoff and ‘death’ was a bit strong. ‘There’s a lot of them on the market and not so many buyers up in those price ranges,’ said Russell Joyce, president of the Valley Board of Realtors.”

“The health of the Anchorage real estate market is on the mind of many, with some feeling it is a buyer’s market. This opinion seems heavily influenced by national news, which overshadows our local perspective.”

“Is Anchorage following the national trend, or do local issues create a different outlook for our real estate market?”

“Nationally, many real estate markets began to experience extreme double-digit appreciation over the next five years. As the frenzy fed on itself, ‘flipping’ and subprime loans artificially inflated the market. National news currently makes you feel that most of the United States is in the middle of a massive correction. It is not.”

“Once again Anchorage is counter to many other states, as shown by modest increases in the average sales price from $233,496 in 2003 to $259,531 in 2004, then $291,013 in 2005 and $315,156 in 2006 to $331,137 as of June this year.”

“Between 2001 and 2005, increasing appreciation coupled with low selection and low rates stimulated multiple offers. Unfortunately, this is what sellers in the Anchorage real estate market grew accustomed to as normal.”

“Last summer, this changed nationally and affected us locally. Nationally, the bubble began to burst in overinflated markets. Locally, it caused some hesitation in our real estate marketplace.”

“So what do we do now? If you don’t have to sell now, don’t. If you do have to sell, realize that it will take more work to sell quickly. First, price it right. The days of an overstimulated market are gone. You can no longer price your property high and wait for the market to catch up to your value.”

“If you are a buyer, now is a great time to buy…If you make a low offer, understand that you may help a competing buyer look even better to the sellers. While it is not a buyer’s market, it is a good time to buy. It is a lot like buying produce in Anchorage right now: The prices are not cheap, but you’ll sure love the choices.”

The Free Lance Star reports from Virginia. “Mary Anne Bryant is starting to see a new trend at the Central Virginia Housing Coalition in Fredericksburg. Landlords behind on hefty mortgage payments for houses worth $500,000 and up are seeking Section 8 status at her office. The federal program picks up 70 percent of the tab for qualifying renters.”

“‘They think that getting families in there paying a high amount of rent will save the house for them, but it’s not working,’ said Bryant. ‘Four months later, the families have to move because the house is being foreclosed on.’”

“‘We’re guessing that they were bought by investors looking to flip,’ Bryant said. ‘Now that the market is going south, they’re trying to sell but can’t so they’re renting instead.’”

“Lisa Swidrak, owner of First Savings Financial LLC in Fredericksburg, blames real estate companies and builders who opened their own mortgage companies to capitalize on the recent housing boom.”

“‘If you have a Realtor who says, ‘You need to see my loan officer,’ who do you think that officer works for? Not you,’ she said. ‘They’re just trying to find a way to get you into that house. A responsible lender would have said, ‘Where do you think the money is going to come from for your payments?’”

“‘Actually, I have had quite a few cases where I don’t know how they got approved for the loan in the first place,’ said Tess Harris, a housing counselo in Fredericksburg. ‘One client earned $23,000 a year and was approved for a $254,000 loan.’”

“Harris said the woman’s initial mortgage payments were likely on the interest only, then ballooned to the current $1,695 a month at 12.25 percent interest. Yet she brings home only $541 biweekly plus child support.”

The Times Community from Virginia. “The local trend could be best described as a market correction - not a crash - from the boom of the past four to five years, some local real estate and banking experts say.”

“Berryville attorney J. Michael Hobert said he noticed, when reviewing county court records, that four foreclosures took place in June alone. ‘That’s a large number for a small community,’” Hobert said. ‘I had never seen that many in the last few years.’”

“To find that high a number, Hobert added, ‘You’d have to go back to the early 1990s.’”

“Reminding that real estate is typically a cyclical industry, predicted Traci Shoberg, president of the Blue Ridge Association of Realtors, ‘It could just be the light-switch effect, just like it was going from a seller’s to a buyer’s market.’”

“The good news for buyers, but bad for sellers, is that home prices have gone down. The regional average sales price in June was $279,575 compared with $345,915 in June 2006. MRIS data shows that, in the price range from less than $30,000 to greater than $500,000, the average sales price in Clarke County dropped from $475,264 in 2005 to $431,956 in 2006.”

“‘Sales are extremely down,’ said broker Victor Fath. ‘There’s a lot of investment opportunities right now. There was just a little too much greed in the marketplace two years, three years ago.’”

“Overbuilding contributed to the inventory glut, he added. ‘They overbuilt in Loudoun County,’ Fath said. ‘That sort of affected everything up this way.’”

“George Ballew, mortgage manager in Winchester, said he has also noticed a slowdown in the whole region. ‘I’ve noticed some prices falling as well, especially with the appraisals that we’re getting for homes from $600,000 or $700,000 or more,’ Ballew said.”

