April 30, 2011

Are We Entering The Let’s-Get-Real Double Dip?

From the weekend topic suggestions thread, I posed this question: “In each region I posted on this past week, I found references to the expiration of the tax credit for buying houses, and how that would result in lower comparable sales numbers. Are we entering the post-tax credit double dip in housing?”

A reply, “I think we are entering the let’s-get-real-the-RE-fantasy-has-ended-and-the-FBs-are-really-screwed dip.”

Another said, “I did see something posted on line about a “double dip” recession, but I didn’t even bother to click on it, I just laughed. Wasn’t aware we’d come out of the first “recession”, if you could call it that. What we are looking at, IMO, is massive failure of global and national systems, across the boards. Housing is just a part of that, added to failed wars, failed education, failed legal systems, failed political parties, failed legislation, failed immigration policies, failed economic policies, failed products, failed energy policies,etc. I think there is massive systemic failure, across the boards, nationally and internationally.”

A reply, “I agree with you. There is massive systemic failure. We probably disagree on why that is, but I do think it leads to a good topic as you suggest. There’s “Where do we go from here?” in a political sense/as a country. I think it’d be interested to talk about it in a more individual sense.”

One said, “The breakdown of government was exactly that — the breaking down of governing. Governing includes, but is not limited to:

1. Regulating the heck out of corporations who take advantage of human needs.
2. Breaking up monopolies before they become too-big-to-fail.
3. Ending the public/private partnerships which coporations use to rob the taxpayers and enrich themselves.

In other words, if you want to break down the breakdown of government, you need to restore government. See how that works?”

One replied, “You’re assuming the failure is simply a result of the government not effectively regulating private entities. Failed education. Failed foreign policy. Failed wars. Failed regulating agencies (they simply didn’t do their job)…”

“Failure of government is simply failure to deliver on its promises and responsibilities. If it can’t deliver on what it’s promised to do right now, why would one expect it could deliver on EVEN MORE? A strong, centralized government simply isn’t capable of doing all the things the citizens of this country demand. And when it fails, for some reason the citizens demand even more.”

“Think if you were running a company…if an employee failed in their daily tasks, would you give them additional, more important tasks to do as well? Or would you fire them/lighten their load to re-evaluate what they really were capable of delivering on?”

And finally, “The robo-signing debacle and ensuing slowdown in foreclosures has muddied the picture a bit. But simple consideration of an ongoing high rate of mortgage defaults (the front-end of the foreclosure process) coupled with a slowdown of NODs, evictions, etc (the back-end) suggests a case of constipation which will eventually produce a larger-than-expected dump of for-sale inventory.”

The Monterey County Weekly. “Bankruptcy court in Salinas is a decidedly unceremonious place. The courtroom offers no indication from the outside that it’s federal space. But even for its informal nature, the courtroom is tense. Debtors who have filed for bankruptcy appear unsure whether to dress up or down, mixing casual attire with a pair of heels or a button-down shirt. The room is hushed but for the chatter of familiar attorneys sharing new bankruptcy statistics, or those who advise their clients in whispers about what to say when they are called up to the stand by the bankruptcy trustee.”

“After Shannon and Steve couldn’t find a buyer for their Seaside home in late 2007, they declared bankruptcy in 2008 to stay up to date on mortgage payments, planning to wait out the recession. This month, they received foreclosure notification after the bank denied a modification to lower their monthly payments on their second mortgage. (Bankruptcy filings are public record, but the Weekly agreed to use only first names for some who shared their stories.)”

“The couple shed some $60,000 of credit card debt in their Chapter 13 bankruptcy, which allows debtors to pay back part of what they owe to keep some property. They used that credit card for a major addition to the house they bought for $300,000 in 2003. Steve, a carpenter, spent weekends adding a second floor and backyard, doing what he says is $170,000 worth of labor himself. They planned to sell the house, hoping to make $300,000 for themselves and their adopted infant daughter. The adoption cost them $18,000 – and despite their financial plight, they hope to start the process anew this year to adopt a second child.

“But even bankruptcy didn’t save their house, despite what they describe as conservative spending habits. ‘With the equity we pulled out, we didn’t buy a Hummer. We adopted a baby,’ says Steve, 31. ‘We bought a home that we could comfortably afford. Our mistake was the addition, but we didn’t know it was a mistake at the time.’”

“Carlos filed bankruptcy this month, three years after defaulting on his East Salinas house. As a car salesman for Ford, his commission-based income fell by more than half in 2008 to $30,000. ‘I wasn’t making enough money to pay the mortgage,’ he says. His parents, sister, girlfriend and newborn daughter all lived in the home he bought for $739,000 in 2006, when business was good – and when stated-income loans, which didn’t require applicants like Carlos, then 21, to prove they made enough money to afford a huge mortgage, flowed like water.

“But still saddled with debt obligations, ‘I was depending on my credit cards,’ Carlos says. To recover the $45,000 he owed, the credit card company began garnishing wages from his new job with Verizon. With 30 percent being withdrawn from each paycheck, Carlos went bankrupt. ‘I had no other choice.’” 

