The Housing Bubble

The Contra Costa Times reports from California. “Roiesha Scot sat on her dark leather sofa, holding her 2-week-old baby, and said it was her fault. ‘Now I wish I had asked more questions and done a lot more market research,’ she said. ‘As soon as we moved into the house, the values were going down. I feel like I put my family in a predicament.’”

“Scott and her husband Joseph were served with a notice of default in September and put their house on Tea Rose Court up for sale in late October for $400,000. They bought the home in March 2006 for $515,000 and, because of a job change, now can’t afford monthly payments.”

“According to DataQuick, 45.9 percent of California homeowners escaped foreclosure by making catch-up payments, refinancing or selling their homes. Last year, that number was 80.9 percent.”

“The numbers also show what caused the problems so many saw in the county. In September 2006, the median home price in Fairfield was $505,000. In September of this year, that price dropped to $386,000, the biggest drop of any city in Solano County.”

“Milian Correa and her husband, Victor, left Oakland when they bought their home in 2002. Soon the two put money down on a house and three years later traded up to a newer, upgraded $540,000 home in 2005.”

“In the past few years, her husband invested heavily in real estate, leveraging loans and properties. Once the appreciation stopped, so did most of his income, and Correa realized in April that they couldn’t afford their two mortgages of $2,700 a month.”

“‘Nobody would refi it or change my payments,’ she said.”

“Correa, who lived off her pension from Alameda County, started working as a server at the Trilogy clubhouse and then cleaned houses. In October, after six months of cleaning houses, she stopped because the work was too physically demanding. She decided it wasn’t worth it, especially when she could rent a home nearby for $1,200.”

“‘I came to terms with the whole thing. For my sanity and health it was the best thing to do anyway,’ she said. She hasn’t made a payment since September.”

“Homeowner Barak Engel called the $495,000 price for his home ‘the last option before the nuclear option.’ The nuclear option means walking away from the home.”

“Engel has a home in El Sobrante he bought in August after a job change and hoped to sell his Vallejo home. But even with $100,000 in upgrades, his home in Glen Cove isn’t selling. So he dropped the price to $495,000 but thinks his house is getting lost amid the area’s foreclosures and short sales.”

“He said he blamed Vallejo’s housing glut. According to Realtor.com, as of Wednesday there were 1,729 properties for sale in Vallejo.”

“‘With more than 1,500 listings, it’s a crapshoot,’ said Engel. So he took his case to Craigslist. ‘I will admit it; we got caught by the insanity,’ his ad read.”

“‘One moment our house is worth $625,000. Then we spend over six months and over $60,000 updating it,’ he wrote. ‘So here is the deal. We owe $495,000 on this house. We are not greedy. I just want to stop paying so much every month on both houses. I don’t want to have it foreclosed on, even though we could technically simply walk away and be none (the worse.) I don’t think it’s honorable.’”

“The ad has earned Engel some interest, but no solid offers.”

“Scott was disappointed about losing her Suisun City home but remained optimistic about her family’s future in Solano County. ‘I guess this was more of a learning experience,’ she said. ‘I think I’d rather rent for a while.’”

From The Sun. “Local retail mortgage branches are joining their counterparts nationwide in trimming employees as turmoil in the subprime lending market entangles growing ranks of homeowners who can no longer pay their monthly bill.”

“The latest casualty: JP Morgan Chase’s subprime loan operation in Ontario. JP Morgan plans to shutter its doors by Dec. 15, laying off just under 100 employees, according to state data on unemployment trends.”

“‘That was our entire facility in Ontario,’ said Christine Holevas, spokeswoman for the Wall Street-based conglomerate. ‘Because of what’s going on with home prices and tighter credit conditions, we decided to consolidate.’”

“Starting with layoffs last summer, subprime offices are expected to shed nearly 260 jobs locally by mid-December, according to data provided by the state’s Employment Development Department in Sacramento.’ “And the local subprime meltdown shows signs of rippling beyond just mortgage-related businesses.”

“Across San Bernardino County, two beverage distribution services, a financial software company, bakery wholesaler, tortilla chip producer, plastic bag manufacturer, bathroom-parts manufacturer, and several other companies recorded more than 1,550 potential job losses since February, according to data on the employment department’s so-called WARN list.”

“First Magnus Financial Corp., a secondary-mortgage service based in Tucson, Ariz., shut down its Rancho Cucamonga branch in August, cutting 76 jobs, and later filed for Chapter 11 bankruptcy protection.”

