It’s The American Way
The Contra Costa Times reports from California. “The high level of foreclosure sales in California has to continue before the state’s housinge market can make a strong recovery, the chief economist for the California Association of Realtors said here Wednesday to more than 700 Realtors from Contra Costa County. ‘We’ve had a very deep decline in the median price, which has spurred sales in distressed properties,’ Leslie Appleton-Young said. ‘Everybody’s looking for a bargain … The faster we work through these foreclosures, the better off we will be.’”
“That is already happening. Almost six out of ten existing houses and condos sold in Contra Costa County in September had been foreclosed on during the past 12 months, according to MDA DataQuick.”
From Reuters. “Foreclosure activity in September rose 21 percent from a year earlier but fell by double-digits from the prior month as some state laws slowed the foreclosure process, according to RealtyTrac. a California law that requires lenders to make contact with borrowers at least 30 days before filing a Notice of Default took effect in early September. The state saw a drop 51 percent from the previous month, according to RealtyTrac.”
“‘Much of the 12 percent decrease in September can be attributed to changes in state laws that have at least temporarily slowed down the pace at which lenders are moving forward with foreclosures,’ said James Saccacio, RealtyTrac CEO.”
From Bloomberg. “Six states accounted for more than 60 percent of defaults in the third quarter, led by California with 210,845 foreclosure filings, more than double the amount from a year earlier, according to RealtyTrac. California had six of the 10 metropolitan areas with the highest foreclosure rates in the quarter, led by Stockton, where 3.69 of the housing units received a default filing in the quarter. Riverside-San Bernardino ranked third, Bakersfield was fourth, Sacramento was seventh and Fresno and Oakland ranked ninth and 10th, respectively, RealtyTrac said.”
The Press Enterprise. “‘It is hard to see if the law is just delaying foreclosure or helping people to permanently avoid it,’ said Daren Blomquist, spokesman for RealtyTrac.”
“Since the Federal Deposit Insurance Commission took control of IndyMac in July, it has adopted a systematic plan for modifying troubled loans in that company’s portfolio, said Dustin Hobbs, spokesman for the California Mortgage Bankers Association. It is uncertain how many other institutions may develop loan modification strategies of their own, Hobbs said. And he said there are many other factors that also could influence foreclosures, especially the economy.”
“‘We don’t know what the economy will look like next week, not to mention long-term,’ Hobbs said.”
From CNN Money. “Because so many mortgages are packaged into securities and sold, it is often the investors who call the shots. ‘I am just bombarded,’ said Leeann Simpson, a senior loan officer at American Security Financial in Modesto, Calif. But so far, most of the lenders or servicers holding the existing loans aren’t ready for the program or do not understand it yet, she said.”
“‘It is not an overnight process,’ says Heidi Lawler, president of Affinity Homeloans in San Diego. ‘It is taking anywhere from three to five months for the current lender to decide with the investors whether they will do a write down.’”
“Not everyone will qualify for the program. ‘Our phones have been going crazy,’ said Anthony Logan, president of Group Capital Mortgage in Cerritos, Calif, a participating lender. ‘Everyone just automatically thinks they are qualified [for the program] because their home is upside down and their payments just went up, and that is not necessarily the case.’”
The North County Times. “The county will receive $48.5 million in federal grant money to boost the local housing market, largely by buying and selling foreclosed homes, county officials announced this week. ‘It’s a nice chunk of money, but not a huge amount relative to the county’s total foreclosure problem,’ said Gene Wunderlich, chairman of the Southwest Riverside County Association of Realtors. ‘I think it’s probably best to use it with first-time home buyers. As affordable as prices are, it’s really an opportunity for a lot of folks to get into the market who haven’t done so before.’”
The Recordnet. “City Hall intends to flip houses, using $12.1 million from the federal government to buy and restore abandoned or foreclosed homes, then sell or rent them out. San Joaquin County is to receive $9 million from the program for properties in unincorporated county and in cities other than Stockton. It was unclear how many home purchases those allocations might fund.’
“‘It’s a drop in the bucket … but you don’t look a gift horse in the mouth,’ said Jonathan Moore, chief deputy director of the county Community Development Department.”
The Milpitas Post. “A Milpitas home gained attention from local television stations last week after the people that lost the home to foreclosure trashed the house and the front yard. The deposed owners left trash, clothes and other items strewn throughout the home’s front lawn, driveway and garage. Some of the windows were boarded up, and the front window had an unfriendly spray-painted message to the bank. The inside of the house was left in even worse condition, with holes in several walls, destroyed carpets and cabinets, garbage spread throughout and more spray-painted messages.”
“Upset neighbors said that the home had been poorly maintained for years. ‘This is not something new. They’ve been living like that for a while I think,’ neighbor Winston Wheaton said. ‘This is just messy. It’s nasty. This is not a way to handle being kicked out of your house. Sometimes, if you’ve got to leave, it’s best just to leave.’”
