The Housing Bubble

The Press Enterprise reports from California. “After a 10-month investigation, the U.S. Securities and Exchange Commission on Wednesday accused three Murrieta men of operating a real estate scam that defrauded at least 95 investors of more than $11 million and forced many into foreclosure. ‘I am ecstatic,’ said Anna Richter, a stay-at-home mom from Rialto who says she lost $500,000 in the scheme. ‘I pray the U.S. attorney and the Riverside DA files behind them in all haste with criminal charges.’”

“From October 2004 to June 2006, (the defendants) directed investors to purchase more than $118 million worth of homes, many of them in Murrieta, the complaint says.”

“Debbie Weber, a Riverside resident, said she joined the investment program with high hopes that turned to worry and then depression when she and her husband lost their house and had to move into a mobile home park.”

“We lost everything — our home, our reputation, our credit and some friends. People look at us differently, like, ‘How could you be so stupid?,’ she said.”

The County Sun. “It’s the first foreclosure auction of the day, and Eric Grabli makes it clear he’s just the warm-up act. ‘This won’t take long,’ he said.”

“At 11:15 a.m., he takes his regular spot outside the Pomona Courthouse and rattles off six addresses. All in foreclosure. All auctions that are being canceled or postponed. Wait for 11:30 a.m., he says. That’s the auction of the day, with more than 100 homes on the block. Not that he expects many, if any, will sell today.”

“The hard truth of the foreclosure crisis is that…most of the houses that were once somebody’s dream will be returned to the lender. These are the homes bought in ‘05, ‘06 and ‘07, Grabli says. They have no equity. And no equity means no interest.”

“‘The point is these loans are worth nothing,’ he said.”

“By the time Mike Loyo settles in at his regular table at the far end of the Pomona Courthouse patio last week, at least 20 people are waiting. Some are at least looking to buy. Others are here to make sure their homes are not sold…hoping a few more days will make a difference.”

“At 11:30 sharp, Loyo glances at his watch. ‘Anyone interested in participating, step forward,’ he said. ‘Gather ’round.’”

“He is reading from a manifest of misery that includes high- and low-end neighborhoods alike. Ten houses become 75, then 101, then 132. It takes Loyo 21 minutes to read the list. Now several dozen properties are up for grabs.”

“The first auction goes especially well. A man pays $1,379,153.54 for Malibu land protected against development on behalf of a trust. The rest are houses with not much, if any, equity. But there’s a script to be read, procedures to be followed.”

“‘I’m usually out of here by 2 p.m.’ Loyo said. ‘This looks like it’s going to be a long day.’”

The LA Times. “Never mind that most of Mammoth Lakes’ second-home market is crawling as slowly as a car in a blizzard. The luxurious, soon-to-be-built Ritz-Carlton Residences, Mammoth and the recently opened Westin Monache Mammoth condo-hotel have many in the resort community ready to haul out the finery and celebrate.”

“The buyers are putting down $10,000 refundable deposits on the homes. Construction is scheduled to start in May on the first 60 of 130 units, said Kathy Richardson, sales director for the development.”

“Most of the mountain resort’s buyers and sellers are experiencing a market that has tumbled, as has most of California. In 2007, 278 condos sold, 22% fewer than the 358 in 2006, according to the Mammoth Lakes MLS. Single-family home sales also decreased to 42 in 2007 from 55 in 2006.”

“One major concern of many would-be second-home buyers is the rental market for their properties. Long-term rentals (six months plus) are on the slide, said Bill Wagner, a Century 21 Mammoth Realty agent who specializes in such housing.”

“‘This is the slowest year ever,’ Wagner said. ‘In winter, I never have an opening. Right now, I have two and am getting another the first of next week.’”

“Agent Sue O’Brien recently represented a buyer who purchased an in-town two-bedroom, three-bath town house for $400,000. The original listing price in July was $485,000, which then dropped to $448,000. ‘Motivated sellers are willing to negotiate prices,’ O’Brien said.”

