The Housing Bubble

The Ventura County Star reports from California. “With a sleeping bag wrapped snugly around his shoulders, Kamran Jabbari was spending the night camped in front of a new condominium complex in Oxnard, staking out his spot as No. 7 in line to buy a home. Jabbari was willing to rough it for a few days for a chance to buy a discounted luxury condominium at Port Marluna at Seabridge. Some had been in line for three days, waiting to sign papers when the sales promotion launched Saturday.”

“Camping out to buy a home is unheard of in today’s declining housing market. But price reductions of up to $320,000 drew eager buyers.”

“The price-slashing turned out to be a success for home builder D.R. Horton. The Fort Worth-based builder has been struggling, with reported losses of $128.8 million for its fiscal first quarter that ended Dec. 31.”

“Dubbed an ‘unauction sale,’ the company described it as ‘low auction level pricing’ without the hassle. The company’s goal was to reduce inventory at 23 of its communities throughout Southern California, including 11 homes at Port Marluna, said Chris Chambers, California regional president for D.R. Horton.”

“Buyers didn’t come in droves, but at least eight were waiting Friday night, armed with $5,000 cashier’s checks, food and warm clothes.”

“‘It’s a deal,’ Marjorie Cole, a Port Hueneme resident. ‘We watch the show Survivior,’ she said, bundled up in a poofy jacket and ski hat. ‘Well, this is going to be our Survivor.’”

‘The sale is more than just hype — homes are actually discounted — she said. The price on the home that she and her husband planned to purchase was reduced $250,000. The wait ended Saturday afternoon when Cole and her husband signed papers on the home of their choice. Escrow is scheduled to close March 21.”

“Although he didn’t get his first pick, Jabbari also purchased a ‘beautiful home.’”

“Jabbari said he trusts that the housing market will rebound. Promotional events such as the luxury condominium sale will help drive a recovery, he said. ‘You have to get over your fear of ‘What if I buy today and six months from now it’s down another $50,000?’ Jabbari said.”

“Realtor Maria Rios called these types of sales ‘bait’ because they generate hype and attract people who think that they cannot afford a home.”

“She said it was an ‘excellent idea for developers,’ who are competing with foreclosure prices. The traditional home seller is being left in the dust because they cannot compete with the developer, she said.”

“‘They are cheating the people who bought the homes from them at regular price,’ Rios said.”

The Bakersfield Californian. “Deeply discounted new homes go on sale Saturday in two northeast Bakersfield communities, an event that has inspired stakeout tactics in some would-be homeowners and a measure of concern among those who paid full price to live in the neighborhoods.”

“D.R. Horton Inc. is selling homes at up to a 50 percent discount in 23 Southern California developments starting this weekend. One home plan, formerly listed for $380,000, has been reduced 48 percent to $199,990, according to a company sales flier.”

“Industry observers said the sale is a drastic measure, and a sign of the impact large national builders have had on the local homebuilding market. ‘They do things that we’ve never seen before,’ custom homebuilder Phil Gaskill said of his national competitors. ‘They overproduce homes when the market’s hot. And then when it’s not, they slash prices to move (inventory).’”

“Jon Hess is betting on securing one of those bargains. He set up camp in front of the Contessa’s Vineyard II sales office Sunday, and was still in line Friday afternoon.”

“‘I think it’s a good value,’ Hess said of the model home he had in mind.”

“Still, he was realistic about what this kind of sale might say about the health of the real estate market. ‘Who knows?’ Hess said. ‘Maybe by this time a year from now it’s going to be worth half of what I paid for it.’”

“At least one Lavender Trails homeowner, Billy Abney was worried Friday that the sale might further depress the value of his home, which he estimates has fallen $60,000 to $70,000 since he bought in the summer of 2006.”

“The 2,600-square-foot home plan he bought for $371,000 is being offered for sale at $230,000 this weekend.”

