The Housing Bubble

The Desert Sun reports from California. “Mirroring a trend sweeping across California and the rest of the country, home foreclosures and mortgage delinquencies are rising in the Coachella Valley. Triple-digit percentage increases are significant and send ‘an alarm that something is wrong,’ said Bill Powers, CEO of Pacific Western Bank in the valley.”

“Borrowers and investors who opted for adjustable-rate, interest-only and other loans are now facing ‘resets,’ just as home prices have flattened or have fallen in some areas. So many borrowers who had hoped to refinance based on fast-increasing home equity are stuck, Powers said.”

“‘I was saying years ago that this was out of control,’ Brad Mix, a business consultant in Palm Springs, said of aggressive lending activity. ‘You could tell it was going to excesses.’”

“Mix has watched foreclosure signs pop up in country club areas of Bermuda Dunes, an unfamiliar sight until now. Other valley cities with one, three or five foreclosures in an entire quarter a year ago are suddenly seeing double-digit figures.”

“The 92240 ZIP Code in Desert Hot Springs had five foreclosures during the second quarter of 2006, but 74 in the most recent quarter. La Quinta, with three during the second quarter last year, increased to 55.”

The Santa Cruz Sentinel. “Jim Chubb of Pacific Inland Home Mortgage in Soquel said he has seen some fallout from subprime loans.”

“‘I have had several Spanish-speaking borrowers come to me to help them understand loans they had obtained from a friend or a family member,’ said Chubb, who has been in lending for more than 20 years. He said he’s seen cases with ‘a gigantic commission’ and ‘misleading or incomplete information about the loan and the costs.’”

“‘I see this as a result of new loan officers entering the business and either being unsupervised or taught to overcharge friends and family because they trust who they are working with,’ Chubb said.”

“So far this year, 539 Santa Cruz County homeowners have received notices of default, which are issued after missed payments; in Monterey County, where there are more Latino home buyers, the number is 1,559.”

“According to statistics from the Santa Cruz Record, about half of those properties are in foreclosure. In the tri-county area, which includes Santa Cruz, Monterey and San Benito, 719 homes have been sold in foreclosure auctions this year, up from 71 last year at this time.”

“‘Until this ‘glut’ passes through the system, the real estate market cannot regain a stable momentum,’ said Greg Flowers, president of FirstNet Mortgage in Capitola, predicting lower prices for homes that go on the market.”

The Modesto Bee. “Forged signatures. Fake documents. Phony figures. Lies. Lies. Lies. That’s what leads to real estate fraud, and housing industry professionals must beware of such crimes or they can be criminally prosecuted.”

“That’s the message Marlisa Ferreira emphasized Tuesday in a talk to a group of Latino real estate professionals. Ferreira prosecutes real estate fraud cases for Stanislaus County, and she’s spreading the word that everyone involved in scams can be held criminally liable.”

“‘I know you all see it. I know you do. So report it. I don’t care if it’s a friend of yours who’s doing it,’ Ferreira told members of the Central Valley chapter of the National Association of Hispanic Real Estate Professionals.”

“Letting a suspicious transaction proceed is not just unethical, it’s illegal, the deputy district attorney explained: ‘If you know the deal is hinky and you do it anyway, you’re aiding and abetting a crime.’”

“There’s plenty of blame to go around in real estate fraud and the current home foreclosure crisis, said Aly Vizcarra, a marketing executive with Chicago Title who is president of the real estate professional group.”

“‘Realtors, title and escrow officers, home inspectors and lenders, we all played a hand in this,’ Vizcarra said.”

“When the housing market was booming, he said, many home buyers got into bad loans without anyone warning them off. ‘It was a lot easier when the market was hot to just look the other way and accommodate these (contract) signings,’ he said.”

“The same day Holly Olmstead packed up the house she no longer can afford here, the City Council took up the troublesome question Tuesday of what to do about homes that have been lost to banks and are now deteriorating.”

“The Northern San Joaquin Valley is ground zero in the foreclosure crisis: San Joaquin County ranks first in the nation, followed by Merced County in second place and Stanislaus County in fourth.”

“Olmstead said she had to stop watering her front lawn when she couldn’t pay the bills. She lost her job shortly before escrow closed in May 2005 on a two-story, five bedroom home on Tannehill Drive, a fact she said her lender knew, but still told her she would be able to refinance in two years with money to spare.”

