Today’s Hit-And-Miss Parade
A report from Florida Today. “Conventional wisdom advises home sellers to examine recent sales of comparable homes in their area, and price their home in line with those selling prices. But today’s market is anything but conventional. ‘There’s no pattern,’ Realtor Cindy Kelley said of sales prices. ‘Here’s what we’re up against,’ she said. If the seller isn’t willing to set what she considers a realistic price, she’ll turn down the listing. ‘I don’t care what you paid for it. It doesn’t matter,’ said Kelley, an agent in Cocoa Beach and Merritt Island and president of the Space Coast Association of Realtors. ‘It’s a hard pill for many sellers to swallow.’”
“Greg Bublitz and his wife, Michele, started out asking $1.165 million for the canal-front, 4,162-square-foot home. The price was based on an in-depth market analysis, including the sale of the home next door for $1.45 million. They’ve gotten a lot of interest, but no sale. They lowered the price to $925,000, and recently dropped it to $795,000.”
“That’s more than the couple paid for the home seven years ago, but not enough to recoup their investment in renovations. ‘There are still a lot of people kicking the tires,’ Bublitz said. ‘I don’t understand why people who want to move up aren’t buying. Now’s the time.’”
“He and his wife make a habit of buying, renovating and selling the homes they live in, and the slow market hasn’t changed their minds. They’ve already bought a riverfront home on Merritt Island that they plan to update. ‘If I had a lot of money right now, I’d buy. I really would,’ Bublitz said.”
The Naples News from Florida. “Michele Greenwood has lost two homes in Naples. She might lose another. All of the homes carried mortgages from Countrywide Financial Corp. She describes the mortgages as ‘weird,’ ‘funky’ and ‘pitiful.’ The mortgages all had adjustable rates. She had ’stated income’ loans, which required no proof of her wages.”
“Even when she was unemployed, Countrywide was able to ‘finagle approvals on loans,’ she said. ‘I never had to put anything down,’ Michele Greenwood said.”
“She really didn’t understand what she was getting into when she signed off on the loans, she said. ‘You just give them what they ask you for and if they say you’re approved you don’t ask questions,’ she said. ‘That’s the way I looked at it.’”
“‘Right now all I can do is pay what I can pay and hope I don’t get a foreclosure notice. What else can I do? I can’t borrow any more money. I just have to gamble and hope we’re able to catch up before they foreclose on me,’ she said.”
The Miami Herald in Florida. “Orson Benn, once a vice president at the nation’s largest subprime lender, spent three years during the height of the housing boom tutoring Florida mortgage brokers in the art of fraud. From his office in New York, he taught them how to doctor credit reports, coached them to inflate income on loan applications, and helped them invent phantom jobs for borrowers.”
“Benn and several associates were convicted of racketeering this year, but Valdes still sells mortgages from a nondescript storefront in Homestead. While prosecutors looked at roughly $100 million in loans written by Benn and a cadre of co-workers, that represents just a portion of the loans they approved during his aggressive expansion into Florida.”
“The Miami Herald found that Benn’s network approved more than $550 million in home loans from Tampa to West Palm Beach to Miami, according to an analysis of court records. In Miami-Dade County alone, Benn’s office approved more than $349 million in loans on 1,913 homes — more than one in three have since fallen into foreclosure, the analysis shows.”
“When Kendale Lakes couple Monica Gaviria and Stacy Duthely applied for a loan through Sandkick in January 2005, they declared a combined income of $68,000 a year. She was a hair stylist; he, an interpreter. When the loan went through a few months later, the documents showed more than a fivefold increase, to $384,000.”
“Gaviria said that figure is grossly inflated, but said she knew nothing about the change on her mortgage application until this year when she fell behind on her payments and the bank called her. She said the bank representative demanded, ‘What’s the problem? You make $17,000 a month.”’
The St Petersburg Times from Florida. “For the dozen state economists huddled around a table this month to fine-tune Florida’s annual revenue forecast, something was different and disturbing. Their new math: In the next four years, the state will collect $31.4 billion less in taxes than expected. That’s more than six times the Pinellas and Hillsborough county budgets combined, the cost of more than 60 waterfront stadiums for the Tampa Bay Rays, and almost half of this year’s state budget.”
