And If The Promotion Doesn’t Yield A Sale? What’s Next?
It’s Friday desk clearing time for this blogger. “Foreclosure filings in Gallatin County have tripled since 2006, when 37 homes were foreclosed upon. Counselor Tracy Menuez of the Human Resource Defense Council said she visited with more people facing foreclosure last week than she had during entire years prior, she said. ‘It’s been a lot,’ she said.”
“Ray Linsky is nearly three months behind on his mortgage. His lender is threatening to foreclose. Linsky works at Pierce Flooring & Design and his wife works at an accounting firm. Their employers are great, he said, but as the construction industry goes, so goes his commission-based salary. ‘It’s just that the economy has risen up and bitten us,’ Linsky said. ‘It just gets worse and worse.’”
“Last fall when the housing crisis hit George Waldrop’s title examination business, he called his older brother, a DNA researcher in Portland, Maine. ‘If things get worse, I could be in danger of losing my house,’ Waldrop said.’
“Not to worry, his brother assured him; Waldrop could always count on him for help. Last month, big brother lost his job. ‘He’s 60, he’s a genius, and he’s scared,’ Waldrop said.”
“There was plenty of outright fraud, Dianne Prince, a counselor at the Regional Fair Housing Center, has discovered. One client she worked with was taking home $500 every two weeks, but somehow qualified for a loan on a $244,000 condominium. When she brought in her loan documents, Prince saw her income had been greatly exaggerated.”
“‘They (the mortgage company) had her working for a trucking company making $5,200 a month, and they said she had $72,000 in the bank,’ Prince said.”
“Growing numbers of Oklahomans had their homes repossessed in 2008, when foreclosures grew by 50.1 percent over the previous year, according to a new survey. Margo Mitchell, executive director of Consumer Credit Counseling Service in Tulsa, said the past year shows that the state isn’t immune to the housing crash that plagues much of the nation. ‘We really have been isolated from the problem until the latter half of 2008,’ she said. ‘We’re now beginning to see the same things that occurred in other parts of the country, though not the same extent.’”
“Tom Inserra, president of Pinnacle Peak Appraisers in Arizona, knows how intense the pressure to inflate values can get. Three years ago, he found himself battling one of his largest clients. The bank’s senior vice president in charge of mortgage lending tried to get Inserra to ‘hit a number,’ industry parlance for inflating the appraisal. He wouldn’t do it.”
“‘The discussion got so heated,’ recalled Inserra, ‘that he threatened to do harm to my family if I didn’t co-operate. I really thought he might do it. I got a restraining order from a judge.’”
“In the end, the banker didn’t hurt his family, but he did punish Inserra by depriving him of the $200,000 in annual business he had been getting from the bank.”
“If you build it, they will come. If you want them to buy it, throw in a free US$200,000 Bentley. At least that’s what an Arizona homebuilder is hoping as it tries to unload a pair of multimillion-dollar custom homes that have been languishing on the market for about a year. Each home is selling for about US$1 million less than the original price, according to Five Star Development Group, based in Scottsdale.”
“And if the Bentley promotion doesn’t yield a sale? What’s next? A free ticket on a space tourism flight? A yacht? ‘We’re probably at the point where it’s unlikely that the offer is going to get sweetened any more,’ said Five Star spokesman Brendan Mann.”
“Wednesday lawmakers voted to take 190 million from a 300 million dollar affordable housing fund to balance the budget. Thursday the Homebuilders Vice President, Chuck Fowke, told the governor the cut was short sighted. ‘These moneys can be used to get people back into housing, that lost their housing in Foreclosure.’”
“Home construction was cut in half in 2008 and the need for new houses continues to shrink. Florida’s housing market is saturated… currently more than 300-thousand homes are empty.”
“A Lindon investment holding company that owns about 50 acres on the southwestern boundary of The Ranches residential development in Eagle Mountain is facing foreclosure after defaulting on its special improvement district assessment. David Shurtliff, a representative of KEB Enterprises, said he believes the assessment ‘isn’t reasonable because it now exceeds the perceived potential value of the property.’”
