The Housing Bubble

The North County Times reports from California. “Real estate agents and builders need to modify their business models in order to survive the current mortgage crisis, senior real estate executives said during a conference Wednesday. The suggestions ranged from copying car sales strategies to conducting more honest assessments.”

“‘The one thing I can tell about you Realtors is that you’re all liars,’ said Joseph Anfuso, president of Florsheim Homes, a builder in California’s Central Valley.”

“Anfuso told agents during a Wednesday real estate conference at the University of San Diego that they need to stop inflating or hiding sales numbers and swallow a hard dose of reality on their cash flow if they expect to remain in business as sales continue to plummet.”

“For real estate agents to survive this downturn, they need to know where their businesses are going over at least the next five years, said Jason Hall, co-owner of RE/MAX Associates in San Diego.”

“‘With fewer transactions, it’s going to be a professionals-only field….If you don’t know where your next five transactions are coming from, you won’t be around next year and should start thinking about what you used to do,’ Hall said.”

The Union Tribune. “Optimism was largely absent yesterday at the University of San Diego’s annual residential real estate conference. Survival through the next 12 to 24 months figured into almost every speaker’s perspective in the half-day session held on the Linda Vista campus.”

“Over the next year, home prices, which have dropped about 11 percent since their all-time peak median of $517,500 in November 2005, may drop further to approach the 17 percent peak-to-trough decline experienced in the last downturn from 1990 to 1996, said USD economist Alan Gin.”

“That is a relatively small correction considering that prices have jumped more than 250 percent in the past 10 years, he said.”

“Robert Kleinhenz, chief deputy economist for the California Association of Realtors, painted a relatively bleak picture through next year. The Federal Reserve, Kleinhenz noted, ‘knows the end is nowhere near’ on housing’s downturn, and positive mortgage-investor confidence is ‘a ways from happening.’”

“Joseph Anfuso, president of Florsheim Homes, said that when prospective buyers come window shopping at a development, ‘treat them like a rich grandfather, as if you’re in the will.’”

“In an answer to a question about the availability of jumbo loans for mortgages exceeding $417,000, Steve Atwood of National City Mortgage, said large money-center banks appear to be the only reliable source.”

“But their capacity to absorb many more such loans into their portfolios ‘is not going to last much longer.’ Previously, such loans were sold off as packaged securities on Wall Street.”

The LA Times. “In Stockton, real estate agent Cesar Dias believes there are fortunes still to be made. That’s why he leads the weekly Repo Home Tour, filling two 18-seat buses with prospective buyers eager to view foreclosed houses that can be snapped up at dramatically reduced prices.”

“Dias said that when he started the free tour in September, some residents criticized it as a tasteless marketing gimmick. But as headlines announce record foreclosures and weeds sprout in the yards of abandoned homes, their tune has changed.”

“‘We’re bringing in homeowners to get the grass green again,’ he said. ‘At this point, I wish the foreclosures would dry up. We could use an end to the free-fall.’”

“At the waterfront Stockton Arena on Dec. 1, about 500 anxious residents lined up at a foreclosure workshop to see loan counselors. Pete Ponce de Leon said he and his wife were barely keeping up with their monthly mortgage payments, which shot up from $1,700 a year ago to $2,500 now.”

“He said he cashed in two IRAs, sold his tools, sold a truck and was bracing for another rate increase this month. Along the way, he lost his job, and his lender refused to cut him a break. ‘Why don’t they just screw us all at once instead of a little at a time?’ said Ponce de Leon, who has found another job and hopes to renegotiate his mortgage.”

“Asked whether the higher payments took them by surprise, Ponce de Leon struck the same note as many other homeowners in trouble. ‘We just thought we’d be OK,’ he said, explaining that he and his wife had planned to use what they’d expected to be the rising equity in their home to refinance the adjustable loan at a lower rate.”

“It was a bet that backfired. Like homes almost everywhere else in California, the Ponce de Leons’ lost value and their interest rates kept going up.”

