The Housing Bubble

The Denver Post reports from Colorado. “Owners with units for sale in the towering Beauvallon building at East 10th Avenue and Lincoln Street are struggling to sell their units because a lawsuit against the developer is dissuading potential buyers and hanging up financing for anyone still interested. Of the 26 properties listed for sale in the 210-unit Beauvallon, 12 are either in foreclosure or listed for less than the seller owes on the mortgage.”

“HOA dues for the penthouse units are more than $1,300 a month, and fees for an 800-square-foot unit are nearly $400 a month. ‘People can’t afford the mortgage and the HOA,’ said Emmett Carr, an agent who has a listing in the building.”

“Many of the units are priced way too high, said Sharon Shepherd, an agent who also has a listing in the building.”

“‘A lot of the sellers have first and seconds (mortgages) on their loans,’ she said. ‘When they refinanced, their property was appraised for more than it should have been in order to get the second. I’ve gotten some calls from investors, but the numbers aren’t working for them because the sellers can’t go low enough.’”

The Arizona Daily Star. “Think you know what your house is worth? You might want to take a deep breath and think again. The rising number of foreclosures is reducing property values in a possibly unprecedented way. Not only are foreclosed properties flooding the market, but they are also becoming the only standard of comparison for other homes sold in some areas.”

“Foreclosed properties usually are not included in appraisals because they are considered under ‘duress’ and not reflective of fair market value, said Bruce Smith, of Equity Valuation Services. However, ‘when those become predominant in the neighborhood, then they become the market,’ Smith said.”

“Casa Grande real estate broker Bill Bridwell said about 90 percent of sales he has handled recently have been bank-owned homes.”

“Fred Brodsky, director of the Brodsky School of Real Estate, said the number of foreclosures in the market is unusual, even for a downturn. ‘I’ve been through three cycles, but I’ve never it seen it this bad,’ he said.”

“In comparison, other houses on the market often seem overpriced, agents said. ‘A lot of stuff out there isn’t going to sell,’ said agent George Cardieri.”

“The high number of foreclosure sales is necessary “to clean up the mortgage lending excesses of the past few years” said Marshall Vest, director of the Economic and Business Research Center at the University of Arizona’s Eller College of Management.”

“‘All these properties are going to need to be marked down and find new owners before this correction process is complete,’ Vest said.”

“In April, the median price dropped about 13 percent from the previous year to $195,000, according to statistics from the Tucson Association of Realtors MLS. Although prices are starting to come down, buyers said many existing homes still seem overpriced, especially for some older homes and fixer-uppers.”

“Misty Shaw, who is building (a) home in Lakeside Ridge, said she was surprised by some of the problems she saw in resale homes. One, she was told, had wiring problems and would blow a fuse if the washing machine and dishwasher were run at the same time.”

“Another house, owned by a California investor, Shaw considered overpriced. She put in a bid for about $25,000 less than the asking price, and ‘they didn’t even counter,’ she said. ‘Their house is still up for sale.’”

The Arizona Republic. “When home builders gather these days to talk about the state of their industry, all conversations eventually circle back to the one inescapable question: Who among them will survive?”

“Meritage Homes executives Steve Hilton and Larry Seay say that because their company is backed by public shareholders, generating consistent revenue and making itself right with today’s market realities, it is ideally positioned to endure the current slump.”

“Despite the complexities of corporate finance, Meritage’s future success hinges on something very simple: its continued ability to build - and sell - homes. CEO Seay, said Meritage is on pace to sell 5,500 to 6,000 homes this year, a significant decrease from the 10,487 homes it sold in 2006.”

“Another short-term problem for Meritage is clearing its inventory of all the land it bought at 2005 prices, for which the company will lose money on every sale.”

“Meritage analyst Eric Brown said pressure from Wall Street to grow earnings each quarter placed added strain on publicly owned home builders, prompting them to expand operations too quickly into unfamiliar territory.”

“‘It’s always, ‘What have you done for me lately?’ Brown said.”

“Seay said the company’s detour into land speculation was fueled by that pressure, as well as by opportunity and ambition.”

“‘We’ve always said we were a home builder and not a land speculator,’ he said. ‘We probably got a little bit off our basics because we were being a little greedy.’”