“‘I’m devastated,’ Olmstead said. ‘By the time I tried to refinance, (the lender) said I didn’t qualify.’”

“She put the house on the market a year and a half ago, but it didn’t sell despite enlisting the help of two real estate companies. She has dropped the price from $650,000 to $515,000. If she doesn’t find a buyer by Sunday, the home goes into foreclosure, she said.”

“She isn’t the only one. A few houses down, another dry lawn surrounds a real estate sign advertising the home as a bank foreclosure. The new neighborhood around Woodward Park is speckled with for sale signs and dry lawns. The story is repeated in other Northern San Joaquin Valley cities.”

The Union. “While declining home prices leave a bitter taste in the mouths of sellers trying to recoup profits on investment properties, the housing slump offers Nevada County’s working class a chance to set down permanent roots in their community.”

“Prices have dropped in western Nevada County since real estate peaked in 2005, and low-end sales continue to fuel purchases in the area’s most relatively affordable area, Grass Valley.”

“Nancy Markson never thought she could afford to buy a home on her own. ‘I didn’t see how a person making what I make could buy a house,” she reflected. But she underestimated herself. Last week, Markson signed escrow for a two bedroom, one bath, ‘cute’ Grass Valley home.”

“Median home prices in Nevada County fell by 7.74 percent, from $465,000 in July 2006 to $429,000 in July 2007, according to Data Quick.”

“The shifting home sale prices mark the beginning of a new real estate cycle, according to Chauncey Poston, president of the Nevada County Board of Realtors. ‘I think what we’re seeing right now is a transition,’ Poston said. ‘We just came from a cycle that reached all time highs.’”

“The flooded market gives buyers negotiating power for a competitively priced house in good condition and in the right neighborhood. Buyers with good credit can still find interest rates under seven percent. ‘Now buyers are king,’ said Teresa Poston, a broker with 22 years in the real estate field.”

“Gone are the days of quick appreciation when investors flipped homes in a matter of months. Instead, buyers must use patience, because they probably won’t see significant returns for five to ten years, Poston said.”

The Emporia Gazette reports from Kansas. “There seems to be a lot of homes for sale these days in Emporia. ‘We have probably the most inventory for this time of year that we’ve had in the last 10 years,’ said Maurice Schmidt, (who) has been in the real-estate business for 30 years. ‘Is this a crisis?’ Schmidt said. ‘Absolutely not.’”

“Schmidt said he personally believes that people in the Midwest are reading and watching national media. ‘It’s kinda like they think ‘Gosh, real estate activity is down on the coast…why isn’t it here?’’ Schmidt said. ‘And maybe there’s a little nervousness if you will.’”

The News Leader from Missouri. “According to data supplied by the Springfield Urban Neighborhoods Alliance, Greene County is experiencing a dramatic spike in home foreclosures. For the most recent 12-month period, August 2006 to July 2007, there were 635 foreclosures, a 40 percent increase over the same period a year ago.”

“‘The housing market has always been cyclical, but what is unprecedented this time is the whole subprime issue and how the nature of lending has changed,’ said Brian Fogle of Great Southern Bank. ‘People are not losing jobs.’”

“‘We lowered so many barriers that we put a lot of folks in homes who should not be in the homes,’ Fogle said. ‘There’s a fine line between what’s enough and what’s too much.’”

“This is a stark contrast to the euphoria of just a few years ago when the barriers to homeownership seemed to melt away and many families saw their American Dream come true. ‘A lot of that was a good thing,’ said Fogle. ‘Our homeownership peaked in 2005 at 69.4 percent.’”

“Said Tonya Collister, of Consumer Credit Counseling Services of Springfield: ‘The industry should have known … you can’t put anybody in a home.’”

“Asked whether there is a silver lining amid this flood of foreclosures, Collister paused and said: ‘In the long run, the economics may come back to an even keel. On the local level, I can’t think of a silver lining.’”

The Rockford Register Star from Illinois. “The free-flowing, easy credit days of 2003 to mid-2006 opened the door to homeownership for millions of people who could not dream of qualifying for mortgages before.”