The Sacramento Bee. “As property tax bills land in mailboxes across the region, county assessors are reporting record numbers of complaints and assessment appeals from homeowners who assume – in the midst of a declining housing market – they’ve been overbilled. State tax codes are fairly rigid and probably due for some change, said Jenine Windeshausen, Placer County treasurer and tax collector.”
“‘I would love it if tax collectors had the opportunity to change the due date. I mean, ‘Merry Christmas and Happy Tax Time!’ Windeshausen said, referring to the current tax bill due dates.”
The Merced Sun Star. “When Joseph Thome of Los Banos got his property taxes in the mail this year, he was stunned — it had been raised. Despite reductions in home values nearing 40 percent across the county this year, Thome saw his home value increase. As he looks around all he sees are housing prices tanking. Houses that sold for $400,000 in 2005 are selling for half that today. It doesn’t add up that his house is worth more this year, he said.”
“‘The assessor shows that my house is worth more now, this year, than it was last year,’ said Thome. ‘And the year before the same thing happened.’”
The New Times SLO. “The recent arrests of the mother-and-son leaders of the bankrupt Paso Robles-based Estate Financial firm were met with cheers from many of the hundreds of local investors who have been battling for months to get some of their collective millions back.”
“Yet the Estate Financial news was only the latest in a series of grim headlines alleging wrongdoing in a highly specialized and little-known area of finance known as hard-money lending. Tom Poole of the California Department of Real Estate, has spent 24 years in the department, first as an investigator and now as the agency’s spokesman. ‘It does seem to be, for the moment anyway, concentrated in your area,’ Poole said.”
“‘I’m guessing you’re in an area with a lot of wealthy retirees,’ Poole said. Hard money loans were attractive to retired investors because they promised high returns of about 12 percent per year, and they were paid in monthly installments.”
“Builder Brad Cross invested hundreds of thousands of dollars in Real Property Lenders and Estate Financial He said when certain brokers started to cut regulatory corners, competition may have driven others to follow. ‘It was kind of a slippery slope here,’ he said, ‘All of these brokers all knew each other and they were all competing for the same borrowers. One would cut corners and others would follow.’”
The Oroville Mercury Register. “Umpqua Bank CEO Ray Davis, who stopped in Chico Wednesday on a circuit tour of branch cities, gave a brief description of how the financial trouble developed with the ‘perfect storm’ of the housing crisis, investment bank turmoil and economic downturn. Davis stressed that it wasn’t a California or U.S.-only problem, but a global one.”
“‘I don’t care what office you held, nobody but nobody would have ever predicted this housing crisis would have gone as steeply down as this one has, and stayed down as long,’ he said.”
“Attributing the housing crisis to ‘greed,’ Davis admitted that ‘it’s the American way.’”
The Bakersfield Californian. “McAllister Ranch could become part of a liquidation bankruptcy case Thursday, court papers filed late Wednesday afternoon indicate. Recent filings also show companies owed money by SunCal want to know what happened to a $144 million ‘dividend’ payment to SunCal subsidiaries and/or its president in 2006. One lawyer says the money was probably used for cruises, charter flights and other extravagances during the real estate boom.”
“Firms have been jilted for more than $46 million, court filings show. Even Sequoia Sandwich Co. — owed $611 — is listed on paperwork that names dozens of creditors. ‘They almost put me out of business,’ said John Scripter, who owns Lancaster-based Masonry Plus. ‘This has been a very hard thing.’”
“Attorney Craig M. Rankin of Los Angeles…represents a core group of unpaid construction firms. When asked what became of the $144 million, Rankin said it was likely spent on cruises and private planes — ‘what rich people do’ with money, he said. ‘It’s the epitome of the go-go real estate market of 2006,’ Rankin said.”
The Daily Breeze. “Slumping real estate prices and a wave of foreclosures have turned properties ‘upside-down.’ In the case of…a Rancho Palos Verdes house that overlooks the Pacific…the owner owes $1.3 million, but the property is worth much less. Frances Baldwin, a long-time real estate professional, has listed it at $1,099,000, but will likely lower the price much further.”
“Baldwin is trying to satisfy both the owner and the bank through a short sale. Baldwin, a partner and senior loan consultant at Excel Funding Real Estate Loans in Torrance, has shifted her focus to short sales as her loan business has plummeted. ‘The loan part of the business has slowed down by 95 percent,’ Baldwin said. ‘I knew this was coming over two years ago.’”
“Baldwin said she has closed nine short sale transactions, with another 42 ‘in the pipe.’ The short sale process can take six to eight months, which buys the owner time as Baldwin negotiates with the banks and ultimately tries to sell the property.”
“‘It all has to do with the packaging and negotiations,’ Baldwin said. ‘So I’m keeping people in their home without paying mortgage for six to eight months.’”