“Scott Meek and his wife visit Mammoth year-round. They waited until last summer, traditionally the slowest time of the market there, and when the prices fell low enough, they bought a condo.”

“The couple had rented over the years and jumped at the chance to buy a two-bedroom Snowcreek Resort home in 1,800 square feet in the $500,000 range, after years of spiraling prices kept them out of the market.”

“‘It’s still expensive in Mammoth,’ Meek said, ‘but prices have definitely dropped.’”

The Marin Independent Journal. “A sense of gloom shrouds city and county administrators in Marin as they draft spending programs for next fiscal year limited by state budget cuts as well as slowing home sales that will curb property tax revenue.”

“Novato has seen home values slipping along with a slowdown in sales. City Manager Daniel Keen said that as property values decline, it is likely that newer owners will ask the county for reassessments to lower their property tax bills.”

“‘The Marin Association of Realtors has told us we are affected disproportionately in Marin,’ Keen said. ‘We have had steeper drops and longer times on the market.’”

The Guardian. “Never in her 20 years in the property market has Heidi Mueller been so much in demand. As one of the leading foreclosure and short sales agents in the San Francisco property market, she is the first person you go to when you can’t afford your mortgage payments and need to sell your home, fast.”

“‘This year is the vintage of 2005,’ she says. ‘Last year everyone that came in had bought in 2004. Just like clockwork: three years go by, then the teaser rates go and,’ she gestures towards the door of her real estate office, ‘in they come.’”

“Drive over the Bay Bridge to East Oakland and beyond and the mirage of well-being dissolves away. Here the streets turn from Victorian grandeur to lines of shack-like bungalows, and a disturbing number are up for sale.”

“‘This guy used to be paying $1,500 a month,’ says Mueller. ‘Then three years later it went up to $6,000.’ The family are now selling up for a fraction of what they paid.”

“Given that 2005 and 2006 marked the peak of the US housing boom, it is this year and next’s vintages which will be the most miserable.”

“It is now pretty well established that these loans tended to go not merely to the poorest families, but, in general, were marketed at America’s black and Hispanic populations. They were the most likely to take on the so-called ‘ninja’ loans (no income, no job, no assets). According to one real estate broker in Oakland, all some credulous households were told was: ‘firma, fecha’ - Spanish for ’signature, date.’”

“One family - the husband is a janitor, the wife a cleaner - bought their two bedroom bungalow in Oakland for $420,000 in 2005. Now their mortgage rate has reset and it is on the market for $119,000. It probably won’t fetch the list price.”

“‘If it had just doubled that wouldn’t have been so bad - at least they could rent an extra room out,’ says Mueller. ‘That’s what most families do to make up the difference. Then when that fails they try to do it with credit cards. Sooner or later they end up coming to see me. They come because they’ve been beaten to death.’”

The Record Searchlight. “The pool at this East Bonnyview Road home has literally popped out of the ground, evidence of a growing blight in Redding: foreclosed properties that have been abandoned. ‘The problem is finding somebody who is legally responsible once the home goes into the foreclosure action,’ Redding Code Enforcement Supervisor Debra Wright said.”

“The home on East Bonnyview has been vacant since October, about the time the lender took it back from the cash-strapped owner. About a quarter of the pool is filled with rain water, which has turned green. Plastic bottles and rags float on top.”

“Wright can’t get anybody to call her back on the East Bonnyview home. AMC Mortgage of Mather is the lender that appears on the deed. ‘Just trying to track down the people who own the home or trying to get a phone number is nearly impossible,’ Wright said.”

“Since January, Wright’s office has posted about 20 compliance orders on foreclosed homes in Redding. That’s the most in Wright’s 20 years - four as supervisor - with the city.”

“Doug Leeper, code enforcement manager in the pricey San Diego suburb of Chula Vista, said communities like Redding need to move fast before the problem gets much worse.”