“To people such as Tim Hoffman, who makes his living managing about 60 single-family rental homes in Rockford, it was something entirely different. He called it ‘the perfect storm.’”

“The vast number of first-time buyers pushed home prices — and tax assessments and tax bills for everyone else — to record levels and left rental property owners with a dwindling pool of tenants to choose from.”

“‘If I was renting a house for $500 a month and that tenant bought a house, I couldn’t find anybody to qualify for $500,’ Hoffman said. ‘And there was this huge glut of rentals on the market, guys in the same situation. I had the option of letting it sit empty or dropping it to $450.’”

“But the good times for iffy borrowers and overeager lenders couldn’t last. And landlords may be the one segment of the economy benefiting from the sudden tightening of credit that’s keeping many from homes they can no longer afford.”

“‘I am seeing an upswing of applications from people who have lost their houses. It’s not like it was four or five years ago, but things are getting a bit better,’ said Hoffman.”

“The Census Bureau, through its ongoing American Community Survey, released this week 2005 housing stats for areas of more than 65,000. According to the survey, the number of owner-occupied housing units in Winnebago County increased 4.5 percent from 2000, but the number of renter-occupied units fell 6.1 percent and the number of vacant units nearly doubled from 6,424 to 12,302.”

“Landlords weren’t making up for the increased vacancies through rents either. The median rents grew from $514 in 2000 to $585 in 2005, an annual increase of 2.8 percent, which barely outpaced the annual rate of inflation of 2.6 percent.”

“‘When I first got into this, my criteria was XYZ and I wasn’t going to rent to someone who didn’t meet the criteria,’ he said. ‘As banks dropped their lending criteria, I had to lower my criteria to X, Y and Z or I was going to have houses sitting empty. You can have some, but too many and you go broke. Now you are seeing more evictions.’”

“Vince Miosi owns two rental houses and nearly a dozen apartment buildings. To fill apartments he did have to cut deals on security deposits because competition for good renters was so fierce.”

“‘That’s really tough on landlords,” said Miosi, who has been a landlord since 1986, the past 11 years in the Rockford area. Miosi, who like Hoffman is on the board of directors for the Rockford Apartment Association, said he stood up at a meeting and implored landlords to cut back on incentives like lower security deposits or offering the first month free before everyone went broke.”

“‘You’ve heard of buyer’s markets, this was a renter’s market,’ Miosi said. ‘I’d get calls and the first thing a guy would ask is how many months’ free rent am I offering.’”

“The tenants who stayed with Miosi were affected as well because, he said, when he had a lot of vacancies he ‘didn’t have the cash flow to make improvements to the properties.’”

The Daily Herald from Illinois. “Tall grass. Homes in disrepair. For-sale signs clustered in a single neighborhood. Suburban leaders say they are concerned when they see these things, red flags that foreclosure is looming, or that it has already happened.”

“Round Lake Mayor Bill Gentes’ village had 60 foreclosures in 2006, according to data on the six-county Chicago area compiled by the Woodstock Institute. Last year was the first year town-by-town data was collected.”

“‘The American dream is homeownership,’ Gentes said. ‘It’s not foreclosure.’”

“Gentes said he’s concerned about one Round Lake subdivision now marked by abandoned homes, clusters of for-sale signs and other signs of distress. Problems at the four-year-old Lakewood Grove subdivision stem in part from individual investors who bought a number of homes with the idea of unloading them for a quick profit, Gentes said. He said 10 to 15 homes have been abandoned at Lakewood Grove.”

“Some investors purchased houses and used a rent-to-own concept to lure occupants with poor or shaky credit. Gentes said the downfall came when the owners dramatically hiked the monthly payments because of higher taxes, sending the residents fleeing and leaving empty homes.”

“Carpentersville had 212 foreclosures or 30.26 per 1,000 owner-occupied units in 2006. ‘I certainly see it as a problem for all communities where people are on the bubble or the bubble has burst beneath them,’ said Carpentersville Village President Bill Sarto.”

The Chicago Tribune from Illinois. “In an ideal market, families with an annual median income of $69,800 should be able to afford a median-price, single-family home, but in DuPage County that’s only about half the wages needed to buy that $360,000 house, according to a new report.”

“At best, that income could support a home priced at $200,000, according to an official at the DuPage Homeownership Center. And few of those homes are available in DuPage, real estate agents say. The DuPage median income is only 55 percent of what’s needed to buy a median-price house in the county, the report states.”