“Salinas attorney Magnolia Zarraga has found bankruptcy to be surprisingly rewarding. ‘You truly are helping people to move forward,’ she says. 
Zarraga takes on about three pro bono cases a year, and is partnering with Legal Services for Seniors to establish a legal clinic for seniors who need to declare bankruptcy. ‘It used to be loss of job or medical debt were the big reasons [for bankruptcy],’ Zarraga says. ‘Now the majority of cases I’m seeing are foreclosures.’” 

“‘It’s the bottom, when they’re in front of me. They perceive this as the worst,’ says Marc Del Piero, one of three Chapter 7 trustees assigned to Monterey County residents. ‘In truth, it’s the beginning of the rest of their lives. The opportunity to have their financial obligations absolved is the opportunity to restore hope to people who have lost all hope.’”

April 29, 2011

Bits Bucket for April 30, 2011

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Belief And Trust In Extraordinary Things

It’s Friday desk clearing time for this blogger. “2006 was a bad year for Josie Kay. Receipts at her bar dropped 50 percent, and last year, she lost the business and declared bankruptcy. Kay and her husband had built their house and lived there for 13 years. They didn’t want to lose that, too. She had heard about home loan modifications, such as the federal Home Affordable Modification Plan, and wondered if something like that might work for her. So she called her bank. And like an untold number of Americans, Kay was informed that to qualify for HAMP, she would need to be two months behind in her mortgage payments.”

“She had never missed a payment before, she says. It was a revelation. ‘What a thing to tell somebody who’s already sinking: ‘Don’t pay your mortgage for two months,’ she says. ‘You love it! You go for it!’”

“In hindsight, she wishes she’d never made that call. She has nothing in writing saying that her house is safe, and fears that any day, the sheriff will arrive with an eviction notice. That the ax will drop. Like it did on her son. In a perverse coincidence, Kay’s son, who had owned his home for five years, applied for a HAMP modification a month before she did. And like Kay, he went two months behind on payments and was rejected, then caught up only to have the bank foreclose.”

“The weekend before Easter, Kay helped him move his stuff into storage. ‘I am not a stupid person, but they took me,’ Kay says. ‘You are hoping beyond hope that a bank is going to do something good for you — because Obama made them. Now I understand why the old-timers hid their money. They didn’t trust the banks.’”

“The first statewide report on the Supreme Court’s foreclosure mediation program is out, and at least one South Florida judge says the program is neither helping homeowners nor clearing caseloads. ‘A lot of these folks are in foreclosure because they don’t have the incomes they had once upon a time, or the mortgage changed over time and they are realizing they just can’t afford it,’ said Tom Genung, courts administrator for the 19th circuit, which includes Martin and St. Lucie counties. ‘If they are seeing that it doesn’t make dollar sense to stay in the home, who can really argue with that?’”

“The Koutoubia mosque in Marrakesh takes its name from the sellers of manuscripts who once plied their trade in the shadow of its ancient walls. This iconic symbol of the former imperial capital prompted a Lebanese friend who has known the city for more than a quarter of a century to share his thoughts on more recent Moroccan history. ‘We too have had our Irish property bubble,’ my friend informed me. ‘This travesty is the result. And furthermore, in the ancient medina, there are now 300 riads for sale. These traditional houses were titivated by foreigners and now they want to abandon them because the property bubble has burst.’”

“A new report, written by former Finnish senior government official, Peter Nyberg, says reckless lending by bankers who were unchecked by regulators and politicians along with the national mania for property are all to blame for Ireland’s banking collapse. ‘As in most manias, those caught up in it could believe and have trust in extraordinary things, such as unlimited real wealth from selling property to each other on credit,’ said the 172-page report, published on Tuesday.”

“‘It appears now, with hindsight, to be almost unbelievable that intelligent professionals in the banking sector appear not to have been aware of the size of the risk they were taking. In order for a systemic crisis to happen, you will need a very large part of society to take part, not understand the risks or stay quiet,’ Nyberg, a former director general for financial services at the Finnish Ministry of Finance, told a news conference.”

“Speaking at a press briefing, Nyberg said banking boards, politicians, former regulators and external auditors had not realized the risks of concentrated lending. He said the blame for Ireland’s banking implosion is to be shared among thousands of people. He explained that this is the reason he did not name names in the report.”

“In his first-ever press conference after a monetary-policy meeting on Wednesday, Federal Reserve Chairman Ben Bernanke is expected to address his agency’s efforts to keep pumping a fortune into the U.S. economy, at least through June. You probably won’t hear him say, ‘Enough, already.’ That’s too bad, because America can’t keep robbing from the future to prop up the present. Anyway, it’s not working.”

“For proof, look at the housing market. After the previous economic downturn a decade ago, the Fed stepped in and kept the easy money flowing way too long. That helped create the residential real-estate bubble, which nearly took down the banking system when it popped.”