The Review Journal from Nevada. “The appointed bankruptcy trustee for Mira Villa condominiums has filed two motions necessary to get the project finished and sold, an attorney for one of the major creditors said.”

“One motion is for a $46 million bond to complete first-phase construction, market the project and pay interest on loans, said Jerry Gordon of the law firm, representing Nevada State Bank. The second motion is to allow the sale of condo units as they’re completed to pay off the existing debtor-in-possession loan and to authorize the sale of units to existing buyers and new buyers, Gordon said.”

“‘It’s really sad that the bankruptcy court is allowing this and hired a trustee who doesn’t have any concern about contractor debt,’ said Mike Lee, president of a general engineering contractor. ‘Their only concern is to finish the project. The contractors are the real losers in this deal.’”

“Alan Schrimpf, chief operating officer of Southern Vegas Valley Contracting, figures his firm is out $190,000 for concrete work. ‘We’re done. All the subs get nothing,’ he said.”

The Las Vegas Business Press from Nevada. “Some suggest the Las Vegas housing market hit bottom in the first quarter of 2008. Others contend the bottom might not be reached until the end of this year or early 2009, and any recovery won’t occur until new jobs are created by resorts opening on the Strip in 2009 and 2010.”

“Tim Sullivan, president of Sullivan Group Real Estate Advisors, said the market must pay for its sins before it improves. ‘Don’t discount foreclosures and their impact on the market. They will be with us prominently through the fall,’ Sullivan said.”

“Terry Jones, vice president of AmTrust Bank, says the housing market is close to its bottom if not there already. He said some existing homes are selling for less than $90 a square foot, and it’s hard to imagine builders going much lower with prices.”

“Builders have been relying less on incentives and more on pricing. In May, the amount of incentives fell to $18,782, down from a high of $27,436 in October, according to the Sullivan Group.

New-home prices are falling faster than existing-home prices since Jan. 1, giving buyers some options, said Ken Perlman, vice president of Sullivan Group. Traditionally, there is a 15 percent to 18 percent spread between new and existing homes but it’s now closer to 12 percent.”

“‘It is certainly something to watch,’ Perlman said.”

“New homes priced under $250,000 accounted for 42 percent of the sales during the first quarter. Seventeen percent of new-home sales were under $200,000, Perlman said.”

The Nevada Appeal. “Short sales were rare in Carson City a few years ago, but 2008 is on track to have the fewest number of home sales in 20 years and the most number of foreclosures in seven years.”

“The average price of a home sold is also so far this year lower that the past three years, which, from 2000 to 2005, had risen by nearly $175,000.”

“According to the MLS, 41 such homes in Carson City and Carson Valley being marketed as short sales.”

“Real estate agents were discouraged from bringing up the option of short sales a few years ago, said Alan Saunders of Realty Executives Nevada’s Choice in Carson City, and lenders were unlikely to approve them because they could foreclose on the house and recoup the costs through a sale.”

“Short sales are much more common now, however, he said, and many agents are taking classes on the topic to keep up with the market and customer demand.”

“‘So many of my clients come in and say, ‘What am I going to do?’ Saunders said.”

“Short sales are for owners already in ‘bad shape,’ said Red Dalen of ERA Pioneer Properties in Carson City, but the short sale at least ‘leaves them with some dignity.’”

The Deseret News from Utah. “For the past few years, the summertime heat of Utah’s Dixie has been matched by the area’s scorching hot real estate market. Home prices increased over a five-year span by an astounding 73 percent, making the St. George metropolitan statistical area among the top appreciating housing markets in the nation.”

“Plenty of folks, from all ends of the real estate spectrum, were making a lot of money. But late last summer, that trend came to a screeching halt.”

“‘I think it was the 12th of August. Foreclosure rates came in for subprime loans at 11 percent, and immediately the market dropped,’ said Melody Knowlton, a local mortgage loan officer. ‘Everything was shut down, except for conventional loans. There was no notice at all on subprime loans. They were just gone.’”

“Many St. George-area homeowners with subprime loans have either defaulted or are poised to lose their investments. Many of those people find it a difficult subject to discuss. A police officer agonized over breaking the coming news of an imminent foreclosure on his home to his wife and in-laws.”

“His plight, he said, made him ‘feel like a big loser.’”

