Ditched And Left To Rot In Florida
The Tampa Tribune reports from Florida. “Ernie Harpster fell behind on his mortgage payments last year. The lender filed a foreclosure lawsuit. Harpster then did something troubled homeowners may never think of doing: He fought back. Harpster has been living payment-free for nearly a year in his Wesley Chapel home. His case is trickling through court, and there are no signs he will be kicked out anytime soon. ‘Not having a mortgage payment meant I didn’t have to file for bankruptcy because I could pay other bills, like credit cards and the electric bill,’ said Harpster, whose income as a real estate agent dried up along with the market. ‘But I’m not trying to take advantage of the situation. I tried to do what I thought was right. To me, it’s the bank’s fault this has stalled.’”
“‘A lot of people just roll over because they know they’re wrong, they haven’t paid their mortgage,’ said Timothy Kingcade, a Miami lawyer. ‘If you’re accused of a crime, do you walk in court and say, ‘I did it!’? You have a right to make the bank prove its case.’”
“Homeowners who protest sometimes find their cases pushed to the bottom of the pile, said Lutz lawyer Ralph Fisher. These lenders ‘are freaking out,’ he said. ‘We’re asking them how they own this mortgage, and they can’t answer.’”
“One of Fisher’s clients, David Clark, hasn’t paid the mortgage on his investment property in Land O’ Lakes in nearly a year. The foreclosure paperwork was puzzling; the mortgage company said it had lost the original note. ‘So what happens if some other bank comes along later and says they in fact own the mortgage?’ Clark asked. So far, the lender hasn’t responded and renters avoid him because they don’t want to get kicked out when the bank takes over the house.”
“Tampa lawyer Stanley Galewski said one of his clients has been in his home - payment-free - for 27 months. He asked the lender to produce the note and other paperwork, and the lender hasn’t answered. ‘It’s like the lender just lost interest,’ Galewski said.”
“John Muratides, a Tampa real estate lawyer, said delaying the case in a declining real estate market could cost homeowners more than their houses. That’s because when the house is eventually foreclosed, it likely will sell for less than it would today. Lenders could file a deficiency claim to force the homeowner to pay the rest of the amount owed. That, Muratides said, would push many homeowners into bankruptcy.”
“For Harpster, who’s waiting on his mortgage company to make the next move, fighting has made life simpler in some ways. His teenage son has been able to stay in his neighborhood school another year. He has been able to stave off bankruptcy and put money away to relocate to an apartment. But fighting foreclosure didn’t take away the stress. Now, he said, both he and the lender will suffer even bigger losses.”
“‘I have my boxes packed, and most of my stuff is ready to go,’ he said. ‘I have no idea how much longer I have in my house.’”
The St Petersburg Times. “Cash-strapped builders breathed easier last year when Tampa’s Metro Development Group, founded by Canadian businessman John Ryan, bought thousands of their idle new home lots. But after defaulting on millions of dollars in payments to banks and business associates this year, Metro is feeling financial pressure of its own.”
“Adding to Metro’s troubles, unpaid contractors, including a landscaper and an environmental consultant, have filed a rash of lawsuits for nonpayment. Metro spokesman John Heagney said the suits are no cause for alarm. As a multimillion-dollar company with 30,000 home sites across Florida, legal entanglements are par for the course.”
“‘Having 10 lawsuits at the same time is pretty much the norm,’ Heagney said.”
“But the 5-year-old company has never defaulted on a loan as large as the one from Mercantile. Metro reported $200-million in income in 2006. The company went on a lot-buying binge last year, scooping up 8,300 home sites from Lennar and 1,000 from M/I Homes. In January, Metro announced a joint venture with a global investment firm. Private investors staked the partners to $250-million to scout land buying opportunities.”
“That hasn’t stopped Metro from defaulting on earlier land deals. Marvin and Roberta Swain, from whom Ryan bought the Prospect Hollow parcel a couple of years ago, said Metro paid cash for half the purchase price and had been making mortgage payments to them for the remaining half. The payments ceased this year. ‘They told us they were out of funds,’ Roberta Swain said.”