“But Abney’s hopeful the sale might ultimately benefit the neighborhood by attracting stable homeowners to a neighborhood where foreclosures have started to pop up. ‘We still need our community to be full,’ Abney said, ‘to fill the community out and not have vacant homes.’”

“Abney owns a second Bakersfield home that has fallen out of escrow twice. He now rents the place to a relative, but the rent doesn’t even cover half of his mortgage payments. ‘If I was qualified, I’d probably be standing in line,’ Abney said. ‘But I’m already buried in two houses.’”

The Fresno Bee. “The latest in a string of auctions designed to sell dozens of foreclosed houses in the central San Joaquin Valley occurs at the Fresno Fairgrounds.”

“The auction company, Real Estate Disposition Corp., is trying to sell more than 80 houses between Merced and Porterville. The event is the third auction in Fresno in seven months.”

“About 12,330 houses in Fresno County started the foreclosure process in 2007, according to RealtyTrac. In addition, about 74% of the homes bought in Fresno County in 2006 and 55% purchased in 2007 have no equity, according to another market tracker.”

“‘It’s amazing how many people attend these things,’ said Michael Gavin, a Fresno real estate agent who sells foreclosured properties acquired by banks.”

“The feverish bidding generated at auctions can drive the price up. ‘Some people don’t even bother with the auction. They just call a Realtor the next day and ask if they have any REOs in the same price range,’ Gavin said, referring to the acronym for ‘real-estate owned.’”

“Fresno real estate agent Cliff Lloyd said he thinks banks are panic selling their foreclosures at prices that are so low they’re driving down property values in many neighborhoods. Those lowball prices then become the standard used for appraising other houses being sold.”

“‘The banks can write off the losses,’ he said. ‘They don’t care; they’re corporate. But it’s affecting middle-class people who might want to make a move.’”

The Press Democrat. “Lenders’ phones are ringing in Sonoma County with questions about the availability of cheaper mortgages envisioned in the housing stimulus plan signed last week by President Bush.”

“But buyers must have the income, credit and some money down to qualify for a loan because subprime and other riskier mortgages that helped stoke housing’s boom have largely disappeared during its downturn.”

“Refinancing is more difficult because Sonoma County home prices have fallen 19 percent since housing hit record highs in summer 2005. Homeowners can’t refinance if they owe more than a home is worth, a particular problem for those who bought around the peak.”

“‘I think it’s just going to stabilize the housing market, but it’s not going to turn it around. It will contribute to hitting the floor by getting some of these properties off the market,’ said said Joan Picard, who tracks the issue for the Redwood Empire Mortgage Lenders Association. ‘But one of the biggest problems in Sonoma County is we don’t have the job base for people to afford the homes. That hasn’t changed. That’s why this county is suffering so bad.’”

The Hollister Free Lance. “President Bush recently introduced new legislation aimed at stemming the rising tide of home foreclosures around the nation. Real estate experts in San Benito county, however, say Bush’s plan is merely a ‘quick fix’ and will do little for homeowners trapped in a stagnant economy and overwhelmed by housing costs.”

“The plan includes lenders from six of the nation’s largest financial companies and would offer the delinquent owners an extra 30 days to renegotiate with lenders and avoid a foreclosure. ‘If people can’t pay their mortgage for 90 days, 30 more is not going to help,’ said real estate agent Dee Brown.”

“The current national drought in housing is the worst crash in more than 20 years and comes after a recent five-year boom in which both housing costs and sales reached record levels.”

“‘This program is just a Band-Aid,’ said Marilyn Ferreira, associate broker in Hollister. ‘The bottom line is, how are they going to pay back the bank? Adding 30 days is just prolonging the inevitable.’”

“For many conservatives, Project Lifeline is seen as an important first step in solving a major issue sweeping the nation. San Benito County Supervisor Jaime De La Cruz said the plan works as excellent short-term relief, while the long-term solution rests in improving the overall economy.”

“‘Any time you can help a family keep their home for even one more day, it’s a step in the right direction,’ De La Cruz said. ‘But in order to solve the problem we simply need more jobs and more job security.’”