“Knowlton said her customers are suffering in today’s market, and there’s very little she can do to help many of them. ‘Before, I could qualify nine out of 10 applicants. Now, I can qualify one out of 10,’ she said. ‘You have to have a big down payment and really good credit to qualify for a loan now.’”

“Knowlton said she tried to help Jaime and Tishanne Stout refinance a beautiful home they had built in Washington city but found it was an impossible task. ‘Their home isn’t worth as much as they owe on it now,’ she said, adding the house appraised for more than $370,000 a year ago and now can’t be listed anywhere near that price.”

“‘It’s my dream home,’ said Tishanne Stout. ‘We built another house, and I guess we should have stayed in that one instead of selling it and building this one.’”

“The Stouts are like many other couples who work in the construction trade here, building a home and selling it to cash in a nice profit before building another house that is even bigger and better than the last one.”

“There are a lot of houses like the Stouts’ home with a ‘For Sale’ sign planted out front, but there are even more listed with no one living in them. Only six of the homes in the Stouts’ neighborhood are occupied, which can lead to a sort of eerie feeling for those who do live there.”

“Entire subdivisions throughout the county are dotted with signs that beckon buyers, but there are few takers.”

“Developer Garret Bangerter of Bangerter Homes said the current southern Utah market is flooded with undeveloped lots and new home inventory, which is also helping to drive down prices in the area. Much of that decrease is due to the reduction in land prices, Bangerter added.”

“‘When everything went crazy a couple of years ago, everybody got into a frenzy and thought they were going to get rich developing lots,’ he said. ‘Everybody jumped in and bought land, and now the Metrostudy group is telling us there is going to be an eight-year supply of lots available.’”

“Bangerter said just three years ago, lots to build homes on were scarce, and the demand was extremely high. Now that situation has reversed itself. He attributed the change to the aggressiveness of seasoned developers and speculators trying to make big money in the hot real estate market.”

“‘Everybody thought there would be no end to the demand, and now we have an oversupply,’ Bangerter said. ‘Prices have definitely been coming down as developers realize there is an oversupply.’”

Some housing bubble news from Wall Street and Washington. Bloomberg, “Wachovia Corp. ousted Kennedy Thompson as CEO of the fourth-largest U.S. bank after the board blamed him for losses that cost the lender more than half its market value in the past year. Thompson’s credibility was dented after he said this year that Wachovia’s $24 billion purchase of Golden West Financial Corp. in 2006 at the peak of the housing boom was ‘ill-timed.’”

“About half of the unit’s lending is in California and Florida, two states with some of the highest foreclosure rates.”

The Columbus Dispatch. “For thousands of credit-crunched homeowners, New Century Financial appeared to be their savior. The California-based mortgage company catered to the riskiest borrowers, even those with credit scores as low as 500.”

“The drive to sign mortgages was so fierce that New Century dubbed its loan department ‘CloseMore University.’”

“The New Century call appeared to come at the right time in 2006 for Chuck and Sheri Simpson, a Hilliard couple with slipping credit scores and mounting debt. The New Century mortgage brokers counseled the couple that refinancing the home they had owned since 1998 would ease their financial burdens.”

“Mr. Simpson, a carpet salesman whose clients include homebuilders, asked, ‘Is this the right thing to do?’ His paycheck was starting to shrink as the building boom faded. The brokers assured him that the mortgage was a blessing.”

“‘When someone comes into your house, sits at your kitchen table, has a glass of iced tea with you and calls you buddy, you trust them,’ Mr. Simpson said.”

“Relief came in the form of an adjustable-rate mortgage that started at 9.5 percent and added about $300 to their monthly payment. Mr. Simpson sensed that the New Century brokers made a handsome commission on his deal.”

“‘I bet you’re off to the Bahamas now,’ he said to them after signing his loan. The brokers chuckled.”

The Journal Sentinel. “Stephanie Williams saw the free flow of mortgage money as her ticket to some easy cash. It didn’t take long for Williams, then 23, to secure large, high-interest mortgages, usually with no money down. In all, she received $465,000 to buy six houses in Milwaukee.”

“A bank teller at the time, Williams entered the world of subprime mortgages with the help of Randez Long, a customer at the Chase Bank branch where she worked.”

“She said she didn’t realize at the time that she was buying two of the houses from Long himself. All told, Williams, now 25, received six subprime mortgages from five lenders. The most expensive loan had an adjustable rate with a cap of 18% interest.”