The Daily Mail. “Instant Access Properties said it has given thousands of investors, mainly middle-class professionals, the chance to build lucrative property portfolios. It boasted how they could ’start from scratch, live on easy street instead of struggling for a living.’”
“But the controversial firm, which was founded by property tycoon Jim Moore, has gone into administration leaving 4,500 exchanges uncompleted.”
“In the past two years, The Mail on Sunday has featured stories from several investors who, far from becoming property millionaires, have lost thousands after signing up with IAP. Many paid up to £8,000 to belong to the firm’s property club, which promised to select and recommend suitable homes for investment.”
“Janet Lay was among those hoping to set themselves up in retirement when she attended a course in 2004 run by IAP’s sister company Inside Track, which went into administration in April. She was persuaded to sign up to two unbuilt properties – one in Basingstoke, Hampshire, and another in Bahama Bay, Florida.”
“By 2006, when the Basingstoke flat was completed, its value was far lower than the price she had agreed to pay, despite a supposed discount and booming market. She could not afford to complete the deal because no mortgage lender would stump up the price. She puts her losses, including the cost of pulling out of the Florida deal, at £40,000.”
The Associated Press. “Despite the glut of homes on the market, falling prices in many areas, and competition from bargain-basement foreclosures, plenty of homeowners still want to sell their properties without a real estate agent. One recent successful seller was Jim Seidel, in Miramar, Fla. With skidding prices and slow sales, Seidel wanted to avoid paying the commission.”
“He noticed a neighbor was being foreclosed upon and the house was for sale. So he found out the price, and slashed his asking price on his Internet listing by about $100,000 to $355,000, and sold his home in just five weeks.”
“‘Obviously we wanted to save money in commissions,’ said Seidel. ‘We wanted to sell it right away, rather than wait, because we figured the prices would keep falling. We did a quick price comparison and we priced it fairly.’”
The Orlando Sentinel. “Metro Orlando’s apartment market tightened a tiny bit this past spring and summer, as the vacancy rate declined slightly to 10.4 percent by September, according to a recent local survey. That could mean higher rents in coming months, though there are signs the trend may not last because the region’s population growth is stalled and job creation is all but flat.”
“In March, the area’s vacancy rate was 10.6 percent; a year ago, it was 9.2 percent, according to the twice-yearly survey by a Maitland-based real-estate research and consulting company. Charles Wayne President Jim Lewis said that, during the past six months, another 11 condominium-conversion projects — ‘most with low occupancies’ — had returned more than 1,300 unsold condo units to the area’s rental pool.”
“That has kept the overall vacancy rate from shrinking much, he said. Another factor contributing to vacancies: The metro area’s ‘anemic employment gain’ of the past year has resulted in ‘fewer new employees moving into area rental apartments,’ he said.”
“The tightest apartment market on record for the region was in March 2006, when the vacancy rate sank to 3.6 percent. At the time, thousands of rental units were being converted to condominiums and put up for sale as complex owners sought to cash in on the soon-to-end boom in housing sales.”
“Many of those condo projects have since returned to the apartment market as sales collapsed.”
From CBS 12 News. “Homes are being ditched by owners and now left to rot by banks and lenders. The hardest hit: Port St. Lucie with 1,800 foreclosures reported in August, nearly 10,000 this year alone. ‘This is what the housing bubble burst has come to, this is what the mortgage mess has come to. This is how it plays out in real people’s lives on real neighborhood streets, especially here in Port St. Lucie.’ said Port St. Lucie City Communications Director Ed Cunningham. ‘Now the city is backlogged with these houses, there are so many of them and it is making the process move even slower.’”
“‘Those are missing one day they were in the living room and then they were gone. ‘all the appliances?’ Yeah.” said neighbor Tom Eder, who watched crime multiply once the house went empty off Gun Club Road in Palm Beach County.”
“‘I get to live next to this,’ said Brad Baldwin, who reported his neighbor to code enforcment with no response just outside West Palm Beach, ‘It appears to be an abandoned house that is being foreclosed on, and next house over is the same thing, same owner.’”
“”If the property is owned by one of these banks and it collapses, somebody has to buy those assets and we got to track down who that is, the next bank in line responsible. Yyet another delay.’ Cunningham said.”