“‘The economic downturn has made the property less marketable,’ he said. ‘We’re capable of paying the assessment but the city has to make concessions. Because of the economic downturn, we may not be able to sell the property for an amount that would satisfy the value of our investment.’”
“The company bought the land in a deed in lieu of foreclosure about four years ago, he said. ‘The dilemma I’m facing is whether to hold a property when we’re not sure of the returns, or to let it go into default,’ Shurtliff said.”
“The Lofts has 27 residential units on the three upper floors, both one- and two-bedroom units. Each has a distinct floor plan. The condo units range in size from 916 square feet to 1,881 square feet. Prices for the units range from nearly $318,000 to $618,000. Developers struggled to find words to describe their project beyond being unique in the state.”
“‘It is hard to find anything, even in Seattle, that compares to this type of lifestyle,’ said Gary Bodenstab of Seattle, during a tour the developers provided the Yakima Herald-Republic. ‘This is really one of the coolest projects I have ever worked on,’ Bodenstab said, ‘to take a department store and convert it into condos.’”
“Those of us of a certain age may remember ‘Geraldine,’ the late comedian Flip Wilson’s alter ego, who loved to say, ‘The devil made me do it!’ when she did something wrong. I thought of her when I read about how Barratt American’s president, Michael Pattinson, explained why his Carlsbad-based homebuilding company went bankrupt last month. ‘What upsets me is that a company that I was loyal to was not loyal to me,’ Pattinson sniffed. ‘But we’re big boys. We know what goes on in this world, and what goes around comes around. I’ve got my boxing gloves on, and I’m up for the fight. I’ve lost Round One, but there’s 14 more rounds to go.’”
“All four of his North County projects now stand unfinished, blighting neighborhoods with half-built homes wrapped in plastic.”
‘Maybe it’s unfair to compare Pattinson to Geraldine. She admitted her mistakes. By accepting no blame for his firm’s meltdown, the self-pitying CEO sounds more like the rebellious, fictional 10-year-old Bart Simpson and his standard excuse, ‘I didn’t do it. You didn’t see me do it. Nobody can prove anything!’”
“The House of Representatives today will vote on a bill package by Congressman Joe Baca aimed at decreasing foreclosures by assisting families with their mortgage crises. Baca’s push this week to aid families in foreclosure comes in the wake of a recent report in the Wall Street Journal that criticized the Congressman for aggressively pursuing legislation that would facilitate the securing of loans for first-time home buyers.”
“Nearly 9,200 families in Baca’s district have lost their homes to foreclosure, according to the report. ‘Families in my district and across the nation are struggling,’ Baca said. ‘The San Bernardino and Riverside County areas currently have the fifth highest rate of foreclosure in the nation.’”
“The number of homes facing foreclosure in the St. Louis area was flat in the last three months of the year, compared with the previous quarter, RealtyTrac said. For all of 2008, nearly one in 50 homes was at some point of the foreclosure process at least once, a statistic up 40 percent from 2007.”
“Karen Wallensak, who heads the Catholic Charities Housing Resource Center, said she had seen activity pick up again in the new year. She said she was dubious that many banks’ mortgage restructuring plans would help much in the long run, unless they write down principal on the mortgages. Efforts in Congress, she said, have done little so far to make banks give borrowers a break.”
“‘Nothing that has been done at the federal level has made an iota of difference,’ she said. ‘Nothing.’”
“Economists for the UC Santa Barbara Economic Forecast Project gave a presentation yesterday on the national and state economies, and suffice to say, there was little good news. Kirk Lesh, a real estate economist for the Economic Forecast, said it’s likely fewer homes will be built throughout this entire year than were built in the first quarter of 2007.”
“‘It’s going to be an extremely rough market for at least the next 12 months,’ he said, adding that the pool of potential buyers has shrunk due to the requirement of more money down on loans and demands for higher credit scores.”
“But in the long run, Bill Watkins, executive director of the Economic Forecast Project said this might not be such a terrible thing. He said the national home ownership rate usually hovers around 64 percent. ‘When it gets above that we get problems,’ he said, noting that prior to the housing meltdown, it climbed to 69 percent.”
“While he acknowledged it isn’t a popular thing to say, he said, ‘There are some people that just shouldn’t own a home and when I was 20 I was one of those people.’”
