The Housing Bubble

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Readers discussed the economic fallout from the housing bubble. “My wife and I decided to speed the bust along by not participating in the consumer aspect of Christmas this year. Beyond a couple bottles of wine for our folks, we’re instead making a donation to our two favorite non-profits. My parents are definitely going ‘lite,’ or so they say. But I think it’ll take a couple more Christmas years before we see the real pain–all those rich people ARMs are just starting to reset, so they probably still have access to credit. 2009 or 2010 for total bust.”

A reply. “I have been fed up with the consumerism related to Christmas for years. In our family we mainly just give gifts to kids anyways, so aside from having a nice dinner we don’t spend all that much. But I get the sense that lots of people are doing the same thing. The housing bubble led to a credit and debt bubble, and this in turn led to a retail bubble. One by one they pop, and as each one goes, it sows the seeds for the popping of the next one.”

One had this. “As a lifelong miser who years ago told others (except my brother’s children) that there would be no gifts from me and there should not be any vice versa, i enjoy this year’s xmas spectacle of shut down the wallets. The american sheeple have needed this bat in the face for a very long time, and they are still sitting on the curb wondering why their face hurts so much.”

And one had this quote. “I had three pieces of limestone on my desk, but I was terrified to find that they required to be dusted daily, when the furniture of my mind was all undusted still, and threw them out the window in disgust. - Henry David Thoreau.”

From Marketplace. “Tess Vigeland: This week many of us were busy stuffing a turkey or pounding mashed potatoes into a pulp, but not everyone was lucky enough to be feasting. I met Elaine, a 41-year-old mother of two from Altadena, California, at the Foothill Unity Center. She was there with her six-month-old. Elaine: ‘We really just don’t know what’s going to happen, but we’ve been in foreclosure 77 days now, so…’”

“Elaine worked as a loan processor. Her husband was a mortgage broker. She says they cleared somewhere north of $100,000 a year and had no trouble supporting themselves and their two small children — until the housing market crashed. And now?”

“They defaulted on their home loan in January and quickly burned through about $20,000 dollars in savings, so now most expenses are going on credit cards. Her husband is pounding the pavement for a new job while she stays home with the newborn. Elaine: ‘We haven’t had a real estate transaction since December, so we had to take all of our E-Trade accounts, close them out. You know, we had to juggle from paying electricity, gas. It’s a humbling experience to go from making all this money and everything looks great and then all of a sudden just looking out and wondering where and when we’ll have money to buy food.’”

The Birmjngham Business Journal. “The tightened credit market and current housing slump in the Birmingham-Hoover metro area have forced several local mortgage brokers to shutter their businesses. Adam Pullen said since some of the more exotic loan products, such as the 80/20 loans and 100 percent financing, have dried up in the markets, brokers have been left out in the cold.”

“‘What’s happened is brokers have had to rely on lenders. Most of them are banks that have clutched down on lending,’ Pullen said. ‘The industry is shutting down brokers.’”

“The markets will remain crippled without non-conventional loans to offer consumers, Pullen said. ‘Let’s face it – most people need 100 percent financing to buy a home,’ he said.”

The Las Vegas Sun. “Casino and gaming executives from domestic and international companies weighed in on the current economic crisis at this morning’s Global Gaming Conference in Las Vegas. Harrah’s CEO Gary Loveman told attendees the tightening credit market is a much more important challenge in casino growth than the short-term drop in consumer spending. The Harrah’s CEO said casino developers ’spend capital like drunken sailors,’ building lavish facilities while seeing little return on their investment during the downturn.”

The Enterprise Record. “Longtime Chico manufacturer Bruce Norlie knows about painful cutbacks. His company, Norfield Industries, manufactures the equipment to make prehung doors, a staple of the housing industry. Each layoff was hurtful to Norlie, member of a longtime Chico family that values its employees and appreciates their productivity. Lucky for him, his other enterprises, including equipment supplies like saw blades, are still positive.”

“‘When the housing industry was going wild, our business was very strong. We’ve had a substantial number of customers go out of business, predominantly in the U.S., some in Canada,’ he said.”

“Over the years that Norlie has been in the industry, he’s seen other downturns. ‘It’s never been this bad though,’ he noted.”

The Union Tribune. “Matt Sauer, a young, single mortgage broker, planned to get rich quick after graduating from college. By age 28, he owned properties in Pacific Beach, Las Vegas and Florida. Today, the houses are underwater, and Sauer’s dreams of quitting his job to become a Christian missionary are on hold because of his financial obligations.”

“‘Like the Bible says: ‘The borrower is the servant to the lender,’ Sauer said. ‘I am enslaved.’”

The Valley Chronicle. “Though the economic future is uncertain for San Jacinto no less than other local California governments, measures are available to save $380,000 this budget year, City Manager Barry McClellan told the City Council last week and greater savings can be achieved if it becomes necessary. McClellan said he began working on reducing spending - all travel on the city dime must be approved by him personally - in August and department heads have come up with additional ways to save money should the need arrive.”

“It probably will. ‘The days of living fat have come to an end,’ said Mayor Jim Ayres.”

The News Leader. “The odds of landing a part-time job at department store operator Bealls Outlet Stores Inc. this holiday season are slimmer than getting into Harvard: It’s one out of every 45. The chances aren’t any better at 7-Eleven. One California store received more than 100 applicants in a week and a half for jobs that pay $8.50 per hour — and the retailer doesn’t even usually hire holiday workers.”

“‘I thought it was going to be pretty easy, but I am not the only one looking for a job. There are thousands of us going for the same thing,’ said Kimberly Caparo of Chesterfield, Mich., who has applied for part-time jobs at Toys ‘R’ Us Inc., Home Depot Inc. and Lowe’s Cos. Inc. in recent weeks since she and her husband were laid off.”

“In one respect, however, Springfield job applicants appear to fit a nationwide trend — rather than the usual pool of teens or stay-at-home moms looking for extra holiday spending money, those vying for jobs have much deeper résumés. As far back as September, Bealls Outlet Stores — which operates most of its 450 stores in Florida — was being flooded with up to 40 to 50 applicants a week, said Conrad Szymanski, president of the Bradenton, Fla.-based chain. A year ago, they saw one or two applicants a week per store.”

“‘What we are seeing is a profound increase,’ particularly in Florida, California, and Arizona, where the real estate market has been hit hard, said Szymanski.”

