The Housing Bubble

The Press Enterprise reports from California. “Three years ago when Jeffrey Homes set out to build Villa de Madrid, a 98-unit condominium project in Hemet, Inland home prices were breaking records monthly. Condominiums were welcomed by local builders as the only way left to provide affordable homes to first-time buyers. Since then, condominiums and town houses have been on the leading edge of a plummeting housing market.”

“At the time, new single-family homes were selling in the $350,000 range. Today, the company would have to price the condos below $200,000 to sell, and that’s less than they paid to build them, said Jeff Holbrook, chief financial officer for Jeffrey Homes.”

“So Jeffrey Homes stopped construction earlier this year after finishing the first 20 high-end condos at Villa de Madrid, Holbrook said, adding that the company will rent the completed units to defray the cost of keeping them.”

“Among the condo buyers with regrets is Candy Canlas, 30, who bought a small, one-bedroom condo in Corona two years ago for $194,000. Since then its value has dropped about $24,000, according to current sales prices.”

“‘When I got it, I thought it was a little expensive. But it was the only thing I could afford and so I went for it,’ said Canlas, who works as a nanny.”

“Canlas said now she feels trapped because she can’t sell the condo to recover her down payment and pay off her mortgage. If she had to do it over, she said, she would have rented.”

“‘I don’t think any builder of a condo project ever thought they would face a market where it is no more expensive, if not cheaper, to buy a single-family detached house,’ said Borre Winckel, executive officer of the Riverside County chapter of the Building Industry Association of Southern California.”

“‘We see foreclosures going for $220,000 for a three-bedroom, single-family detached home in the Corona area,’ said Christine Cordova, a sales agent at the project.”

“Mick Pattinson, CEO of Barratt American, said his company was building about 140 condominiums and town houses in French Valley, but shut that project down at the end of 2007 after building only the models because the homes couldn’t be sold at prices high enough to break even.”

“‘Foreclosures are the name of the game right now. It is what people are buying,’ Pattinson said. ‘It is impossible to compete with foreclosures.’”

The Sacramento Bee. “Robert Winward of Sacramento bought a house in the Rosemont neighborhood in June 2005 with an adjustable-rate loan that quickly threatened to hike his payments. ‘I could have refinanced a couple of times,’ he said. ‘But what stopped me from doing it was that it would have cost about $15,000.’”

“When his penalty period ended, he was unable to sell and unable to refinance, he said. Winward is one of the luckier borrowers. His lender recently froze his interest rate at its original level for five years.”

“Did he know he had a prepayment penalty in 2005? ‘I didn’t understand exactly what it meant,’ he said. ‘When we bought, we were very naive.’”

“When Carol Wallace sold her Sun City Roseville home two years ago, she got an expensive reminder from her lender. She owed $5,964. Why? She had paid off her adjustable-rate mortgage early.”

“The lender offered to waive it, Wallace said, if she’d buy another house with one of their loans. But here was the point: She had cancer and didn’t intend to buy again. She had to pay up.”

“Two years later, still ill, Wallace still fumes. ‘It’s written in my paperwork when I die to remind my kids,’ she said. ‘It says if there’s a class action lawsuit, to remember me, to get my $6,000.’”

The Orange County Register. “A steady trickle of customers descended on IndyMac branches throughout Orange County on Saturday as word got out that federal regulators seized the bank late Friday.”

“Most customers who went to local branches Saturday asked about CDs. Many had opened CDs as recently as last week because the bank had been paying some of the highest rates around to attract new deposits.”

“Lisa Vargas of Tustin complained about a list of annoyances that had happened. Her husband went to the bank Friday afternoon, after the bank was closed. He went to the ATM to get cash, but he didn’t get any money, and the machine ate his card. When he brought his wife back to the bank later that evening, the ATM ate her card, too.”

“Then, when Vargas went to the Wells Fargo Bank on Saturday morning to deposit an IndyMac cashiers check she had gotten earlier in the week, she was told there would be a six-day hold on the money, even if the check was being honored by IndyMac. The couple still has one CD at IndyMac.”

“‘Our money is all locked up,’ she said.”

“‘My wife called me 20 minutes ago,’ said Carl Lapidus of Laguna Woods, outside the Laguna Woods branch on Paseo de Valencia. ‘I just opened two CDs and just began direct deposit of my Social Security last week, and there’s no information about what’s going to happen.’”

