The Housing Bubble

It’s Friday desk clearing time for this blogger. “A private lender representing a consortium of banks has taken ownership instead of foreclosing on the 33 unsold condominiums at Pond View Village and, after slashing prices by about a third, has successfully resumed selling in a slumping market. Two units have sold in recent days, according to Ruth Pino, sales agent for the Massachusetts Housing Investment Corp.”

“The first sale closed Nov. 16. It was a 1,200-square-foot, two-bedroom, 11/2-bath unit that had been priced at $320,000. It was returned to the market in August at $210,000 and sold for $205,000 - a 36 percent markdown. ‘It’s the first time we’ve experienced losses like this,’ said Cape Ann Housing Opportunity president, Joseph Flatley. ‘There are enormous losses on condos everywhere. If you’re loaning a lot of money, you’re going to experience losses.’”

“October turned out to be one of the worst months in years for home sales in Licking County, Ohio. The number of units sold decreased 35 percent, the dollar volume plummeted almost 40 percent and the average sale price fell 7.2 compared with October 2006. Foreclosures already have matched 2006’s record high.”

“‘That’s a big drop, there’s no doubt about it, Licking County Board of Realtors President Jim McKivergin. eal estate sales in Licking County have been going up for more than a decade. Whether this is an anomaly or a trend, I can’t say.

“Overall in Chicago, the foreclosure rate was 40 percent higher for the first six months of this year compared to a similar period in 2006. Harold Freeman had realized his dream of home ownership by buying a three-bedroom brick ranch in Calumet Heights. Then came the one-two punch of a job loss and increases in his adjustable rate mortgage.”

“‘My dream turned into a nightmare. The phone calls didn’t let up, morning noon and night. The pressure and stress brought on migraines. My doctor took my blood pressure and said ‘What’s going wrong in your life?’ Freeman said.”

“The final report of Gov. Martin O’Malley’s Homeownership Preservation Task Force released last week revealed Maryland is right in the middle of a growing national foreclosure crisis and Worcester County has not been immune to the trend.”

“‘During that last big boom, sub-prime lenders lowered their standards to allow people to buy properties they had no business buying,’ said County Commissioner Bud Church, a long-time area realtor. ‘They didn’t think the bottom would fall out as fast as it did and it backfired on them. Some lenders got greedy and wrote tons of mortgages that never had a shot of being paid.’”

“Toll Brothers, the nation’s largest builder of luxury homes, posted its first quarterly loss as a public company, as it continued to struggle with what its CEO called the worst housing slump in its 40-year existence.”

“‘It’s not a matter of if, but a matter of when, the oversupply [of homes] is absorbed,’ said CEO Robert Toll. ‘Then we shall return to better times. I believe those who wanted to buy but didn’t will kick themselves for their reticence.’”

“In response to an analyst’s question, Toll said the U.S. economy appears headed for a recession. ‘If I had to make a bet on recession or no recession right now, I’d probably think that we’re going to have a recession,’ he said. ‘I have no idea how deep or how long it would be. [But] it’s nothing more than an uneducated person’s opinion.’”

“This morning, Halifax (UK) reported a third month of falling house prices, adding to the weight of evidence that the market is slowing. Patrick Collinson, personal finance editor of The Guardian. Would you buy now? No, rent instead. We are in a period when the cost of renting is below the cost of buying. On top of that, house prices are flat or falling.”

“Jonathan Davis, chartered financial planner. Would you buy now? Don’t touch [the housing market] with a barge pole. Over the next year house prices will go down by 5%-10%, and over the next four to six years they will fall 30%-40%. It’s a natural market movement - when a market goes up 200% in 10-15 years it can reasonably be expected to retrace 30%-40% over a four-year period”

“The U.S. housing slump has spread south across the border, dampening a coastal real estate boom boosted in recent years by Americans snatching up vacation and retirement homes in Baja California and elsewhere in Mexico.”

“‘There is a lot of supply in the pipeline,’ said Embree Bedsole, managing director of the global advisory firm Alvarez & Marsal. ‘We’ve been debating whether that’s going to be developed.’”

“Bruce Greenberg, who heads an Arizona real estate appraisal and consulting firm, said the region’s developers tended to be smaller developers and builders who came across the border. ‘Two guys with cell phones’ was the description offered by Justin Mehren, managing director of Latin America Capital Group.”