“David Ortega, a training store manager at the 7-Eleven in Citrus Heights, Calif., that got more than 100 applications, noted that many applicants have management experience — including those who owned construction businesses. The store in a suburb of Sacramento, which has been hard hit by the housing slump, usually saw candidates who came straight out of high school, he said. One recent applicant — a former manager in cosmetics at Macy’s — even wrote him a thank-you note for discussing the $8.50 per hour job.”

“‘You expect to see that for a higher-level position, like an executive,’ he said.”

“John Morris, who expects to be laid off from his Springfield marketing job at the end of the year, has applied for jobs all over the country.Morris, 41, said the impression he gets is that, although there is a lot of competition, there are a lot of jobs available, as well. ‘The thing that is probably killing the market right now is everyone is waiting for Jan. 1 for the new financial year to start before making any decision.’”

“He’s still optimistic he’ll find another marketing position but recently has been considering taking a job shuttling railroad workers to and from job sites. ‘The stigma there is how do I tell my family I didn’t really need a college degree?’ Morris said.”

“‘Right now I’m still hoping to get a job that is more continuing up the professional ladder,’ he said. ‘But if December comes around and there’s nothing there, then I will swallow my pride and get a commercial driver’s license and lower my expectations — and honestly, probably be happier. There’s not a lot of stress with driving a bus. It gets the bills paid and right now that’s the more important thing.’”

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Readers discussed the holidays and the housing bubble. “Three months ago everyone in my extended family up north was talking about coming down to LA for some warmth and sunshine, disneyland, and broadway show. About two weeks ago their plans all fell apart and now we’ll only have local family at our dinner. Only one brother was willing to admit his cancellation was due to financial duress, but I know that my mother has lost big bucks in her stock accounts and my older brother has said his practice barely cashflows.”

“I predict light traffic at the airports and on the freeways over the holiday season and that warm tourist destinations worldwide will go unvisited by those north of the 40th parallel.”

Another said, “My wife and I were just discussing the downturn and how in the last 12 months months we’ve purchased: a new laptop, a used car, all kinds of baby stuff, furniture, took a cruise.”

“We’re very, very frugal, and this was an aberrant year, so we’re thinking that this is way worse than we imagined. We didn’t buy a house though!”

A reply. “Well, with no home purchase closing costs and that big commission due a mortgage broker you certainly had the dough in your pocket for all the other stuff. And just think about all your friends with mortgage notes who are gonna get their yearly notices for payment of higher property tax escrows for the coming year due to the collapse of commercial assessments.”

“Ho! Ho! Ho! Merry XMAS!”

One had this, “I had two get towed off Interstate 26 going into Columbia because of a car issue. (car is 8 years old). The tow truck driver strikes up a conversation that he was retired for two years but went back to work part time. He indicated he had lost $150,000 in the stock market and was very disappointed. I wanted to cheer him up so I said, ‘Well at least you did not get into real estate.’ He replied that he had bought a condo in Daytona a few years ago.”

“It will be a difficult holiday season for conversation.”

To which one posted, “I’ve been saying ‘Well, as long as you didn’t buy or HELOC real estate in the past five years, you’ll probably be fine.’”

“Trouble is, EVERY person I know (besides myself) has bought or HELOCed in the past five years. Seriously. Maybe I need to meet new people.”

The North County Times. “Barratt American, a large, private builder based in Carlsbad, might soon be forced to file for Chapter 11 bankruptcy protection because of a loss in funding from its lender, said Michael Pattinson, president of the company. So far, 11 Barratt American projects around the region have fallen into foreclosure.”

“Pattinson said much of the fault lies with banks unwilling to lend money despite capital infusions from the federal government. ‘Until the banks do their jobs, the economy is going to deteriorate and everybody is going to have a miserable Christmas,’ he said.”

The Record Searchlight. “Calls to the National Foundation for Credit Counseling’s Locator Line have been setting records with each passing week. What’s more, consumers taking the NFCC’s Mortgage Realty CheckSM, are up 33 percent for the year. ‘Unfortunately, we have people who are beginning their 2008 shopping season who are still paying for 2007,’ said NFCC spokeswoman Gail Cunningham. ‘The minute you make that purchase, the interest starts accruing.’”

The News Herald. “Gov. Charlie Crist has kicked off the holiday season with a proposed gift to distressed homeowners: placing a moratorium on foreclosures through the first of the year. The governor called it an act of ‘compassion.’ But it could just as easily be seen as a vacation from economic reality.”

“If a lender believes an owner can make payments on the property after the first of the year then he is more likely to hold off on foreclosure anyway.”

“That mostly leaves the worst cases, the owners who simply can’t make payments in six weeks or six months. Freezing their foreclosures gives them a break they don’t deserve and prevents the lender from being able to recoup his investment. Also, it threatens to create a logjam of foreclosed homes that will be released all at once when the freeze is lifted, flooding the market at a time when it can’t handle more excess housing inventory.”

The Miami New Times. “Two months ago, Cassy (not her real name) was homeless, out in the rain with her four kids. Now she has a three-bedroom, two-bathroom, sky-blue house on a tree-lined street in Miami’s Buena Vista neighborhood. She takes warm showers, cooks vegan dinners, and watches the news on a small, fuzzy TV screen. The only catch: The house isn’t hers. Cassy is a squatter and, at any moment, could be arrested for trespassing, even burglary.”

“Not everybody in Miami-Dade County is crying over this year’s 40,342 foreclosed properties. Cassy is part of a small, well-executed movement by activists at Take Back the Land to relocate homeless families into empty houses and abandoned government-owned buildings.”

“‘We could virtually empty the streets and shelters simply by filling the vacant houses,’ director Max Rameau says. ‘Homes should go to people, not kept empty so banks can cash in.’”

The East Valley Tribune. “For Darrell Logan, 2008 has been the most difficult year of his life. An unyielding series of financial setbacks have culminated in the Queen Creek homeowner, along with his wife, Donnique, and their four children, falling behind on their mortgage and hoping that their lender, Washington Mutual, will give them a break and not rush them into foreclosure.”

“Things were going well for the Logans when they moved from Compton, Calif., in July 2007 and purchased their Queen Creek home in October 2007. They also owned a home in Compton and chose to rent it after they left. ‘(The tenants) were doing OK with the payments in the second half of 2007, but, starting in January, they just weren’t making payments consistently and then they stopped paying,’ Darrell Logan said. ‘So we basically had to use our savings to make up for the payment. Even when they were making payments, we still had to pay $500 extra to make up what they weren’t paying in rent, so that put us in a bind.’”

“Donnique Logan then lost her job with the school district while pregnant with their fourth child. ‘At the same time, we’re paying lawyers to evict these people out of our house … and they just got out of the house on Nov. 12, but the house then foreclosed on Nov. 12. So it just hasn’t been a good year at all,’ Darrell Logan said.”