“Hundreds of IndyMac customers lined up at branches throughout Orange County this morning - some before dawn - waiting for the bank to open for the first time since it was taken over by federal regulators Friday.”

“Carrie Lee staked out the first place in line at the Laguna Woods branch, arriving at 4:45 a.m. ‘It was very dark and I thought, ‘Maybe I’ll come back at 6′, but then I decided to just stay,’ she said. ‘I just want my money.’”

“By the 9 a.m. opening time, more than 100 people - many retirees from nearby Leisure World - had lined up. Many, like Frank Van Wickle of Laguna Woods, who arrived just before 6 a.m., brought lawn chairs.”

“‘I feel very stupid for rolling over my CD just two weeks ago when they had all these people here pulling their money out,’ he said. ‘But (bank officials) assured me everything was all right.’”

The San Gabriel Valley Tribune. “Hundreds of people lined up outside the Pasadena branch of the new IndyMac Federal Bank early on Monday, with some fearing they would lose thousands of dollars of their savings.”

“After waiting two hours to get into the Pasadena branch, Sandra Valles, 64, of Los Angeles still was not close to the front of a line the stretched around the building. She had $150,000 in a certificate of deposit account and wanted to find out how much was insured.”

“‘Mostly, I’m looking for information,’ she said. ‘I have relatives on the account, so I don’t know how much the government will guarantee.’”

“Bank officials on Sunday said money at the bank was safe and urged customers not to rush to branches for withdrawls. Many customers, however, chose not to take that advice. Char Marshall of Cupertino flew to the Los Angeles area last night to withdraw her money, she said.”

“Louie Vasquez, 36, of Duarte said he was tired of hearing bad news about IndyMac and was withdrawing all of his money. ‘I’ve had enough,’ he said. ‘If it’s going down, it’s a gamble to leave it in. It’s like going to Vegas.’”

From Reuters. “‘I didn’t think anything like this would happen,’ said retired teacher Charles Tengeri from Pasadena, who was first to emerge from the branch after withdrawing $171,000 — about two-thirds of his life savings. ‘I withdrew as much as I could. I know it’s going to take a little time.’”

“‘I have $360,000 in this bank, and I was misled by this bank,’ said Robert Clark, a Glendale resident. ‘I gave the names of my mother, my sister and my brother on the account so I thought I would be insured. I don’t know what to do. I really don’t know what to do.’”

“Jitesh Patel, a doctor from Burbank, said he took a day off from work to withdraw his money from IndyMac. ‘We have money we are afraid we are going to lose,’ he said. ‘I wish we were a little more savvy.’”

“Tengeri said he was originally attracted to IndyMac because of the high interest rates it offered on deposits. Asked if the thrift’s collapse would disturb his retirement, the 70-year-old said: ‘Very much.’”

“There was no shortgage of ambition at IndyMac Bancorp Inc. And there’s no arguing that the bank achieved success. Last year, it ranked as the second-largest independent mortgage lender in the nation.”

“‘I think they were overtaken by events,’ said Paul Gray, a former Claremont Graduate University professor who co-authored a paper on IndyMac’s innovative use of computer technology. ‘They made some assumptions about the nature of the market … and they were wrong. They got caught up in the bubble and assumed it would go on forever.’”

“During its boom time, the bank functioned primarily as a major Alt-A lender, making loans to people who are just below the level of prime borrowers but with better credit than those who could only land subprime loans.”

“Alt-A loans are considered to be more secure than subprime loans, but they’ve nonetheless become troublesome over the past year due to a high volume of defaults. ‘They were basically given to anyone who could fog a mirror,’ said Norman Cox, a regional VP with Coldwell Banker Town & Country in Covina and Claremont.”

“The bank was particularly effective with its use of eMITS, a Web-based automated mortgage underwriting system whose decision engine was referred to as the ‘brain’ Gray said.”

“‘They invested in the concept of very quick turnover on loan applications,’ Gray explained. ‘They realized that when a loan application comes in, there are only a few parameters that are really looked at - credit rating, employment status, things like that. And using eMITS, that could all be turned around pretty quickly.’”

“‘They were very much an innovator in technology,’ he said. ‘They understood that technology could actually change the dynamics of things. And everyone in the industry followed suit.’”