“Orange-based ACC Capital Holdings had two subsidiaries, also in Rancho Cucamonga, and laid off an undisclosed number of employees in May. Data from the state shows ACC laid off 51 people locally.”

“Chris Orlando, ACC’s VP of corporate communications in Irvine, blamed the layoffs on a ‘challenging nonprime market.’ ‘We’re currently winding down our retail operations,’ said Orlando of the company’s subprime business.”

“Many jobs were created when borrowers devoured these risky adjustable-rate and special-interest loans to purchase homes in the San Bernardino-Riverside area or to refinance their existing mortgage. It’s one reason Thomas Pierce, economics professor at Cal State San Bernardino, isn’t surprised when he hears about layoffs in housing-related industries.”

“‘Now that the situation has weakened very substantially, and the level of housing activity and borrowing has leveled off, it’s not surprising that you would see some layoffs in really any sort of business that’s related somehow to housing,’ he said. ‘It’s not shocking to hear.’”

The Daily Pilot. “It hasn’t been a sterling few months for the U.S. economy. The housing market has dipped, foreclosures have hit record highs in California, and the National Retail Federation predicted in September that the holiday season would experience the lowest sales growth in five years.”

“The Daily Pilot quizzed Peter Navarro, a professor at UCI’s Paul Merage School of Business. Navarro predicted tough times ahead.”

“Q: Do you think the economy is headed toward a recession? A: It’s clearly headed toward a slowdown and for most Americans that will feel like a recession.”

“Q: Does the housing market play a part in the downturn? A: No question about it. The housing market basically was the primary stimulus of consumption since about 2002. Basically, people were using their homes like ATM machines. That was a tremendous stimulant to growth, just as the tech bubble was a stimulant in the late 1990s. Now, that stimulus is no longer there, and that’s causing lots of issues.”

“Q: Are there any positive signs you see in the economic forecast? A: To be honest, no. We’re in a difficult situation here.”

“Q: What is your forecast for Newport-Mesa? A: This is a very heavy area for real estate development and financing industry, and these sectors will continue to be hit hard by this slowdown. New home buyers in the O.C. in the last several years will likely see a significant loss in home equity as real estate prices slide.”

The Sacramento Bee. “The weakness in Sacramento’s real estate market is no longer confined to housing. Commercial real estate is starting to soften.”

“It would seem like one of the best locations to build a shopping center: Elk Grove Boulevard at Interstate 5, in one of Sacramento’s fastest-growing suburbs. But retailers have been slow to flock to Stonelake Landing since it opened last March. The Elk Grove center is 45 percent rented and has lost two tenants that had signed leases.”

“Signing leases ‘has taken us longer than we anticipated,’ said Dan Nethercott, owner of the firm behind the center. But it’s ‘frankly better than I expected, given the doom and gloom that I hear.’”

“‘It is a little bit of a concern,’ said David Lyons, labor market consultant for the state Employment Development Department. ‘It looked like we were going to have this isolated to housing, (but) the commercial side is starting to feel some of it.’”

“‘Retail goes where rooftops are,’ said Sacramento-area real estate consultant Alan Gianini. ‘Clearly there’s no way anybody could say commercial is immune to what’s going on in residential.’”

“The housing market is hurting retail in another way: When times were good, entrepreneurs tapped their home equity to open stores and restaurants. No more.”

“‘For a lot of startups, their initial line of funding comes from home-equity loans,’ said Garrick Brown, regional research director at Colliers International real estate. ‘That’s disappeared.’”

“Marty Clevenger, president of a commercial developer in Roseville, said small strip centers without a large anchor tenant have fallen out of favor. And new shopping centers anchored by supermarkets have come to a halt because of the dropoff in home building.”

“Grocers ‘have pulled back because those projects are specifically tied to housing units,’ he said.”

“Clevenger said his own company is backing off from development projects until the picture brightens. ‘We’re moving to a cash position and waiting to see how this shakes out,’ he said. ‘We’ve liquidated everything.’”

“Sacramento psychotherapist Peter Cole and Daisy Reese have worked with dozens of clients, helping untangle emotional conflicts that all too often were rooted in unhealthy attitudes about money – how to spend it, save it or squander it.”

“Q: What makes your ‘financial psychology’ approach different?”

“Reese: You can’t really separate psychology and money…but people often wind up (in trouble) because of their internal tug-of-war over money issues. For many people, the families they grew up in and the messages they got about money … play out to their detriment as adults.”