The Desert Sun. “The Riverside-San Bernardino metro area, one of the fastest-growing regions in the United States in recent years, now ranks fourth in the nation in foreclosures.”

“The Coachella Valley has not been immune: RealtyTrac reported 8,966 pre-foreclosure, auction and bank-owned properties in the valley as of Monday. Countrywide Financial Corp, a leading lender in the valley, auctioned 54 properties since Jan. 18 and has 100 more slated for auction through April 14.”

“Fred Bell, executive director of Building Industry Association Desert Chapter, said he is concerned with the county’s economy. ‘It appears that we’ve lost about $22 billion in Riverside County in (new) construction activity year over year,’ Bell said, citing the Construction Industry Research Board Report.”

“The economic impact of that, measured with a 2.5 percent multiplier, equates to about a $55 billion loss, he said. Housing starts have fallen from 8,800 at the market’s peak in 2006 to roughly 1,500 this year. Bell says the construction jobs that once constituted 33 percent of the valley’s workforce will plummet as a result.”

“‘We’re in the midst of a pretty substantial market correction,’ he said.”

“The real estate market today and the foreclosures are too familiar to real estate agent Janet Phelps. ‘I worked the repos out here in the 1990s,’ said Phelps, who specializes in bank-owned homes. ‘I think we’ll have many more this time.’”

“The situation was different back then, she said. There weren’t that many homes. Lending was conventional: It required a down payment. Buyers thought the meaning of ‘flip’ related to a hair-do from the 1960s.”

“‘I think during this year, we’ll have quite a few (foreclosures) come on the market,’ she said, noting agents are making a concerted effort to find buyers who had previously been squeezed out of the market because home prices were not affordable for them.”

“‘The silver lining is that California, a state with an abysmal affordability rate, will see the doors open for people who had once been locked out of the super hot market,’ said Greg Berkemer, executive vice president of California Desert Association of Realtors.”

“‘It can be a perfect opportunity for someone right now,’ Phelps said, recalling sales she made when foreclosures hit the valley in the 1990s. ‘Out of all destruction can come construction.’”

“Justin Burke’s corner of the world bears the telltale signs of foreclosure. A ‘No Trespassing’ sticker is slapped on the window of one home. Police escorted its occupant out one day, long after the power was shut off.”

“The Realtors’ sign no longer hangs from its white post, and the wooden fence surrounding the property is beginning to fall. ‘This has been going on for months,’ he said, pointing to one of the first of four homes in the neighborhood to fall into foreclosure or wind up abandoned.”

“But still, he has hope. ‘Once people start picking these up, my business will come back,’ said Burke, who runs a one-truck Extreme Clean business and has seen sales drop due to foreclosures by as much as 40 percent in the last year. ‘People are scared to put their money in a home right now,’ he said.”

“A renter, Burke’s hoping to catch a good deal for his family. He thinks this may be a time to buy.”

“‘It’s been tough. But we’ve been waiting on whether to stay in the desert or hold on,’ he said. For now, he’s holding on.”

Some housing bubble news from Wall Street and Washington. Philadelphia Inquirer, “Radian Group Inc., a Philadelphia insurer of mortgages and bonds, said yesterday that it lost $618 million in the fourth quarter as the credit condition of American households worsened. Claims paid for mortgage defaults more than doubled in the quarter to $164.67 million from $81.14 million in the 2006 quarter. The increase included prime mortgages, which climbed to $53.2 million from $28.9 million.”

“Those payments are expected to reach $200 million in the current quarter and $1 billion for all of 2008, C. Robert Quint, Radian’s chief financial officer, said during a conference call. The company threw out its September projection of $2.16 billion in cumulative losses on mortgage defaults.”

“‘We now believe that losses will exceed those projections, although it’s unclear to us at this point by how much given the prevailing uncertainty in the market,’ Quint said.”

