Built On A Basis Of A Dream
It’s Friday desk clearing time for this blogger. “The heart of Home Affordable Modification Program (HAMP) is that banks receiving $75 billion dollars in federal stimulus money through the Troubled Asset Relief Program (TARP) are expected to use the money specifically to help homeowners modify their mortgages to an amount within their budgets, given their current situations. Homeowners who have tried the program are saying it doesn’t work, and at least two Northwest Georgia families are calling the program ‘a sham.’ Both said they are worse off now than before participating.”
“Dan and Lisa Capetto of Acworth thought the house was a good investment and would sell well when they were ready to ’scale back,’ as many people do after children leave home. The Capettos found out they were ‘unapproved’ for the HAMP in April. Mrs. Capetto said if they lose this house, they couldn’t buy another because their credit has plummeted under this program. ‘Had I known this was going to screw everything up, I never would have done this,’ Capetto said.”
“Paula Milton, who has a home in Canton, said she had a similar experience. She and her husband bought their home in 2006 as an investment. ‘We expected it would have a good bit of equity,’ she said. ‘It went the opposite way and we’re underwater $35,000.’”
“Her immediate solution to avoid foreclosure was to find a credit card and take out the cash needed to satisfy Wells Fargo. Mrs. Milton is left with a bad taste for the ‘change’ promised in Obama’s campaign. ‘We’re good people. There are people going bankrupt and getting out of all of it. There’s got to be something for us,’ she said.”
“Citing business and real estate debts, Former Jacksonville Jaguars quarterback Mark Brunell filed for protection under bankruptcy laws on June 25 in the U.S. Bankruptcy Court in the Middle District of Florida. Brunell listed assets of $5.5 million and liabilities of $24.7 million. ‘Mark’s filing is an unfortunate sign of the times and just how broad a reach the current economic downturn and collapse in the real estate market have been,’ said his attorney, Michael Freed.”
“Nina LaFleur with the LaFleur Law Firm in St. Augustine: ‘I have many clients who own 20, 30 or even 50 rental houses. The rent is not sufficient to pay the mortgages, the banks will not renegotiate the loans and the properties are not selling. It is interesting to note that the rents never covered the mortgage payments. They never cash-flowed. A couple of years ago, folks would just pull the equity out of one house in order to pay for all the others. They were always counting on property values to continue rising. Now the properties are all under water and many renters are not paying. In many cases, the owners have not made a mortgage payment for over a year, but it is only now that the banks are initiating foreclosure proceedings. That is when they come to see me. Or they wait until they have depleted all their savings and retirement accounts, hoping that things will turn around.’”
“In Minnesota, 2010 bankruptcy filings through the end of May were up 11.6 percent from a year earlier, totaling 9,596 — the highest level in 10 years of recorded data. ‘The economy is finally starting to catch up with people,’ said Richard Pearson, a bankruptcy attorney in New Brighton. ‘This recession has hit the middle class more than any others I’ve seen.’”
“Many of his clients have been people earning $100,000 or more, often having worked as real estate agents, builders, remodelers and financiers during the height of the real estate boom. ‘Things will pop back,’ he said. ‘But a lot of people won’t be making what they made before.’”
“One week after an auction of waterfront condos at Pier Homes, prices for the remaining 22 units in the Baltimore luxury development have been reset, starting at $625,000. The new prices, like the units that sold last week, are well below the original asking prices of well over $1 million per unit, said Jon Gollinger, East Coast president of the Boston-based auctioneers that will handle sales at the complex.”
“Sales at the Pier Homes development had been nearly idle for a couple of years. Units were listed for up to $1.9 million, yet even the location on the city’s picturesque and colorful waterfront could not spark interest, as two-thirds of the complex had remained vacant. ‘The face of the new market is for the most part similar to who bought at the auction,’ Gollinger said. ‘The remaining units are not going to sell below the auction prices.’”
“Price cuts in Chicago’s condo market are nothing new, particularly downtown. Other buildings conducted auctions and then set new prices for the remaining units, based on the auctions. The size and scope of the decreases vary. The constant, though, is lenders’ efforts to jump-start stalled sales in new buildings. ‘Every development has a different circumstance, depending on if it has a lender that’s coming to reality,’ said @Properties agent George Schultz. ‘Every development is financed a different way. But the bottom line is the downward pressure on new construction has come to bear.’”