“During the boom years, houses were a dream investment. Prices only went up, and millions cashed in on those temporary gains. That game is over. There’s only one good way to establish prices and put buyers and sellers back together again: Let the market do its job. Every day, it seems, the government unspools more red tape aimed at the housing and banking sectors, not to mention all the misguided stimulus. It’s a huge distraction. The less interference from government, the quicker residential real-estate will begin to make the lasting comeback we all want to see.”

“If you live in Florida, ground zero for robo-signing and the nation’s fourth-highest foreclosure rate, you see the effects of collapse daily. If you’re in midtown Manhattan, where expense account restaurants are bulging, it’s more ‘crisis, what crisis?’ That’s why U.S. banking regulator Shelia Blair got attention when she told the group a meltdown could happen again.”

“‘I am not going to stand before you and claim that the inherent instability of financial markets can be regulated out of existence,’ said Bair, who runs the Federal Deposit Insurance Fund. Blair then went on to say that Dodd-Frank financial reform legislation could be used to mitigate the worst effects of another financial shock.”

“Two other U.S. officials tended to take more hands-off position. Charles L. Evans, president of the Federal Reserve Bank of Chicago, called the crash a ‘once in a lifetime crisis’ caused by a ‘myopic focus’ on short-term profits. Charles I. Plosser, president of the Philadelphia Fed, took the positon that no one could have detected the financial corruption.”

“But Texas economist James K. Galbraith, a former chief staffer of Congress’s Joint Economic Committee, read from testimony to the Financial Crisis Inquiry Commission noting that Fed Chairman Ben Bernanke was warned in detail by housing lenders in 2005 how corrupt lending was driving a severe collapse. ‘The Fed should at least have the courage to admit it knew but didn’t act. If government had followed the military’s rule all officials involved would have been removed from their positions and an official inquiry started to see what the knew,’ he declared.”

“In mid-conference, The New York Times came out with a package of stories explaining that federal prosecutors and the FBI were denied funds to pursue Wall Street mortgage investigations, unlike in the 1980s, when more than 1,000 savings and loan officials were convicted.”

“‘Of course bailouts can happen again,’ declared Phil Angelides, chairman of the Financial Crisis Inquiry Commission, noting that America’s four largest banks now control far more assets than they did in 2007. People ask, ‘Is the government just an insurance company for those with financial power? I think what we are grappling with now is far greater than the financial crisis. It is the eradication of trust.’”

“Some very specific lending, regulatory and planning changes need to be made to avoid another property crash in the years ahead. Given the damage caused to our competitiveness, economy and sovereignty, our banks, environment and to individuals’ finances, we must now erect strong defences against any continuing vulnerability to a similar future disaster.”

“This is not just a question of bashing bankers, burning bondholders, roasting regulators and punishing politicians. It goes far deeper. The relationships between the zoning and planning process and the profits to be made from development also influenced the intensity and duration of the bubble.”

“We must change fundamental beliefs and the way we organise much of our governance and decision-making. In addition we need independent structures for reviewing, auditing and reporting on the appropriateness of key policies and on the execution of those policies.”

“It may sound like heresy, but increasing house prices are fundamentally bad for the economy.”

Weekend Topic Suggestions!

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Bits Bucket for April 29, 2011

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April 28, 2011

Every Foreclosed Family Is Unhappy After Its Own Fashion

The Sea Coast Online reports from Maine. “In the five years following 2001, Las Vegas was one of the country’s biggest boom towns. Housing values soared. Banks lent to anyone with a pulse. Fraud was endemic. Buyers deluded themselves about how the market would perform. Then in 2006 the bubble burst. York has seen housing prices decline in recent years, too. Between 2007 and 2010 the average price of homes sold in York dropped from $606,396 to $482,580.”

“To learn more about the local housing market, I contacted Greg Gosselin of the Gosselin Realty Group. He told me that between 2005 and 2009, the median price of single family homes in Maine decreased 14 percent, but in York County it dropped by 22 percent. In the town of York, by contrast, the price drop averaged just 8 percent though this number is distorted by the sale of a single $4.8 million home in 2009.”

“This does not mean, however, that everyone in York escaped the collapse of the housing bubble. The fact that homes in York are being foreclosed on tells you that people are suffering. Gosselin identified 17 houses in town currently in the foreclosure process. ‘That’s not the full list either,’ he noted, ‘because here as everywhere there is a shadow inventory of homes that have been abandoned.’”

“One home we visited in Cape Neddick has been abandoned for two years; vandalism and crime are real threats. The owners obviously left in a hurry as television sets and appliances, magazines and files, games and toys lay about as though the owner might soon return. Built in 1985, this house has an assessed value of nearly $450,000 and yet it sits empty.”

“How do foreclosures happen? Three months of skipped mortgage payments, unanticipated medical expenses that force people into bankruptcy, loss of income because of layoffs or business failures. To paraphrase Tolstoy: every foreclosed family is unhappy after its own fashion.”

Crain’s New York Business. “It will take more than a decade to clear up all the shadow inventory in the residential real estate market in New York state, according to new report released by Standard & Poor’s Ratings Services. That is more than three times longer than it will take the rest of the nation, a difference that the report largely attributes to the greater time it takes to foreclose on a property in New York.”