From BBC News. “Credit Suisse has suspended a ’small number’ of traders suspected of inflating the value of mortgage-backed bond investments by $2.85bn (£1.5bn). The Swiss firm blamed pricing errors for its actions, which would cut $1bn from expected first-quarter profit.”

“It also blamed ‘adverse market conditions’ for the write-down.”

“Tuesday’s revelations by Credit Suisse stunned many analysts because they came a week after the Zurich-based firm posted its results for the last three months for 2007. At the time, it reported minimal damage from the US sub-prime crisis, with losses of 2bn Swiss francs ($1.8bn; £938m) last year, less than it had originally expected.”

From Reuters. “Barclays Plc, Britain’s third-biggest bank, raised its 2007 writedown on the value of risky assets to 1.6 billion pounds ($3.1 billion). The bank said its exposure to collateralized debt obligations stood at 6 billion pounds before hedging, while its exposure to Alt-A mortgages rose to 4.9 billion and its exposure to U.S. monoline insurers totals 1.3 billion.”

The Daily Express. “Gordon Brown is under intense pressure to sack Alistair Darling after the ‘disaster’ of Northern Rock’s nationalisation. Northern Rock shareholders were also outraged after being that told their holdings have been made virtually worthless by the state takeover.”

“City analysts warned that investors will get virtually nothing. Sandy Chen, of investment firm Panmure Gordon, said: ‘Shareholders will want to see some money out of their investments but the financial reality is that they are likely to get nothing.’”

“Ministers opted for nationalisation after failing to reach a deal for a private takeover. Plans for potential sales to Sir Richard Branson’s Virgin Group or Northern Rock’s management team both collapsed.”

“A statement from Mr Branson said: ‘We believe that nationalisation is not the right answer and that a commercial solution would have been the best way forward.’”

“Details of the nationalisation were rushed out yesterday and will be debated in the Commons today. Mr Darling faced rowdy scenes in the Commons. Shadow Chancellor George Osborne told him he had taken Britain back to the failed policies of Labour’s past.”

“He added: ‘We can safely say you will never recover your reputation for competence. You are now politically a dead man walking and if the Prime Minister could actually make a decision he would move you.’”

The LA Times. “After years of watching house prices soar even faster than those in America — modest three-bedroom tract houses in the London suburbs were going for $2.2 million at one point — Britons are now weathering a sharp rise in mortgage defaults.”

“Repossessions — the British term for foreclosures — jumped 21% last year, with filings against more than 27,000 homes, according to the Council of Mortgage Lenders.”

“‘There is potentially a huge number of people who may be in difficulties,’ said Adam Sampson, director of a nonprofit group that counsels homeowners seeking to avoid losing their houses to debt. ‘So many of the people we see are husbands and wives who have borrowed against both their incomes. A substantial number have never had to verify their income to their lender.’”

“Dawn Newbury, a mother of three in Cardiff, Wales, saw her payments rise from $1,510 a month to nearly $2,000 when her sub-prime loan’s interest rate reset. The lender immediately sought repossession when she fell behind. Newbury won a reprieve in court, but was hauled back when her payment fell $40 short of the minimum.”

“Newbury found another sub-prime lender who paid off the first. She is now on an interest-only loan at $1,500 a month, which will soon go up to $1,910.”

“‘And then the whole cycle’s going to start all over again,’ she said. ‘They’re vultures, I’m telling you. They give you the money because they know you’re going to default, and they know they’ve got a lovely house coming out of it.’”

The Providence Journal. “A nationally recognized housing expert from Harvard University asserts that the federal government has ‘underreacted’ to the alarming rise in home foreclosures across the country.”

“Nicholas P. Retsinas, director of Harvard University’s Joint Center for Housing Studies, said the initiative announced last week by the Bush administration to grant some homeowners threatened with foreclosure a 30-day reprieve is like a ‘a stay of execution, but it’s not a pardon.’”

“‘Our government, particularly at the federal level, has underreacted to this market,’ Retsinas said before a group of about 60 people. ‘It’s a problem that calls for a very rapid and extensive government solution.’