“‘It only takes one of those homes to start the decline of an entire neighborhood. Don’t underestimate that 20,’ Leeper said of Redding. ‘We once had 20 and now we probably have 2,000, and there’s more to come.’”

“Fed up with lenders seizing homes and then leaving them to rot, Chula Vista in July adopted a program that forces lenders to maintain homes they’ve taken back and to register the abandoned houses with the city.”

“Leeper said in the first few months of the program, the city didn’t get much cooperation from lenders. When the $5,000 and $10,000 fines started showing up on lenders’ desks, however, Leeper’s phone was ringing.”

“‘They asked me, ‘How can I make this go away?’ I’m not going to cut them a break because they’re ignoring the property,’ Leeper said. ‘Last week I had one gentleman come in and register 38 properties.’”

“Dealing with foreclosed properties that have been abandoned has become such a problem that Leeper teaches classes across the state. ‘It’s a catastrophic tsunami that will flood every community in California that has sold a home in the last five years,’ Leeper said of the growing problem.”

Some housing bubble news from Wall Street and Washington. Morningstar, “Total loan impairment charges at HSBC’s US personal financial services division soared by 70 pct to 11.7 bln usd, lifting the group’s overall bad debt charge to 17.242 bln usd, an increase of 63 pct. Europe’s biggest bank, which lends to US consumers through its HSBC Finance Corporation unit, has been suffering from rising default levels for the past 18 months as flat or falling house prices make it impossible for overstretched borrowers to repay their debts by tapping into their housing equity.”

“In a statement, HSBC chairman Stephen Green confirmed that the bank’s US operations could face further bad debt problems this year, saying that conditions in the US ‘may well get worse before they get better.’”

“In a conference call, HSBC finance director Douglas Flint said that the US bad debt crisis should come to an end by the middle of 2009, provided the economic slowdown did not trigger a sharp rise in unemployment.”

“‘It depends on your view of whether the US will have a recession, and if it does, how long it’ll last. If employment holds up, we should see a turnaround in 18 months or so,’ Flint said.”

From MarketWatch. “Shares of Thornburg Mortgage Asset Corp. fell on Monday, plunging as the lender said that it has not been able to meet a new wave of margin calls worth at least $270 million and that it’s facing a possible liquidity shortage.”

“‘There is no assurance as to Thornburg Mortgage’s ability to sell such assets or raise additional funds in the current market at acceptable prices, or to raise additional capital,’ the company said in a statement. ‘If the company is unable to satisfy outstanding margin calls, any or all of its reverse repurchase agreement counterparties may declare an event of default and liquidate the pledged securities.’”

“Thornburg’s been hit hard by the fallout in the mortgage market because it’s specialized in two industry hot spots: adjustable-rate ‘jumbo’ mortgages and the trickier ‘Alt-A’ loans.”

From Bloomberg. “Fannie Mae and Freddie Mac, the biggest sources of financing for U.S. home loans, agreed to overhaul the way property appraisals are conducted under an accord with New York Attorney General Andrew Cuomo, according to a person familiar with the negotiations.”

“Fannie Mae and Freddie Mac agreed they will no longer purchase loans from mortgage originators who use their own in- house appraisers, according to the person, who spoke on condition of anonymity.”

“Most homeowners at risk of foreclosure have yet to ask lenders for help and may lose their homes as a result, Treasury Secretary Henry Paulson said. More than 80 percent of ‘at-risk homeowners aren’t responding’ to letters sent by the Treasury-backed Hope Now Alliance of mortgage lenders, Paulson said.”

“‘Homeowners must actively engage with their lenders and demonstrate that they want to keep their homes,’ Paulson said in a speech. ‘If borrowers don’t ask for help, they will have to bear the consequences, which may very well mean losing their homes.’”

“Paulson had a tough message for homeowners: Don’t think about walking away from your mortgage if you can afford the payments. In a speech Paulson said people who can afford their mortgage payments but decide to walk away from their homes because of falling home prices were nothing more than ’speculators.’”