The Baltimore Sun from Maryland. “Laurel Tokar made one of the biggest financial steps in her life a few weeks ago when she signed for a mortgage on her first home, a white Colonial in North Baltimore’s Wilson Park.”

“But the next day, her lender, American Home Mortgage Investment Corp., disclosed that it was bailing out. ‘It was terrible,’ said Tokar, 21, who managed to find another lender after a midnight paperwork session with her real estate agent. ‘”I couldn’t really sleep.’”

“‘The bottom line is, we have people who want to buy homes or who want to refinance, and we have to turn them away because of tightening credit standards,’ said Tim Higgins, a loan officer in Ellicott City. ‘They may have qualified for financing as little as a week ago.’”

“‘It’s absolutely going to be a mess. I’ve been in the business 24 years, and I’ve never seen anything like this,’ said Sara Lenes, president of a Columbia brokerage. ‘We’re going to see more foreclosures, fewer people able to buy, and more houses sitting on the market for longer.’”

“William L. Yerman, chief executive officer a Baltimore brokerage, title and mortgage company, said he has been trying to persuade sellers over the past year that the market is not the same as it was in its heyday.”

“‘Sellers really need to have realistic expectations of what their house is worth,’ he said. ‘Can a changing mortgage market affect that? Absolutely.’”

“Home prices flattened in July in metropolitan Baltimore, as unsold houses swelled to a record and buyers faced tightening credit from a distressed mortgage industry.”

“‘Some houses have been on the market for so long that people have lost interest in keeping them up,’ said Tina Marine, an agent with in Annapolis. ‘They’re grungy. The beds get stopped being made. People just give up.’”

“Stacey Wooden and her husband, David Schreiber, have had their Mount Washington home on the market for four months. The couple initially listed their home for $769,000 but eventually dropped the price by almost $70,000.”

“The couple had hoped to move over the summer to enroll their two sons in school in North Carolina by fall. But despite several open houses, they have had just one offer.”

“‘We’re trying to be pragmatic about things,’ Schreiber said. ‘There don’t seem to be a lot of variables we have control over in the housing market.’”

The Bowie Blade from Maryland. “The number of Bowie area homes entering some stage of the foreclosure process has increased along with the national trend.”

“‘Bowie has had a substantial increase in foreclosures and notices of default because of the size and expense of many Bowie homes, combined with the modest, but inadequate, income of those purchasing these homes,’ said John Burns, chairman of the Prince George’s County Bankruptcy Laws Committee. ‘We find a number of folks were put into mortgages that they never should have been put into in the first place.’”

“‘No one discusses how they will pay their mortgage once it jumps up,’ Burns said. ‘You either have to sell your home, try to refinance at an affordable rate, or apply for bankruptcy. Otherwise, you’re stuck as the odd man out in a never ending game of duck, duck, goose.’”

“Selling a house in today’s market isn’t going to be as easy as it was a few years ago during the housing boom. According to local real estate agent Jane Gregory, ‘houses in the 20715, 20716 and 20720 ZIP codes are taking an average of 5.9 months to sell when three years ago they’d sell in less than a week.’”

“Despite the high levels of foreclosures and defaulting loans across the nation, one local real estate agent said that the Bowie area has not been hit nearly as hard as surrounding areas.”

“Broker Boyd Campbell, who has worked in the Maryland, Virginia and D.C. markets for some 30 years, said Bowie is fairing well and is more stable than Northern Virginia and Montgomery County.”

“‘Appraisers have been more conservative in Prince George’s County and investors haven’t invested as much here as in those areas,’ said Campbell. ‘Now those investors are trying to get out of their investments and they’re flooding the market. There’s far more loan defaults, bank foreclosures and houses going to auction in those areas than here.’”

The Morning Call from Pennsylvania. “A Morning Call investigation in July showed that the poor performance of subprime lending is affecting the Lehigh Valley. Federal banking statistics showed that Lehigh and Northampton counties ranked first and second among Pennsylvania’s 67 counties for the growth in subprime loans from 2004-2005.”

“Furthermore, one nationwide study…showed that federal and state legislators were aware of problems with subprime lending in Pennsylvania since at least 2001, but that legislation to respond to the growing problem had stalled.”

“In the past, Weaver of Deutsche Bank said, borrowers with these types of adjustable-rate subprime loans with low initial fixed rates used to keep refinancing when the initial fixed-rate period was over. And as long as home prices kept going up, this was not a problem.”

“But now, ‘the music is over,’ said Karen Weaver, global head of securitization research for Deutsche Bank. Home prices stopped going up.”

“The borrowers who face higher payments for subprime adjustable-rate mortgages with two-year fixed-rate periods are going to be people who took those loans out at ‘exactly the wrong time,’ said Weaver. And they are ‘just going to get hammered’ between the decline in home prices and the clampdown on credit, she said.”