“Retsinas’ remarks came during a forum titled ‘Lost Homes: Tip of the Iceberg?’ In Rhode Island, ‘10 homes a day’ begin the process of foreclosure, Retsinas said.”

“The ‘epidemiology’ of foreclosures ‘looks like cancer,’ said The Providence Plan’s Bruce Boucek., pointing to maps of Providence with colored dots indicating the spread of foreclosures.”

“Consider the demographics, Boucek said, and the questions multiply. In the West End, 36 percent of the residents fall below the federal poverty level, according to the 2000 census. The neighborhoods showing highest concentrations of foreclosures are the same neighborhoods where more than half of the residents are minorities, most of them Hispanic.”

“‘Why were all of these people sold mortgage products in the first place?’ said Boucek.”

The New York Times. “The mortgage market may be in a historic upheaval, but mortgage companies continue to pump out upbeat advertisements.”

“Countrywide Financial brags in its ads that ‘No one can do what Countrywide can’ and that ‘Countrywide can show you the way home.’ Wachovia ads feature an ‘Approved’ stamp prominently at the top, and Bank of America says, ‘Homeownership is the best medicine.’”

“Also, the National Association of Realtors is running national television ads saying there has never been a better time to buy a home. Home values nearly double every 10 years, the commercial claims, showing a young couple walk up to their white colonial-style home.”

The Associated Press. “Regulators are trying to punish Wall Street for mortgage finance practices that expanded home ownership and spread risk among a host of new players — but also may have duped borrowers and investors who supplied cash to fuel a housing boom that’s turned bust.”

“A handful of state securities regulators and a couple foreclosure-blighted cities have fired the opening shots with lawsuits trying to prove that investment banks and big lenders are guilty of more than just bad business decisions and failing to foresee looming mortgage troubles.”

“Aside from the civil cases, the FBI is looking at possible criminal action, focusing on what Wall Street firms knew about the risks of mortgage securities backed by subprime loans, and whether they hid risks from investors.”

“States have responded by tightening rules governing how lenders and brokers arrange mortgages and are compensated. But lawsuits and administrative complaints are the main tools regulators use to seek fines against companies accused of wrongdoing, or to set examples to deter bad behavior.”

“‘What they can’t enforce through regulation, they will try to accomplish through suing,’ said David Bizar, a Hartford, Conn.-based attorney who defends against subprime mortgage lawsuits brought by consumers and regulators.”

“In the rush to sue big business, there’s plenty of blame to go around in the subprime meltdown, said Bizar. But the mess can be blamed more on unrealistic expectations than fraud, he said.”

“‘You had a lot of people reaching to get into homes they couldn’t afford, on the theory that it would go up in value,’ Bizar said.”

“It is confession season for the world’s big banks as they complete 2007 results and try to account for the full scale of the subprime credit upheaval that threatens to stall the global economy.”

“Over the next two weeks, most major U.S. banks will file annual reports with the U.S. Securities and Exchange Commission, and several of Europe’s biggest financial companies will release 2007 earnings statements.”

“For some, it will be the first audited reckoning of how badly they were hurt by the market turmoil that began with defaulting on U.S. subprime mortgage loans.”

“Kenneth Rogoff, an economics professor at Harvard University and former chief economist of the International Monetary Fund, said write-offs related to the subprime problem were just the beginning.”

“‘We haven’t by any means seen everything,’ Rogoff said. ‘If it were just the subprime debt, it wouldn’t be so bad. We’re just entering the recession, so the defaults are just beginning.’”

“Rogoff recently co-wrote a paper comparing the current banking troubles to five of the biggest financial crises of the 20th century, including Japan’s ‘lost decade,’ which began in 1992. He found that the current U.S. housing-fed crisis was following a strikingly similar pattern.”

“The crises were marked by swift rises in asset prices, mounting debt and steep current account deficits. The rise in the U.S. housing market from 2003 to 2006 was even steeper than the average asset price rises in the other five crises.”