“She put no money down in four deals, and twice received loans that exceeded the sale price by more than $20,000, according to records in the county Register of Deeds offices. Williams said she never saw that extra cash because it was supposed to be used to fix the properties.”

“In November 2006, Williams was hit with her first foreclosure suit. By the following March, lenders had filed suit against her for all five of her rental properties. She eventually lost all but one of those houses.”

“Under pressure from the city to deal with numerous violations, Williams said she had to convince tenants at a couple of properties that she, not Long, was the owner and that rent money should be paid only to her.”

“Today, Williams lives in North Pole, Alaska, with her husband, who is stationed at a nearby Army base. Her credit rating, which she said had been a respectable 650, is now below 500, making it difficult to get even high-interest loans. Each month, she sends the City of Milwaukee $100 to $250 to pay down the $13,000 in penalties she owes for building code violations.”

“Her recent bid to land a bank teller’s job in Alaska was shot down because of her poor credit rating, Williams said.”

“‘They said if I can’t handle my own finances,’ she said, ‘I can’t handle other people’s money.’”

The Evening Standard. “The owner of a central London flat has knocked almost £1 million off the asking price in an attempt to sell. The Hyde Park mansion flat went up for sale for almost £3 million late last year when the market was still buoyant. Now, almost eight months later, the flat has failed to sell and is offered for just under £2 million.”

“A poll by the Evening Standard found that owners across the capital are being forced to reduce prices by hundreds of thousands of pounds to tempt buyers.”

“Estate agent Lloyd Coleman said: ‘I have been in the business for 13 years and have never seen it so tough.’ He believes part of the problem is agents encouraging sellers to overprice their homes to win their custom.”

“Helen Koulle has been trying to sell her four bedroom period house for almost six months. She has now reduced its price by £65,000 and it is now on the market for £515,000. She said: ‘I didn’t want to reduce it but the agent said it was the best way to sell and we have had more viewings since.’”

“One buyer did make an offer on the house - but backed out after failing to get a mortgage. Mrs Koulle, a housewife from Finchley, said: ‘It is quite worrying. We want to downsize, but it is all very difficult.’”

The Courier. “With the winter finally over and the sun breaking through between storms, Wednesday afternoon was a prime day for construction in Cedar Falls.”

“But in three southern Cedar Falls neighborhoods, where some homes sat partially completed, there was not a construction worker in sight. The wind whistled through the skeleton-like frame of one house in Huntington Ridge, trusses lying in the dirt that would be the home’s front yard.”

“That home was just one victim of the collapse of Iowa’s largest home builder, Des Moines-based Regency Homes. There are dozens of others in Cedar Falls that Regency had already sold or was building on speculation when subcontractors packed their bags and left last month.”

“The Des Moines Register reported earlier this month that Wells Fargo, the nation’s fifth-largest bank, demanded Regency officials pay off more than $50.5 million in corporate debt and $5.25 million in personal lines of credit.”

“Other lenders followed suit, and soon Regency did not have enough revenue from home sales to cover the demands of its lenders. This led to the layoffs, which led to the liens.”

“Caught in the middle are homeowners who paid Regency for their houses but now have to wait until the mess is sorted out before their homes can be completed.”

“‘I would expect there is a very good chance that a number of homeowners are going to have to take money out of their pockets to get occupancy permits,’ said attorney Gary Jones in Cedar Falls. ‘It’s a very difficult situation for homeowners.’”

“‘I know there are people out there who need sod and sidewalks,’ said Jake Huff, a real estate agent for Weichert Realtors who handled many sales in the Huntington Ridge neighborhood. ‘But I’m a little clueless as far as what the city’s going to do.’”

“Huff’s confusion is not unique. Greenhill Village townhome owner Cindy Lang is missing the sod and grading she paid for when she bought her home.”

“Huff says a company could finish the speculative homes and pay the subcontractor’s liens from the profit of the home sale, but he was not sure what fate would befall those homeowners who have already paid for work that may never be completed. They may have to pay out of pocket for the work and get in line with the countless subcontractors who have liens against Regency.”

“‘I would guess they will be pretty far down the line,’ Jones said of those owners. ‘I don’t know Regency’s total financial situation, but typically in corporate bankruptcy, more secured than unsecured creditors [end up getting paid].’”