“Monaliza Botello said she was surprised when her father, who brings in $4,500 a month, last year secured a loan requiring a $4,000 monthly payment.”

“The idea was that Monaliza’s father would own the new $495,000 four-bedroom for a year or two, at which point she and her husband, could afford to buy it from him with a refinanced loan. But the three of them, who were all living there, fell behind in their payments, and Monaliza lost her dream home.”

“‘It still hurts,’ she said. ‘We were getting phone calls and notices from the lender: ‘If you give us the balance in full, you can keep the house.’ It was nothing like ‘Call us and we’ll see what we can work out.’”

“As home prices plunged, Botello’s cousin around the corner also went into foreclosure, as did her godmother — a real estate agent nearby. ‘Everyone was going, ‘We can’t refi? How can we afford this?’ she said. ‘Everyone was just shocked.’”

“Occupied by Monaliza’s family for just seven months, the Botello home in Lathrop, just south of Stockton, is on the market for $300,000.”

“‘Not to be callous about it, but what goes up must come down,’ Dias said, adding that he expected the market to boom again in a year or two.”

“Dan Noel and his wife were checking out homes for themselves. In fact, the Noels, who live in a one-bedroom apartment with two teenage sons, had already put money down on a home they discovered on a previous tour.”

“‘We’re so excited we can hardly contain ourselves,’ said Dan Noel, who said their full-price offer of $179,450 for the three-bedroom house beat seven others.”

The Orange County Register. “Real Estate Disposition Corp. tonight in Long Beach will peddle 22 converted condos from the Monterey Villas in Santa Ana. Nineteen are 2-bedroom, 2-bath units with opening bid from $179,000 to $209,000, or about half the old prices.”

“According to a February ‘06 news item from CoStar, ‘Pacifica Cabrillo LLC purchased the 272-unit apartment complex…in Santa Ana for nearly $51.73 million, or $190,165 per unit. The buyer intends to convert the apartment complex into condominiums.”

“SoCal bankruptcies were up 73% in the third quarter vs. a year ago. The rest of California’s bankruptcy courts saw 10,053 filings in the third quarter, up 69% in a year.”

The Desert Sun. “Home sales in the Coachella Valley continued to fall in October, with 564 properties being sold, or a 43 percent drop from last year. The median price also declined 7.9 percent to $350,000, according to DataQuick.”

“The only bright spot was the condo resale numbers, which grew 15 percent on sales of 138 units. However, the median price of condos dropped to $292,000, down 14.1 percent.”

“Patrick C. Veling, president of Real Data Strategies Inc. of Brea, says the monthly data ‘points out the flaw in using median price for anything except real macro analysis. ‘The statistical sample (of homes sold) is now small enough that the median price misrepresents what buyers and sellers are dealing with.’”

“The DataQuick data for October saw sales range from a low of $180,000 in Thermal to $7.2 million in Indian Wells. The median price per square foot also showed a drop of 12.7 percent to $204 across the valley.”

The Press Enterprise. “The Federal Reserve surprised the financial world Wednesday by announcing a plan to inject cash into the international banking system. Banks have been reticent to finance business investments in recent months because of the dramatic increase in foreclosures in this country, because many loans for new investment are backed by mortgages held by people on Main Street.”

“Inland Southern California saw 31,661 foreclosure-related filings in the third quarter, including defaults, foreclosure auctions and lender repossessions. That was one filing for every 43 households, more than four times the national average.”

“Redlands-based economist John Husing said the inclusion of foreign central banks underscores how serious Federal Reserve now views the meltdown of the subprime mortgage market.”

“‘It’s the issue we did not see,’ Husing said of the international credit crunch. ‘We thought that mortgages were all about the regional housing market. But, internationally, it’s much bigger and much scarier.’”