“‘The conventional wisdom is that a family earning the median income for a given area should be able to afford the median-priced home in that area,’ said said Dru Bergman, executive director of the Homeownership Center. ‘An index of 100 would mean that the market is in balance. Clearly in DuPage, with an index of just 55, housing prices are far outpacing the incomes of many working families.’”

“And indexes from previous years indicate a worsening situation, the report states. Last year’s index was 59, and in 2005 it was 63.”

The New York Times on Ohio. “Tami and Charles Eggleston never took out a risky mortgage, never borrowed more than they could afford and never missed a monthly payment on their neat, three-bedroom colonial in the Cleveland suburbs. But that hasn’t prevented them from getting caught in the undertow of the subprime mortgage mess now submerging this town.”

“Over the last 18 months, the Egglestons have watched one house after another on their street end up foreclosed and vacant. Although lawns are still tidy and empty homes are not boarded up and stripped as they are in inner-city Cleveland, the Egglestons say Maple Heights no longer feels safe after dark.”

“In May 2006, they put their home on the market in order to move closer to Mrs. Eggleston’s parents in another middle-class Cleveland suburb, Richmond Heights.”

“They have had no takers. Although they lowered the asking price to $99,000 from $109,000, no one has even come to look at it in more than six weeks.”

“‘My heart panics every time I drive down the street and I see another for-sale sign,’ says Mrs. Eggleston, pointing past the placards in front of her porch to others that dot surrounding yards like lawn furniture. ‘Some people on the street couldn’t pay, so they just left. The competition to sell is just ridiculous.’”

“Analysts also say that the fallout from mortgages gone bad is spreading well beyond borrowers now in default. It has begun to engulf middle-class communities like Maple Heights, where nearly 10 percent of the houses — or 910 properties — have been seized by banks in the last two years.”

“Many of these loans were made in 2005 and early 2006, when standards were at their most lax and cities like this were blanketed with aggressive pitches from mortgage providers.”

“‘I don’t think we’ve hit bottom,’ says Michael G. Ciaravino, the mayor of Maple Heights. ‘My fear is that foreclosure rates could go to double where they are today.’”

Some housing bubble news from Wall Street and Washington. MarketWatch, “The U.S. housing market showed signs of major mortgage disruptions, with contract signings on existing homes falling by 12.2% in July — the largest drop since the pending homes sales index started in 2001, the National Association of Realtors reported Wednesday. Pending sales are 16.1% below July 2006. The July data reflects trends prior to the mortgage meltdown in August.”

“‘It’s difficult to fully account for mortgage disruptions in the index, and our members are telling us some sales contracts aren’t closing because mortgage commitments have been falling through at the last moment,” said Lawrence Yun, NAR senior economist, in a statement.

“Yun said abnormal factors are clouding the horizon. ‘These temporary problems are primarily with jumbo loans, and there are continuing issues for subprime borrowers, but there are no serious problems for the majority of buyers who qualify for conventional financing or FHA-insured loans.’”

“‘If lenders focus on the essentials of creditworthiness and adjusted valuations based on comparable sales, and ignore speculation on what might happen in the future, broader stabilization will come sooner rather than later,’ Yun said.”

“The PHSI in the South was 15.2 percent below a year ago. In the Northeast, the index is 10.0 percent lower than July 2006. The index in the Midwest was 15.8 percent below a year ago. In the West, the index was 21.8 percent below July 2006.”

From Bloomberg. “U.S. bank regulators, facing the worst housing slump in 16 years, called on mortgage lenders to stave off foreclosures by cutting or postponing home payments for cash-strapped borrowers. The Federal Reserve joined with the Treasury Department in making the unprecedented appeal.”

“The public move by the regulators is ‘extraordinarily unprecedented’ since they’ve historically made such recommendations behind the scenes, said Gilbert Schwartz, a former associate general counsel at the Fed.”

“The banking agencies are taking a voluntary approach since ’securitization transactions are contractual in nature’ and ‘regulators can’t force institutions to breach these contracts,’ said Schwartz.”

“‘The Fed’s institutional culture doesn’t lend itself to this,’ said Lou Crandall, chief economist at Wrightson ICAP LLC. ‘They don’t get here without sharing some of the anger in general in Washington at the lending practices.’”