From City Business. “The Federal Reserve’s lowering of interest rates looks similar to the moves that set up the housing market collapse, but a repeat scenario is unlikely, said Lawrence Yun, chief economist with the National Association of Realtors.”

“‘Many blame Mr. Greenspan for having fueled the housing market bubble and subsequent collapse by keeping the rates too low for too long,’ Yun said.”

“Yun said real estate speculation was a key factor in the first collapse, with buyers using subprime loans to acquire investment property. When those properties flooded the market and did not sell, speculators often walked away from mortgages they couldn’t afford. Foreign investors who gambled on subprime loans in the secondary mortgage market were burned.”

“‘Is the current action by the Fed simply trying to replay the same volatile game? The answer is an unambiguous no,’ Yun said. ‘The same game is played out because the global capital providers will not be taken for fools again. German mutual funds or the Chinese government or the Florida’s teacher pension fund will no longer buy toxic subprime loans.’”

The Associated Press. “Folks on Humphrey Hill Drive were still waking up on the icy Saturday morning the shark hunters came to town. They rounded the suburban traffic circle in a pair of rented school buses after a half-hour ride from far more modest neighborhoods, rumbling to a stop at the Garmone family’s driveway. Forty-two caffeinated Clevelanders piled out, their leaders carrying bullhorns.”

“Their quarry, Mike Garmone — a regional VP at Countrywide Financial Corp., the nation’s largest mortgage lender — didn’t answer his door. So they deployed, ringing bells at the big homes with three-car garages, handing out accusatory fliers and lambasting Garmone and his company’s loans.”

“‘The problems that exist everywhere now … showed themselves earlier here because there was no getting out of them,’ says Zach Schiller of Policy Matters Ohio, a Cleveland nonprofit focused on the state’s economy.”

The LA Times. “Insurance lawyer David Grais has been poring over equations in finance books to get up to speed on his new specialty: lawsuits stemming from the sub-prime mortgage debacle.”

“‘This whole area is a new dawn’ for lawyers, Grais said.”

“Sub-prime borrowers are suing loan brokers and lenders, accusing them of deceptive practices. Wall Street firms that bought now-delinquent sub-prime loans are trying to force lenders to buy them back.”

“Investment-bank shareholders are going after those firms’ managers, saying they took excessive risks by loading up on bonds backed by sub-prime mortgages. And investors are suing money managers whose sub-prime-laden funds have suffered hefty losses.”

“‘Somebody described it to me as, ‘Everybody’s standing in a circle shooting at each other,’ said lawyer Kevin LaCroix.”

“In all, the 278 civil sub-prime-related cases filed in federal courts last year already amounted to half of the 559 actions brought during the entire savings-and-loan crisis from 1989 to 1995, according to Navigant Consulting Inc.”

“The Securities and Exchange Commission, the Justice Department, the FBI and many state attorneys general all are conducting sub-prime-related probes. If government regulators show that banks didn’t adequately disclose the risks, it ‘would put this litigation into an entirely different and far more serious category,’ said Jonathan Macey, a securities-law professor at Yale University.”

“‘That would take these from ‘kind of improbable to win’ to ‘How many zeros are we talking about on the check?’ he said.”

The New York Times. “Real estate and mortgage industry executives said today’s ‘rent versus buy’ decision is more complicated than in years past. For one thing, mortgage executives say, even people with good credit face difficulties getting mortgages these days.”

“Matthew Hackett, underwriting manager for a Manhattan mortgage lender, said buyers who need jumbo loans - those above $417,000 - must typically have enough savings after the purchase to carry them through at least six months of mortgage payments.”

“‘And if you want a good rate,’ Hackett said, ‘it’s more like 12 months.’”

“Mark Obrinsky, chief economist at the National Multi Housing Council, a trade group in Washington, said the shadow rental market of unsold homes and condos put up for rent was rising, although no good data exist on the extent of that phenomenon. Nearly 3 percent of the homes now for sale are vacant, he said, a number that far exceeds historical highs.”