The Palm Beach Post. “You have to wonder if a partnership led by a New York-based hedge fund rues the day it ever heard of West Palm Beach.”

“The Trinity Development partnership is engaged in three different battles on three different downtown properties. Their grand plans to build tall towers and fancy condos are now held hostage to legal or zoning battles, despite the millions of dollars the partnership has poured into the projects.”

“Trinity’s plans were for a luxury condo. The condo hasn’t been developed yet, but that’s not the problem. The problem is that Trinity now risks losing the property - and $139 million, including the lease purchase price, plus lost condo profits, according to a lawsuit filed against a Burt Handelsman company.”

“Burdened by the knowledge Handelsman had left “millions of dollars on the table” when he did the deal with Sisemen, Trinity claims Handelsman is trying to wrest the property away from Trinity by claiming ‘bogus’ and ‘drummed up’ reasons for eviction. Among them: A technical delay in obtaining a letter of credit, Trinity says.”

“Trinity is prepping for a June 19 hearing on a motion to foreclose on a $1.4 million mortgage on the Opera Place land. Opera Place, meanwhile, has a lawsuit going against Trinity for bailing on a $44 million contract to buy the property and turn it into a mishmash of offices, condos and a hotel.”

“Finally, there’s Trinity’s battle with the residents of West Palm Beach over a too-tall tower planned for the boarded-up, hurricane-damaged 1515 S. Flagler Drive condo. In 2007, Trinity paid $36.5 million for the property, hoping to turn it into a 391-foot-high skyscraper dubbed The Modern. But the plan was just rejected by the West Palm Beach City Commission.”

“Is Trinity ready to give up? Not a chance, says Trinity lawyer Larry Alexander. Trinity has ‘gone back to the drawing board’ on the 1515, he said. And as for the other battles, well, Trinity is optimistic it can win those wars, too. ‘If it was easy, anybody could do it,’ Alexander said.”

“It sure sounded easy back in 2006, when Stillwater was trolling for investors willing to finance the Opera Place and 1515 purchases. Here’s the rosy pitch made in an offering circular: ‘An investor who contributes $1 million to the deal would receive back more than $2 million in about 3′1/2 years.’”

The Concord Monitor reports from New Hampshire. “When Louise and Bob Cloutier walked into their dream home on Buck Street in Pembroke, there was an old mattress in the living room and mold lining the insulation on the front-porch windows. The couple got the deal from Bert Cox, a real estate investor in Concord who bought the home for $100,000 from someone facing foreclosure.”

“The previous owner owed nearly $240,000 on the mortgage and simply could not pay it back. Cox persuaded the bank to let him buy it for $100,000 and let the borrowers walk away, rather than foreclosing on the property and ruining their credit.”

“‘The truth is, the house wouldn’t have brought $50,000 at a foreclosure auction,’ he said.”

“Just a few years ago, when houses appreciated overnight and sold within days, many investors bought inexpensive houses, hired a crew to fix them up as quickly as possible, and resold them for more money than they had paid. Now, Cox said, many of the good deals are bank-owned properties that have been foreclosed on.”

“A successful short sale can require hours on the phone with a mortgage lender. An investor must demonstrate to the bank that the homeowner can’t pay back his mortgage, that there is a buyer lined up, and that the house is worth what the buyer is offering.”

“‘It’s amazing that you’ll go in to see someone, and they’re quite happy to walk away from their house,’ said Richard Dale-Mesaros, an investor from Campton. ‘Usually, the main goal is to be able to get out from under their house without having to bring money to the closing, and to repair their credit.’”

The Newburyport News from Massachusetts. “While each new month seems to paint a grimmer picture of the Bay State’s real estate market, Greater Newburyport is bucking the trend and faring better than average. Longtime local agent Jerry Lischke says the sky is not falling as much as confusing data and misleading numbers point in that direction.”

“‘Beware of narrow statistics. Their basis will always be misleading if you take a snapshot of one month,’ Lischke said. ‘This is housing. In the years between 1996 and 2005, people played the real estate market like a speculative venture. It’s not, it’s long-term capital.’”

“Lischke said the monthly release of the latest trends reflecting ‘normal’ transactions only helps the banks, which do not want any of the loans they have written to be labeled as ‘bad,’ and the assessors, who use the data to make homes look more valuable, therefore, charging more taxes for a city or town.”