“Q: Why is money such an emotional issue? Reese: Many people define themselves by their salary or how much they have in the bank. If that doesn’t measure up to what their parents expected or what their next-door neighbors are making, many people get down on themselves, get depressed, feel incompetent.”

“I have a client who’s a victim of the subprime mortgage debacle. His payments keep going up, he can’t get refinancing, and he’s really terrified he’s going to lose his house. And it was because he was trying to keep up with the Joneses in his personal life. He came in for emotional therapy, but part of that involved his financial issues.”

The Record Searchlight. “It’s a great time to buy. That’s the chorus coming from real estate agents and builders everywhere as they attempt to prop up the sagging industry.”

“But how many can afford to buy in Shasta County? Well, according to the National Association of Home Builders’s own housing affordability index, not many.”

“In Shasta County, 20.3 percent of the homes sold in the third quarter of 2007 were affordable to families earning the area’s median income of $52,700 a year, the NAHB reported last week.”

“California remains the nation’s least affordable market for housing. Statewide, a mere 12.6 percent of all homes sold were affordable for a median-income family, compared to 42 percent nationwide, the NAHB reported.”

A report from the Arizona Daily Star. “Chris Tanner and his wife found their dream home last year, a four-bedroom, 3,100-square-foot house on the Northwest Side with a pool, a postcard view of the Santa Catalina Mountains — and an uncomfortably high mortgage payment of about $3,000 per month. ‘I knew if we ever fell behind on this mortgage, then we’re done,’ Tanner said.”

“Tanner said past rapid appreciation in the market made him feel pressured to buy his current home. He wound up in a bidding war for it, which didn’t seem like a problem at the time.”

“‘It became apparent that if you didn’t buy a house (then), next year it was going to be $50,000 more,’ he said.”

“Now Tanner expects to lose his house in a little more than a month to foreclosure. A former account executive for a mortgage lender, he could no longer afford the payments after losing a job last year and struggling to earn equal commissions in other mortgage jobs.”

“More than 5,000 homes have fallen into foreclosure in the Tucson region during the first nine months of this year, according to RealtyTrac. That’s nearly double the number over the same time last year.”

“The surge includes homes in virtually every part of town — from lower-income neighborhoods on the South Side to upscale areas near the Catalina Foothills, according to RealtyTrac.”

“Maria Jimenez, who works for Sun Tran, said she is afraid she will lose her home near West Valencia Road and Interstate 19 because of an increasing payment for an adjustable-rate refinance loan she received about two years ago. The payment is set to rise from about $980 to $1,300 in December.”

“Meanwhile, her husband, a roofer, has been unable to keep a job because of the slow housing market. Jimenez filed for bankruptcy to help keep foreclosure at bay, but she doesn’t think she’ll be able to afford the higher payment.”

“‘I still have to pay my lawyers,’ she said. ‘It’s just really outrageous.’”

“Even bankruptcy may not protect Jimenez. Lenders can foreclose on borrowers in bankruptcy with the court’s permission, said University of Arizona law professor Jean Braucher.”

“Many properties repossessed by lenders will likely end up sitting on the market with an already-high inventory of nearly 10,000 homes, said Fred Hubbard of HomeVestors.”

“Midvale Park Neighborhood Association President Joe Miller said some buyers may have stretched their finances to get in. ‘They were probably overly optimistic,’ he said.”

The Arizona Republic. “Home prices in metropolitan Phoenix took a healthy drop in October. No one who owns a home wants to hear that, including me. But real-estate analysts say home prices in many parts of the Valley need to come down after climbing too high during the frenzy of 2004-05. The decline will help the market stabilize, they say.”

“The median price of an existing Valley house fell to $242,000 last month, reports the Realty Studies department at Arizona State University. It’s an almost 10 percent drop from the median resale high of $267,000 the housing market hit in early 2006.”

“Remember, before the 50 percent price run-up in 2004-05, metro Phoenix was long considered a hot housing market for having steady annual home price gains from 6 to 10 percent.”

“Market analysts have been saying for the past several months that Valley home prices were due for a correction as big as 20 percent. Most big builders in the Valley cut prices at least that much a few months ago to keep selling homes. Some say home prices still have some sliding to do, so October’s price drop is a move in the right direction, even if it’s painful.”

“David Highmark, CEO for Northern Trust’s Southwest region, said he senses ‘definite weakness’ in the Arizona economy and predicts housing values will have to drop from current levels before buyers return in force. He also thinks banks and other lenders will report problems throughout the fourth quarter.”