Some housing bubble news from Wall Street and Washington. CNN Money, “Jerry Howard, CEO of the National Association of Home Builders, told CNNMoney.com that numerous problems caused the sharp slump in the housing and mortgage markets, but he added that overbuilding during the boom years was a contributing factor. ‘There were some builders [who] were probably overly aggressive. There’s no question about that,’ Howard said.”

“‘Economists were starting to say this is a cyclical business and we are going to get into a downturn. But some guys were chasing the gold and pursing the brass ring, and they didn’t heed the market warnings as quickly as they should have,’ he said.”

“Government figures show that 6.2 million new single-family homes were completed between 2003 and 2006 - hitting record levels year after year during the boom. Howard also said builders underestimated how much speculative investors were pumping up the market.”

“‘We now find out in hindsight it played an important role and a very dangerous role,’ he said. ‘For the first time that I can remember, you saw investors coming into the housing markets and trying to play it into almost like a day stock.’”

“Dean Baker, co-director of the Center for Economic and Policy Research, said a boom in building was bound to happen due to the bubble in home values; builders were responding to the market conditions, not creating them.”

“‘I put them low on the list as villains for the story,’ Baker said. ‘If there’s a high price for houses, people build them.’”

From Realty Check. “I’m hearing some disconcerting rumblings from some builders, anecdotally speaking of course. One mid-sized private builder told a friend of mine that potential customers coming through their model-home doors are openly hostile. They’re not just looking for good deals; they’re looking for payback.”

“Apparently some of today’s new homebuyers blame the builders outright for the current housing predicament. They are telling unwitting sales reps that they are to blame for running up prices and foisting untenable loans on clients during the latest housing boom. Buyers are telling the sales people stories of how rudely they were treated during the boom.”

“Another builder told someone else I know that buyers today aren’t just low-balling, they are making truly ridiculous offers, like half the asking price.”

From CE Pro Magazine. “Some industry prognosticators are predicting that the housing market will not turn around until 2009. Why are some integrators not sad, but downright happy, to hear that news? For some integrators, it’s a matter of having been burned by the shady practices of a large builder in the past.”

“‘They’re all scumbags!’ is how the owner of one large Florida-based security company bluntly characterized large production builders recently when we spoke. He proceeded to tell me several details regarding his dealings with several national builders.”

“For instance, long after contracts had been signed, one builder insisted the dealer provide an extra free alarm keypad for every home in the development. When the dealer resisted, he was thrown off the job. ‘And the company they ended up using did everything wrong and many of the systems failed, hurting that builder’s reputation,’ he recalls.”

From Reuters. “The top lobbyist for the U.S. mortgage banking industry said on Wednesday that he is stepping down after five years to head a trade group representing mortgage title insurers.”

“Kurt Pfotenhauer, who will leave the Mortgage Bankers Association at the end of January, said the recent housing finance crisis has made the last eighteen months some of the most challenging in his professional life. Pfotenhauer has often had to defend an industry that sold troubled subprime mortgages with built-in cost spike that are helping drive up foreclosures.”

“‘We had some members that pushed the envelope too far to the cost of families and financial institutions,’ he said.”

The New York Times. “The Illinois attorney general is investigating the home loan unit of Countrywide Financial as part of the state’s expanding inquiry into dubious lending practices that have trapped borrowers in high-cost mortgages they can no longer afford.”

“Lisa Madigan, the attorney general, has subpoenaed documents from Countrywide relating to its loan origination practices, a person briefed on the matter said.”

“Countrywide Financial Corp, the No. 1 U.S. mortgage lender, said on Thursday mortgage loan funding tumbled 40 percent to $23 billion in November, sending its shares down as late payments continue to escalate.”

“The bulk of the origination decline came from a near-evaporation of Countrywide’s subprime lending business and a sharp fall-off in adjustable-rate mortgages.”