“A luxury condominium development, once heralded as a forerunner of an anticipated surge of dense residential projects in the commercial core of the Palos Verdes Peninsula, is now on the auction block. Originally priced from $930,000 to $1.7 million, the high-end units at Silver Spur Court are two- and three-bedroom flats and townhomes, ranging from 1,600 square feet to about 2,800 square feet. Starting bids now range from $275,000 to $495,000. A Rolling Hills Estates city official said buyers need to be forewarned about a $11,885 per-unit city parks fee that must be paid before escrow can close.”
“City Councilman Frank Zerunyan, a lawyer who works in real estate development, said he believes Silver Spur Court may have had a fatal flaw from the beginning. ‘I believe these folks built on a basis of a dream more so than on the basis of a marketplace,’ said Zerunyan, who stressed that he appreciated having a high-quality project in his city.”
“Developers of a Battle Mountain ski resort say they have dramatically downsized their proposal. Developers still plan a mix of condos, townhouses and single-family homes but they expect to build far fewer units than the original 1,700 homes proposed. Other changes include fewer ski lifts at the proposed private ski area. Whereas the plan once included more than half a million square feet of commercial space, developers now plan only about a third of that. There will be a coffee shop, ski shop and some ‘chili shacks,’ said Crave Real Estate Principal Dave Kleinkopf.”
“The pain of home foreclosure is spread throughout the region, from the poor communities wracked by unemployment to wealthier ones with empty homes in unfinished subdivisions, according to new data compiled by Southeast Michigan Council of Governments. ‘We deal with this every single day,’ said Frank Vaslo, the mayor of Lincoln Park, where an estimated one in 28 homes is in foreclosure.”
“Neighbors complain about abandoned pools and mosquitoes that spawn there, high weeds and the potential for crime at abandoned homes, Vaslo and others said. High foreclosure rates can be found in just about every corner of Oakland, Macomb and Wayne counties, including some of the most prosperous neighborhoods. ‘It’s happening everywhere,’ said Macomb County real estate manager Don Symons of Real Estate One. ‘It’s in every price range.’”
“Local realtors said one of the bigger challenges in West Islip is continued falling home prices, which is a larger issue for higher priced homes. For example, a home that three years ago was priced at $995,000 is now valued at $795,000. ‘This is an issue not just for the individual homeowner, but also serves to bring down prices of surrounding homes as the banks used comparable sales when doing appraisals,’ said Jamie Winkler, owner of Winkler Real Estate.”
“Also a major issue impacting home sales is sellers being unwilling to alter selling prices to meet current market conditions. Local realtors reported that when sellers received little or no interest in their home at a given price, they are holding steadfast on the price and spending several months attempting to sell their home. ‘Prices are still in a declining position, but many sellers refuse to accept market conditions,’ Winkler said. ‘There are some homes that have been on the market for a year or two. That should never happen.’”
“Along with its production of grass seed, hazelnuts and Christmas trees, Oregon is becoming a national leader of a different kind. The state’s foreclosure rate unexpectedly jumped 20 percent in the first quarter, making it No. 3 in the country. ‘It’s very discouraging,” said Tim Duy, a University of Oregon economics professor. ‘For all those people who said, ‘No, we don’t have a housing bubble,’ well, we did.’”
“Two former officers of failed Integrity Bank today pleaded guilty to fraud. Integrity opened in 2000 and mushroomed to $1 billion in assets thanks to lending in Georgia’s once white hot housing market. The bank trumpeted its Christian-based operating principles. It failed in August 2008. ‘Among the roots of our nation’s financial crisis were criminal acts by bank insiders and major borrowers that contributed to the failures or bailouts of financial institutions previously believed to be secure,’ said U.S. Attorney Sally Quillian Yates in a statement. ‘Today we announce that two of these corrupt insiders here in Atlanta will be trading in their corporate offices for federal prison.’”
“RE: Wildlife travel zone shrinks June 20 article. ‘I guess it has and always will be about the developer and how many homes they can squeeze into the land. With all the knowledge we have about the environment and how development affects everything we touch, you would think we would do the right thing. It’s all about money. Greed. No one is happy with what they have. It always has to be bigger and better.’”
“‘Nothing has been learned from the housing bubble. We are looking forward to building more and more, even when towns and subdivisions are void of people and business. Look at our politicians; they are the ones to blame, but we continue to re-elect them (like we have any choice). However, we need to look at ourselves. Do we learn from our mistakes?’ Kathleen J., New Port Richey”