“But he also views the real-estate slump as a ‘healthy’ correction for squeezing out greed and unrealistic optimism.”

“‘People have a tendency to forget what happened in the past,’ he said. ‘You can’t become a good banker and lender until you’ve been through some of these cycles.’”

The Sierra Vista Herald Review from Arizona. “The Herald/Review recently sat down with Melissa Clayton, president of the Southeast Arizona Realtors Association, to ask her about the year past and future in local real estate.”

“Q: What are the foreclosure rates in the county? A: There are more foreclosures than normal. Q: Are lessons to be learned? A: I think the main lesson is not to use your house like a charge card.”

“Q: What are your predictions for the coming year? A: I think there will continue to be foreclosures based on irresponsible borrowing. The bottom has passed here but not everywhere. The market will start picking up and it’ll be a great time to buy a house.”

“Q: Do you have any advice for homebuyers and sellers? A: For buyers: Be serious when you’re writing an offer. This is a not a market that will accept what we call a lowball offer. And be qualified and ready to buy. Don’t wait because it’s perfect for someone else, too.”

“For sellers: 2007 is not 2004. Price your house appropriately and listen to suggestions and your Realtor’s advice… Be ready to look at all offers. Good, bad and ugly.”

The Review Journal from Nevada. “Virtually every major builder in the Las Vegas Valley has pushed big sales this fall, and the price breaks have been steep.”

“Pulte Homes marked down prices 15 percent on certain models, with discounts of up to $80,000 on some completed new homes during one October weekend. The builder’s Del Webb subsidiary sliced $55,000 from some of its asking prices.”

“Rhodes Homes has offered as much as $100,000 off on finished houses. Lennar Corp. has slashed prices on some models by about a third; Lennar cut the cost of a 5,000-square-foot home in its Earlstone community from $911,490 to $662,490, and a 4,498-square-foot home in its Silver Creek subdivision went from $807,290 to $612,290.”

“Pulte Homes had an ‘exceptional’ weekend during its ‘Monster Sale’ Oct. 19-21, said Nick Parks, the builder’s local director of marketing. ‘It’s a new market, and you need to provide the consumer with new value propositions to be successful today,’ Parks said. ‘It’s a positive indicator that the market isn’t as depressed as some want us to believe.’”

“Toll Bros., a luxury builder that also hasn’t marketed any discounts, had zero net sales in the week ended Nov. 11 and a negative net-sales rate of two homes in the week ended Oct. 14.”

“That means the company, whose homes are priced from $345,975 to more than $1 million, had two more cancellations in Las Vegas that it had sales.”

“Toll spokeswoman Kira McCarron said sales of new homes and standing inventory ‘are consistent with current marketing conditions.’”

The Salt Lake Tribune from Utah. “New-home construction along the Wasatch Front dropped sharply for the second month in a row in October to the lowest level since 1990, mirroring the downturn in housing markets felt nationally. Builders locally took out permits for the construction of 530 single-family homes, down from 1,186 in October 2006, according to Construction Monitor.”

“The last time residential building activity along the Wasatch Front in October dipped that low was 17 years ago. ‘It’s definitely the most uncertain time for builders in Utah that we’ve had in at least 20 years,’ said Jim Wood, director of the Bureau of Economic and Business Research at the University of Utah.”

“‘I’ve never seen the market change so quickly,’ said Curtis Dowdle, executive officer of the Salt Lake Home Builders Association, who has been in the business since early 1970s.”

“Another factor was the homebuilding boom, said Jim Bringhurst, president of the Utah Association of Realtors.”

“‘We’ve built a lot of homes in the last couple of years,’ he said. ‘The supply kind of got ahead of the demand. It’s going to take some time for those homes to be acquired.’”

“‘The problem is that consumers are afraid to buy right now,’ said Eric Allen, director of the Utah/Idaho region for Metrostudy, which tracks new-home construction. ‘They are under the impression that prices are going to come down.’”

Some housing bubble news from Wall Street and Washington. Bloomberg, “HSBC Holdings Plc, Europe’s largest bank, will bail out its two structured investment vehicles, taking on $45 billion of assets to avoid a fire sale of bonds. SIV holdings have declined $75 billion since July, and net asset values have fallen to 70 percent from 100 percent in July, according to data compiled by Fitch Ratings. ‘HSBC believes there is not likely to be a near-term resolution of the funding problems faced by the SIV sector,’ the bank said.”