“Full disclosure is a critical step in the restoration of global markets to good working order. That was the point hammered home earlier this month when finance leaders from the Group of 7 rich nations met in Tokyo.”

“‘We need to keep encouraging our financial institutions to recognize their losses, let the market work and raise capital,’ Treasury Secretary Henry Paulson told the U.S. Congress on Thursday.”

From WKRN.com. “While the cheaper prices may be good for newcomers, it is bad news for the hundreds of residents who moved to The Hills at Concord Place in the past year. Some residents want Centex to either sell the new houses at the market price they paid or refund the difference.”

“Resident Joe Calvert said, ‘[It] kills resale. If you’re a person who wants to refinance a mortgage you wouldn’t be appraised at the level you owe.’”

“Through email, a spokesperson for Centex wrote, ‘Lower prices are necessary to sell homes in the current business environment. We don’t control market conditions and pricing is a significant issue nationwide, not just in one neighborhood.’”

“In fact, across Middle Tennessee, home builders are going to extreme measures to get home buyers to purchase their homes.”

“Pramod Panasa bought his home in the Southern Home Builders’ subdivision in January of last year, before builders rolled out the big deals. That, he said, is part of the real estate gamble.”

“‘Right now, I’m sure there are better deals out there, but right now I’m not thinking about it,’ he told News 2.”

The Tampa Tribune reports from Florida. “Florida ranks behind only Nevada in the percentage of foreclosures fueling the current housing bust, Pasco County Community Development Manager George Romagnoli told about 120 people at the Richey Suncoast Theater. Some lost their jobs. Some got divorced. Others who attended the homeowners education seminar Saturday simply bought houses they could not afford.”

“There were 630 foreclosure lawsuits filed in Pasco in January, and more than 75 percent of those cases involved homesteaded properties or owner-occupied homes, he said. ‘Half of the loan failures have balances of under $150,000,’ Romagnoli said. ‘These are affordable homes.’”

“‘In other counties, it might be speculators losing properties; but in Pasco, for the most part, it’s homeowners,’ Romagnoli said.”

“Steve Masterson of Holiday is a bit of both. He said his wife sued for divorce two weeks after they bought what was supposed to have been an investment home, where he now lives. Instead of renting out the home to make a profit, Masterson said he is struggling to make mortgage payments that include spiraling insurance costs.”

“Masterson said he used to make good money as a construction crane operator, but there is no work for him in today’s depressed real estate market.”

“‘I got a raw deal, but I’m trying to dig my way out of it,’ he said.”

“Fred Sager of Shady Hills said he got into mortgage trouble after his son lost his job and could no longer make payments on a home in the Shadow Ridge subdivision. Sager was a co-signor.”

“He said the seminar inspired him to try and renegotiate the loan terms, so he can sell the now-empty house at a reduced rate. ‘I’m just a middle class guy trying to protect my good credit’ rating, Sager said.”

“Many of those in attendance did not want to be quoted by name. That is probably because they are embarrassed that they were talked into an adjustable-rate loan that has ballooned past the point they can afford, said mortgage broker Gene Cunningham.”

“‘What it comes down to is common sense, and there is a major lack of common sense everywhere out there,’ Cunningham said.”

“Real estate broker Len Trubia said he came to the seminar looking for solutions to share with clients. Trubia said he has refused to sell homes to people who obtained preapproval for subprime and adjustable mortgages he felt they could not afford.”

“‘Not everybody is innocent in this thing,’ Trubia said. ‘There has to be integrity in this business. I call it dirty money’ when a home is sold to someone who will not be able to make the payments.”

The Miami Herald. “Two condo developers filed for bankruptcy last week. The developer of Fort Lauderdale’s Strada 315 condo filed for Chapter 11 despite selling about 40 percent of the 117 units in the two months since completing construction.”

“Strada 315 LLC of Delray Beach couldn’t persuade Regions Bank to extend a $34.8 million construction loan on the project in Flagler Village.”