“All across the East Valley, distressed homeowners are on the verge of losing their homes, and there are already roughly 40,000 foreclosed homes in Maricopa County.”

The Gazette. “Colorado Springs homeowner and artist T. Benton Brooks isn’t in foreclosure — yet. He’s missed two mortgage payments, but is determined to avoid losing the west-side rancher he’s owned for 18 years. At a time when record numbers of people have fallen into foreclosure in the Colorado Springs area, Brooks believes he’s exactly the type of troubled homeowner that lawmakers, housing advocacy groups and consumer counseling agencies want to help. But after nearly six weeks of phone calls and faxes, Brooks has more questions than answers.”

“Brooks, a California native who moved to the Springs in 1978, admits he’s made poor choices. As a car salesman years ago, he took out cash advances on credit cards during lean months — effectively borrowing money at hefty interest rates. Multiple refinancings to fund home improvements early on, and to pay off credit cards in later years, left him owing $260,000 on a home he estimates is worth $180,000. He filed for bankruptcy in 2007.”

“Afterward, he was allowed to stay in his house as long as he made his combined $2,115 a month in first and second mortgage payments. In past years as a cars salesman, he never sold fewer than 12 cars a month; now, he’s struggling to sell seven or eight. He missed $1,425 payments in August and September on his first mortgage, and a $690 payment on his second mortgage in November.”

“‘I know I’m a culprit,’ said Brooks, who added that his financial troubles are of his own making. ‘But I’m also a victim.’”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

The Press Telegram reports from California. “Delfa Robles, 68, a Long Beach resident and a member of the Association of Community Organizations for Reform Now, is facing foreclosure of the home where she and her family have lived for 13 years. ‘She tried to start a restaurant business a couple of years back, and due to financial difficulties, she lost the business and got behind on her house payments,’ she said through ACORN organizer David Mazariegos. ‘The only choice she has is to sell the house or file for bankruptcy, which she doesn’t want to do.’”

“The Robleses were given a variable mortgage rate from their lender, Wachovia, which has given the Robles family time to catch up on their payments.”

“‘They gave her a year to pay, but she has to pay the back mortgage and the monthly payments as they come, and they have raised her mortgage by $800,’ Mazariegos said. ‘She has a whole year to figure it out, and we will put a little bit of pressure on Wachovia to help her out. We made them ‘Turkey of the Year,’ for not working with the people.’”

The San Gabriel Valley Tribune. “California home sales climbed 117 percent in October as buyers took advantage of properties selling for nearly 40 percent less than the year before, according to an industry report released Tuesday. Some of the steeper declines include Altadena (-39.6 percent) and Baldwin Park (-37.7 percent). Bucking the trend, Alhambra saw its home values increase 13.4 percent to $482,000 in October, compared to last year.”

‘Thomas Berge Sr., whose Berge Co. Realtors and Appraisers has been in Alhambra since 1954, didn’t put too much weight in the Alhambra numbers. In reality, ‘the market in Alhambra has deteriorated dramatically,’ he said.”

The Voice of San Diego. “September home prices in San Diego County fell by 26.3 percent from the same month a year earlier, according to the most recent Standard & Poor’s/Case-Shiller index released Tuesday. That was a 34.4 percent drop from the market’s peak in November 2005. Prices are still about 64 percent higher than they were at the start of the decade. The index reports housing data with a two-month lag.”

“Real estate agent Camille Bruno in Bonita sells bank-owned homes in the South Bay, and named two sales where homes that previously sold for $1.3 million and $1.5 million sold in recent months in the $700,000 range. ‘They’re like 50 percent off, basically,’ she said. ‘Those same houses haven’t come down in North County as far as they have here yet.’”

“But Ed Mracek, real estate agent with Willis Allen in La Jolla, said the long-held supposition that the coastal neighborhood would stay untouched by housing trouble is going away and the La Jolla ZIP code is starting to see large price reductions, he said. He mentioned an oceanfront house that the sellers had listed for more than $25 million before recently lowering their asking price to $18.8 million. They paid $17 million for it, he said.”

“‘Sellers need to be realistic — the world kind of changed after the stock market crash,’ he said.”

The Union Tribune. “Some distressed sellers are offering great deals. Peter Toner, a broker with Prudential, said a 1,500-square-foot house in North County purchased for $498,000 four years ago is now listed at $289,000 as a short sale. Toner said the weakening economy is beginning to take a toll on neighborhoods that until now have been relatively unscathed by the foreclosure crisis, particularly along the coast.”

“‘I think it is spreading a bit,’ he said. “It just has taken longer. The people on the coast weren’t quite so involved in the dodgy loans.’”

The Recordnet. “Housing production in California last month was the lowest on record, down 45 percent from October 2007, according to the California Building Industry Association. The group wants some help for the industry - and thus, the economy - via a government stimulus. Joe Anfuso, CEO of Stockton-based Florsheim Homes, said he anticipates that the federal government will approve some type of tax credit for home buyers as a way to stimulate the economy.”

“‘The one thing I like is knowing that housing is at the forefront of the political landscaping,’ Anfuso said. ‘That’s the key.’”

“Tuesday’s announcement of another $800 billion bailout that’s designed to unfreeze the nation’s market for consumer debt has drawn mixed reviews from Southland business leaders, economists and political figures. Mike Spence is president of the California Republican Assembly, the state’s oldest and largest Republican volunteer organization.”

“‘The government is deciding who wins and who loses,’ Spence said. ‘Lobbyists are spending millions to make sure their industry gets a piece of the pie - that’s not how you recover economically.’”

“Larry Harris, a professor of finance and business economics at USC’s Marshall School of Business, agreed that the rescue plans thus far have been all over the map. ‘They’ve done so many different things … how can you not agree with some part of it?’ he asked, jokingly.”

“Still, Harris acknowledged that some kind of action has been sorely needed. ‘All attempts by the government to address the market problem are welcome as long as they don’t make the problem worse,’ he said. ‘We’re operating in an uncertain environment and it’s inevitable that mistakes were made and mistakes would be made if they didn’t act. We just have to trust in people who are wiser than us to decide on our behalf.’”

The Burbank Leader. “State lawmakers continued deliberations Tuesday on competing plans that could freeze foreclosure proceedings for up to 120 days. Richard Pittman, housing services coordinator at a nonprofit housing counseling agency, said the proposals could have negative consequences by simply extending the foreclosure process for homeowners who failed to do enough to stay in their homes.”