“Credit Suisse analyst Moshe Orenbuch said Countrywide’s delinquency rate was 6.34 percent in November, up from 5.89 percent in October. Subprime mortgage funding fell to $17 million in November from $3.06 billion a year earlier, when lending standards were lax. Adjustable-rate fundings fell to $3.33 billion from $14.3 billion.”

The Associated Press. “Lehman Brothers Holdings Inc. had $3.5 billion worth of writedowns during the fourth quarter, with a majority of it coming from investments in mortgage-backed securities, the investment bank’s global head of risk said Thursday.”

From MarketWatch. “Security Capital Assurance may lose its crucial AAA rating because it insured complex securities that are being hit hard by the subprime-mortgage meltdown, Fitch Ratings warned.”

“Fitch said that, after reviewing the CDOs and mortgage-backed securities guaranteed by Security Capital, the insurer’s capital adequacy falls $2 billion short of what’s needed to keep an AAA rating.”

“The main problem centers on Security Capital’s $16.1 billion exposure to structured finance CDOs, according to Fitch. A number of those securities, which were originally rated AAA, should now be rated BBB or junk because the underlying subprime mortgages and other assets have deteriorated and are expected to keep getting worse, the agency said.”

“Residential mortgage-backed securities that Security Capital guaranteed also have deteriorated, particular those backed by prime, second-lien home loans, Fitch added.”

From Spiegel Online. “The much anticipated sale of Landesbank Sachsen went through on Thursday morning. But the state of Saxony is on the hook for €2.75 billion despite promises by the government that tax money was safe.”

“The deal was initially agreed to back in August. After Landesbank Sachsen (Sachsen LB) ran into massive difficulties stemming from the subprime collapse in the United States and resulting credit shortages, Landesbank Baden-Württemberg (LBBW) expressed interest in buying it. But the deeper LBBW plunged into the books of Sachsen LB, the less it liked what it saw.”

“The eastern German state of Saxony agreed to put up a guarantee of €2.75 billion ($4 billion) to help cover some €43 billion worth of risky investments at Sachsen LB and an affiliate, according to Saxony government spokesman Peter Zimmermann. According to press reports, LBBW had been demanding €4.3 billion, which would have amounted to almost a quarter of Saxony’s entire state budget.”

“The bank itself, Zimmermann confirmed, changed hands for €328 million in cash.”

From Bloomberg. “The Bank of Japan said Thursday that it would act as needed to relieve strains…after several top central banks - the Fed, the European Central Bank, Bank of England, Bank of Canada and Swiss National Bank - announced a new short-term lending facility and other measures Wednesday.”

“It was the first such joint action by major central banks since they took steps to help financial markets recover after the attacks on the United States on Sept. 11, 2001.”

“Investor delight at a concerted central bank effort to relieve jammed money markets fizzled out on Thursday with experts saying the credit crisis would only end when commercial banks trusted each other again.”

“Even the Swiss National Bank said central banks alone could not solve the crisis, as it kept interest rates on hold. ‘As long as uncertainty with respect to the scope of the credit problems exists the disruptions on the money market are likely to persist,’ the SNB’s Thomas Jordan said.”

“‘Central banks cannot compensate for this lack of confidence simply by injecting additional liquidity,’ he said.”

From The Age. “‘Investors (were) initially buoyed by the action of the central banks then, once the colourful present was opened, they spat the dummy like a petulant child,’ said Joseph Palmer & Sons director Alex Moffatt in a note to clients.”

“Financial institutions became reluctant to lend to one another during August, when defaults in the US subprime mortgage market hit some banks and set off a period of extreme volatility on equity markets.”

“The interest rates banks charge each other for short-term loans in Europe failed to decline from the highest levels in seven years a day after central banks joined forces to break a logjam in money markets.”

“The highest short-term rates since December 2000 suggest that the first coordinated central bank action since the Sept. 11, 2001, terrorist attacks may not be enough to revive interbank lending. The cost of borrowing dollars fell 7 basis points to 4.99 percent, about half what was anticipated, based on prices of Libor futures contracts.”