“Regions also put holds on any money the developer made on unit sales above the loan payments it owed, Strada says in court documents. Jack McCabe, a Deerfield Beach real estate analyst, said Regions’ stance with Strada signals lenders are becoming more aggressive in collecting debts from developers.”

“And Surfside-based Beach House Property sought bankruptcy protection. The 12-floor glass building was to break ground last year on the property of the Beach House Hotel. Beach House’s 20 largest unsecured creditors are owed $4.6 million.”

“At Strada, the condo has sales contracts on 51 of the remaining 69 units, but the developer admits it expects ‘a large number’ will not close and buyers will forfeit deposits because of the current economic conditions. Nevertheless, it adds it expects to close ‘a significant number of units in the next two months.’”

“Regions apparently isn’t as optimistic, McCabe said. ‘There’s good reason for that: We’re seeing such a high percentage of walkaways,’ said McCabe.”

“Regions last month blamed slowing real estate markets in Florida and Georgia for quadrupling its reserve for loan losses to $360 million. The bank is ‘acting quickly to address current areas of weakness,” said Dowd Ritter, CEO of the Alabama-based bank, in a Jan. 3 statement.”

The St Petersburg Times. “Mike Burgur returned from work last month to interrupt a break-in at his rented Clearwater Beach condominium.”

“The intruders were stripping fans off the ceiling and the knobs off the doors. They had carted out the refrigerator and yanked up a toilet. They’d even pulled the plates off electrical outlets and unscrewed the faucet handles.”

“Burgur had no trouble recognizing the culprit: It was his own landlady.”

“‘I’m going to strip this mother,’ the 70-ish property owner raved to Burgur, as she ripped apart the 950-square-foot unit on Island Way.”

“People who lose their homes to foreclosure and in a pique of revenge strip the homes before the bank takes them back. Local experts estimate such borderline looting occurs in roughly 20 percent of bank repossessions. But foreclosures are such an explosive growth industry in the Tampa Bay area that home stripping affects scores of properties.”

“‘She even took my shower rod and coffee pot,’ Burgur said of his landlady, who hadn’t paid her mortgage in full for more than a year before the bank seized the $300,000 condo in January.”

“There’s no denying that many strip jobs are deliberately destructive. Witness this single-story beige stucco house in St. Petersburg’s Northeast Park neighborhood. The old owner bought the house near the peak of the market in 2005 for $152,800 and couldn’t make the payments.”

“Neighbors were shocked last month when, as the bank zeroed in on the house, the former owner leased a Bobcat excavator and uprooted the wooden privacy fence and five palm trees. Postholes still litter the yard.”

“That wasn’t the end of it. The ex-owner dismantled and removed the garage door and the double French doors in the rear, leaving the home exposed to the elements. ‘They’re mad at the property when they should be mad at themselves,’ said Jerry Sigler, an agent specializing in bank-repossessed homes.”

“Burgur said his former landlady has missed payments on other properties so he expects the stripping and ripping to continue across Clearwater Beach. ‘I moved to a three-bedroom condo in Tampa,’ he said. ‘Hopefully the new landlord is better at making his mortgage payments.’”

The Herald Tribune. “James Russell Crain and his attorney, John Yanchek, developed a reputation for being inconsiderate property owners when they owned investment properties in The Landings, Bird Key and Deer Creek. Residents often complained that the two men failed to maintain the grounds around their empty houses.”

“Now that banks have seized most of Crain and Yanchek’s properties for their failure to make interest payments, one would think that problems with homeowners associations would disappear. But that is not the case.”

“Thomas Frey, a member of the Deer Creek Homeowners Association, said Port Charlotte-based Peninsula Bank, which foreclosed on a $400,000 loan to one of Crain’s corporations in April, is delinquent in paying association dues.”

“Jeffrey Kalaman, a Peninsula loan officer who made two loans to Crain and Yanchek, said he was surprised that the dues had not been paid.”