“‘In some cases it will buy them time for folks who may be out of work to get them started, and that’s great,’ he said. ‘But people are not necessarily looking at the big picture, and neither is the lender.’”

“According to a report, 1,337 homes in Burbank and 1,614 in Glendale are in various states of foreclosure. More than 309,000 homes in California are close to or are already in the process of being foreclosed upon.”

“‘We need to have some flexibility and relief to people who are facing imminent foreclosure,’ said Assemblyman Paul Krekorian, a Democrat whose district includes Burbank and Glendale. ‘What I’m going to be concerned about is encouraging lenders who have programs in place without discouraging additional credit from coming onto the market.’”

The Hi-Desert Star. “Two more banks with local branches, Pomona First Federal and Downey Savings, became the latest names on the list of failed institutions late Friday. PFF was the oldest bank in Southern California, founded in Pomona in 1892. After weathering over a century of financial disasters and staying out of the recent subprime mortgage debacle, analysts claim it was the last batch of unpaid millions in construction loans that drove shares down from a high of $40 two years ago to 36 cents last Friday. PFF had 38 branch offices in the counties of San Bernardino, Riverside, Orange and Los Angeles.”

“Bill Powers, Indian Wells-based president of Pacific Western, feels the pain for his struggling neighborhood institutions, but in a tough-love kind of way. ‘None of this is unexpected in our greed economy,’ Powers observed. ‘Greed takes a toll on everyone’s common sense.’”

“Powers attributed his bank’s financial soundness to ‘adhering to the basics of banking.’ ‘We didn’t do Freddie Mac or Fannie Mae,’ he said. ‘You don’t loan money to people who can’t pay it back.’”

“Still, Powers thinks ‘no one will go unscathed. This is a centipede economy,’ he said. ‘How many shoes have dropped so far? I don’t even know how many shoes the centipede has.’”

The Desert Sun. “For Debbie Lewis of Terra Lago, the $48.5 million Neighborhood Stabilization Program the Riverside County supervisors approved Tuesday can’t arrive soon enough. Lewis bought her $500,000-plus home in the country club setting of Indio when housing prices were at their high.”

“Now, as homes tumble into foreclosure and her home equity disappears before her very eyes, Lewis is part of a growing army of Coachella Valley residents seeking a return to stable, well-stocked neighborhoods.”

“One day last week, alone, notices of default were listed on properties in the Coachella Valley with mortgage defaults totaling $18.1 million. The next day, the troubled paper count on yet another round of properties heading toward the auction block stood at $3.1 million.”

“‘We lobbied heavily for the funding,’ said Fred Bell, executive director of the Desert Chapter of the Building Industry Association. ‘The primary goal is to make sure the maximum amount of money that can be allocated reaches the end-user.’”

The Daily Herald. “Many working people can’t get the credit they need, said Richard Pittman, a counselor with (a) nonprofit which offers personal credit counseling in Los Angeles. ‘We’re crossing our fingers that this will work,’ Pittman said. ‘If we don’t get the market moving again, the biggest industry is going to be soup lines.’”

“The small businesses that rely on loans to stay open need to see more liquidity in the credit markets, said Scott Hauge, president of Small Business California. ‘There have been situations where a guy went to have his credit line increased but instead they cut it in half,’ he said. ‘I’ve also heard about people who don’t even know their lines or credit cards have been cut until they try to use it. It’s a mess.’”

The Enterprise Record. “Builders, planners and real estate agents have seen a significant decline in the local housing market, with new construction taking the biggest hit. ‘The new home housing market is about as slow as we’ve seen in a long time,’ said Chris Giampaoli of Epick Homes.”

“Jason Bougie of the Butte Community Builders Association said the builders who are struggling are the ones that are sitting on unsold built homes. Locally that hasn’t happened much, but it was a big factor in the Sacramento area where corporate builders built hundreds of homes, he said.”

“Debbie Brodie, president of the Chico Association of Realtors, said plenty of loans are available for normal-priced homes, but she’s seen people have problems getting loans if they’re seeking a higher amount, have poor credit, or are trying to finance commercial loans or ‘anything outside the box.’ She said first-time buyers are able to get loans as long as they have good credit scores.”

“Bougie agreed. ‘All the while, it is the best time to buy a house. If I had money I’d buy a few of them.’”

Inside Bay Area. “Washington Mutual’s departure from Pleasanton could do more than eliminate 1,200 jobs and erode the local economy and office market: The exit could leave the failed thrift’s landlord in the lurch without rental payments. ‘We have the right to exit from those leases,’ said Gary Kishner, a Washington Mutual spokesman, said of the Pleasanton rental agreements. “Chase will not be making those lease payments.’”

“LBA Realty Fund, WaMu’s landlord at the Pleasanton office complex, would have to get in line with WaMu’s other creditors if LBA wishes to enter a claim to recoup at least some of its lost revenues from the unpaid lease.”

“The LBA group paid an estimated $66.5 million in June for the 217,000-square-foot complex. LBA used a previously established $150 million line of credit to finance the acquisition, according to Alameda County property records. That loan, obtained from Bank of America, would need to be paid to keep the Pleasanton buildings out of default, the county records show. The mortgage also is being used to finance other buildings in California, including a property in Fremont.”

“‘”LBA is a pretty deep-pocketed owner that is successful and has hit some home runs,’ said William Nork, a senior vice president who manages the Emeryville office of Cornish & Carey Commercial. ‘But who would have thought this would have happened? When LBA bought the building, WaMu was a real quality tenant.’”

About this time of the year in 2005, we discussed the possibility of a housing bubble related holiday bust. A bit premature, but what about 2008? And what of the various local housing markets in light of the unprecedented economic events that are unfolding? Anecdotal insights from your holiday gatherings are appreciated. I’ll forward these threads through the weekend.

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

A report from the Associated Press. “Existing home sales in the Northeast dropped more than 9 percent in October from last year, while the median sales price in the region sank 5 percent to $277,000, the National Association of Realtors said Monday. Michael Lynch, regional economist at Global Insight, said the largest economy in New England, Massachusetts, is starting to show cracks after seeming ‘resilient’ for the past several months. Job losses are mounting, which could be a harbinger for the rest of the region. ‘It’s the place to watch right now,’ Lynch said.”

“Already, the New York City suburban housing market is teetering, said real estate agent Sandra Lippman of Prudential Centennial Realty in Westchester County, north of the Big Apple. Lippman said sales are ‘creeping’ while inventory has increased over last year. Sales in Suffolk, Nassau and Westchester counties, which surround New York City, dropped more than 11 percent, while prices fell almost 10 percent to $400,000, according to the AP-Re/Max report.”