“‘The good news is delinquencies aren’t noticeably higher and the frequency of loans defaulting is lower than other states,’ said Diane Westerback, a managing director at Standard & Poor’s. ‘The bad news is once these loans fall into delinquency, they are hardly moving.’”

“According to the report, shadow inventory in Brooklyn will take the longest to unwind at more than 17 years. Bronx was close behind at 16.5 years, and Staten Island recorded 12 years. Manhattan fared the best, coming in at a little more than eight years.”

The Record in New Jersey. “Home prices dropped 3.1 percent from February 2010 to February 2011 in the New York metropolitan area, which includes North Jersey, the Standard & Poor’s Case-Shiller index reported. The median prices of a single-family home rose 1 percent in Bergen County, to $425,000, from February 2010 to February 2011. The number of sales rose 15.3 percent in that period. In Passaic County, prices declined 16.5 percent, to a median $225,194, while the number of sales declined 6.5 percent.”

“These numbers come from the N.J. and Garden State multiple listing services; Case-Shiller does not break out price data by county. The MLS numbers reflect the mix of properties sold in a given month and are affected by the number of higher- or lower-price homes sold. Case-Shiller is considered a more reliable number because it tracks the value of the same properties over time.”

“‘Prices in the New York metropolitan region are nearing 2003 levels, with no sign of stabilizing. It appears that last year’s tax credits provided a temporary – very temporary – respite from a downtrend that still has some distance to go,’ said Patrick O’Keefe, economist, J.H. Cohn, Roseland.”

“In another sign of the real estate slowdown, eight Rochelle Park condos once priced above $500,000 are to be auctioned next month with minimum bids of $125,000. The sale is the latest in a string of North Jersey auctions. ‘Like a lot of properties, it’s a victim of circumstance,’ said auctioneer Max Spann Jr. of the complex.”

“Construction on the 80-unit building started several years ago, when the housing market was booming. But as the market faltered, sales slowed. At the same time, builder Town & Country Developers of Woodcliff Lake ran into serious problems on several other projects.”

“Nationally, $17.1 billion worth of real estate was auctioned in 2008, up 48 percent from 2003, according to the National Auctioneers Association. This does not include sheriff’s auctions due to foreclosure.”

The Worchester Business Journal in Massachusetts. “It’s been easy in recent months for state officials to claim that the Bay State’s economy is on the upswing and well on its way to a full recovery. The foreclosure mess that has weighed the economy down for more than three years may not be over, according to the region’s bankers and real estate experts.”

“Much like it is in other areas of the economy, the job market still isn’t good enough to ensure that homeowners can’t fall into unemployment and eventually lose their homes. The problem is especially prominent in the Fitchburg-Leominster area, where unemployment lingers around 12 percent while the state’s overall rate is below 9 percent.”

“‘I do not think it’s over,’ said Martin Connors, president of Rollstone Bank and Trust in Fitchburg. ‘Unemployment nationally is close to 10 percent, and unemployment in Fitchburg-Leominster is close to 12 percent, and in a lot of the foreclosures we’ve been involved with, the common theme is job loss.’”

“Rollstone’s $325-million retail loan portfolio is about 64 percent residential loans. ‘It’s hard to think that it’s over when the economy is the way it is,’ Connors said.”

“Vincent Valvo, group publisher at The Warren Group, said foreclosure petitions slowed down in the middle of 2010. ‘It hasn’t been a situation where fewer people are being foreclosed upon, it’s a situation where the technicalities are slowing down the process dramatically,’ he said.”

“A moratorium on foreclosures by national banks because of lawsuits concerning faulty paperwork slowed down the rate of foreclosures. But Valvo argues that that could actually be a bad thing. ‘Anybody who has had a three-day cold or looked over at their co-worker that has been sniffling for months can appreciate the notion that you want bad things to pass quickly,’ Valvo said.”

The New England Business Bulletin. “Single-family homes sales in Massachusetts dropped 15.7 percent last month, marking the lowest number of sales for the month of February since The Warren Group began tracking data in 1987. ‘The local housing market has hit a bump in the road,’ said Timothy M. Warren Jr., CEO of The Warren Group. ‘Sales dropped sharply in February and we could see that pattern continue through the spring months ahead. Because of the severe winter weather that kept home shopping to a minimum, the market has been slow to heat up. To make matters worse, in the second quarter, we will be comparing sales to the height of the homebuyer tax credit. We had booming sales last year so the comparison will be tough to beat.’”

“The median price for a single-family home also dropped to $255,000 from $270,000 in February 2010. The year-to-date median home price is down more than 6 percent — dropping to $263,000 from $280,000 last year.”

The Daily Item in Massachusetts. “Claiming attorney David Zak did little to keep them away from foreclosure and charged them $4,500 for his services, Emilio Jimenez and his wife Dominica Mendez joined other foreclosure protesters in demonstrating outside Zak’s Revere office. The protest is not the only pressure Zak’s law firm and loan modification service is facing. A civil complaint filed by the state Attorney General’s office in Suffolk Superior Court states Zak ‘misled over 1,000 homeowners’ since February 2009 by promising them legal assistance and mortgage loan modification help.”