“So comforting to know that Pollyanna is alive, well and still gainfully employed at the University of Central Florida. Sean Snaith sees only blue skies, no matter how dark the horizon may appear. To wit: ‘We are in for a couple quarters where there won’t be much good news for the real-estate industry. But I think 2008 will be the year we put the housing situation behind us.’”

“Were one to substitute ‘years’ for ‘quarters” in Snaith’s appraisal of the Orlando housing market, his forecast might be credible.”

“As Mike Thomas noted in his Nov. 29 column, Fortune magazine actually ranked Orlando No. 1 in projected residential devaluation, with a prognostication that the loss would be 34.6 percent during the next five years. Apparently, the ‘Chicken Littles’ to whom Snaith referred include those on the payroll of that esteemed publication.”

“A group of Denver investors is selling off its commercial properties and reinvesting in distressed condominiums. Over the last 18 months, Colorado & Santa Fe has sold about $225 million of commercial real estate in Colorado, Texas and Arizona.”

“The company’s CEO, Marcel Arsenault, has created a new company that will reinvest the proceeds from those sales in distressed condominiums, primarily in Florida.”

“‘Orlando, Fort Myers and Tampa Bay are the areas where projects are being taken back by lenders, and we’re bidding in those markets,’ Arsenault said. ‘Florida is a terrible market. There’s blood in the streets, and it’s going to get worse.’”

“Residents of a southwest condo building are outraged after spending several bone-chilling days in -20C temperatures with no heat in their building. ‘There’s no heat, there’s no hot water,’ said Elizabeth Lock, who moved into a hotel at 2 a.m. Saturday after trying to spend a third night in her freezing one-bedroom condo.”

“‘I was just too cold and I couldn’t sleep,’ she said. Elizabeth Lock and her spouse, Gordon Marr, try to warm up using the oven in their condo before they decided to check into a hotel early Saturday.”

“The heat went out late Thursday afternoon, along with power in the common areas, pitching the hallways of the building into darkness. ‘It’s a dangerous situation,’ said Lock, who has been warming her unit with heat from an open oven.”

“Residents of the 20 units say they’ve received no explanation from anyone in charge and have no one to contact for building problems. Matt Vermunt, who previously worked with the original developer, has been receiving calls from concerned residents.”

“He says part of the problem is that the building lacks a condo management group and that building management has been plunged into disarray since the original developer was removed from the project.”

“Resident Heather Murray shivered her way through the nights wearing layers of clothing under two thick duvets. She said it’s too expensive moving to a hotel — especially since she thinks it’s doubtful she’ll get that money back.”

“She bought her one-bedroom unit in the newly converted building this spring for about $250,000, she said. Though she’d like to move out after experiencing the problems at the location, she’s doubtful about being able to sell in Calgary’s current market.”

“On Saturday, she boiled 15 pots of water so that she could have a hot bath. ‘This place is a gong show,’ she said.”

Inside Bay Area reports from California. “Quakes from the housing market’s downturn continued to shake San Mateo County in November, as home sales sagged nearly 30 percent, a new report revealed Thursday. The growing inventory of unsold homes on the Peninsula pushed home sales down to their poorest November in at least 10 years, real estate agents said.”

“Meanwhile, the median price of a single-family home countywide remained on a roller-coaster ride, falling more than $100,000 to $922,500 in November compared to October. Still, the median price was up 5 percent from November 2006.”

“‘Those Google kids are skewing it, buying $3 million and $4 million properties,’ said Geoffrey Craighead, president of the San Mateo County Association of Realtors.”

“Foreclosures tripled in the third quarter in San Mateo County compared to the same period in 2006.”

“Some of the county’s lower-income cities were hit hardest by median price declines between November and November 2006. They included East Palo Alto, which fell 32 percent to $412,500; South San Francisco, which slipped 14 percent to $650,500; San Bruno, which slid 16 percent to $632,450; and Daly City, which fell 11 percent to $655,000.”

The Daily Pilot. “Chapman University President James Doti, in a slide presentation before about 2,000 people, said the United States economy was clearly headed for a slump next year and that the figures for the current year were more discouraging than the university predicted last December.”

“Doti, like the UCI panelists, devoted much of his talk to the housing market. Reckless borrowing by homeowners, he said, had contributed partly to a massive drop in home equity over the last year.”

“‘People are kind of borrowed to the hilt,’ Doti said.”