“HSBC’s rescue shows the world’s second-largest bank manager of SIVs, companies that borrow short-term to invest in higher- yielding securities, isn’t prepared to wait for the $80 billion ‘SuperSIV’ to start buying assets. Bank of America Corp., Citigroup Inc. and JPMorgan Chase & Co. have been working for more than two months to set up the fund initiated by U.S. Treasury Secretary Henry Paulson.”

“The SuperSIV is ‘is all good and well, but it’s not big enough,’ said Tom Jenkins, a credit analyst at Royal Bank of Scotland Group Plc in London. ‘If you have a large SIV, you’re going to need to find another solution.’”

“Former Federal Reserve Chairman Alan Greenspan is among those who say the ‘SuperSIV’ may do more harm than good by delaying the need for investors and SIVs to absorb subprime losses.”

The Associated Press. “The viability of an SIV relies on its ability to continue borrowing money. Amid this year’s flight from risk, lenders in the commercial paper market have frequently balked at letting borrowers ‘roll over,’ or extend, their debt. This is what is happening to most of the world’s roughly 30 SIVs, which collectively manage about $320 billion.”

“An SIV that cannot continue borrowing money would need to find cash elsewhere or sell its investments. Since mortgage debt has lost so much value, some types of mortgage debt are selling at less than 20 cents on the dollar, this would likely lead to losses for investors in SIVs.”

“Earlier this month, bankers from Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. announced an agreement on a multibillion-dollar fund to buy distressed debt securities. HSBC, whose SIVs are among the largest in the market, said it would not be participating in that fund.”

“‘As existing investors will continue to bear all economic risk from actual losses up to the full amount of their investment, HSBC expects no material impact to its earnings,’ the company said.”

“Loomis Sayles & Co. declined to invest after receiving one of 16 invitations for a personal meeting last week with current Fed Chairman Ben Bernanke, said Daniel Fuss, who oversees $22 billion as chief investment officer at the firm. The Securities Industries Financial Markets Association trade group extended the invitations, Fuss said.”

“‘It’s so nice to get a personal invitation to go to Washington and have a one-hour visit with Ben Bernanke,’ said Fuss, who decided participating wasn’t worth the risk to his firm. ‘Oh, boy, did I feel important for about 27 seconds, and then you smell a rat.’”

“Treasury spokeswoman Jennifer Zuccarelli said the department ‘is pleased with the work the private sector is doing on a structure that is meant to improve liquidity’ for all participants.”

“Analysts including Richard Bove of Punk Ziegel & Co. have criticized the proposal because it may saddle new participants with losses created by their bigger rivals.”

“‘Why should we put something on our balance sheet that is going to result in further writedowns?’ is how most contributors will respond, Bove said in an interview. ‘The job of the Treasury isn’t to go out and defraud investors.’”

“Boston- based State Street Corp. CEO Ronald Logue said Oct. 16 ‘you won’t see us participating in any way.’ Deutsche Bank AG, Germany’s biggest, was awaiting more details, CEO Josef Ackermann said last month. Terms for participants haven’t been publicly released.”

“The fund’s lack of disclosure makes it ‘a necessary failure,’ Bill Gross, manager of the world’s biggest bond fund at Pacific Investment Management Co., said in an Oct. 31 interview. ‘Transparency is what the Treasury and Fed are supposedly all about.’”

“JPMorgan’s involvement in the fund is meant to help SIVs ‘properly liquidate,’ CEO Jamie Dimon said on Nov. 13. ‘SIVs don’t have a business purpose’ and will ‘go the way of the dinosaur,’ he said.”

“Bank of America ‘has far more to gain down the road’ with regulators by backing SuperSIV, said Tony Plath, a financial professor at the University of North Carolina at Charlotte, who expects the plan to fail. ‘They are setting themselves up so they aren’t criticized when this thing falls apart.’”

“Royal Bank of Scotland Group Plc CEO Fred Goodwin is proving that making acquisitions doesn’t always improve profitability. Goodwin’s bet that America’s housing boom would supplement slower growth in the U.K. backfired this year as U.S. foreclosures rose to a record and the world’s biggest financial institutions wrote down more than $65 billion for debt-related losses.”

“‘It seems to be a confluence of calamities,’ said Neil Wesley, who helps oversee about 165 billion pounds ($340 billion) at London-based Morley Fund Management Ltd., which owns Royal Bank shares. Royal Bank dropped 37 percent in London trading this year.”

“Goodwin said as recently as March when Royal Bank reported 2006 results that ‘the U.S. is our single biggest opportunity.’”