“Zak, the complaint states, ’sought to capitalize on the foreclosure and economic crisis and to prey upon Latino homeowners who are facing the imminent loss of their homes.’ Zak said he specializes in defending clients against foreclosure and offers loan modification services. ‘We have helped reduce mortgage payments by 35 percent to 50 percent for a minimum of 350 Massachusetts residents,’ he said.”

“Emilio Jimenez said he did not even have a chance to pay the first of three trial mortgage modification payments in March by Zak before the company holding the mortgage on his home filed a foreclosure notice.”

“Jimenez, speaking through translator Cristino Acosta, acknowledged he had not paid his mortgage on the house since August 2009 after his wife lost her job. But he said he stopped payments only after a previous trial modification arranged with loan holder PHH Mortgage Corporation did not result in a permanent reduction in his $1,590 a month mortgage.”

“‘We thought we were going on a five-year plan where, from the fifth year on, we would receive a permanently reduced payment,’ he said.”

“Jimenez went ahead and on March 28 made the first of three payments on the modified loan. Then he turned to Lynn United for Change, a local organization aiding people facing foreclosure, for help. United arranged to have foreclosure proceedings against Jimenez delayed while he pays his modified loan. In the meantime, the group is taking aim at Zak.”

“Without specifically naming United, Zak said non-profit organizations are working with federal agencies to counsel homeowners on mortgage modifications at the taxpayers’ expense. ‘What happens is banks know these agencies are ineffective because they don’t have attorneys who can file lawsuits,’ he said.”

“But Emilio Jimenez said his $4,500 payment to Zak got him little, if any, protection against foreclosure. ‘Even putting food on the table was difficult… but still he took $4,500 to save our house,’ Jimenez said.”

Bits Bucket for April 28, 2011

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April 27, 2011

A Rude Awakening

A report from the Idaho Statesman. “While developer Bob Hosac is taking bids on Royal Plaza’s condos to stave off a foreclosure sale, Steve Hosac, his brother with a separate development company, is moving ahead with the 130-condo River 8 project. Meanwhile, 15 residential and commercial units in the Royal Plaza will be auctioned May 7 for minimum bids ranging from about $150,000 to $400,000. ‘We’re trying to move forward,’ Bob Hosac said. ‘It’s important to bring some kind of closure to the Royal Plaza.’”

“Most condo projects in Downtown Boise were planned or under construction before the bubble burst in the housing market and the recession hit in December 2007. Several, like Royal Plaza with 26 units, had up to half their units sold before they were finished. But since 2008, developers have had to lower prices and offer upgrades and other incentives to lure buyers. Not being able to drop prices far enough and fast enough because of the financing contributed to Royal Plaza’s problems, real estate experts said.”

“Sales are improving but at a slower rate than developers would like, said Bryant Forrester, owner of Urban Concepts Group at Homeland Realty, which specializes in condominiums. Pricing Downtown ranges from about $200 to $400 per square foot, compared with $300 to $500 in 2007, Forrester said. R. Grey Lofts, 16 units at 8th and Myrtle streets, has new owners and is about to go back on market with new prices, Forrester said. ‘If you can close one a month, that’s a pace that’s enough to keep the project viable,’ Forrester said.”

“According to the Intermountain MLS, 808 homes in Ada and Canyon counties received sales offers last month, a 5.2 percent drop from March 2010. Industry experts were not surprised by last month’s slowing Valleywide sales figures, arguing that March’s numbers were competing against 2010 transactions influenced by a now-expired $8,000 federal tax credit that had first-time homeowners rushing to get homes under contract before the offer expired. ‘Last year’s numbers for March, April and May were inflated because of that tax credit,’ said Jere Webb, an agent with Coldwell Banker.”

The Columbian in Washington. “The number of Clark County homes in foreclosure fell dramatically in March. Some say the sector’s new willingness to help borrowers with home-loan modifications led to the 29.2 percent one-month drop in local foreclosures, as reported by RealtyTrac. Others say banks are slower to foreclose because they don’t want to own still more properties when it is taking longer now to sell off houses in distress, given the smaller pool of qualified buyers.”

“Scott Anthony, a broker in charge of the real estate owned division of Windermere Real Estate Stellar Group in Vancouver, attributed the drop in Clark County’s total foreclosures to occupants who refuse to move out of distressed properties, holding out for the relocation fees offered by many banks. ‘The banks will actually offer them cash to move out,’ as long as the occupants don’t leave damage behind, Anthony said.”

“Anthony, who has sold more than 270 bank-owned foreclosures since 2009, has also seen some troubled homeowners plan out their homes’ foreclosure. He said the strategy occurs more among Clark County homeowners who are hopelessly underwater, which means they owe more on their mortgage balances than the home is worth. About 32 percent of homeowners in the Portland-Vancouver metro area were underwater in 2010, according to Zillow.”