“With the mortgage crisis, the credit crunch and the flatlining of the population, the twin industries that buffered Florida through two previous recessions, real estate and construction, are weighing down Florida’s economy. ‘This recession is not only going to be bad for us. It’s going to be worse than the nation’s,’ said David Denslow, a University of Florida economist. The primary reason: Florida’s residential construction boom grew at twice its normal rate and ‘we got overbuilt.’”
“‘We are in trouble,’ Chief Financial Officer Alex Sink, who pays the state’s bills, said earlier this month. ‘We’re writing checks like crazy and the money isn’t coming in.’”
“During a single week in November, she said, the state took in a half-billion dollars in tax revenue and wrote checks totaling $1.3 billion, a recipe for fiscal disaster. ‘We can’t rely any more on attracting fixed-income retirees from up north and selling them cheap land,’ Sink said. ‘Those days are over.’”
The Athens Banner Herald from Georgia. “The country’s uncertain financial state of affairs hit various sectors of the U.S. economy hard, with losses of money, homes and jobs the top three entries on today’s hit-and-miss parade. Companies everywhere are being forced to cut expenses in a variety of ways in order to make the bottom line tolerable.”
“In these shaky fiscal times, is it best to pull back, ramp up or maintain the status quo when it comes to touting one’s business? Such is the dilemma Bonnie Jones is wrestling with. Jones, the director of public relations and communications for Jackson EMC, said she’s not sure which direction the electric cooperative will turn, but she’s well aware of the difficulties all power providers are facing.”
“‘We’re at status quo right now, but the downturn in the housing market is affecting us, Georgia Power and others,’ Jones said. ‘What we’re seeing now is that people aren’t buying new homes, there are plenty of foreclosures and builders who have finished homes that haven’t sold are cutting the power until they can sell the houses.’”
From the State in South Carolina. “Almost one in 10 S.C. homeowners was behind on mortgage payments or in foreclosure at the end of September. And the state’s high unemployment rate indicates more people will have trouble making payments next year.”
“Sam Waters, a shareholder at Rogers, Townsend and Thomas law firm, said his practice has seen foreclosures rise because of the many adjustable rate mortgages in the state. ‘Each time you have a period of resetting, you have people who can’t make payments,’ said Waters, whose firm represents lenders.”
“He, too, said growing unemployment numbers will cause more people to get behind on their loans. ‘Job losses lead to foreclosures. That’s inevitable.’”
“At Consumer Credit Counseling Services of Columbia, financial counselors have seen a growing number of clients who face foreclosure, said Wayne Odom, the director. ‘Our focus was on people who wanted to become homeowners,’ Odom said. ‘Now, it’s people wanting to get out of it.’”
“It’s important that people who are behind on payments call their mortgage companies and ask for options to work out payments, Odom said. They need to ask for help as soon as they miss a payment. Otherwise, the debt gets out of control. ‘If people can’t pay one month, they can’t pay two at the same time,’ he said. ‘I call it chasing the house. At some point, it’s outrun you.’”
The Wall Street Journal. “As the glut of foreclosed homes swells, banks and other lenders are starting to warm to the idea of selling some of the homes in bulk to investors, a departure from the practice of selling homes one at a time. Barclays Capital estimates that banks and loan investors owned 871,000 foreclosed homes as of Nov. 1, up from 414,000 a year earlier. Barclays forecasts that this inventory will peak at around 1.4 million homes in mid-2010.”
“James Odell Barnes, an investor in South Carolina, says he and a group of investor partners recently paid about $1.2 million for a bulk purchase of about 800 homes from Fannie Mae. That works out to about $1,500 apiece on average. A large share of the homes were in Detroit and other depressed Michigan cities; others were in cities including Indianapolis, Pittsburgh, Memphis, Tenn., and Toledo, Ohio. Barnes says he quickly resold for about $50,000 one of the Detroit homes purchased from Fannie for $1,800.”
“Some homes get sold at least twice before new occupants move in. An example is a three-bedroom house on Burnt Leaf Lane in Snellville, Ga., a suburb of Atlanta. The home had sold in March 2007 for $116,900. After the owners defaulted, Saxon Mortgage, owned by Morgan Stanley, acquired it through foreclosure in April 2008. Saxon sold the home to Gibraltar for $39,000 in September. Two weeks later, Gibraltar sold the home for $50,000 to Real Property Investment Group LLC of Atlanta. Gibraltar’s Jim Simon says his firm’s profit on the transaction after commissions and other costs was $4,600.”