“Once a mortgage applicant’s data was submitted to eMITS, IndyMac was able to change the loan decision time ‘from three weeks to under a minute,’ according to Gray.”

“Former IndyMac Chairman and CEO Michael W. Perry acknowledged the banking industry’s looming problems and the mistakes from which they spawned.”

“‘Speculators often lied about homes being owner-occupied and lenders got caught up in the housing frenzy,’ Perry said. ‘We got too carried away and loosened our guidelines too far.’”

“Rick Wartzman, director of the Drucker Institute at Claremont Graduate University, said many players in the financial industry were out of control before the subprime meltdown occurred.”

“‘There was some terrible management, terrible oversight and a lot of greed,’ he said, ‘and that’s a pretty powerful cocktail for disaster. A lot of those people in the mortgage business really violated Peter Drucker’s first responsibility for any professional - do no harm.’”

“The sad part, according to Wartzman, is that the credit pendulum has now overcorrected to the point where many will not be able to claim a piece of the American Dream.”

“‘The notion of making credit more available to a segment of the society that is effectively locked out of the system is not a terrible thing,’ he said. ‘This was not a terrible idea gone bad…but a good idea gone bad.’”

The Rocky Mountain News reports from Colorado. “The foreclosure tsunami is starting to sweep over some of Denver’s most exclusive neighborhoods. Homes priced at $1 million or more in places like Cherry Hills, Cherry Creek Country Club and LoDo are popping up more frequently on foreclosure rolls. On a recent week, the Douglas County Public Trustee received six new filings for $1 million-plus homes entering the foreclosure process.”

“Dave Marshall is president of Landmark Custom Homes, one of the builders in Cherry Creek Country Club. Some of his homes and land parcels are in foreclosure there, according to records.”

“And two to three years ago, when the luxury market was still thriving, builders were forced to pay lot premiums for the best sites. ‘No one saw how severe the coming recession and (the) mortgage loan meltdown would be,’ he noted.”

“‘This slow-moving market is leading to some foreclosures in the upper end,’ Marshall said. ‘It is bound to happen. Ironically, it happens more in the best developments because that is where the most homes were built.’”

The Aspen Daily News from Colorado. “Real Estate Transfer Tax collections are already down 37 percent this year off of 2007, which was at the end of a three-year spike in real estate volumes that peaked in 2006 with $2.5 billion in area sales volume.”

“The city’s general fund, which is fed primarily by sales and property taxes, could face troubled times. ‘I think we are at the beginning, not the end (of an economic downturn),’ said City Manager Steve Barwick. ‘There are a lot of credit and debt problems that will take years to work through.’”

“Council members agreed that the city needs to be prudent in the face of an economic downturn. ‘We need to be prepared for that outcome,’ Mayor Mick Ireland said. ‘It is serious.”

The Grande Junction Free Press from Colorado. “There are signs the Western Slope took some hits in the first half of the year. ‘When I moved here a couple of years ago I had to turn away work,’ said Jeff Tanksley, who is a general contractor in Grand Junction.”

“‘I was busy … I didn’t have to advertise. It (business) was going strong. Now, I am not seeing the same thing happening. I am seeing people afraid to spend their money. Instead of a total (home) remodel they are doing a room or two,’ he said.”

“The 20-year industry veteran added, ‘They are cutting back for a good reason - the uncertainty of the economy.’”

“Some local real estate agents say they are getting a sense that qualified buyers seem unwilling to do deals. ‘It seems like the people that can buy things are not. They are sitting on the sidelines,’ said Mark Abbott, who is a real estate broker in Grand Junction. ‘And people who want to own stuff are not getting qualified.’”

The Salt Lake Tribune from Utah. “The ads said, ‘Dare to Dream,’ and Jeff Denison was among dozens who did. All he had to do to get into Utah’s red-hot real estate market in 2006 was sign a contract with Dare to Dream Investments. That signature allowed his good credit to underwrite the purchase of a building lot and construction of a house.”

“Denison liked the program so much, he signed up for two houses. Now he’s left holding the bag on two $300,000 mortgages beyond the one he owes on his actual home.”

“And…houses in Grantsville aren’t selling to Wasatch Front commuters like they once were. Making matters even worse, the structures have piles of liens against them by subcontractors who didn’t get paid. Denison is struggling to find money for them, too.”