“‘I had a few buyers who work for the investment banks or brokerage houses. Some of them have just disappeared,’ Lippman said.”

“Downtown Providence is still reeling from too many condos and rampant lending to riskier borrowers during the boom. About one in four sales are bank-owned properties or short sales, in which the lender agrees to accept a sales price below the balance owed on the mortgage, said real estate agent Julie Longtin, in East Greenwich, R.I.”

“The median price of a Providence home tumbled more than 12 percent in October, from a year ago, the largest decline of the Northeast metro areas. The supply of unsold homes decreased by 6 percent from October of last year. Still, Longtin said, ‘We’re on the cusp of stabilization if nothing else goes dramatically wrong.’”

“Steve Testa put his split-level ranch house in Cranston, a Providence suburb, on the market in January for $339,000. With very few nibbles, he slashed the price to $302,500 in the summer. Finally, to nab one buyer who kept coming back, he reduced the price even more. The final selling price for the three-bedroom house: $297,500.”

“‘If we didn’t negotiate with this potential buyer,’ he said, ‘there was a very distinct possibility we would be in the house through the holidays and into the springtime.’”

The Press & Sun Bulletin from New York. “In Broome County, there were 173 foreclosures between July and September, up from just 18 two years ago. More than 50,000 homeowners in New York face foreclosure this year, particularly in the Mid-Hudson Valley and western New York.”

“Property taxes will account for 39 percent of the City of Binghamton’s expected revenue next year. And while the Greater Binghamton area has been bucking national trends with its climbing housing values, Mayor Matthew T. Ryan is concerned. ‘We’ve already got our fiscal crisis,’ Ryan said, ‘and obviously we’re not looking forward to something that adds to it.’”

From New York Magazine. “Is there anyone in town—owner, renter, or especially buyer or seller—who isn’t watching the New York real-estate market right now? New York collected seven of the best real-estate minds we know for an afternoon roundtable.”

“Do they think we’re at bottom? Do you? “Noah Rosenblatt, Halstead Property vice-president: ‘I don’t expect to do a deal in the next three or four months. It’s not that I don’t want to. But my clients know what’s going on. If I said, ‘Buy now, you’re going to miss it,’ I’m going to insult their intelligence.’”

“Dottie Herman, CEO of Prudential Douglas Elliman: ‘I have to disagree. If you’re going to live there and raise a family, and you try to wait for that perfect time, you might miss something you like. [But] if you expect to become rich in a day or two, forget it.’”

“New York Comptroller Thomas DiNapoli said Monday that the financial crisis gripping Wall Street and the world economy could cost the state and New York City 225,000 private-sector jobs over the next two years. The securities industry in New York has already lost more than 16,000 jobs and could shed a total of 38,000 jobs by next October. In the first half of this year, New York Stock Exchange member firms alone lost nearly $21 billion, DiNapoli said.”

“‘These numbers are translating into job losses,’ he said. Before the current crisis, the securities industry accounted for 5 percent of New York City’s employment but nearly 25 percent of the wages.”

The Boston Herald from Massachusetts. “Eviction filings in state housing court hit a new high in the last fiscal year as the faltering economy and a worsening foreclosure crisis pushed more than 20,000 Bay Staters to the brink of homelessness. In particular, housing advocates are worried about the growing number of tenants in multi-family units who pay their monthly rent, but still receive eviction notices from banks who have foreclosed on their landlord’s property.”

“In March, Barclay’s Capital Real Estate Inc. foreclosed on the two-family home where Rob Chiampa had been renting an apartment for $700 monthly since 2003, according to Suffolk County land records and an interview. Chiampa and his neighbors were in Boston Housing Court last week because of eviction notices that had been mailed to their homes under the name ‘John Doe.’ He didn’t know why the landlord fell behind.”

“‘Lord knows,’ Chiampa said. ‘She certainly wasn’t paying the mortgage.’”

My Central New Jersey. “Foreclosure filings on New Jersey properties hit 8,473 in October 2008. That’s a 75 percent increase over filings for October 2007 (4,844). ‘”I’ve been doing this job for almost 30 years and it’s as bad as it ever was,’ said Middlesex County Sheriff Joe Spicuzzo. ‘We were averaging, several years ago, maybe two or three sheriff sales a month. Now, we’re scheduling about 50 a month on average.’”

“In all, home foreclosures in New Jersey are now on pace to hit 50,000 this year. The situation is exacerbated by rising joblessness with employment in the state falling in eight of the 10 months of 2008. The Associated Press reported that unemployment in New Jersey climbed to its highest level in five years in October.”

“‘When I first became the sheriff, I would grant anybody all the time they needed to settle with the bank,’ said Spicuzzo who said a judge then called him in and explained that, by law, sheriffs are obligated to sell foreclosed homes on scheduled dates or risk becoming personally responsible for the debt.”

“‘I’ll schedule sheriff’s sales for this next coming Tuesday, and I can’t stand selling a person’s house two days before Thanksgiving, and two days before Christmas,’ said Spicuzzo. ‘But you know, that’s my job, and I feel really bad about doing it.”’

The Star Ledger from New Jersey. “Turns out there may be an upside to the prolonged downturn in home prices. With home prices down 25 percent in New Jersey from peak levels in 2006, some homeowners may be entitled to a reduction in property taxes come 2009.”

“‘We had 4,200 appeals, last year, which was up from the prior year and I’m bracing for even more this year,’ said Lawrence Vituscka, the tax administrator at the Ocean County Board of Taxation. ‘Every day people are seeing home sale prices falling in their areas and foreclosures, so they feel over assessed. The economy is bad. We’re seeing more layoffs and people are starting to look at every dollar very closely.’”

“One big stumbling block in this sluggish housing market, however, is the shortage of recent sales data. ‘It is very difficult to prove the value of real estate in New Jersey right now, because in this market, you may not be able to find a lot of comparable home sales,’ he said.”

“Another strike against homeowners: estate sales, foreclosures, short sale are not considered ‘arm’s length transactions,’ in New Jersey and therefore you are not allowed to present those types of transactions as comparable sales data during your appeal. ‘Make sure you present only valid sales — properties on the open market that have been sold in a competitive fashion and not under duress,’ Vitsucka said. ‘Foreclosures are considered under duress.’”

“Still, Timothy Duggan, a tax attorney in Lawrenceville, says in these unprecedented times, with home foreclosures and home price declines in record territory, it certainly wouldn’t hurt to include foreclosures along with your regular comparable sales data to really drive your point home, he said. ‘We are anticipating a lot of appeals this coming year,’ he said. ‘I don’t know how many will be successful, but I think in 2009, more people will be winning.’”