“‘It’s just inaccurate comparing anything from 2007 to 2008,’ Lischke said.”

The Telegram from Massachusetts. “New England’s economy will see slow growth in the second half of the year, but will lag behind the nation as a whole due to the ongoing housing slump and slower job growth and per capita income growth. That was the forecast given by a panel of economists and speakers at yesterday’s New England Economic Partnership’s Spring Economic Outlook Conference, held at the Federal Reserve Bank of Boston.”

“‘The expectations in the housing market is that it will not stabilize until the second half of 2009, and we won’t see any state with housing prices where they were at their peak, in 2006, at any time in the forecast,’ said Ross Gittell, an economics professor at the University of New Hampshire.”

“‘This is actually the largest peak-to-trough decline in housing starts to occur in nearly 50 years,’ said Eric S. Rosengren, the bank’s CEO.”

“Particularly hard-hit by the foreclosure situation is the multifamily market, he said. In 2006 and 2007, multifamily properties accounted for 28.4 percent of the foreclosures, even though they constituted only 10.8 percent of the residential purchases since 1990, he said.”

The Associated Press on Massachusetts. “When Osman and Rose Bangura bought a two-family home three years ago at the peak of a housing boom, they saw a good investment in the $400,000 Colonial.”

“For a couple years, they lived upstairs while rent from a downstairs tenant helped cut hundreds of dollars off the monthly payment.”

“But, like many owners of southern New England’s nearly 320,000 two- and three-family homes, the Banguras ran into trouble. Their monthly payment on a pair of adjustable rate mortgages jumped from about $2,900 last summer to nearly $4,200 - out of reach for a couple with $50,000 in annual income, supplemented by $1,150 in monthly rent from their tenant, a single mother of two children.”

“‘We are praying we will be able to keep it until the home crisis starts getting better, and maybe we’ll be able to refinance the loans,’ said Osman Bangura, who juggles two jobs and has managed to stave off foreclosure so far with the help of a local nonprofit.”

“Massachusetts, home to 220,000 two-families and three-families often known as ‘triple-deckers,’ has seen the steepest decline among the three southern New England states where such homes make up significant portions of the overall housing stock.”

“Last year, more of those homes in Massachusetts had foreclosure petitions filed against their owners than were sold.”

“And while sales of single-family homes in New England’s most populous state fell 10 percent last year, two-family home sales dropped 35 percent, and an even sharper 43 percent for three-families.”

The Boston Herald from Massachusetts. “An Old Town Trolley gave prospective home buyers a first look at what may be their next homes yesterday during a sightseeing tour of foreclosed properties in Dorchester and Roxbury that city officials want to restore to life.”

“The Department of Neighborhood Development sponsored the trolley tour, which visited 47 properties on 29 streets, including condo units, single, two- and three-family homes and mixed-use buildings.”

“‘What happened in the past is that people wanted to buy houses, they were so anxious to buy a home they got bad mortgages, bad advice and what this is all about is giving good advice and helping them through the process,’ said Boston Mayor Thomas M. Menino, who greeted prospective home buyers aboard the trolley before it departed from City Hall Plaza.”

“This is awesome,’ said Mezfin Clary of Mattapan. ‘I’m a first-time home buyer and I’d like to have something that I can live in and supplement my income.’”

Bloomberg on New York. “The foreclosure tour, mobile proof of the U.S. housing bust, has rolled into the New York City market. For $75, prospective buyers on the Long Island version last month got velour banquettes, a supply of potato chips and Reese’s Peanut Butter Cups and visits to eight foreclosed homes, with a general contractor and home inspector in tow.”

“The white bus pulled up to a small home in East Meadow, Long Island. The driveway was cracked, and the vinyl siding sagged. ‘You have some mold issues; you can definitely assume some water issues,’ said Dean Miller, a broker on the tour. Then again, he said, the asking price for the 1951 Cape Cod was $312,900, down from $457,101 in February.”

“Foreclosures are scattered across otherwise healthy neighborhoods, offering New Yorkers a chance to move up to a house they wouldn’t ordinarily be able to afford. The East Meadow home is a 45- minute commute from Manhattan.”

“Some of the tourists said they’d be ready to buy the same day. ‘If the right house comes along, you really don’t need 20 days — at the right price,’ said Brian Cacioppo, a 24-year-old salesman shopping for his first home with Courtnie Harrison, 28. Buying a foreclosed home could give them some cash for improvements, he said.”