“Others expect county foreclosures to increase in September, when interest rates will bump up on a crop of adjustable-rate mortgages issued during the height of the housing boom, said Terry Wollam, an agent and president of the Clark County Association of Realtors. ‘We are going to continue to see those through September,’ Wollam said. ‘After that, it’s just going to be a matter of working through that inventory.’”

The Yakima Herald in Washington. “Yakima County has seen a drop in home sale prices over the first two months of the year. The average home price for January and February was $142,720, down 12.1 percent from the same period a year ago, according to Headwaters–The Source, a Selah-based firm that tracks Yakima County real estate sales. ‘It is kind of a reminder (that) we’re still not back to normal,’ said Ken Nelson, broker of DK Bain Real Estate Inc. in Sunnyside.”

“An increasing number of foreclosed homes on the market has been the primary driver of dropping sales prices. Concerns amid the national robo signing scandal slowed down the foreclosure process for many of these homes in the past few months, said Glenn Crellin, executive director of the Washington Center for Real Estate Research at Washington State University. But now the homes are making their way to the real estate market, creating price pressure on nonforeclosed homes, Crellin said.”

“‘We’re seeing some of these foreclosures at 60, 70 percent of their value, because (banks) want to dump them,’ said Daniel McLaughlin, owner and broker for The Buyer’s Agent in Yakima. ‘They’re being bought below market value and it’s really affecting other homeowners because that below-market sale is used as a comparable sale.’”

“While a drop in prices is good news for the buyer, it’s tough for sellers. Mike and Gloria Munly listed their parents’ house after the death of Gloria’s father in December. They priced the west Yakima home at $157,500, just under the current assessed value of $158,000. They felt the price was competitive, especially because they repainted the house and replaced the furnace to make the home move-in ready.”

“They expected to sell the house with a full-price offer. What they did not expect was just one offer, $12,500 below their asking price. ‘It was a rude awakening,’ said Mike Munly. But with the house paid off, they decided to keep the listing price as is and let the house sit for several months, if necessary.”

“‘When you see value in the home, you don’t want to hand it over and give it away’, said Gloria Munly.”

The Oregonian. “Leland Jaquay, president of the Fairview Terrace Homeowners Association, says the association has reluctantly sued some members with unpaid association fees. Fairview, like homeowners associations all over the state, is enduring a financial storm brought on by the economic slump and housing bust. Hard-pressed residents are not paying their HOA dues in numbers that professional condo managers say they’ve never seen. The delinquencies are depriving associations of a crucial revenue stream and forcing some to defer maintenance or levy special assessments on the paying neighbors to make up the shortfall.”

“‘Its something that I’m learning: to try and sue someone, to garnishee their wages,’ Jaquay said. ‘It’s sad, very sad. When you see someone losing their home, bringing in the moving men, you ask yourself where are they going. I’m sure it will affect them the rest of their lives.’”

“‘We’ve got some HOAs suffering 5 percent to 40 percent delinquencies’ on their association dues, said Karna Gustafson, a Portland attorney whose firm represents more than 1,000 associations. ‘What ends up happening is all these delinquencies have to be split up among the homeowners who are paying, so it increases their fees. Then they can’t afford it and they go into default. It’s like a domino effect.’”

“It’s not always cash-strapped homeowners who renege on their HOA dues. Residents of the Hunters Ridge development in Sherwood are facing a shortfall of more than $182,000. The Hunters Ridge association claims most of that sum, about $140,500, is owed by a company controlled by J. Patrick Lucas, the real estate developer who built Hunters Ridge. ”

“The impact of unpaid HOA dues goes deep. Fannie Mae and Freddie Mac announced a year ago that it would no longer buy mortgages on the secondary market involving homes in associations suffering HOA delinquencies of 15 percent or more. Absent a willing buyer on the secondary market, many banks are unwilling to lend money to buyers wanting to buy into the developments. The Federal Housing Administration has declined to make new loans for would-be homebuyers in associations with more than 15 percent delinquencies.”

“Homeowners faced with the threat of foreclosure might simply walk away from their homes, and obviously stop paying the HOA dues. When banks repossess a condo or townhome unit, they generally are good about paying new HOA obligations as they come due. But in many cases, the bank or servicer chooses not to proceed with foreclosure for months or even years. The result is what HOA officials call a ‘ghost foreclosure.’ The owner is long gone, the bank refuses to step up and take possession, and the HOA dues go unpaid as the home sits in limbo.”

“‘The pending foreclosures really drive me crazy,’ Jaquay said. ‘The banks delay and delay, and we’re getting nothing for months and months.’”

“Doug Farrell, a resident of the Rockwood Village development in east Portland and former president of its HOA, said a 1,200-square-foot unit at Rockwood sold for $165,000 before the recession. After the housing bust and foreclosure wave, vacant Rockwood units have sold for as little as $35,000. Those were distressed sales, and the actual market value of the Rockwood units may be well more than that. But Farrell, 73, fears that the $55,000 he still owes on his unit may be more than its worth.”