The New York Times. “When Jirina Koy heard that President Bush was announcing a freeze yesterday on mortgage interest rates, the Stockton, Calif., homeowner felt a flicker of hope.”

“It was quickly extinguished. After calling a nonprofit housing assistance center, Ms. Koy learned that her mortgage, for all the trouble it was causing her, was not likely to be one of those qualifying for relief. Mortgage experts say there will be many borrowers like Ms. Koy.”

“She has a so-called option loan, which gives her the choice of how much to pay every month. Heavy in debt, she usually chooses the minimum. ‘I got all these calls from brokers all the time — ‘You could pay off debt, pay off the car loan, make extra money every month, blah blah,’ she said. She took out $60,000.”

“Jason Bosch, president of Home Center Realty in California’s hard-hit Riverside County, was pessimistic. ‘We were selling $300,000 homes to people who could only afford $175,000 homes,’ he said. ‘Even if you freeze their payments, they still can’t handle it.’”

The Merced Sun Star. “It’s the time of year for glad tidings, and that’s what the latest figures on Merced’s housing affordability show. But when it comes to other real estate numbers, the data lean more toward lumps of coal.”

“Which city led the country in dropping home values? You guessed it: Merced. Prices here slid 13 percent from the third quarter of 2006 to the third quarter of 2007. Prices in Merced dropped 5.37 percent from the second to third quarter.”

“In October, the period for which monthly numbers are available, Merced County’s median home price was at $250,000, down 26.7 percent from the October 2006 price of $341,000, according to DataQuick.”

“Scott Oliver, president of the Merced County Association of Realtors, cast the plummeting prices in a favorable light. With prices moving back to where they were before the boom of 2004 and 2005, Merced is returning to a ‘normal market,’ said Oliver.”

“Lately he’s seen buyers making offers about $20,000 below the asking price, whereas last year buyers were putting in bids up to $75,000 below what sellers were asking, said Oliver.”

“Don Gray, president of Merced chapter of the Central California Building Industry Association, says builders are cautiously optimistic that their business will pick up in 2009. But with local homes now selling for $100 per square foot, which Gray calls a ‘phenomenal price,’ he’s curious about why more folks aren’t jumping back into the market.”

“‘We’re surprised that there’s not more interest right now and there’s not more people buying homes,’ said Gray.”

“As recently as 1999, the percentage of affordable homes on the market in Merced was at 67.4 percent. Since then, the figure has dropped steadily, reaching an all-time low in 2005, at the height of the housing boom. Back then, Merced ranked as the least-affordable smaller city in the country. Today, Merced is ninth on that list.”

The Bakersfield Californian. “Kern properties foreclosed last month totaled 412, by far the most in a single month since the county began tracking filings in 1995, trustee’s deeds filed with the Kern County Recorder’s office indicate.”

“Likewise, 985 default notices were sent to property owners in November, a number that also sets a new monthly record.”

“The filings were up from October, when 372 foreclosures and 945 defaults set new records at the time. Year-over-year foreclosures more than quadrupled and defaults more than doubled.”

The Voice of San Diego. “In July 2005, a one-bedroom, one-bathroom condo in the Park Boulevard West building in downtown San Diego sold for $417,500. The unit, No. 1203, was repossessed when the owner failed to make mortgage payments. It sold again last month, this time for $268,000 — a 35 percent price drop.”

“The game of real estate pricing is built on a foundation of comparable sales, known as ‘comps.’ So when those comps slide, so do prices in general. And when there’s not much, except height and sometimes a view, to distinguish one one-bedroom, one-bath unit from another in the same building, foreclosures are expected to affect prices especially hard in some buildings in downtown San Diego.”

“Of the 46 units that closed escrow between Nov. 1 and Dec. 4, nearly one-quarter were either bank-owned or short sales.”

“‘They are the ultra-motivated seller,’ said Peter Dennehy, VP with the Sullivan Group Realty Advisors. ‘As more and more foreclosures have started to come on the market — when you have 10 units (in foreclosure) in a building instead of one, you’re more than likely to cut your prices lower.’”

“‘There are very few buildings that have none,’ said Jim Abbott, a longtime downtown Realtor. ‘There’s even one in Meridian, which is unheard of.’”

“In the first 10 months of 2007, 449 different houses or condos in the downtown San Diego ZIP code, 92101, were in one of the three stages of foreclosure, according to RealtyTrac. The neighborhood’s rate of foreclosure was one for every 23 homes.”