“‘With a foreclosure, it’s selling for lower than it’s worth and the equity is already in the house,’ Cacioppo said.”

“Prices are still high, said Liliana Martinovich, who wants to move closer to her son’s school in Garden City. She said she’ll wait for prices to fall further before buying.”

“‘It seems like it’s going to get worse before it gets better with all these Wall Street layoffs,’ said Melissa Cohn, president of Manhattan Mortgages, a mortgage broker active in Long Island. New York City, where financial services are the largest private employer, expects to lose 59,000 jobs by the middle of next year, according to the City’s Independent Budget Office.”

The New York Times. “It seemed somehow fitting that a recent tour of foreclosed homes in Nassau County was held on a bus that, with leopard-print sofas, a wood- and mirror-paneled ceiling and a wet bar, looked as if it was headed for Atlantic City rather than for New Hyde Park.”

“Many of those who had lost ownership of homes on the tour route may well have gambled on rising real estate values.”

“‘It’s hard to believe that someone paid more than $500,000 for this house just a couple of years ago,’ said Joan Toomey, a passenger on the tour, about the first house on the tour, on Bedford Avenue in New Hyde Park.”

“The house sold for $550,000 in 2006, according to information provided to passengers by David Farrell, owner of the Mineola real estate firm where the tour started. The asking price for the house, which is owned by the U.S. Bank National Association, a subsidiary of U.S. Bancorp of Cincinnati, is $320,000.”

“When prices were rising, ‘people thought it was going to stay like that forever, and it didn’t,’ said Connie Lassandro, the director of housing and homeless services in Nassau County, which runs a counseling program for people facing foreclosure. ‘The rug was pulled out from under them.’”

“In Nassau in April, there were 502 foreclosure filings, more than double the number in April 2007, according to RealtyTrac. In Suffolk County, foreclosure filings increased by 43 percent, to 734, compared with April of last year.”

The Buffalo News from New York. “Bankers are cautioning state lawmakers and regulators not to go too far in passing legislation to address the mortgage crisis and lending abuses, lest they unwittingly increase the cost of borrowing for consumers.”

“‘We’re worried there will be legislation that will make it more difficult and more expensive to extend credit in New York state,’ said Mark Czarnecki, president of M&T Bank Corp.”

“In particular, they’re not objecting to the imposition of new requirements or the prohibition of certain practices on so-called ‘non-traditional’ mortgage loans - such as high-cost subprime loans to borrowers with bad credit.”

“But they are concerned about how those loans are defined, to make sure traditional prime loans aren’t accidentally included if the threshold is set too low.”

“Also, they are firmly against a suggested one-year moratorium on foreclosures. That bill passed the Assembly early this month, and is pending in the Senate Judiciary Committee.”

“New York already has the longest foreclosure process in the country - averaging 445 days. That’s designed to protect homeowners by giving plenty of time to work out alternatives. Extending it by another 365 days, bankers said, would make it harder for banks to keep homes occupied and prevent abandoned properties from becoming derelict.”

“‘We pride ourselves on taking care of the houses in foreclosure. We’ll do anything to keep somebody in the house,’ Czarnecki said. ‘Put another year in foreclosure, and bad things tend to happen.’”

The Pocono Record from Pennsylvania. “Congress has enacted several bills to help struggling homeowners, Congressman Paul Kanjorski said Saturday, but owners themselves have to take timely proactive steps to keep their homes.”

“Up to 2 million Americans could lose their homes this year, though federal and private partnerships might save 500,000 owners from foreclosure, Kanjorski said during a forum sponsored by the Pocono Mountains Association of Realtors and Pocono Builder’s Association.”

“‘Probably some in this room aren’t going to make it,’ he told dozens of attendees. ‘That doesn’t mean your life is over.’”

“Kanjorski said some buyers and lenders have only themselves to blame for their predicament. Some buyers bought much larger homes than they could afford. He said 16 percent of subprime loans guaranteed by one property insurance company went into foreclosure without a single mortgage payment made by the buyer.”

“‘My question is: Where was everybody’s brains?’ he asked. ‘Where were the regulators? And the regulators could say, ‘Where was the president? Where was the Congress, the governor, the state Legislature?’”

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