“‘We’re underwater,’ he said. ‘This house was supposed to fund our retirement.’”

The Double-Edged Sword Of Distressed Homes

The Frederick News Post reports from Maryland. “The number of foreclosures in March in Frederick County may show a decrease, but the figures…’are not reflective of the actual delinquency rate of mortgage customers,’ said Patrick McLister, an attorney with Salisbury and McLister. Mortage companies halted thousands of foreclosures to scrutinize documents that had been authorized with little or no review — a practice that has come to be known as ‘robosigning.’ ‘Mortgage companies have not acted on these delinquencies to start the foreclosure process because they are busy reviewing files which were caught robosigning,’ McLister said.”

“McLister and Carlton Boujai, secretary of the Maryland Association of Realtors, said there will be another wave of foreclosures caused by the moratorium placed on lenders. Bob Sawchuck, an agent with Mackintosh Inc. Realtors, said 202 homes were sold in March in Frederick County, up 30 percent from February, but down 81 percent from March 2010. Sawchuck said the high figure for March 2010 can be attributed to a federal tax credit program in place at the time that gave incentives, especially to first-time buyers.”

“‘Since the Homebuyer Tax Credit was drawing to a close at this time last year, sales were artificially inflated by those who wanted to take advantage of the tax credit,’ Sawchuck said.”

“The double-edged sword of distressed homes creates a field of lower-priced homes for potential buyers, but at the same time means current homeowners are faced with lower prices for their houses or lower appraisals when values are based on foreclosed homes in the same neighborhood. That can be a factor in new home sales, according to Steve Seawright, president of the Frederick County Builders Association. Unless a homeowner can get what they consider a good price, they are unlikely to sell and move up to a new house, Seawright said.”

The Virginia Pilot. “Since 2000, two financial institutions from the Old Dominion – a tiny savings and loan in Danville and a savings bank in Reston – have ended up in the FDIC’s hands. The paucity of failures, however, masks the growing pressure on several of Virginia’s community banks. During the past year, at least eight of the 80 state-chartered banks in Virginia have been ordered by regulators to improve their operations and strengthen their capital.”

“One of the eight, Norfolk-based Commonwealth Bankshares Inc., reported earlier this month that its Bank of the Commonwealth subsidiary needed $27.6 million of additional funds to comply with federally mandated capital ratios. ‘Even if we succeed in raising the capital, we may need to raise additional capital in the future due to additional losses or regulatory mandates,’ Commonwealth said in an April 15 filing with the U.S. Securities and Exchange Commission.”

“Investors have been skittish about buying shares of community banks, partly because of fears that the quality of the banks’ loan portfolios will continue to deteriorate. ‘They want to know why they’re injecting the capital, and they don’t want to throw their money into a black hole,’ said Allan Bach, a bank analyst with the Richmond-based brokerage firm Davenport & Co.”

“Among community banks with shortages of capital, there’s one common denominator: the damage inflicted by heavy losses on their real estate lending. Commonwealth, for instance, reported having $162.6 million of nonperforming assets at yearend. The bulk of that consisted of $126 million of real estate and construction loans and $32 million of property taken back through foreclosure.”

The Free Lance Star in Virginia. “The slumping real estate market has taken a heavy toll on the Celebrate Virginia developments, leading to millions in overdue payments and dwindling reserves to pay the bonds that financed roads and utilities.”

“Project developer the Silver Cos. and its more than 100 investment partners owe about $5 million in back taxes and special assessment payments in Fredericksburg and Stafford County. In addition, reserve funds to pay the project’s bondholders have dropped below half their required levels. The situation, which involves perhaps the area’s most prominent developer and one of its largest projects, shows the extent to which the recession has hit home.”

“Thus far, all bond payments have been made on time, and it would likely be more than two years before the developers would risk losing land in any tax sale. Silver has potential deals that could generate the revenue to get back on track. But if the deals don’t pan out, and the real estate market doesn’t improve, the Celebrate Virginia CDAs could be at risk of missing bond payments, and the delinquent landowners could lose their property unless they raise money by putting up more cash, selling land or some other means.”

The Richmond Times-Dispatch in Virginia. “Signs of economic recovery continue to prove elusive to homebuilders in Chesterfield County, but conditions aren’t as dire as they were two years ago. For the first quarter of this year, county building inspectors issued 143 residential certificates of occupancy. That marks the fourth straight year the first-quarter number has declined and represents a decrease by nearly two-thirds of the number issued in the first quarter of 2007.”

“‘That’s a good indicator of how bad the market is,’ said developer Casey Sowers, whose family’s 1,300-acre mixed-use Roseland project, once planned to have as many as 5,500 homes, has yet to be built. ‘There’s no credit out there for builders,’ he said. ‘This is a speculative business, so no credit means no building.’”

“The market isn’t ready for widespread construction, said William P. Brown, the Dale District representative on the Chesterfield County Planning Commission. ‘I believe we’ve seen the worst,’ he said. ‘But there’s a glut of foreclosures. And until that glut is cleared,’ there won’t be big movement from builders.”