“The rates banks charge each other to borrow in dollars for three months rose for a 10th day as concern about losses on securities linked to U.S. subprime mortgages kept lenders from offering cash for any time longer than a few days.”

“Lending rates have risen so fast that the Bank of England today offered to provide additional cash to ease the squeeze and the European Central Bank said it may act tomorrow to soothe money markets if needed. The moves came amid concern banks may be sitting on undisclosed losses as a result of late payments by homeowners with poor credit histories.”

The Financial Times. “‘What is happening right now suggests that the moves by the Fed and ECB just haven’t worked as we hoped,’ admits one senior international policymaker.”

“Or as UniCredit analysts say: ‘The interbank lending business has broken down almost completely…it is a global phenonema and not restricted to just the euro and dollar markets.’”

“The high demand from banks to secure liquidity for the next three months, coupled with their desire not to lend out what liquidity they have, has made it virtually impossible to execute trades – even at the official prices quoted for such borrowing.”

“That has created some extraordinary dislocations such as the fact that the cost of borrowing three-month money in the sterling Libor markets is now higher than borrowing six-month or 12-month money. ‘The system has just completely frozen up – everyone is hoarding,’ says one bank treasurer. ‘The published Libor rates are a fiction.’”

The Financial Post. “Owners of billions of dollars of troubled asset-backed commercial paper issued in Canada could lose as much as half of their money because of poorly disclosed exposure to derivatives trades, industry observers are warning.”

“Commercial-paper markets around the globe have been struggling with fallout from the subprime mortgage crisis in the United States, but the situation is worst in Canada.”

“The vast majority of about $35-billion of non-bank ABCP is backed by risky bets on credit default rates that are now so far underwater that investors could be looking at losses as high as 50 on the dollar, said Edward Devlin, Canadian portfolio manager for highly respected bond fund manager Pacific Investment Management Co. LLC.”

“‘You’ve got to think people are not going to be pleased about that,’ he said in an interview.”

From Newsday. “Delta Financial Corp., the troubled Woodbury-based subprime lender, said Wednesday it has bundled together for sale bonds backed by $900 million in mortgage loans, a move the company hopes will increase its ability to borrow money to originate more loans.”

“Hugh Miller, Delta Financial’s chief executive officer, said in a statement before markets opened for trading that pricing the security was ‘paramount’ for the company ‘in light of the rapid deterioration in the credit markets.’”

“Miller added, the pricing was much less favorable than in the past, ‘reflecting the highly illiquid market conditions where virtually no mortgage-related securitizations are being consummated or sold.’”

“Two weeks ago, Delta said that it will be cutting 300 jobs, most of them in Florida, Texas and California, but some on Long Island, because of the current market environment.”

From Reuters. “Planned U.S. lay-offs rocketed in August as the housing slowdown and subprime mortgage debacle led to record job cuts in the financial sector, an independent report showed on Wednesday.”

“Announced lay-offs surged 85 percent to 79,459 in August from 42,897 in July, according to Challenger, Gray & Christmas Inc.”

“‘Nearly half of the August cuts came from the financial sector, as dozens of mortgage and subprime lenders caved under the pressure of a sinking housing market,’ Challenger, Gray & Christmas said in a statement.”

From CNN Money. “Home Depot’s CEO Frank Blake said Wednesday that the softness in the housing market and the subprime mortgage squeeze will probably carry through much of 2008.”

“‘In the beginning of this year, we had hoped to see the start of some bottoming in the housing market in the back-half of 2007. We don’t think this will happen,’ Blake told an analysts gathering.”

“He added that 2007 ‘will continue to be a tough year.’ More importantly, he said ‘much of 2008 will face into the same headwinds.’”

“‘There’s a lot of speculative activity in the markets. And the subprime issue is putting additional pressure on consumers. We will see this play out over the next few quarters,’ Blake said. On a regional basis, Blake said Florida and California were two markets that had suffered the most dramatic slowdown in terms of Home Depot’s business.”

“Daiwa House Industry Co., Japan’s second-biggest homebuilder by market value, wants to cut local costs and expand in China as the developer is concerned a property ‘bubble’ may burst, slashing land prices.”