“‘We’ve been taking care of the property and fixing the pool,’ Kalaman said. ‘So I don’t know why the dues weren’t paid. Maybe it’s because they didn’t get the check or something.’”

From Bloomberg. “St. Joe Co., Florida’s biggest private landowner, said fourth-quarter profit fell as the company incurred restructuring expenses and land values declined. Revenue dropped 35 percent to $93.8 million.”

“St. Joe is getting out of homebuilding to focus on planning communities that include residential, retail, commercial and industrial properties. The company had pretax expenses of $10.5 million in the quarter to write down the cost of home sites and exit businesses.”

“The company owns 718,000 acres of land, mostly in Northwest Florida, an amount of property about the size of Rhode Island. Most of the land was purchased in the 1930s for less than $100 an acre, Chief Financial Officer William McCalmont said.”

“For the full year 2007, JOE had Net Income of $39.2 million, compared with $51.0 million for the full year 2006. Full year results were affected by: Pre-tax impairment charges for the full year 2007 totaled $23.2 million after tax, which included: Approximately $13.6 million primarily related to a write-down of costs on homes and home sites in JOE’s residential segment to approximate fair value.”

“‘This past year was clearly difficult,’ said CEO Peter S. Rummell. ‘As we prepare for the traditional spring selling season, Northwest Florida resort and residential real estate markets remain very weak…we will remain patient and disciplined in our approach to the sale of our assets with an eye toward maximizing the value of JOE’s land.’”

“On December 31, 2007, JOE owned approximately 700,000 acres, concentrated primarily in Northwest Florida. These holdings include approximately 310,000 acres within 10 miles of the coast of the Gulf of Mexico. JOE also owns approximately 14,000 acres in southwest Georgia.”

“On December 31, 2007, JOE’s land-use entitlements in hand or in process totaled approximately 46,000 residential units.”

“As part of the October 2007 restructuring plan, JOE announced that it intended to accelerate marketing and sales of its inventory of existing developed home sites and homes. The JOE Board of Directors approved a succession plan that calls for the promotion of Britt Greene to president and CEO.”

“‘Despite poor market conditions, we have seen some demand for high quality product priced to the market,’ said Greene. ‘To that end, JOE closed on 134 home sites and 31 homes in the fourth quarter. To harvest our embedded investment in existing inventory, we are focusing our efforts to be in position for the traditional buying season that starts in the spring.’”

“‘We are working on a number of strategic initiatives designed to stimulate demand as we put time back on our side; however, there are no quick fixes or easy answers,’ said Rummell. ‘We believe we are taking appropriate steps to improve JOE’s position to withstand these challenging market conditions.’”

“‘Longer term we continue to like our position very much,’ said Greene. ‘JOE’s strategic position is one that cannot be duplicated: low basis land, a lot of it, in Florida.’”

The News Journal. “Mint juleps, eye-catching billboards and country star Travis Tritt’s performance for an invitation-only crowd at the Saenger Theatre marked last spring’s splashy rollout of the most ambitious residential project in Santa Rosa County history.”

“The project called Jubilee promised a glorious new community with more than 500 homes valued at up to $1.5 million, a town center, a new school and a golf course designed by Pensacola’s Jerry Pate.”

“But the excitement was short-lived. Within months, Jubilee stalled because of unpaid debt, and celebration turned to uncertainty. Investor Barney Ng of California stepped in, taking over from the Atlanta-based Eagle Group, renaming the project Contrada Hills and vowing to press forward.”

“But now he’s facing a new hurdle that he expects will stall work again. Santa Rosa County resident Euby Black is suing Ng and other key players, claiming they deceived him and ultimately cut him out of the project into which he invested millions of dollars.”

“Ng said he never intended to be more than an investor in the project, and now, he realizes he has inherited a development that is many, many millions of dollars over budget.”

“‘We gave them money to help them develop part of the property in order to bring some investors to the table. Then they overspent,’ he said.”

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