“‘The biggest thing I’ve lost is my good credit [rating],’ he said. ‘I’m trying not to go into foreclosure. But I’ve had to go 30 days, 60 days late [on mortgage payments]. I just can’t keep up with it.’”

“Attorney, Brennan Moss said some of his clients are left with mortgages of $600,000 to $700,000 on homes that are worth only $450,000 in today’s market. Some of the houses have not been completed.”

“‘The scheme may have worked for a time when housing prices were going up rapidly,’ he said. ‘But Dare to Dream played fast and loose. It’s terrible. It’s devastating.’”

“In March, Kimberly Schneider, who ran Transform America Mortgage and Dare to Dream filed for personal bankruptcy. Transform America Mortgage and Dare to Dream no longer exist.”

“In an interview, Schneider denied fraudulent activity. And she is broke, she said, to the extent she can’t even hire a lawyer to defend against the lawsuits.”

“‘The market crashed in July [2007], and we couldn’t close our loans,’ she said. ‘I cried the entire month. It’s my entire world.’”

“The lot appraisals and construction bids were all independent, she insisted - not part of a scheme. Schneider explained that her parents lost their life savings in the Dare to Dream venture. She, too, poured all of her own money into the program in an effort to keep it afloat. And her brother holds mortgages on two houses he purchased through Dare to Dream.”

“‘If we were doing any form of fraud, would I expose them like this?’ she asked, noting that investors were left with properties, while she has nothing. ‘The money that was lost was our money.’”

In Business Las Vegas from Nevada. “Clark County is preparing to file civil action this month against the Meridian Luxury Suites to stop its operation as a condo hotel. The Meridian has been leasing its condo units as a hotel for months and was even featured by In Business Las Vegas in April for the concept that was a new chapter for the condo conversion market.”

“In previous interviews, Meridian General Manager Eric Lynn said that of the 678 condos in the complex, 450 decided to participate in the hotel concept that requires them to buy new furniture for their units that ranged anywhere from $15,000 to $35,000.”

“Clark County Commissioner Chris Giunchigliani says the owners of the complex, American Invsco of Chicago, are taking advantage of the people who bought the units and got them to invest money in furniture without being authorized to do so.”

“‘It is another example of a greedy corporation taking advantage of out-of-state investors who put in their life savings,’ Giunchigliani says.”

The Review Journal from Nevada. “Ronald Cowan thought he’d be living the high life in Las Vegas, rubbing elbows with sports stars and celebrities. Cowan plunked down $132,000 for a deposit at Palms Place, the swank condo-hotel tower that opened earlier this year next to the Palms.”

“One slight problem: He can’t close escrow on his $663,000 unit. Cowan, of Cambria, Calif., was hoping to sell his property in nearby Grover Beach and use the proceeds in an Internal Revenue Service code 1031 exchange to buy the unit at Palms Place.”

“‘I would love to close (escrow) and stay in the project,’ Cowan said. ‘I’m in real estate and with a stated income, you can’t get a loan. Maybe if you put 50 percent down. Call it whatever, reality is what it is.’”

“Cowan isn’t the only condo buyer in that sinking boat. Tighter credit requirements squeezed some buyers out of financing. Other people simply want to cut their losses on condos that are appraising for sometimes hundreds of thousands of dollars less than the sales price. They want out of their contracts, preferably with deposits refunded.”

“Robert Daniels wishes he’d held off buying a 910-square-foot unit at Juhl, the mid-rise development by San Diego-based CityMark in downtown Las Vegas, for $440,000. He sees 1,600-square-foot units at nearby Newport Lofts and SoHo Lofts going for about the same price.”

“‘How are these units going to appraise for what we paid for them?’ Daniels wondered. ‘Now I’ve got a guy who said, ‘Make me an offer’ at either Newport or SoHo. It’s going to cost me $3,000 a month to keep it alive and I can only rent it for $1,000.’”

“Daniels is assuming he’s lost 20 percent in value at Juhl and may walk away from his deposit, but he’s not whining about it. ‘I took my shot. It didn’t work out,’ he said. ‘This is Las Vegas. Some people win, some people lose. Who are the winners, anyway?’”

“Many people bought high-rise condos in Las Vegas on pure speculation, hoping to ‘flip’ the units, Realtor Steve Hawks said. ‘Owners wanting out are having a horrific time unloading them,’ Hawks said. ‘One reason is many have dropped in price, so much that they owe more than it’s worth. Units that were once $1.4 million are now $700,000 and units that were $600,000 to $900,000 are now $350,000 to $600,000 and are continuing to free-fall with no end in sight.’”