“Santander SA is considering making an over 1 bln eur provision in the fourth quarter to cover the decline in the value of its stake in Sovereign Bancorp, Bolsacinco reported.”

“The US subprime loans crisis and the dollar’s depreciation against the euro have had a combined impact on Sovereign, the website said, adding that Santander now has accumulated capital losses on its just under 25 pct stake in the US bank of some 1.44 bln eur.”

“Allianz SE shareholders have a new reason to rue the almost $21 billion purchase of Dresdner Bank six years ago: the collapse of the U.S. subprime mortgage market.”

“Europe’s largest insurer is trading at the lowest valuation in four years on concern subprime losses at Dresdner will erode profit. Dresdner had 575 million euros ($852 million) of writedowns in the third quarter when the bank accounted for just 6 percent of Allianz’s total revenue, the Munich-based company’s reports show.”

“Swiss Re, the world’s largest reinsurer, surprised investors last week by announcing a 1.2 billion-Swiss franc ($1.1 billion) loss on derivatives in October.”

“‘Swiss Re has dealt a heavy blow to the entire industry,’ said Markus Engels, who helps oversee about $90 billion, including Allianz, at Cominvest Asset Management in Frankfurt. ‘Currently nobody looks at valuations or fundamentals: the market panic doesn’t allow it.’”

From FIN Alternatives. “Hedge funds sometimes get a bad rap in the U.S., but in Norway they are taking an epic beating following reports that four public municipalities have suffered huge losses because of hedge fund investments. The scandal involves a credit-focused Citigroup hedge fund marketed by Terra Gruppen and sold to local townships in the Scandinavian country.”

“The subprime credit crisis in the U.S. hit the fund hard, and the municipalities, four of which invested a total of $739 million, were forced to place more money into the funds or face losing their investments.”

“According to reports, one small town couldn’t even make payroll for December and was forced to cut child care and elder care programs.”

From Reuters. “JPMorgan Chase & Co Inc plans to cut about 100 subprime mortgage jobs in California amid falling U.S. housing prices and tighter lending standards.”

“JPMorgan said it has reduced subprime originations and operations staff because of home price weakness and tighter credit standards. About 40 percent of JPMorgan’s 2006 subprime originations would not be approved under today’s standards, the bank said in a statement.”

“The bank has discontinued, for example, all subprime home equity loans.”

“Citigroup Inc., bracing for big credit-related losses in the fourth quarter, is looking to lower costs, which could mean another round of job cuts at the nation’s largest bank.”

“‘We are engaged in a planning process in anticipation of our new CEO, and our business heads are planning ways in which we can be more efficient and cost-effective to position our businesses in line with economic realities,’ said Citi spokeswoman Shannon Bell.”

“Citigroup, which has about 320,000 employees, earlier this year reduced its workforce by 17,000 before the credit crisis.”

From Marketplace. “When business is down, morale usually sinks with it. That’s when it’s time to hire someone with a shinier outlook.”

“Doug Krizner: Morale in the mortgage industry has been in the pits. The Labor Department estimates nearly 100,000 jobs related to credit and lending have been lost. So how can managers pump up the workforce? Hire business cheerleaders. Marketplace’s Jeff Tyler reports.”

“Frank Candy, president of the American Speakers Bureau…says business with the mortgage industry is up about 20 percent. Frank Candy: ‘The one thing that’s gotten myself and a lot of my friends who are in this business through is believing in yourself and hope for a better tomorrow.’”

“Motivational speaker Chuck Carmen makes between $5,000 for a keynote and up to 25 grand for a two-day intensive workshop. In the past, he’s done presentations for Countrywide and others in the industry.”

“Even if they’d like a cheerleader, some companies can’t afford it. Candy says companies want to hire motivational speakers — but on the cheap.”

“Candy: ‘They’re calling us and saying, ‘We’d like to bring in a good speaker, but we don’t have the budget that we used to have.’ And so they’re asking for more, and hoping to pay less.’”

“Carmen says there’s life after subprime for mortgage brokers. If nothing else, they can earn commissions off the speculators buying homes in foreclosure.”

The Sun Sentinel reports from Florida. “Alice Gordon was getting ready to put her villa up for sale in Palm Isles, but she’s decided to wait. She wants to move into independent living, but Alice is putting her move on hold because of the flat real estate market. How long was she told it would take to sell her place? ‘Forever,’ she said, laughing.”

“Alice’s scenario is played out across the swath of retirement communities, especially in western Delray Beach, where people bought condos decades ago. Now many of them are trapped, unable to move because they can’t sell unless they significantly drop their price.”