“Of the 46 units in all of 92101 that closed escrow between Nov. 1 and Dec. 4, 11 were either bank-owned or short sales, where homeowners negotiate with the lender to sell their home for less than they owe on the mortgage. That’s nearly one-quarter of the sales in the month sold in such circumstances.”

“Foreclosure isn’t the most significant source of downward pressure on prices in downtown, Dennehy said. ‘Prices have already been coming down,’ he said. ‘Now it’s just another shoe dropping. Some buildings have had many whammies. Pretty much every building has something going on.’”

“Savvy buyers and their agents look at the low end, usually foreclosures, and make offers below the most recent sale. And even if there were a buyer willing to pay top dollar for a unit, lenders won’t issue a loan for more than a unit’s appraised value, which slips with every lowered price.”

“‘It’s where the market is going,’ said Brenda Crann, a real estate agent who focuses on selling units for lenders. She said she and her co-workers expect to be ‘flooded with more bank-owned properties’ in January.’”

“As foreclosures become the norm, constituting nearly a quarter of the sales in a month like in downtown last month, prices will fall further in some places, Dennehy said.”

“‘People don’t look at the market. They look at the individual building,’ he said. ‘You’re not going to pay more than you have to. The value of something is what somebody’s willing to pay for it. That becomes the new price.’”

The Sacramento Bee. “A new town house project in West Sacramento is biting the dust. After selling just 11 of its 34 three-story units, according to Hanley Wood, owners of Harriet Lane are putting it on the auction block.”

“The project had a claim to fame and a 2005 mention in the New York Times as one of the nation’s first factory-built town house projects. Sales then started at $339,000 to $359,000. Opening bids now: $169,000 and $179,000.”

The Times News reports from Idaho. “There is such a glut of high-priced homes for sale in southeast Idaho that it could be years before they all attract buyers, experts predict. Jefferson County has a 20-year inventory of homes priced at $500,000 or higher, the Snake River Regional MLS reported. Bingham County has a nine-year inventory and Bonneville County a three-year inventory.”

“‘What happened was the builders mismatched the market,’ realtor Steve Taggart told the Post Register. ‘Two years ago, we had all these people coming up from California, so they went and built all these high-end spec homes.’”

“‘You have investors who are just waiting,’ said Ryan Nickel, owner of Cherry Creek Mortgage in Rexburg.”

The Mail Tribune from Oregon. “The return of sanity to the local real estate market has come at a price. Locally, the fallout has contributed to a growing inventory of homes for sale that is nearing the 2,400 mark.”

“‘I think people are sort of getting the idea that there are changes in the mortgage market and finding they have to put more of their own money in when they buy a house,’ said Rick Harris of Coldwell Banker Pro West Real Estate in Ashland. ‘They’re finding they actually have to have a job and some decent credit.’”

“According to the latest figures compiled by the Southern Oregon MLS, the median price of $243,000 for existing Jackson County homes, sold between Sept. 1 through Nov. 30, declined 9.3 percent compared to a similar period in 2006. The inventory of homes, meanwhile, grew unabated.”

“Many of the buyers who fueled the upswing have contributed to the decline by selling. Add to that the dearth of California buyers with cash in hand, because the Golden State’s real estate market is far worse, and it’s easy to see why ‘For Sale’ signs spring up faster than weeds.”

“‘Inside the inventory there are distress sales,’ said Mike Malepsy, owner of Windermere Trails End Real Estate. ‘You’ll see 10 listings for three-bed, two-bath homes in an area for $200,000 to $250,000. There will be two or three in the remarks that say ‘Must sell’ or ‘Make an offer.’ If you really have to sell, you have to compete with the desperate home sellers, and that drives the prices down.’”

The News Tribune from Washington. “Year-over-year median home prices in Pierce County declined for the third consecutive month in November as sales remained slow. Sales of homes, including houses and condominiums, decreased by 31 percent for the same month in 2006.”

“There were 7,981 homes for sale in the county in November, 32.8 percent more than the same month last year, according to the listing service.”

“Ana Sierra-Jonsson moved to Tacoma in September and looked in Puyallup, North Tacoma and Lakewood for a two- to-three bedroom home. After she and her husband viewed about 100 properties, they decided instead to rent for one to two years.”

“‘There are such wild price adjustments going on; we thought time was on our side,’ Sierra-Jonsson said. ‘We want to see where things end up, because we certainly don’t want to end up paying too much for a house.’”