“Buyers at Mira Villa condos, a project by HDB that filed for Chapter 11 bankruptcy in January, are worried they may never see their earnest money again. Randa Bishop said she has good credit and assets, including a $1.5 million apartment in New York, and wanted to get an interest-only loan with 20 percent down on her $740,000 unit at Mira Villa, plus about $60,000 in upgrades.”

“‘If they come and say the property only appraises at $700,000, I still have to cough up an additional $100,000 for the difference,’ she said. ‘That I don’t like. I would probably be better walking away from it with my money and wait three months or six months and go back in and buy it.’”

“Signs of ‘vertical Vegas’ going flat are becoming more evident every day, Hawks said. Homeowners association fees weren’t an issue when units were originally purchased because most buyers were looking to flip the units, he said. When that didn’t pan out, the first thing some people did was stop paying homeowners association fees.”

“‘Some homeowners associations are on the verge of being broke,’ he said. ‘Amenities are being drastically cut from security to landscaping. The hallway carpets in some complexes are stained and smell like vomit from Vegas partiers that rented units from owners getting foreclosed on.’”

“Judy Anderson, an attorney from Walnut Creek, Calif., sent a letter to Slade Development, developer of Vantage Lofts, terminating her sales contract and demanding that her $40,000 deposit be returned.”

“She said the contract stipulated that her unit be completed in two years, which would have been June 3. ‘It’s probably overpriced,’ Anderson said of the $540,000 unit. ‘For me, this is good to get out, but I want my money back. I’m entitled to it.’”

“The mortgage meltdown has claimed 14 more victims: a Reno-area couple and their 12 adopted children. Dave and Kathy Bain of Spanish Springs are facing foreclosure on their 3,400-square-foot home after falling behind on payments.”

The Bains moved into the house in January 2007, six months before they adopted nine of the children, including eight siblings. The couple, who earlier adopted three children, weren’t able to rent out their previous, smaller home until last September.”

“Also last year, Kathy Bain switched to part-time work, then stopped working altogether to take care of the 12 children, ages 3 to 16. With their old house rented, she said they now are able to make payments on the new house.”

“However, their lender, GreenPoint Mortgage, is foreclosing because they’re behind $20,000 in payments, she said.”

“‘Here I am with 12 kids at home that I need a home for … I need this size of house,’ Kathy Bain told the Reno Gazette-Journal. ‘It’s hard for me to ask for help, but I need some guidance on where to go from here.’”

The Kalamazoo Gazette reports from Michigan. “No matter the motivation, many homeowners are finding that despite reasonable interest rates, they’re stuck with the loans they’ve got. The problem? Declining home prices and a slow market have stolen the equity many homeowners thought they had built up in their properties.”

“Lost equity has been especially severe for those who bought homes in 2005 and 2006 using adjustable-rate mortgages and down payments of less than 20 percent, experts say.”

“‘Anybody who got a low-down-payment loan in the last couple years is under water right now,’ said Brian Seibert, president-elect of the Michigan Mortgage Brokers Association.”

“The large number of home foreclosures is driving down prices because when a bank resells a property, it’s usually at a heavily discounted price, Seibert said. Home repossessions after foreclosure in the county are on track to top 1,000 this year, which would be a record.”

“‘Most of the sales in the last six months have been distressed sales,’ Seibert said.”

“Eric Hendrickson, senior VP of mortgage lending in West Michigan for Fifth Third Bancorp, said much of the secondary market has dried up. So Fifth Third is denying risky refinances when borrowers don’t have enough equity built up.”

“‘If they borrowed 100 percent of value two years ago, the equity probably won’t be there,’ he said. ‘Home prices have declined. That’s the issue.’”

The Grand Rapids Press from Michigan. “Propelled by a fast-growing housing market and rapid development, bank profits were soaring in 2006 as dividends were on the rise with little indication of an end in sight.”

“But by 2007, things started to get ugly. Bankers who had been loaning out cash to practically anyone with a pulse found themselves in a pickle. An oversupply of housing left developers with no buyers and unable to pay on loans for huge projects.”