“That means already frustrated neighbors must wait for action. ‘Someone needs to step in an say hey enough is enough.’ said John Brady, who reported a home vandalized beyond imagination. The bank responsible claimed to not know it was a hazard.”
The Keys News. “Joe O’Connell, owner of Safe Harbour Marina on Stock Island, said he fights every summer for his livelihood, and that of the dozens of fishermen, boat mechanics, treasure divers and others that work at his marina. The fight is against the county’s property appraiser’s office, which each year increases the value of the 10-acre, 60-boat-slip piece of so-called ‘working waterfront,’ because developers have gobbled up similar properties in the Keys at ever-higher prices in recent years.”
“This year, O’Connell said his tax bill nearly tripled from last year, mostly because of a steep rise in his property’s assessed value. But he’s taken a step to prevent this from happening again. ‘We’re in negotiations to work on a deed restriction so nobody can ever develop the property. The [property appraiser’s office] is working with us,’ O’Connell said.”
“Frank Herhold, executive director of the Marine Industries Association of South Florida, said Broward County lost six of its 19 boatyards to redevelopment. In Key Largo…developers purchased (a) site for a luxury housing development, but a deal with Monroe County to transfer building permits to the site fell through.”
“Michael Reckwerdt, who owns Robbie’s marinas in Stock Island and Islamorada, said deals like the $90 million purchase of Holiday Isle Resort and Marina a few years ago has impacted the values of smaller marinas like his.”
“‘My taxes in Key West are over $100,000 a year, well over,’ Reckwerdt said. ‘I’m a boat yard, and you have to haul a lot of boats, a lot of boats, to make $100,000 in profit just to be able to pay the government. That has forced people to sell.’”
The Palm Beach Post. “Lixkarime Padilla’s family loves South Florida, but high prices and the sour economy have them thinking it might be smart to move someplace cheaper.”
“‘We have friends who couldn’t sell their house here so they rented it out and moved to North Carolina,’ said the 24-year-old Colombian immigrant. ‘They said rent is so much cheaper there that they can pay for food and everything else for what they used to pay here just for housing.’”
“The impact is being felt by school districts, which are seeing declining enrollments and face funding shortages, as well as municipal and county governments, many of which are making cuts as revenues drop. The state budget hasn’t been immune, either, facing a $3 billion shortfall when lawmakers met this past spring.”
“‘We still have only preliminary numbers for 2008, but the evidence so far is showing a very substantial slowdown, the largest since the 1970s,’ said Stan Smith of the University of Florida’s Bureau of Economic and Business Research.”
“‘Certainly the housing slowdown and the credit meltdown affected the superheated economy in Florida,’ said William Frey, a demographer at a Washington, D.C. think-tank. ‘But to see it have such a large impact on population growth is quite surprising.’”
“In Palm Beach County, growth was essentially flat last year, with an increase of only 99 new residents. County officials are bracing for worse news this year; Smith’s team has warned them that the county’s population may actually fall in 2008, the first drop in decades. Hardest hit in 2007 was Broward County, where population fell by 13,000 to 1.76 million. Five Broward cities were among the fastest shrinking in the nation, and overall 26 of the county’s 31 municipalities lost population.”
“Hollywood was the biggest loser, dropping 1.4 percent as its population fell by 2,000 residents from 142,000 the previous year.”
“Maurice Bernard, 57, moved to Hollywood 40 years ago from frigid Canada, buying up a string of rental units and a small motel. After decades of easy living, things have gotten tight. ‘I believe the hurricanes are starting to scare people away,’ he said. ‘And everything is built out here; there’s no more land. The population goes down because kids grow up and move away.’”
“Padilla said her family is considering moving to Gainesville, where she and her sister attended the University of Florida. ‘Taxes are up and insurance doubled,’ she said, noting that at the same time the family’s business - a clothing boutique - has seen about a 50 percent drop in sales.”
“After hurricanes socked the area a few years ago, Bernard saw his insurance premiums on an apartment building he owns jump from $2,200 to $4,700 a year. At the same time, he’s reluctant to raise rents because he knows his tenants are struggling.”
“‘I really worry,’ he said. ‘Gas is up, insurance is a nightmare, and people can’t afford to live here.’”