“Michael and Janelle Hanks listed a Thea’s Landing penthouse condominium at $379,000, just under the price of two recently sold units, in May, just before buying a house in Gig Harbor. ‘We get lots of showings but no offers,’ said Michael Hanks.”

“So, they are carrying two mortgage payments while they debate listing strategy on the one-bedroom condo. The couple has offered to pay homeowner’s dues for a year as a buyer’s incentive and lowered the price over the summer to $365,000.”

“‘If we got offers that were really low, it would give us a clue that it was overpriced. I think we’re priced OK. I think it’s just a bad time in the market to put something on the market,’ he said.”

“Local real estate agents, brokers, mortgage lenders and business people hashed out big questions and answers regarding the changing real estate market at a forum Thursday morning at The News Tribune.”

“The paper has written stories with context that compares this market to more ‘normal’ real estate markets, said David Zeeck, The News Tribune’s executive editor. ‘I’m not saying it’s a happy time, and I’m not saying we are 100 percent right,’ he said. ‘But I think we have done the stories you are asking us to do.’”

“Lynn Michaelis, chief economist for Weyerhaeuser Co, noted that Bob Toll, CEO of Toll Brothers, often blames the press for what’s happening to housing. ‘Yes, a lot of the markets they report on are negative, and it is affecting some buyers,’ Michaelis said. ‘But the reality is the sea change is changing. It’s not the press causing a slow down in housing. There are some real fundamental issues.’”

The Seattle PI from Washington. “The typical house that sold in King County last month fetched nearly 10 percent less than the typical sale in July, according to statistics released Thursday.”

“Geoff Pfander put his Wedgwood house on the market in September for $535,000 and sold it last month for $505,000.”

“‘We never reset our price, but the offer was lowball and we accepted it,’ he said. ‘We were so glad to be done, because the market was getting scary.’”

“Rob Cockerill and Michele Meyers bought a Broadview house at list price last month and weren’t worried about prices dropping. ‘We’re thinking it’s not going to get any better than this,’ Cockerill said. ‘We’re San Francisco II up here.’”

The Seattle Times. “The Seattle-area housing market is in a pronounced slump, with fewer houses selling, inventories climbing and prices returning to year-ago levels. King County’s median price has fallen four months in a row.”

“What’s more, last month’s median price for detached houses, $435,000, is back where it was the previous November, according to numbers released Thursday by the Northwest MLS.”

“The number of King County houses sold has declined every month since March, when compared with the same month a year earlier. Since August those dips have consistently surpassed 25 percent. Meanwhile, the number of houses for sale in King County last month was about 40 percent higher year-over-year, a percentage realized almost every month since May.”

“‘You see more buyers asking for price concessions, and they’re getting them,’ added Rich Lucas, an agent in the Auburn office of Keller Williams Realty.”

The Anchorage Daily News from Alaska. “Two failed real estate developments in the Matanuska-Susitna Borough go on the auction block this month, both of them unusually large victims of foreclosure.”

“First National Bank Alaska holds a foreclosure sale Tuesday for 62 empty half-acre lots at Gemstone Estates subdivision. The next week, 18 units at Willow Heights ranch condominiums hit the public auction block.”

“The other project, Willow Heights, looks like a ghost town: five largely empty, gray ranch-style condo buildings aligned on a pretty bluff off a rural stretch of Fairview Loop Road. Willow Heights was built by Hummel Homes LLC.”

“According to First National, Hummel owes more than $1,152,000 plus interest. Hummel owners are Janice Hummel and Blaine and Myrna Brown, according to a state database.”

“Blaine Brown said he and his wife, a real estate agent in Anchorage, ’started out with the best of intentions’ to build partially assisted-living housing with no steps and floors for easy wheelchair movement.”

“Then came hurdle after hurdle: the Valley real estate market went flat, fuel and plywood costs skyrocketed and the state required water filtration for arsenic. The couple, sole investors, lost a rental property to the bank, Brown said.”

“They covered payroll out of pocket, used credit cards to cover costs, and refinanced their Anchorage home to pay bills. Brown said he’s had to delay his retirement another four years. ‘It was not a pleasant experience,’ he said. ‘And my wife and I were the biggest losers.’”

“The Mat-Su real estate market is no stranger to foreclosure. Starting late last year, real estate agents reported a spike in the number of single-family foreclosures, due in part to the same subprime mortgage crunch hitting the Lower 48, and to cooling markets here.”