Public Opinion News from Pennsylvania. “The national housing downturn has touched Franklin County. Home foreclosures are up. The number of properties listed for sheriff’s sale has doubled. The median sale price of a house declined 3 percent. Sales are flagging.”

“‘I think people forgot a home was a home and turned it into a money vehicle,’ said Tina Long, Realtor/owner of Exit Preferred Realty, Chambersburg. ‘It’s still a home. There’s money out there to buy a home. I don’t remember seeing the public as afraid as they are now.’”

“‘It’s not a good time to buy if you’re going to live in a house for one year,’ Long said. ‘If you’re going to live in it for five years, and make a house a home, it’s a great time to buy.’”

“With national media attention focused on foreclosures, Exit Preferred Realty has scheduled a local foreclosure bus tour for Jan. 11. ‘The idea is to get investors looking at houses so the houses aren’t sitting in inventory,’ Long said. ‘Banks are working with people. It’s an excellent time to buy. It’s just a way of getting some interest.’”

The Cape Gazette from Delaware. “The Sussex County housing market took a sharp hit this fall as a perfect storm of problems developed both here and nationwide: an oversupply of homes, a credit crisis and a decrease in consumer confidence. Still, a local builder says the gloomy outlook will pass - and possibly sooner rather than later.”

“Schell Bros. President Chris Schell said sales are ugly right now, but that people should realize when it gets this bad, it’s good. Schell said his company and other national builders in Delaware reached their peak home sales in 2004 and 2005. A classic speculative bubble formed, he said, resulting in a huge surplus of new and existing homes despite a high demand in the area.”

“‘Back then, a lot of people got involved in real estate and everyone was making money,’ said Schell. But the problems implanted in the speculative boom came to an end, led by a mortgage crisis, and ultimately resulted in a huge drop in consumer confidence, he said.”

The Herald Mail from Maryland. “Don’t break out the champagne yet, but for those with a house to sell, there is good news: Washington County’s real estate market increased last month for the first time in nearly three years. The number of people buying homes rose slightly, boosting the market 2.4 percent.”

“That alone is reason to cheer, said Joan McLernon, president-elect of the Pen-Mar Regional Association of Realtors. ‘Any news is good news, and I will take it for all it’s worth,’ McLernon said. ‘And if the buying public has woken up and seen what wonderful buying opportunities there are out there, that’s wonderful.’”

“In Washington County, the real estate market peaked in 2005 with a mind-numbing 45 percent gain, according to MRIS data. In that one year, buyers grabbed up a total of 2,254 houses here for a total of $578 million, a record high. During the heady days of 2005, there was an average of 607 homes for sale in Washington County. On average, sales were taking 50 days.”

“This past month, by comparison, there were 1,292 homes on the market. And, on average, sales were taking 184 days. Such figures are a lesson in the effects of supply and demand, McLernon said. When the supply is high and demand low, prices fall. That’s why Realtors have been trying to reduce the supply by urging clients ‘who don’t have to sell’ to pull their houses off the market, McLernon said.”

“‘If you don’t need to sell or, more importantly, if your house is not priced appropriately, you are hurting more than helping,’ McLernon said. ‘Some sellers are in denial of what the market is’ and won’t accept lower prices, she said.”

“MRIS figures show the average price of homes sold here last month was 13 percent lower than the average asking price. In 2005, the average selling price was 2.8 percent lower than the average asking price. Properties that don’t have 2008 prices are ‘just going to sit there, but the inventory is going to stay up,’ McLernon said. ‘So it’s hurting all the other people who need to sell, who maybe their job has moved or they really need to reduce their mortgage and downsize.’”

“McLernon listed a log home with acreage a few days ago. Almost immediately, she said she began receiving ‘a huge number of inquiries from people who are considering second homes.’ The response was so unexpected, she said she began asking callers why they were interested.”

“‘A lot of them are saying, ‘The money in my 401(k) is going down. … They’re saying, ‘If I buy a second home soon, not only do I get the enjoyment of a second home, but the property will appreciate and more likely than not, will end up being a better gain for me in the long run,’ McLernon said.”

“In the same way, she said, October’s uptick in sales indicates ‘the buying public is finally starting to listen to us, that there are tremendous buying opportunities out there, and interest rates are at historic lows.’”

“Sales are important now, regardless of the product, McLernon said. ‘We, as a public, we need to invest in our country. We need to buy cars. Everyone can’t be paralyzed,’ she said. ‘People are afraid. But to spur our economy to keep us strong, as a buying public, we need to buy when it is appropriate.’”

From WVEC. “In the hard-hit real estate sector, Virginia in October saw a tenfold increase in the number of home foreclosures since 2004. People who held onto their homes have seen their equity wither the past two years. One telling measure from the Washington, D.C., market is that the percentage of people who forfeited deposits they had put down on contract to buy a house increased from 4 percent in 2005 to spike at 66 percent in August, largely a measure of buyers who could not secure financing, according to a George Mason University analysis.”

“In dismaying detail, legislative budget writers got their fullest look Tuesday at a darkening fiscal crisis that will soon force them to cut government priorities once held harmless. ‘You are at the juncture where all the low-hanging fruit is gone,’ members of the House Appropriations Committee learned from the chief of the committee staff, Robert Vaughn.”

“The credit crisis has brought an end to discretionary shopping and consumers are avoiding frills, explaining why upscale retailers are suffering and discount chains such as Wal-Mart that cater to basic needs remain profitable, said legislative fiscal analyst Ann Oman. ‘Americans don’t stop spending when they run out of money. They stop spending when they run out of credit. That’s what appears to be happening,’ she said.”

The Washington Independent. “With graffiti-scarred walls, an overgrown lawn strewn with crushed cardboard boxes and empty cans and a rusted swing set next door, it’s fair to say that the foreclosed townhouse, part of a complex called Irongate in suburban Prince William County, Va., doesn’t have a lot going for it. It’s hard to tell if things look any better on the inside, since someone broke the lockbox and stole the key.”

“The unit sold in 2005 for $285,000, but these days it’s going for $50,000 — and it’s still been sitting on the market for more than six months, with no takers in sight. Places hit hard by the foreclosure crisis, like Prince William County, are dealing with hundreds, and sometimes thousands, of abandoned and deteriorating properties like the Irongate townhouse.”