“Sam Heskel, the executive VP of a real estate appraisal and consulting company in Brooklyn, N.Y., said he had seen ‘a lot of developers changing from condos to rentals just to weather the storm.’”

“Some homeowners are doing the same. Heskel said he had appraised a home for ‘more than $500,000′ in Massapequa, on Long Island. The owner had renovated and had initially planned to sell it for a profit. Now she will try to rent the house until prices rise.”

“And even if, after accounting for the mortgage’s tax benefits, the landlord can charge enough rent to cover the mortgage, Obrinsky of the housing council said, yearly property maintenance costs can run from 1 to 1.5 percent of a home’s purchase price.”

“‘Most of the time, if you can sell something for more than you bought it for,’ said Michael Moskowitz, president of Equity Now, the mortgage lender, ‘you’re better off selling it and walking away.’”

From CNBC. “With home prices falling and families losing their homes to foreclosure, some people who under other circumstances would be looking to buy their first home now see greater security in renting.”

“One such person is Lisa Chesnut, who lives in Tucson, Arizona. With a good job and two young sons, 29-year-old Chesnut and her husband, Bryan, look like classic first-time buyers. They had considered it, until the the market started to slide a year ago.”

“‘At first we thought, prices are falling, that’s good,’ she said in a phone interview. ‘Then we started reading about the foreclosures and the ARM rates and people losing their homes. We thought, what if something happened where we could lose our house?’”

“‘Turnover is slowing and the rate of moving out for home purchase we also saw slow throughout 2007,’ said Fred Tuomi, president of property management at Equity Residential, who oversees about 150,000 apartments nationwide.”

“‘There’s probably 700,000, maybe 800,000 people out there that are not getting into the market either as a renter or as a homebuyer,’ said Walter Molony, spokesman for the NAR. ‘Where are these folks? They’re out there, they’ve got jobs. Some of them are moving back with their parents, never left the house, they’re doubling up with roommates.’”

“‘They’ve seen what can go wrong in the mortgage market,’ said said Bob Moulton, president of Americana Mortgage Group, whose company brokers $300 million of mortgages a year. ‘Everybody’s advising them, from the mother, to the father, to the uncle, their co-workers, telling them, ‘Don’t buy. Prices are coming down.’”

The Orlando Sentinel reports from Florida. “The wave of investors who invaded Lake County in the mid-2000s did no favor to buyers, and in the long run, no favor to the community either. They served as a main engine to drive prices to an artificially high level for a short while. Neil Fischer, owner of one of the biggest real-estate firms in the county, said the house flippers set the stage for the slump today. ‘It got to a stage where they started seeing things slowing, and the investors went ‘poof!’ They’re out,’ he said.”

“In March 2004, only three months of inventory was for sale in Lake County. The inventory on the market today is an astounding 38 months.”

“Meanwhile, buyers in Lake County have a window, and Fischer, ever the consummate salesman, knows how to take advantage of it. ‘If a buyer says, ‘I think I’ll wait and see if it bottoms out,’ I say, ‘How much more do you think it’s going to bottom out? Ten percent? OK, let’s make an offer for 10 percent less than the asking price.’”

“‘If they think it’s going down 50 percent, they’re crazy,’ he said.”

The Palm Beach Post. “Two years ago, Angie Cifarelli of New Jersey signed a pre-construction contract to buy a condo at the Residences at Midtown in Palm Beach Gardens. Purchase price in the contract: $404,500. Last month’s appraised value of the newly completed condo: $200,000. ‘I was shocked,’ Cifarelli said.”

“A property worth less than half its value in 2006 is all you need to know about how bad the real estate market is these days. But this 50 percent drop is not just academic for Cifarelli. With the rock-bottom appraisal, she says she can’t get a mortgage for $283,000, as planned. And she says she certainly can’t go into her pocket for the balance.”

“Cifarelli says she asked the developer either to drop the price or to let her out of the deal and give back her $80,000 deposit. Ram Development’s response: No, thanks.”