“But Gemstone and Willow Heights represent investments rather than a place to put the family. Industry observers say problems with these two developments stem as much from bad business decisions as from difficult markets.”

“‘Clearly the market is soft; there’s a lot of inventory,’ said Jerry Moses, associate broker in Wasilla. ‘That just means as a business person you have a sharper pencil; you don’t do stupid things.’”

“The average sales price for vacant land in Palmer dropped 42 percent this year compared to last, from about $103,000 to $60,000, according to Alaska MLS statistics. In Wasilla, the average price for vacant land dropped 26 percent, from about $75,000 to $55,000.”

The Miami Herald reports from Florida. “Seven new suspects accused of mortgage fraud were rounded up by police, as Miami-Dade County Mayor Carlos Alvarez unveiled new legislation to increase criminal penalties for people convicted of real estate fraud. The proposal would allow property appraisers to revalue assessments in neighborhoods plagued with fraud, where inflated values have driven up property taxes for nearby homeowners. It would also create a statewide mortgage fraud task force.”

“‘A lot of people think…[mortgage fraud] is just a way of making money, that it’s a business, it’s an industry. But they are going to find out very differently,’ Alvarez said at a news conference. ‘If you’ve done it, you might be in trouble.’”

“None of those arrested had prior records. Police said they were seeking to arrest the appraiser who appears to have overvalued the home, which fraudulently sold for $1.8 million.”

“‘I would venture to say in talking to some of these folks that they probably don’t even think they have committed a crime. It’s a business transaction: You use my credit, you give me money, and we’re all happy,’ Alvarez said. ‘The fact of the matter is that’s fraud. Being a straw buyer is a fraud. Inflating property values is a fraud. Creating documentation is a fraud just to obtain a mortgage.’”

The Daily Business Review from Florida. “‘If we’re No. 1 in fraud in the U.S., then there’s a problem with overvaluation of properties,’ said task force chairman Glenn Theobald, legal counsel to the Miami-Dade Police Department. ‘Everyone’s taxes have gone up because of these knuckleheads doing fraud.’”

“A condo building known to have 30 to 40 percent of its units involved in phony deals, which almost always involves inflating values to get more money back for the fraudsters, could be carved out of tax rolls.”

“‘Everyone’s just values will be what they should be, and they will pay less taxes,’ Theobald said.”

“Miami-Dade’s proposal is one county property appraisers statewide should already be doing, said Frank Gregoire, a Tampa appraiser and chairman of the Florida Real Estate Appraisal Board.”

“‘Sales that are falsely inflated should not be considered in the market-value approach to appraisals because they aren’t a measure of an informed buyer and seller dealing at arm’s length,’ he said.”

“In Pinellas County, numerous sales have been removed from the county’s appraisal strategy, he said.”

“In Miami-Dade County, 20,475 foreclosures have been filed — roughly one of every 32 homes. That’s up from 9,814 foreclosures filed in all of 2006, according to court data.”

“In Broward County, 20,812 foreclosures have been filed, that’s about one of every 30 homes.”

“‘There are too many foreclosures, but it’s reality,’ said attorney Stuart Gitlitz, who has filed foreclosures on behalf of lenders for more than 20 years. ‘It’s all these loans that were refinanced during the last six years or so as interest rates came down, and stayed down.’”

“Aside from mortgage fraud, Gitlitz said, adjustable-rate loans ‘are the single largest culprit of what is happening here because interest rates really haven’t gone up.’”

“For the state, new foreclosures filed in the three months ending Sept. 30 for all types of mortgages rose 49 percent from the previous three months to 1.09 percent, up from .73 percent of all outstanding loans, according to the Mortgage Bankers Association.”

“And the number of loans already in the foreclosure process jumped 54 percent from 1.42 percent to 2.19 percent of home loans during the same period.”

The Sun Sentinel from Florida. “South Florida won’t get a big boost from President Bush’s plan to freeze interest rates for homeowners nationwide who are bracing for sharp increases in their adjustable-rate mortgages, analysts say.”

“Many distressed borrowers across the region can’t benefit because they’re investors or homeowners at least 90 days late on their house payments.”

“What’s more, Bush’s proposal is focused on preventing a national foreclosure crisis and not meant to aid individual states, such as Florida and California, that are leading the housing bust after the boom of 2000-2005.”