“‘It’s not going to help us find an exit to this crisis,’ said Cyril Beuzit, head of interest-rate strategy at BNP Paribas SA in London. ‘These measures aren’t going to address the root cause of the crisis. Banks are still reluctant to lend money to each other because there are serious concerns about potential further bad news.’”

From Fin Facts. “ECB says the 21 largest Eurozone banks have €244bn in off-balance sheet assets that they may have to take onto their balance sheets which would impact their lending capacity.”

“‘All in all, it cannot be excluded that the market re-pricing process could become more disorderly, possibly revealing further and, so far hidden, risk exposures. In addition, those LCBGs that rely on funding from non-deposit sources, and those that are particularly active in the securitisation businesses, could see their revenues decline significantly. Forward-looking financial market indicators, such as banks’ CDS spreads and share prices, currently suggest that challenges pertaining to the banking sector are likely to remain in the near future,’ concluded Lucas Papademos, Vice-President of the ECB.”

“Interest rates on loans in euros stayed at a seven-year high, a day after global central banks teamed up in an attempt to thaw a freeze in money markets.”

“The three-month borrowing cost was at 4.95 percent, its highest level since December 2000, according to prices from the European Banking Federation today. That’s 95 basis points more than the European Central Bank’s benchmark interest rate and up from 4.18 percent at the start of July, before losses related to subprime mortgages contaminated money markets.”

“U.K. Prime Minister Gordon Brown said the surge in credit costs should spur increased transparency in the banking industry and change the way credit-rating companies work.”

“‘It’s a wake-up call for the global economy,’ Brown told lawmakers in Parliament in London today. ‘The existing institutions aren’t good enough. I’m going to make it my business to reform those institutions.’”

“Former Federal Reserve Chairman Alan Greenspan ignored warnings about the Fed’s low interest rates that fueled real estate speculation and the current housing recession, said Allan Meltzer, professor of political economy at Carnegie Mellon University in Pittsburgh.”

“‘I think he lets himself off much too easy,’ said Meltzer, author of a 2002 book on the early history of the central bank, in an interview. ‘He acknowledged maybe his policy had a little bit to do with it. But he found all kinds of other reasons’ to blame for the housing and mortgage problems…in a Wall Street Journal commentary.”

“Greenspan…said the Fed was worried about deflation. Meltzer said he met then with Greenspan at the former chairman’s invitation and disagreed with the concern over deflation.”

“‘I said, ‘Alan, we have had six or seven deflations in the United States in the history of the Federal Reserve, and only one of them ever had terrible consequences, and that was 1929 to 1933,’ he said. ‘In all the other six, nothing happened.’”

“Greenspan ‘continued to believe that deflation was the problem. He was wrong about that, simply out and out wrong,’ Meltzer said.”

The Orlando Sentinel reports from Florida. “Fewer than 1,000 homes were sold in the Orlando Regional Realtor Association’s core market in November — only the second time in nearly 11 years that the number has dipped below that threshold. The other instance was three months ago, in September, when sales in the core market totaled 970. The preliminary count of 963 sales in November was down nearly 48 percent from the same month a year ago, according to the association.”

“‘The continuing fall from record-high sales in 2005 is evident throughout the four-county metropolitan area and the region more generally.”

“‘It’s gotten a lot worse,’ said Ron Resch, president of Total Building Consultants and Inspectors Inc. ‘My business is off about 40 percent’ from a year ago.”

“The new-home side of his inspection business is in even worse shape, Resch said. ‘We usually have 30 to 40 in the system, as they progress’ from foundation work to final finishing and trim. ‘Right now, we’ve got four or five.’”

“The Orlando Realtors’ report for November showed that the core market’s local inventory remained above 26,000 properties for a fifth straight month. Using last month’s anemic sales total, that amounted to a 27-month supply of homes for sale — yet another record in that category.”