“Her lawyer, Gary Nagle of Juno Beach, said Ram has given Cifarelli an impossible choice: ‘Lose $200,000 at closing, or walk away from your $80,000 deposit.’”

The Sun Sentinel. “The housing slump and shaky economy have led to a shortage of jobs for people in the construction industry. They say they are so eager for work they are taking on smaller projects they might have rejected a year or two ago when there was a glut of jobs.”

“‘We’re wheeling and dealing because we all need the work,’ said Bill Adams, an owner of Plantation-based Superior Pools, Spas and Waterfalls Inc. ‘Compared to last year, this is the worst year pool contractors have had that I can remember.’”

“The price of screen enclosures has also dropped, going from as much as $25,000 two years ago to $9,000 today. The wait is about a month, compared with as much as six months after the hurricane. And the enclosures are built under new regulations adopted after the storms.”

“‘Our prices are back to where they were and people are getting a much stronger enclosure that is more resistant to wind,’ said Glenn Cummings, owner of Sunshine Screen and Patio in Hollywood.”

The Miami Herald. “On Thursday night, neon lasers lit up the 10th floor of Jorge Perez’s newest achievement: The Plaza on Brickell. The Miami developer unveiled what is now Brickell’s largest residential structure, two 56- and 43-story towers boasting a total of 1,000 units.”

“What may seem like an odd time to debut a gargantuan condo, at the yet-lowest dip in the housing market and start of a possible recession, Perez sees as a successful long-term investment.”

“Construction on both towers began at the peak of the housing boom in 2005, after all 1,000 units were spoken for with deposits. In the last month, Plaza has had 200 closings, well shy of the 1,000 available. As condos are not officially sold until after closing costs and final payments, units may still be available.”

“But Coconut Grove Realtor Nathan Kurland doesn’t think many of those buyers will be American — partly because of the weak dollar. ‘We’re one of the leading foreclosure cities in America, and we’re talking about building another 1000-unit system of housing we can’t afford. Who bought them?’ he asked.”

“For those that don’t close, Perez will do what he said is most sensible — he’ll buy and keep them until the housing market recovers.”

The News Press. “A conversation about single-family homes in Lee County with a pricetag under $200,000 would have been brief, two or three years ago. But oh what a difference a couple years can make.”

“In January of 2004, in the market’s pre-peak phase, there were 1,626 homes listed under the $200,000 threshold, according to the Denny Grimes & Company’s VP, Michael Polly. A year later, that number had declined to 588, the vast majority of them in Lehigh Acres, and by January of 2006, that total had a miniscule rise to 593 homes.”

“Proof of the market’s decline was illustrated by the January 2007 figures, which found 1,524 such homes. And over the last year, that total has exploded, leaping upward to 5,485 homes.”

“Grimes & Company is also the agent for a short-sale home in Cape Coral, built in 2006, with three bedrooms, two bathrooms and 1,272-square-feet of living area. The price is $119,000. Polly said the home probably would have sold for more than $230,000 at the market’s peak.”

“‘Unfortunately, the people who are not short sales are having to adjust their price based on what’s happening in the market,’ said Gloria Tate of Raso Realty in Cape Coral.”

“Raso said the drop in prices has meant that homes that were unaffordable are now within reach of middle-income home shoppers who had been priced out of the market. ‘In essence, affordable housing has come back to Cape Coral in a good, affordable way, without government help,’ she said.”

“‘I think two-to-three years ago, we would have been talking about are there any (such homes) on the market,’ Tate said. ‘Today you have a wide variety on the market. Before, people picked where they lived based on what they could afford and now its based on where they want to live.’”

The Tampa Tribune. “Real homeowners with real problems seem to be driving the mortgage foreclosure debacle in Pasco County…according to government officials and real estate agents.”

“Chief Circuit Judge Lowell W. Bray Jr. said the culprits behind the crisis appear to be unscrupulous lenders. ‘There is a lot of really creative financing out there,’ he said. ‘One I couldn’t believe had adjustments every other Monday. I guess you had to call every week’ to find out what the next payment would be.”