“‘It’s not going to help areas that need help the most, and Florida certainly is one of those,’ said Per Gunnar Bergland, chief economist for Moody’s Economy.com.”

The Northwest Florida Daily News. “Local circuit courts are struggling to keep up as mortgage foreclosure filings continue to increase. Already, more than 2,000 foreclosures have been filed in Okaloosa, Santa Rosa and Walton counties.”

“In Santa Rosa, foreclosures have made up most of the civil cases filed in circuit court this year, said Susan Land, supervisor of Santa Rosa County’s circuit civil division. Her division has had about 1,300 cases filed. Of those, 804 have been foreclosures.”

“Okaloosa County has also seen a large increase in foreclosures, going from 466 last year to 892 so far this year, said Danny Luke, courts director for Okaloosa’s Clerk of Courts office.”

“Based on the number filings so far, Okaloosa Clerk of the Circuit Court Don Howard estimates that 930 foreclosures will be filed by the end of the year. That would be a 234 percent increase from 2005.”

“‘That’s substantial to say the least,’ Howard said. ‘With the increases we’ve seen the last couple of years, it’s put a burden on that department. There’s no doubt about that.’”

The St Petersburg Times from Florida. “An increasing number of homeowners are unable to make payments on homes worth less than they owe. But one man’s problem is another’s possibility. A new market is forming for those who buy and sell homes about to be taken back by banks.”

“The process can be complicated. Banks are more interested in receiving payments than taking a home, but they won’t discount a loan for nothing, so there has to be evidence of a problem. And after the fact, there can be tax implications for the homeowner.”

“‘You have to have a hardship,’ said Ken Monduori, who works with Regions Bank and teaches real estate agents the finer points of ‘loss mitigation’ with banks. Typically the story should be ‘the sadder the better’ to persuade the lender to accept less than full payment.”

“‘If you’re financially insolvent, there’s a hardship, but if not, get in line, pal,’ he said. ‘There are a lot of slick people. Banks aren’t going to play that game.’”

“If there is equity in the home, a buyer may get a deal at the expense of the distraught home-owner. If there’s no equity, someone like Mitchell Herman will try to talk the bank down. ‘I have no compunction about making money off of banks,’ said Herman.”

From The State in South Carolina. “S.C. homeowners are falling behind on their mortgages at a greater rate, and more are entering foreclosure than a year ago, according to a report Thursday by the Mortgage Bankers Association.”

“About 1.7 percent of South Carolina mortgages were in foreclosure on Sept. 30, up from 1.6 percent a year earlier. The U.S. foreclosure rate was also 1.7 percent, up from 1.1 percent a year ago.”

“About 6.5 percent of the state’s mortgage holders were more than 30 days late — but not yet in foreclosure — up from 5.9 percent a year ago.”

“Don Schunk, research economist at Coastal Carolina University in Horry County, said the rising delinquency and foreclosure rates reflect loose lending practices of the past few years: offering low teaser rates that adjusted sharply up after a couple years; lending the full price of the house and requiring little or no proof of income.”

“‘We know there were a lot of loans made that shouldn’t have been made,’ Schunk said. ‘A lot of the funding to make those types of loans is gone. That’s a good thing.’”

The Journal News in West Virginia. “Homes, lots and raw land that had been foreclosed upon brought in millions of dollars at auction this week, along with warnings that such instances are ‘just the tip of the iceberg’ that is the current mortgage crisis.”

“‘You hate to see foreclosures, but it’s a sign of the times right now,’ said Darwin Plumlee, of Plumlee Auction Service, which held sales over three days and finished up Thursday afternoon in Berkeley County.”

“On Wednesday, $5.2 million worth of property was sold, with the majority coming from the Apple Knolls subdivision off Dry Run Road — a development Plumlee called ‘one of the nicer in the county.’ On Thursday, raw land prime for the development of additional subdivisions in the southern end of Berkeley County was sold for a total of $2.3 million.”

“In his 34 years as an auctioneer, Plumlee said he has never seen so many foreclosures come through the area. He attributed the increase to the subprime loans made to people who bought homes they truly couldn’t afford.”

“Residential properties, even in growth areas like the Eastern Panhandle, are suffering in today’s downtrodden market.”

“Some of the properties bought at auction, including those in Apple Knolls, were houses that were never even sold. A lot of people need to sell,’ Plumlee said. ‘It’s the best way right now. It’s working.’”

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