The Palm Beach Post. “Foreclosures in Palm Beach County and the Treasure Coast tripled in November compared with a year ago as the worst housing slump in nearly two decades continued to ravage the tri-county area.”

“In Palm Beach County, once one of the hottest real estate markets in the nation, 1,671 homeowners received foreclosure notices in November, according to the county clerk’s office.”

“‘People are desperate,’ said real estate analyst Jack McCabe, who has closely tracked the local decline. ‘A lot of people weren’t trying to buy a house over their means, but nevertheless they got caught up in this,’ he said. ‘Now they’re emptying their savings, but for a lot of people it makes sense to cut their losses.’”

“In Palm Beach County, there’s a four-year supply of homes for sale, according to Illustrated Properties Real Estate. That leaves foreclosure as the last unhappy option for squeezed homeowners, as climbing rates in the Treasure Coast show.”

The Daily Business Review. “Veronica Hearst, the widow of newspaper heir Randolph Apperson Hearst, is expected to close on a ‘deal’ in the next few days to save her 52-room Manalapan mansion from a $40 million foreclosure lawsuit, her public relations agent said Tuesday.”

“Hearst has until Jan. 22 to come up with a plan before Palm Beach Circuit Judge Jeffrey Winikoff decides whether lender New Stream Secured Capital, may foreclose on the estate bought by her husband for $29.87 million a few months before he died in 2000.”

“(An) agreement signed in January 2006 required Hearst to list the property for sale and provide a letter of intent to sell for no less than $40 million by Feb. 19, 2007. If the house didn’t sell by then, the lender would be authorized to reduce the listing price to $27 million. If it didn’t sell in another month, the price would be reduced by 5 percent every month until sold.”

“During the deposition, Carlton Fields attorney Alan Grunspan of Miami, who represents New Stream, asked her about an appraisal presented by New Stream that placed the value of her estate at $25 million. He asked if she recalled throwing the appraisal sheet across the room when it was shown to her.”

“‘It’s possible, but I don’t recall,’ she said.”

“Robert Fessler, who has several investments in Manalapan, offered about $20 million for the house around March, according to the deposition. When asked about the offer, Hearst said, ‘I don’t recall exactly, because if I recall I would’ve probably stepped into it and done it.’”

The Naples News. “As the number of foreclosures increases across the region and around the country, so does the popularity of a tool to dodge them: the short sale.”

“There were 1,764 foreclosures in Lee County in November, and the county is expected to break the record of more than 9,000 foreclosures by the end of the year. Many homeowners are turning to short sales as a way to avoid becoming one of those foreclosure statistics.”

“Wes Brodersen, president of EXIT Gulder Real Estate in Bonita Springs, said one of the frustrations with short sales is they take so long to complete. ‘Banks haven’t adjusted to the reality yet,’ he said. ‘An offer will land on someone’s desk and it moves and it moves and it moves until someone either approves it or turns it down. It can be frustrating for sellers and for buyers.’”

“Terry Dona, president and underwriter for Bonita Springs-based Metro Mortgage, said many foreclosures and short sales can be traced back to two things: unscrupulous lenders and buyers who had little money but didn’t want to miss out on the boom.”

“‘You see it in places like Lehigh Acres, Golden Gate Estates and Cape Coral in neighborhoods where families live and lots of speculating was going on at the height of the boom in 2004 and 2005,’ she said.”

The Herald Tribune. “Two of Sarasota’s most notorious bad boys are about to lose millions of dollars in real estate that they accumulated during the past 10 years.”

“On Thursday, a larger auction, consisting of 45 homes, condos and building lots, will take place at 7 p.m.. The properties formerly belonged to Daniel Prewett, a tax felon who is awaiting extradition from an Italian jail on money laundering charges connected to a cocaine deal.”

“Prewett, who ran a Jackson Hewitt franchise in Sarasota for 15 years, convinced many of his well-heeled clients to participate in real estate joint ventures. When Prewett was arrested in October 2006, clients…filed a series of lawsuits demanding repayment of $19 million.”