“Bray said he has seen adjustable-rate mortgages ‘tied to strange indexes’ or no indexes at all, meaning monthly payments can go up without reason. Some such loans, and others with high prepayment penalties, have been found to be unlawful by appellate courts, the judge said. Others leave the homeowner on the hook.”

“‘Even if they can find another source of financing, they have to pay a prepayment penalty’ for paying off the original loan before the term is up, he said.”

“Further aggravating the situation has been a drop from the inflated home prices of a few years ago, the judge said. Where there used to be a surplus of $40,000 or more when homes were sold at foreclosure auction, more and more homes are selling for less than the homeowners owe, Bray said.”

“Some lenders refuse to accept the loss and are demanding ‘deficiency judgments’ that remain in effect for 20 years, meaning someone who is left with nothing will still owe money, he said.”

The Herald Tribune. “The MLS used by Realtors is supposed to specify, in the comments field, whether the listing is a short sale. At the Sarasota Association of Realtors, Executive Director Kathy Roberts says 5 percent of listings now carry the designation. But that probably understates the reality of the marketplace.”

“At Horizon Realty, a regional leader in the short sale game, President Matthew Augustyniak estimates that 15 percent of the listings now on the books in Sarasota-Bradenton will result in short sales. ‘In all distressed sales, I bet at least 25 percent of the market,’ Augustyniak said.”

“‘Lenders have been resistant or unwilling to accept losses, said said Jack McCabe, a Deerfield Beach-based economist.”

“McCabe predicts that 2008 will be a year of capitulation for lenders who have held back on short sales. ‘Lenders will become more realistic to what actual market values are, which are considerably different from what they had in mind,’ he said.”

“‘We know the short sales are definitely accelerating across the country, but it is impossible to quantify because lenders will not reveal that data,’ McCabe said. ‘They don’t necessarily want anyone to know how many deals they are willing to accept at lower than the loan amount.’”

“George Lewis probably was given a larger loan than he should ever have been able to get for the family home on the Island of Venice. After that, he got another one on the house he moved his family to in Manatee County.”

“During a year of unsuccessful listing, Lewis was thinking of his Venice property as an $800,000 deal. The marketplace had a different number in mind: $445,000. The Venice house became the subject of a short sale, with the lender taking a $185,000 loss.”

“Lewis and his wife made dramatic improvements during the 19 years they lived at the desirable north end of the Island of Venice. But a $630,000 refinancing loan for a guy working as a counselor in the school system, and for his wife, who owns a hair-dressing shop? How could this loan be issued?”

“‘I have no idea,’ Lewis said. ‘I think it was lack of due diligence on the part of the people who were doing this. It was an adjustable rate mortgage. I think it ratcheted up after two or three years.’”

“That second loan on the house in Lakewood Ranch: ‘It takes everything that we earn, my wife and I — and I work two jobs — to make the mortgage payment and scrape together the money for the monthly bills,’ Lewis said.”

From NBC 2 News. “Yard sales are good for getting rid of old stuff, but for one man in Cape Coral, his yard sale Sunday was to get rid of it all. Al Rasmussen is facing a foreclosure and bankruptcy. He’s part of a growing number of people in Cape Coral and Fort Myers who can’t survive in an area with record breaking foreclosures.”

“Rasmussen and his wife retired in the Cape and got a mortgage before the market went belly up. Then, during the housing boom, they got a second mortgage to pay of their bills.”

“‘That was another amount of money suddenly going out for payments. Then everything kind of fell apart. Gas went up, food started going up, everything started going up, and my income didn’t change,’ Rasmussen said.”

“‘We had a first mortgage, which was no problem, then when the market went up we said, all this money is just sitting idle, we can use it to pay off some bills, so we took out a second mortgage,’ Rasmussen said.”

Please post off-topic ideas, links and Craigslist finds here.