“Banks admitted they didn’t know how bad the situation would get. Turns out, it got really, really bad. So bad that bankers such as Fifth Third Chief Executive Kevin Kabat began to talk about a potential wave of bank failures, without naming names.”

“So bad that hyperbole like ‘uncharted waters’ and ‘the worst I’ve ever seen” became part of the everyday vernacular in an industry that had only a few years ago become accustomed to talking ‘record profits’ and ‘expectations for continued success.’”

“‘We’re in waters as a banking industry that in my 26 years I have never seen,’ said Sean Welsh, regional president for National City.”

The Indystar from Indianapolis. “A national housing activist group is threatening legal action to force Lake County’s sheriff to halt the sale of foreclosed properties. The Lake County Council recently endorsed the group’s proposal for a temporary moratorium on home foreclosures to give homeowners more time to try to save their homes.”

“More than 4,600 foreclosures have taken place in Lake County since October 2006, part of a national trend as adjustable rate mortgage payments start to balloon.”

“Lake County Chief Judge John Pera said that while he is sympathetic, he’d be reluctant to deviate from the prescribed legal response to late mortgage payments.’

“‘There isn’t a judge in this county who is not concerned about the foreclosure situation,’ Pera said. ‘Unfortunately, the judiciary has to follow the law, and the law allows for mortgage foreclosures.’”

The Courier News from Illinois. “Pressed by a wave of foreclosures in South Elgin, the village board approved an ordinance this week cracking down on owners who let vacant properties fall apart.”

“Community Development Director Steve Super said the code enforcement staff estimates between 100 and 180 homes in South Elgin are vacant. Not all are empty because of mortgage foreclosures. But a growing number are, and those probably cause the most problems, Super said, because they often end up owned by some far-away bank or mortgage company that does nothing to keep up the property.”

“Before joining the board’s unanimous ‘yes’ vote, Trustee Scott Richmond said forcing a homeowner who already can’t pay his mortgage to hire a local property manager and go through red tape ’seems like piling on.’”

“But Super said the original resident rarely will be affected by the new rules. ‘The vast majority of the parties involved are banks,’ Super said.”

From WJFW TV 12 in Wisconsin. “Even the Northwoods isn’t immune to the hard times being seen in the housing market. Eric Johnson is a broker and owner at Remax First in Minocqua, he says, ‘We’re being pulled into what’s happening in the rest of the country. Our market is slower.’”

“Mike Mulleady, GM of Coldwell Banker Mulleady Realtors adds, ‘We’ve had such a hot market over the last 5 years that it’s come back down to a normal range.’”

“And for buyers that’s good news. ‘They buyers know it’s a buyer’s market. They are jumping around like butterflys from flower to flower to see what’s there,’ says Mulleady.”

From Kiplinger. “The market shows no signs of reviving anytime soon. In May, Dave and Mary Jo Nelson hired an auctioneer to sell their large, pristine home on Big Sand Lake, near Hertel, Wis., which includes an acre of lakefront land.”

“The Nelsons were angling for $399,000. But the highest bid came in at $355,000, and the Nelsons rejected it. They want to move somewhere ‘where it’s warm and there’s no snow,’ says Mary Jo, but they’re still holding out for a better offer.”

“Two years ago, shells were selling quickly for as much as $85,000. Now Pat Tomanek, a real estate agent in Siren, Wis., can show you a two-story, 1,200-square-foot shell on a generous lot near Crooked Lake for $59,900, down from the original asking price of $75,000.”

“Minnesota’s Cross Lake glistens in the spring sunshine as real estate agents Jeremiah Bicknese and Tricia Erickson inspect waterfront homes listed for sale. One drab, four-bedroom rambler needs paint but is redeemed by a two-level wraparound deck with a lake view and a boat dock.”

“The sellers were asking $335,000 last summer and struck out; over the winter, they cut the price to $290,000. ‘It’s still way overpriced for the condition it’s in,’ confides Bicknese. Would the sellers take $250,000? ‘I bet they would,’ he says. ‘Absolutely.’”

“Just a few hundred feet away sits a smaller but more appealing home, in much better condition. And it’s been on the market for a year, priced first at $249,000, then $229,000 and now $209,000. ‘They’d take $190,000 if you did a cash transaction and closed quickly,’ says Bicknese.”

The Timberjay from Minnesota. “In Minnesota, home foreclosures could exceed 66,000 by the end of 2008, according to a study that compiles data from the state’s 87 counties for the first time.”