“Bankers piled on by filing foreclosure suits of their own, requesting more than $14 million.”

“In effort to satisfy a portion of these claims, Prewett’s portfolio of 45 remaining properties will be sold at public auction by Fisher Auction Co., a Fort Lauderdale-based auction house.”

“Included in the mix are 14 single-family homes found from Chipley to Sarasota, 10 condo units from Osprey to Siesta Key, 14 building lots and seven unfinished homes in Sarasota and North Port. Fisher’s Web site lists the total appraised value of the properties at $12.4 million.”

“Though that number is far less than what Prewett paid for the properties during the recent real estate boom, it is unlikely that auction proceeds will match appraised values. For example, the 11 building lots in North Port have appraised values of $27,000 to $38,000 per lot. But land is not selling for nearly that much these days.”

“‘Those assessments are based on 2006 sales, and sales have dropped off since then,’ said Dennis Black, a Port Charlotte appraisal instructor. ‘There are hundreds of building lots available for far less than those assessed amounts.’”

“North Port and neighboring Charlotte County, each with tens of thousands of vacant lots, have an estimated 1,200 abandoned construction sites, yet another problem arising from the collapse of the region’s real estate market.”

“Chief building official Jim Evetts said Charlotte County would need $4 million to $8 million to demolish the county’s backlog of abandoned sites. North Port’s response is ‘interesting,’ he said. But Evetts was wary of possible lawsuits the cleanup could prompt.”

“Meanwhile, crews across North Port are cleaning trash and flattening mounds of dirt in front of half-finished houses.”

“More than 80 of the homes on North Port’s abandoned list are from bankrupt St. Petersburg builder Construction Compliance Inc., a company that has been sued by dozens of jilted clients and owes millions of dollars.”

“And while work has started on some home sites, residents in other areas who have waited more than a year for progress are eager to see results. ‘I have not seen one single thing done,’ said Jacquie Baldelli, who has several abandoned job sites within two blocks of her home.”

“For the first time in at least a decade, Sarasota County educators expect they will end the school year with fewer students than last year. Students have been leaving this year at a faster pace than usual, with enrollment down by about 300 through November. By the end of the year, administrators project the district could lose another 300.”

“‘We are dipping further than we have ever dipped before,’ said Al Weidner, finance director for the school district.”

“School officials believe this year’s declining enrollment is fallout from the area’s stagnant housing market. They say families are leaving the area in droves because they can not find employment.”

“‘One family withdrew today, and they’re going back to Puerto Rico,’ said Diana Anderson, a registrar at Emma Booker Elementary. ‘They lost their job and lost their home. There’s a lot of that going on.’”

“The most drastic drops are in counties where the real estate market was hottest — making Sarasota ground zero. ‘They’re going back to the north, Chicago, Tennessee,’ said Bill Muth, principal of Ashton Elementary, which has lost about 30 students. ‘People feel like this is a good time to move because of everything going on here.’”

“‘The state of Florida has historically been growing,’ Weidner said. ‘Now, we seem to be going in the other direction.’”

The Coloradoan. “Federal regulators have delayed a final decision on the sale of Norlarco Credit Union in Fort Collins while it negotiates with creditors to try to stave off lawsuits.”

“At least 10 lawsuits have already been filed naming Norlarco as a defendant, claiming Norlarco ignored credit-worthiness when approving loans, many in Lehigh Acres on the western edge of the Everglades near Fort Myers, Fla.”

“Construction loans resulted in mounting delinquencies for Norlarco when the Florida housing bubble burst, prompting the National Credit Union Administration to seize control in July within weeks of the lawsuits hitting Florida courts.”

“Norlarco has just over 1,000 real estate construction loans worth more than $238 million in Florida, with much of that — up to $200 million, according to the Credit Union Journal — shared by other credit unions that joined in loan participation programs.”

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