“‘The real estate market is making it extremely difficult for residents who want to go into assisted living or go up to be by their children,’ said Bob Schulbaum, longtime president of the Alliance of Delray Residential Associations. ‘They’re tapping their savings to bring in aides.’”

“Luckily, that’s not the case with Alice, whose villa is paid off, so she can afford to wait.”

“Bob sees other problems. Condos sit empty after a relative dies when the heirs can’t sell it. The lack of turnover is being felt. ‘The older communities, especially, need new blood,’ he said. ‘Where are the worker bees going to come from?’”

“Barbara Katz, president of the coalition west of Boynton Beach said she agrees with Bob about the real estate market. ‘More people are feeling the crunch,’ she said.”

“People are late paying their maintenance fees. Homeowners who have to sell are forced to reduce their prices, and she’s seeing a few foreclosures. ‘You very rarely saw that,’ she said.”

The Herald Tribune from Florida. “The same group of colorful Californians who bought 15 units at the Bermuda on Osprey condo complex in Sarasota at inflated prices attempted at least three similar deals in Lakewood Ranch.”

“Two of the sellers, who approached the Herald-Tribune with their stories, said the deals smelled fishy from the start. But the real estate agents and the lawyers they called for advice said it would be OK to proceed as long as all details of the transactions were spelled out to the banks providing the financing.”

“To some critics, the fact that real estate agents, appraisers, mortgage brokers, title agents and lawyers all sign off on the legitimacy of such transactions goes to the heart of the problems facing the U.S. real estate and mortgage industries.”

“‘Realtors and mortgage brokers were thinking about commissions. Appraisers, title agents and lawyers were thinking about fees,’ said Erroll Phillips, a Manatee County Realtor and real estate instructor. ‘The victim is not just the banks. It is all of us.’”

The Miami Herald from Florida. “Miami’s former building boom, has become Miami’s building bargain, one city commissioner says. And Commissioner Marc Sarnoff says the best thing for government to do is just what any savvy shopper would: buy, buy, buy.”

“The commissioner says if prices dip as low as $175 per square foot, government should purchase condo units and partially subsidize them for teachers, police officers and the like.”

“Community activist Max Rameau worries that Sarnoff’s proposal could become a taxpayer bailout for condo developers who overestimated demand and are now having trouble selling their units. Sarnoff says government wouldn’t be bailing out developers, just taking advantage of a good deal. But if the idea helped stabilize the shaky real estate market a bit, Sarnoff said, that’s not a bad thing.”

“‘This is a real-estate driven economy,’ he said. Allow a collapse to happen and ‘people won’t be making a living. There are title companies. There are real estate agents.’”

“A government-assisted buyer program could fill up struggling condo buildings, Miami state Rep. Carlos Lopez-Cantera said, though he added there is a risk that buyers who paid full price will resist the new, subsidized, arrivals.”

“Sarnoff says mixing people of different incomes is a laudable goal, something Miami should do more of. ‘Instead of warehousing the working-class poor, let’s put them amongst the middle class,’ Sarnoff said. ‘Not overload the building, but five or 10 here and there.’”

From My Fox Atlanta in Georgia. “For the past 13 years, Michelle and Raymond Beardon have enjoyed living in their Loganville home, but when they got back from vacation this past July, they were in for a big surprise.”

“‘Actually have mail, tons of mail and we open up the first piece of mail and it was actually a foreclosure notice out of the newspaper,’ said homeowner Michelle Bearden.”

“The Beardens had decided to refinance their home in 1999. They blame their lender for their current trouble, claiming their monthly mortgage payments were incorrectly credited to their account. They’re now suing the mortgage company.”

“‘It’s devastating to find out that way you are being foreclosed on,’ said Beardon.”

“There have been over 53,000 foreclosures in metro Atlanta in 2007, some 6,800 properties were foreclosed on in October 2007 alone.”

The Atlanta Journal Constitution from Georgia. “The white paint has barely dried on the cathedral ceilings. And some of the stacked-stone chimneys have yet to crackle with that first fire. Here, in a half-built neighborhood near Grayson, everything is freshly minted, down to the suburban dreams.”

“Yet earlier this month, outside the Gwinnett County courthouse, nearly half the subdivision was auctioned off — the latest casualty of a foreclosure crisis that has pounded model-home sales offices around metro Atlanta.”

“‘Going once, going twice, sold to Legacy State Bank,’ attorney Samuel L. Chesnutt shouted to a crowd of investors showing little interest.”