“Foreclosures in the Twin Cities area rose from 3,759 in 2005 to 7,039 in 2006 - a jump of 87 percent - and leaped to 12,974 in 2007. The study forecasts that foreclosures in the area could rise to 19,936 in 2008.”

“Leading the pack by sheer numbers is Hennepin County, where foreclosures from 2005 through 2007 reached 10,284 and are projected to grow by another 8,585 in 2008.”

“‘The FBI ranks Minnesota as the fourth highest state in the county for mortgage fraud,’ added Warren Hanson, president of the Greater Minnesota Housing Fund. ‘I don’t know if it’s because we’re considered easy pickings because we’re trusting or if it was because fast-rising property values created opportunities for lots of mischief.’”

The Courier from Iowa. “Southern Cedar Falls neighborhoods Greenhill Village, Greenhill Townhomes and Huntington Ridge were developed primarily by Regency Homes, but construction came to a halt in late April when the Des Moines-based company announced it could no longer cover its financial obligations.”

“Regency subcontractors suspended construction on homes throughout the state, and mechanics’ liens and lender lawsuits piled up against the homebuilder. Several of Regency’s properties in the neighborhoods have been purchased by Weichert Realtors-Inspired Real Estate — the real estate company that previously had been selling the homes for Regency.”

“All involved parties are trying to downplay the neighborhoods’ association with Regency. Signs at the entrances to the neighborhoods have been altered to remove affiliation with the stagnant homebuilder, but within the neighborhood, Regency signs are still present on the properties that the company still owns.”

“‘We’re not trying to put a ribbon on a pig,’ Darryl High of High Development Corp., the underlying developer of the neighborhood, said of the situation. ‘But for those of in the process of trying to move forward, we don’t want to take any additional bumps.’”

The Kansas City Star from Missouri. “Don’t blame Missouri’s subprime mortgage problems on subprime loans, says a researcher for the credit union industry.”

“‘Let’s not overreact. Let’s not do away with subprime lending, because that has helped a lot of people who up until now have not been able to purchase a home,’ said Nancy Pierce, president of Tipton Research Group in Kansas City.”

“Pierce said she found that Missouri’s subprime loan problems had much to do with mismatches between buyers’ income levels and the amount of money they were borrowing, not the kind of loan itself.”

“‘People were buying more house than they could afford,’ she said.”

“Pierce said some lenders improperly qualified buyers based on temporarily low interest rates that held down house payments. Problems compounded when stagnant-to-falling house prices prevented borrowers from refinancing.”

“‘It’s not the subprime loan by itself that’s the culprit here,’ Pierce said. ‘There’s been a lot of greed that has gone on in a lot of different areas that has contributed to the subprime problem.’”

“Pierce said the research also found that subprime mortgage delinquencies in Missouri have been above the national average, though foreclosures have been below the average. Pierce said that the state may yet see a surge in foreclosures.”

“Unfortunately, Pierce said, credit union managers have told her recently that they were beginning to see borrowers miss payments on other types of loans, hoping to keep their mortgages paid up. She said that could suggest more difficulties ahead.”

From KMBC.com in Missouri. “Is there a silver lining to the record number of home foreclosures? A Northland real estate agent said there is if you are willing to take a chance on a Department of House and Urban Development home.”

“KMBC’s Bev Chapman reported that you probably would not think of a $300,000 home in Riss Lake as a HUD home. But the house had a government-backed loan, and when the family who lived there lost it, it went back to the government.”

“Sometimes people who are forced from these homes are not happy. ‘Somebody’s been real rough on this place. I bet somebody rehabbed this and got over-extended. Every door’s been kicked in,’ said Mike Phillips of Century 21.”

“The bank has already been here, and the locks have been changed. Phillips is just here to check out the property and try to sell it. Chapman reported that Phillips is moving as many as 150 homes a month. They are priced to sell as is. Before the mortgage crisis, Phillips said he might sell one a month.”

“‘How we got into this situation was mortgage fraud; people fudging numbers, mortgage brokers fudging your numbers when you don’t know about it,’ Phillips said.”

“‘It’s just average mom and pop … working couples. It’s sad when something like this happens. They were just trying to achieve the American dream. (They) did everything they could to own a home, even though home ownership might not have been right for them at that point in time,’ Phillips said.”

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