“Despite a commute that can take an hour or more, Prince William boomed during the last decade, as buyers flocked to brand-new, spacious homes on wooded lots, or to affordable middle-class rowhouses. It soon became one of the country’s fastest growing areas, emblematic of the expansion of the exurbs around the country. Housing values skyrocketed.”

“The housing bust was just as dramatic. Foreclosures rose from 246 in 2006 to 2,800 in 2007, and the county expects more than 7,000 this year, said finance director Christopher Martino. It’s the highest number of any jurisdiction in Virginia.”

“Some 5.5 percent of the county’s housing was in some stage of foreclosure last spring, according to the George Mason University Center for Regional Analysis. Home values have also taken a tumble, down 30 percent this year for single family homes and 40 percent for townhouses. With the economy weakening, and many loan resets expected next year on interest-only mortgages, more foreclosures could be coming down the pike, Martino said.”

“Sales of foreclosed houses are soaring in the meantime — but prices aren’t going up. Average sale prices dropped by $90,000 between January and October, said local realtor Keith Elliott Jr.”

“In a subdivison of more upscale houses, in nearby Gainesville, a spacious three-bedroom home looks nearly untouched by damage except for some stained carpeting. But the orange stickers noting that it’s been winterized are dated from December 2007, meaning the home has been vacant for nearly a year, despite its sales price of $270,900, well below its assessed value of $327,100.”

“Elliott said he’s not surprised. ‘There’s just a huge volume of houses like this all throughout Prince William County,’ he said.”

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The San Fernando Valley Business Journal reports from California. “Gangi Development of Burbank has decided to go the auction route with their new Glendora townhome development. On Dec. 14, the companies hope to sell all 20 of the units in the Vermont Avenue Lofts complex in one fell swoop. Given that the craftsman-style homes are expected to fetch about prices about 50 percent lower than what the developer anticipated when the project was conceived a few years ago, the cost savings of the auction format are very appealing, said Frank Gangi.”

“‘Instead of selling over an eight, nine or 10-month period, we’re basically selling the units in one day,’ said Gangi.”

From KTLA. “On Saturday, thousands turned out for two events aimed at providing some relief; a food giveaway and free mortgage help. In Montebello, nearly 5,000 turned out for a food turkeys and other Thanksgiving Day items, a number that stunned organizers. In Van Nuys, about 2,000 homeowners attended a workshop promoted as ‘Home Preservation Day.’”

“To the dismay of many, property owners discovered that they have to be behind at least two months with their mortgage and facing foreclosure before they can restructure their home loan. But some of those not yet behind in their payments complained that bankers need to do more to prevent looming loan defaults and home foreclosures.”

“IndyMac spokesman Evan Wagner was sympathetic. But he said his Pasadena-based thrift is limited in its flexibility to rework loans. ‘We’re stuck enforcing existing contractual agreements’ with outside institutions that own about 93% of IndyMac’s loans, Wagner said.”

“‘The program is evolving. We’re helping people today who we couldn’t help a month ago,’ he said. But loan modifications are ‘not about a better deal. . . . There’s no principal reduction.’”

The LA Times. “Nationwide, 3.07% of prime mortgages were in foreclosure or at least 60 days late in the second quarter of this year, the latest period for which the Mortgage Bankers Assn. has figures, easily topping the previous record of 1.97% set in 1985. In California, with a jobless rate topping 8% and home prices down more than 40% from their peak and falling, the situation is significantly worse, with 4.15% of prime loans seriously delinquent. That far exceeded peaks of about 2.6% reached in the recessions of the 1980s and 1990s.”

“The bleeding housing market had drained the equity from Judy Jones’ home in Murrieta, but her life still seemed secure. She had a government job, after all, and a 30-year fixed-rate mortgage at 5.875%, unlike the shaky, variable-rate loans of many of her Inland Empire neighbors. Then her employer, the city of Corona, decided to deal with the economic slump by eliminating 112 positions, including Jones’ job.”

“She moved from El Cajon to Murrieta in 2005 with her adult daughter, who provided $20,000 of the $80,000 down payment on the new three-bedroom home. With property values still rising, they took out a second mortgage for home improvements in 2006, a 15-year loan for $40,000 with a fixed interest rate of 9.25%, bringing their total mortgage debt to about $355,000.”

“Jones figures she owes about $100,000 more on the mortgages than her home’s current value. ‘Every week at church, somebody else is out of work,’ Jones said. ‘I’ve been a homeowner a long time — the last 10 years as a single mother — and I never missed a payment. Now look at me. And it could be you — any middle-class person who goes to work today could be walking out the door of a foreclosed house in a couple of months.’”

The Press Enterprise. “Modifications used by lenders range from adding the past due amounts to the loan balance — which results in a higher monthly house payment — to temporarily halting rate increases on adjustable mortgages, lowering interest rates and lengthening the life of the loan. Reducing the mortgage balance is the rarest solution, experts say, because it is often unpopular with the investors who own the loans.”

“Paul Lloyd said he works seven days a week — weekdays as a water delivery man and weekends as a handyman — and his wife works as a nurse so they can continue to make a $3,800-a-month, interest-only payment on their house in Fontana. They worry that they may lose the house to foreclosure in eight years when they will have to start making an even larger monthly mortgage payment to cover principal and interest.”

“The couple is counting on their good credit and work record to enable them to qualify for the federal government’s new Hope for Homeowners refinancing program which could lower their loan balance. Lloyd said he believes lenders are reluctant to make any concession. ‘You have to keep pushing and hope you are one of the lucky few to qualify,’ he said.”

The Desert Sun. “More than 50 new and used home buyers poured into the Riverside County Education Center in Indio to discuss a litany of problems over adjustable rate mortgages and depreciating home values in subdivisions across the Coachella Valley. ‘It’s a ticking time bomb,’ said Chris Young, an organizer for Alliance for Homebuyer Justice. ‘We want to make builders accountable for their role in the housing crisis.’”

“The Alliance has said its examination of mortgage data in sectors of the country that had explosive home-building growth shows a pattern whereby some large home builders in the Coachella Valley were issuing adjustable rate mortgages. More than a third made by builders in 2006 involved five-year ARMs that will reset in 2011, they said.”

“‘There is no question there are abuses in the mortgage side and underwriting,’ said Fred Bell, executive director of the Desert Chapter of the Building Industry Association. ‘But to go after the builders who are a minute portion of that is disingenuous. The reality of it was the industry at large has had its challenges.’”

The Orange County Register. “For a few delirious years, subprime mortgages brought fat profits to Orange County lenders – plus Mercedes, Beemers and the occasional Lamborghini for their salespeople. Subprime loans left a more lasting impact elsewhere, in places like Fresno and Moreno Valley, Florida and Michigan – areas now suffering from massive foreclosures.”