“A few were unsold homes. Most were vacant lots. All went to a buyer with no home-owning dreams. ‘We expect to see a lot more of that, to be honest,’ said Domonic Purviance, a senior consultant with Metrostudy.”

“The building gloom is a stunning reversal for one of this decade’s hottest Zip codes for new-home construction in metro Atlanta. Even now, by all outward appearances, this corner of Gwinnett is still bursting at the seams. Road crews are widening traffic-clogged Ga. 20. Another middle school is under construction. Subdivisions are sprouting up around every corner. But peek into many of those new houses, and there’s something missing: people.”

“Metro Atlanta has 140,000 vacant lots, Purviance said. That’s a nearly four-year supply, or double what’s normal for the region. And nobody is in a hurry to build on top of them. The supply of unoccupied new homes has soared and is now twice the usual three-month inventory.”

“‘People paid premium prices for land,’ Purviance said. ‘But the prices were a little inflated. The developers are stuck now.’”

“So are homeowners like Mark Braswell, who moved into Chandler Woods Estates last July. From his cul-de-sac lot, he expected to see property values rise with each new home. But sales slowed. And construction nearly ground to a halt.”

“Last month, ‘Reduced’ stickers joined the ‘For Sale’ signs that lined Cattail Ives Road. Then, on a record-setting Tuesday for foreclosures in Georgia, the signs disappeared altogether. The properties went to the bank that issued the construction loans in the first place.”

“Braswell fears the lots will end up in the hands of a builder who brings a cheaper product to the neighborhood, where homes currently are priced from the high $200,000s to the mid $300,000s.”

“‘It leaves us very vulnerable to whatever comes in,’ he said.”

The Birmingham News from Alabama. “Record low unemployment rates and economic development coups have done little to curtail bankruptcy filings across Alabama. Instead, a rush of foreclosures and surging debt consumer loads have pushed Alabama’s personal bankruptcy rate to third in the nation.”

“Last week, attorney Ted Stuckenschneider got a visit he says has become all too typical in recent months. A single mother, stuck with an adjustable-rate mortgage she no longer could afford, came in for help.”

“‘She makes $1,400 a month and her mortgage has doubled from $550 to $1,100 over the last five years,’ Stuckenschneider said. ‘There is no way she can afford that. She’s three months behind and they are going to foreclose on her home.’”

“Once Stuckenschneider told her even bankruptcy could not save her home, the woman, who also faced a monthly car note that pushed her debt payments beyond her ability to pay, left his office in tears.”

“‘This is a woman who never should have been given a mortgage loan in the first place,’ Stuckenschneider said. ‘She lived with her mother and would have been better off staying there. But she wanted to realize the American dream of having a home.’”

“‘It is ridiculous for people to be able to get a home loan with 50 percent debt ratio,’ he said. ‘The government had good intentions for people to be able to become home owners, but the criteria allowed more people to buy who shouldn’t be. It should be harder to qualify.’”

The Charlotte Observer from North Carolina. “Charlotte’s teachers, police officers and firefighters can now buy foreclosed houses at a discount under a federal program intended to improve neighborhoods hit by vacancies and flagging property values. The U.S. Department of Housing and Urban Development is posting pictures on its Web site of houses it will sell for half the listed price.”

“Charlotte-Mecklenburg Schools teachers received an e-mail advertising eight houses listed between $33,000 and $187,000 that they could buy for $16,500 to $93,500. The effort, already in place in cities such as Denver, Chicago and Houston, is a response to Mecklenburg County’s growing foreclose rate, the highest in the state.”

“Federal officials contacted Charlotte leaders in May about joining the Good Neighbor Next Door program after the number of foreclosures in the county jumped to 7,162 last year from 4,414 in 2002, a 62 percent increase.”

“The program comes with rules: Buyers must live in the houses for at least three years. Some of the houses also will cost thousands of dollars to repair. One house recently listed for $120,000 needed a new gas furnace, an air-conditioning unit, a sink and light fixtures. That would cost at least another $10,000, city officials said.”

“Also, discounts are common on foreclosures. Such properties often sell for 60 percent of their listed price, said Mike Jaffa, president of Graham Investment, which lends money to developers.”

“Additionally, Jaffa said, the homes frequently are in crime-ridden neighborhoods.”

“Charlotte officials blame the trend on high numbers of risky subprime loans to homebuyers with spotty credit, on predatory lending and on liberalized finance laws.”

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