“‘The property market has become dangerous,’ Takeo Higuchi, chairman of the Osaka-based homebuilder, said in an interview. ‘I wouldn’t be surprised if the real estate bubble goes bust.’”

“Land prices are key for Japanese homebuilders like Daiwa House because declines in population are shrinking the residential construction market. Housing starts in the first half of this year averaged about 23,000 a month fewer than they did 20 years ago.”

“Japan’s land price growth quickened last year to 8.6 percent from 0.9 percent in 2005. The gain was the fastest since the National Tax Agency started to compile national land figures. The rapid gain in land prices has become worrisome for Daiwa House, Higuchi said.”

From Marketplace. “Stacey Vanek-Smith: ‘Gone are the days when you could land a home loan with less-than-sterling credit and no money down. Mortgage lenders and big banks have gotten very finicky in the last few weeks.’”

“Mitch Ohlbaum is a mortgage broker in Los Angeles. He says if you want to get a decent interest rate now, you’d better have great credit and be prepared to put down a big chunk of change. Mitch Ohlbaum: ‘For now, the standard is really going to be 10 percent if you want to buy something. Which in the real world’s not so bad, it’s just a little bit more difficult where we live, where everything’s a million dollars.’”

“Ohlbaum says 10 percent down is unrealistic for many of his middle-class and working-class clients, even those with steady incomes and good credit. The result? They can’t get the loans they need to buy in L.A.”

“Dan Arguelles is a real estate agent in Manhattan Beach, California. Dan Arguelles: ‘Now it’s getting even tougher, that you have to state your income. It is getting a little harder to find that qualified buyer.’”

“The same thing is happening in New York, San Francisco and Washington D.C.”

“Housing market economist David Lereah is with move.com. He says a couple months ago it was too easy to get a loan, now it’s too hard.”

“David Lereah: ‘We need to be making loans to families that have the financial wherewithal to buy these homes. That’s the American dream, is homeownership. And now we’re keeping families out of that dream, because we’ve overreacted to this boom-bust cycle that we find ourselves in.’”

“Lereah says if the credit-crunch continues, it will erode consumer confidence in high-priced real estate markets and that could spread to the broader economy.”

The Sun News reports from South Carolina. “August real estate sales continued to show large declines compared to last year, with the number of condominiums sold reaching less than half of what sold last year. Real estate agent Lee Horton said August started out looking like sales would pick up, since he had two contracts signed at the beginning of the month.”

“But then news of more mortgage tightening happened, and he thinks that affected the rest of the month. One of those contracts fell through. ‘The last two weeks of August it was really slow,’ said Horton.”

“Horton has a four-bedroom home on the market on which he lowered the price by $200,000. He said the $849,000 price tag was an amount the seller could have gotten a few years ago, but not today. A home in Arcadia Ridge that’s for sale started at $547,000 and lowered to $489,000. He has a contract for that one, but it’s lower than the asking price.”

“He has been told by some buyers that all the bad news has them believing now may be the time to buy, although few have acted on it. ‘The main thing is the psychological factors. Nobody wants to be the first [to buy],’ he said.”

The News Press from Florida. “Mortgage foreclosures in Lee County continued to rise in August while building permits fell to their lowest level since November 1981, according to statistics released this week.”

“Foreclosures are ’still an upward trend,’ said mortgage broker Jeff Tumbarello, who tracks the local foreclosure market. ‘It’s hard to know what to think of it until it hits the top. How many more can we have?’”

“He noted that they’re mainly recently bought properties that the owners, many of them speculators, are letting go of because they no longer make sense as an investment. ‘Everyone who bought in ’05 and ’06 is just walking.’”

“‘It is unfortunate about the foreclosure number but not unexpected,’ said Jamie Pirrello, president of Vision Homes USA in Fort Myers. ‘As far as the permit numbers it’s good news” because that means there will be a chance for the real estate market to start grinding away at the 15,000 homes for sale through Realtors.’”

“Mortgage broker Lane Houk in Bonita Springs said the relaxed rules for federal insurance of loans instituted by President Bush last week will help some but not all people facing foreclosure.”