“In central Santa Ana – today the county’s foreclosure hotspot – the subprime share topped 40 percent. A series of maps shows subprime lending spreading year by year from the South to California to the Midwest and Northeast.”

“John Mahoney, director of the Real Estate & Land Use Institute at Cal State Fresno, has studied the new home market in Fresno for years. Between 2004 and 2006, said Mahoney, the number of new housing units produced each year doubled. The median price also doubled. Easy money was ‘the primary component that fueled the overbuilding, the overpricing,’ Mahoney said. It was ‘a marketing cycle that fed on itself.’”

The Fresno Bee. “In Merced County, existing-home prices fell 43.2% to $130,300, and the area now is the most affordable market in the state. The median price of an existing home in Fresno County tumbled almost 32% to $168,000 last month from a year ago and on new houses fell 12.7% to $248,000.”

“Bank-owned houses are increasingly the product of choice, totaling 56% of the 799 resales in October, said MDA DataQuick. Only a month earlier, foreclosures represented 54.4% of all the sales. They comprised 15.4% of the market in October 2007.”

“Production and sales are down so far that the president of the California Building Industry Association is predicting a shortfall of new housing. ‘California needs to be building around 230,000 units per year to keep up with population growth, but we won’t even build a third of that number this year,’ said Robert Rivinius.”

“The association is trying to juice sales by pushing Congress to increase the temporary homebuyer tax credit of $7,500 enacted earlier this year, and to make it a credit that does not have to be repaid.”

The Recordnet. “Federal regulators issued a cease-and-desist order on Delta Bank, National Association effective Oct. 14, giving the bank until the end of this month to comply with numerous conditions to ensure its future stability. Stockton banking expert Joe Johnson, who spent 36 years in commercial banking and now teaches entrepreneurship at University of the Pacific’s Eberhardt School of Business, explained that a cease-and-desist order is the most serious level of enforcement action the OCC can take.”

“‘They are going to want to see those things done. Regulators these days are feeling their oats; they will do what they think they have to do,’ Johnson said, adding that such an order indicates significant problems and concerns that demand the attention of the bank’s entire management team and board of directors, who can be held personally liable for noncompliance.”

The Contra Costa Times. “On Friday night, federal regulators seized the iconic Inland Empire institution that was started on Christmas Eve 1892 and sold it to the subsidiary of Minneapolis-based U.S. Bancorp. Walter Hackett, a former PFF commercial loan department manager, said most, if not all, of the lawsuits against PFF executives probably aren’t going away.”

“‘You’ve still got board members who are worth millions,’ he said.”

“Hackett is also a witness for a group of shareholders who are building their case against PFF - one of several suits claiming PFF executives and board members foresaw financial losses and sold their stock while telling shareholders everything was OK. ‘I still think it warrants an investigation by the Department of Justice,’ he said.”

“Upland resident Jack Peterson walked out of PFF’s Upland branch after he checked to see if his PFF checks would still be honored. He said he was told they would be. Peterson was watching television that morning and noticed that PFF had been seized by the government. ‘I assumed everything would be fine, and it is, if you want to call this fine - a fine mess,’ said Peterson, a 25-year customer. ‘I wish they had spent more attention on banking rather than making money. Of course, they aren’t the only one.’”

The Press Democrat. “At the southern edge of the greater Sacramento area’s seemingly endless sprawl lies a road to nowhere, a wide parkway in Elk Grove built to reach homes yet to be constructed. A condominium project in Carmichael looks completed from the exterior, but a closer inspection shows unoccupied units, unfinished interiors and missing balconies.”

“These and other stalled development projects throughout the once red-hot Sacramento real estate market make up much of the wreckage of Exchange Bank’s construction loan portfolio. For a bank that had never lost a dime on a construction loan, the reversal of fortune has been agonizing.”

“Exchange Bank felt comfortable lending money to Rancho Cordova-based Reynen & Bardis Communities in part because of its size. But even this veteran developer has run aground. Founders John Reynen and Christo Bardis both filed for personal bankruptcy this year, citing a staggering $1 billion in development loans that they personally backed.”

“Another residential project Exchange Bank has been forced to foreclose on is a subdivision in Rancho Cordova by Cambridge Homes. After completing all of the streets, curbs and site improvements, the builder ‘folded up the tent and went away,’ said Bill Campbell, principal planner for the city of Rancho Cordova.”

“Cambridge, which had planned to build more than 100 homes in Anthology, found demand had evaporated for its modest homes, which started in the high $200,000s. ‘They can’t even give them away at that price,’ Campbell said.”

“The bank is facing losses because property values have fallen faster and further than anyone ever could have imagined, said bank President William Schrader. ‘The values of development properties have dropped down in many cases more than 50 percent, and no developer can withstand that type of situation, and no lender can escape those types of conditions,’ he said.”

The Mercury News. “San Jose property owner Salvador Ruiz paid a company $8,950 to renegotiate the terms of his loans on two houses four months ago, but he says they did nothing and haven’t returned his money. ‘They tell me everything’s OK, but they haven’t done anything so far,’ said Ruiz, who is filing a complaint with the California Department of Real Estate.”

“The state Attorney General’s office is prosecuting First Gov, also called Foreclosure Prevention Services, a Los Angeles company that promised to renegotiate loans for $1,500 to $5,000 but instead ‘ripped them off for thousands of dollars’ while their homes went into foreclosure, according to the Attorney General’s office.”

“East Side real estate broker Jaime Alvarez says he’s successfully modified the loans of six people in the past four months, charging $1,200 upon completion. But he says he doesn’t like to advertise the service because success is so rare. Alvarez doesn’t need state approval because he doesn’t get paid until after he gets a loan modified. ‘It’s constant phone calls, faxing, going from one department to another department, from one negotiator to another. These banks are backed up. It can take three to four months to get these through.’”

“It’s a ‘hot market,’ Alvarez said. ‘There are a lot of people getting into it that are probably not knowledgeable about real estate, but see an opportunity to make money from desperate families.’”

The Union Tribune. “Back when it seemed the county’s real estate prices would just keep rising, land-preservation groups struggled to keep pace with their goals for protecting habitat from bulldozers. How times have changed. Conservationists say fast-falling property values and dwindling development are allowing them to snatch up open space.”

“‘We have brokers that are chasing us in the street. . . . They have significantly cut their asking prices, sometimes just trying to unload their land for whatever they can get,’ said Mike Kelly, president of the San Diego Conservation Resources Network, an alliance of land trusts also called conservancies.”