“The number of homes that were sold fell year-over-year for the 14th consecutive month, according to statistics released by the Lehigh Valley Association of Realtors.”

“Other statistics suggest these trends will continue. New listings of available homes rose 9 percent last month to 1,615 units. The number of pending sales contracts, an indication of future sales activity, fell to 554 homes, the lowest level since February.”

“The outsize increases in prices and the fast pace of sales that became common during boom years of 2004 and 2005 are now securely in the past.”

“‘Anyone who just bought a house, hopefully, they are in it for the long haul,’ said independent appraiser James Keim.”

“Keim, who appraises homes in Lehigh and Northampton counties, soon expects to see asking prices for some homes to dip below what similar models sold for earlier this year. It’s likely to happen in suburban areas where many homes have not sold quickly, he said.”

“The lull comes after blockbuster years, in which low interest rates and an influx of people from New York and New Jersey brought new buyers into the market and sent prices soaring.”

“Another development that has limited the number of buyers is a tightening of borrowing regulations. ‘It is eliminating probably 20 percent of the market,’ said Jeff Burnatowski, an agent in Allentown.”

“Burnatowski and other real estate agents say the drop in sales has changed how they deal with their sellers. For example, sellers should consider all offers because, as Burnatowski said, ‘who knows when the next will come by.’”

“‘Sellers remember 2005, when homes were flying off the shelf,’ he said. ‘Sometimes they still expect that. It is not the same market.’”

What do you see in your housing market this weekend? A cartoon? Or a remorseful seller? “The Athens housing market, like the rest of the nation, has been slumping since its peak in 2005, but the first half of this year has been particularly hard. The Staianos, who moved to a home in the Cobbham neighborhood of Athens, originally put their Five Points house on the market in December 2006 and immediately found someone interested in buying the house, but for less money than the Staianos were asking.”

“‘We got an offer out of the gate, that in retrospect, we should have taken,’ Mark Staiano said.”

“Angie Adams has been a real estate agent for 27 years in the Pikes Peak region. Today, buyers might find 40 homes that match their desired price, location and amenities; three or four years ago, their choices would have been limited to maybe six or eight, Adams said.”

“‘Buyers used to narrow down their choices much faster,’ she said. ‘They don’t now. They want to see more. There’s just more to see.’”

“Even when Adams tries, however, some sellers don’t listen. She puts them in the ‘yes, but’ category. When she explains why they must lower their asking price to compete in the market, Adams often hears something like: ‘Yes, but my house has a beautiful yard,’ or ‘yes, but my house has a three-car garage,’ or ‘yes, but my views are better.’” “‘It will sink them,’ Adams said. ‘The ‘yes, but’ typically means they’re pricing it over the marketplace.’”

Rising foreclosures? “Mayor Robert Duffy opened a Foreclosure Summit at City Hall, telling a capacity crowd of more than 150 people: ‘We have a problem in Rochester. We have a problem with vacant houses. We have a problem with foreclosures.’”

“‘The view from the street is it’s a jungle,’ said John DeMott with Sector 4 Community Development Corp. in southwest Rochester. ‘The American dream is a little bit of an American nightmare right now.’”

“Banks are on pace to foreclose on more than 2 million American homes this year. It’s a national trend that’s hitting homes in East Tennessee as well.”

“Just ask Illree Terry about it in her La Follette neighborhood. To her…foreclosures are about the waist high grass and trash accumulating in the yard of the home next door. ‘Well, it’s just a big ol’ mess as they say and we have talked to our city for 2 months and nobody is doing nothing,’ Terry said.”

“60 days ago her neighbors disappeared. ‘Packed up and left one night about 12 o’clock and they have not been back. The house is a total wreck,’ Terry said.”

“Wayne Gregg, La Follette’s city code officer says the problem is getting worse as more homes are foreclosed on. ‘You can spend half a day trying to find who honestly owns this property,’ Gregg said.”

“In cases where the city can’t collect, it puts liens on the property to pay for the yard work. Just ask Terry, in today’s housing market, there still aren’t any guarantees. Collecting on those liens might not be as easy as it sounds.”

‘”Well, the way it looks now, No way it’s going to sell. No way,’ Terry said.”

Underwater? “Homeowners hit by rising interest rates are paying out hundreds of extra euro in mortgage repayments for properties that have dropped in value by more than €8,000 in just six months.”

“A four-bedroom semi-detached house in Rathfarnham, south Dublin, had its sale agreed at €820,000 but the deal fell through and the owner is now asking for €750,000 or ‘anything near that’ to secure the property.”

“An apartment owner in Dublin 15 saw the value of his property fall by €30,000 in just three months.”

“Group chief executive of Irish Life and Permanent plc, Denis Casey, described the falling prices as a ‘modest decline. It’s not substantial. House prices are back where they were in the third quarter of 2006.’”

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