“Houk said the new loan has to be no more than 97 percent of the home’s value and that can be a problem because many houses bought at the height of the housing boom in Lee County are worth far less than their mortgages. The bottom line, Houk said, is that ‘many of the people in subprime loans bought in ’04 still have equity in their home’ and could be eligible. ‘If they bought in ’05, they probably won’t.’”

The Orlando Sentinel from Florida. “Many Realtors and home builders privately concede that the slump is serious and has had a ripple effect on other businesses, but publicly they tend to remain upbeat.”

“Few Realtors, though, have the experience or plain-spoken nature of sales agent and developer E. Everette Huskey of Longwood, who said last month that the Orlando area is ‘experiencing one of the worst residential housing slumps — the worst I have seen in more than 61 years of real estate and developing in Central Florida.’”

From My Fox Tampa Bay in Florida. “Gone in 60 seconds. That’s how quickly homes in foreclosure sell on the auction block at Hillsborough’s Courthouse. ‘We’ve got about a 60 percent increase in mortgage foreclosures, and of course we didn’t anticipate that,’ said Clerk Pat Frank.”

“Frank says her office logged 900 new filing in August alone. ‘I would say we’re in for a couple rough years,’ she said.”

The Coloradoan. “Norlarco Credit Union wants to try to resolve more than 960 delinquent construction loans before it resorts to foreclosing on the properties, saddling the credit union with up to $70 million in property worth a fraction of its original value in one of the worst housing markets in the country.”

“State Commissioner of Financial Services Chris Myklebust, whose office oversees state-chartered credit unions, told the Coloradoan on Tuesday no foreclosure proceedings had been started on a portfolio of delinquent construction loans in Florida.”

“The loans, which Myklebust said were ‘not prudent,’ threaten to bring down Norlarco and Huron River Area Credit Union in Michigan.”

The Bradenton Herald from Florida. “Three months after The St. Joe Co. halted preconstruction sales on its $600 million SevenShores condominium development on Perico Island, the company still isn’t saying what its next step will be. ‘You know, you read every day about what’s going on with condo projects and inventories and I think they’re taking all that into account,’ said Scott Carpenter, a public relations representative for St. Joe.”

“Preconstruction sales at SevenShores first began in May of last year. As of December, only nine of the proposed 686 units on 353 acres fronting the Intracoastal Waterway near the Anna Maria drawbridge had been presold, despite the prices of starting units being dropped by $60,000.”

“Commitments for 20 units were needed in order to begin vertical construction on the first of 13 planned condo towers.”

“St. Joe officials offered to refund deposits on the units once the project was halted. Carpenter would not discuss the status of deposits on the units. ‘We’re not going to get into who’s been refunded what and how much has been refunded,’ Carpenter said.”

The Tampa Tribune from Florida. “A New York hedge fund is now poised to provide financing for the 52-story Trump Tower Tampa if Donald Trump drops his lawsuit against local developer SimDag LLC, a consultant working on the deal said.”

“Thomas Long of (a) Tampa law firm, is representing several buyers, including two who have sued seeking their deposits back. He said his clients have been hearing about hedge funds for two years and are not holding out hope that the latest one will decide to back the deal.”

“‘A bunch of lenders have said no, and those lenders charge normal interest rates,’ Long said. ‘A hedge fund will want part of the deal and they charge a large interest rate. I would think there won’t be much profit left.’”

“Some buyers, Long said, have agreed to get half their money back, but the clients who have sued declined the deal because that would mean forfeiting rights to get back their full deposit.”

“Buyers put down 20 percent deposits. Half the money went to escrow, Long said, and the other half was available for the developer to use on construction costs. ‘I don’t know how much money is left,’ Long said.”

The Palm Beach Post from Florida. “The region’s condo market may have cratered, but an Atlanta-area developer is betting that Delray Beach’s rental apartment market will stay strong.”

“Renting was considered a fool’s game during the housing boom that ended in 2005. But with mortgages less available and property taxes and insurance bills in the stratosphere, renting a home no longer looks like such a bad deal.”

“The median condo price in Palm Beach County plunged 23 percent in the past year, the Florida Association of Realtors said in August, and many would-be flippers are forced to rent their empty units. But Jay Jacobson, Wood Partner’s South Florida director, said there aren’t many of those empty condos near his site.”

“‘As long as you’re not in an area where there are a lot of condos that are being rented, the apartment market is strong,’ he said.”

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