The Cary News in North Carolina. “The developer behind Amberly, the 1,100-acre community in northwest Cary, has handed over the remaining sections of the project to a California firm that works with federal regulators to sell troubled assets. Amberly is just the latest high-profile Triangle real estate development to run into trouble. Several condominium projects in Chapel Hill and Raleigh have had foreclosure proceedings started in recent weeks.”

“Amberly, which was conceived at a time when credit flowed freely to ambitious real estate developments, has been beset by financial problems since the housing bubble burst. About 40 percent of Amberly is undeveloped, and nearly all the land has been caught up in the project’s funding problems. Plans for the project originally called for as many as 5,000 houses.”

The News & Record in North Carolina. “An 18-hole golf course in Rockingham County is on the auction block after its owners defaulted on $2 million in loans. Greensboro National Golf Club, created in 1994 by Eden orthopedic surgeon Titus Plomaritis Jr., went into foreclosure on March 25, according to court documents. The 342-acre golf course and club — valued at $5 million — along with unsold residential lots, are scheduled for auction.”

“Greensboro National resident Rebecca Cipriani said rumors have circulated in the neighborhood about the foreclosure. But she was not worried about its effect on residents since homeowners are not responsible for the course’s maintenance. ‘People are talking about (the foreclosure) but nobody really knows if anyone is going to do anything with it,’ said Cipriani, who serves as register of deeds for Rockingham County. ‘It’s such a beautiful property. I can’t envision that they would do anything with it other than continue it as a golf course.’”

The News & Observer in North Carolina. “The developer of 140 West Franklin says the luxury condominium and retail project now under way in downtown Chapel Hill will succeed because of its location, financing and luck. Ram Realty Services rebid the eight-story project after the recession hit and contractors were hungry for work, chairman Peter Cummings said. That reduced costs from $76 million to 55 million, including the town-financed parking structure.”

“‘We’re lucky,’ Cummings said. ‘If the town approval process was 12 months faster, we might have started building at the wrong time.’”

“Ram has contracts on about half its 140 planned condominiums, Cummings said. It needs a dozen more before it can draw on its loan, he said. Ram has contracts on about half its 140 planned condominiums, Cummings said. It needs a dozen more before it can draw on its loan, he said. The condos in 140 West are now priced from one-bedroom units in the $290,000s to two-story, 3,000 square-foot terrace homes for $1.3 million.”

“The possible foreclosure of the nearby Greenbridge project has raised questions about 140 West Franklin, which along with the redevelopment of University Square, will transform downtown Chapel Hill. Greenbridge has sold only 36 of its 97 units, and Bank of America has begun foreclosure proceedings.”

“Cummings said he’s not worried that Greenbridge’s troubles will lead to a price war if that project lowers prices to sell more units. ‘You don’t want to see a project fail in the middle of town,’ he said, then added: ‘I shouldn’t say fail. You don’t want to see a project in stormy seas. The one thing I’m saying categorically is we have a better location.’”

“They’ve lost $8.65 million of their own money, but the developers of Greenbridge say they have five investors willing to help save the $56 million condominium project from foreclosure. Unable to sell units since liens were put on the property last fall, developer Tim Toben says, they now hope to find a buyer committed to sustainable, energy-efficient housing.”

“‘We recognize, because of this death spiral we’re in, that our equity is lost,’ he said.”

“If the bank had been more flexible, Toben thinks the developers would have been able to continue selling units and keep the property out of foreclosure. ‘I think it’s a really sad story for green building; we are being treated like we are Vegas condo project,’ he said. ‘Five years from now, I have no doubt that this will be a home run,” he said. “We still believe in this thing. Believe it or not, we’d probably do it again.’”

Bits Bucket for April 27, 2011

Post off-topic ideas, links, and Craigslist finds here.

April 26, 2011

Something We Couldn’t Have Imagined 10 Years Ago

The Chicago Tribune reports from Illinois. “At best, Chicago-area home prices are bouncing along the bottom or getting less bad as the depreciation rate slows. At worst, they continue in a free fall. ‘I’m not seeing price increases but I am seeing stability on the lower end,’ said Gary Christensen, an agent in Elk Grove Village. ‘If the home is nice, it does move if the seller isn’t greedy,’ Christensen said. ‘If we can price it based on where the market is, we’re OK. If we have to price it because we need a (certain) number, those don’t move.’”

“In Homer Glen, Steve Brown is waiting for that one special buyer to emerge from his or her bunker. Brown tried to sell his custom-built home last fall, but the only offer he was received was for $370,000, more than $70,000 less than his listing price for the well-appointed home with its own private pond. Now he’s trying again, dropping the price by $6,000, to $436,500. ‘People are starting to inquire again,’ Brown said. ‘I know I can sell it easily if I reduce the price to $400,000. My gut reaction is we’ve hit bottom, but I’m not willing to give it away.’”

The Austin Daily Herald in Minnesota. “Brian Blecker of Blecker Realty said the housing market has been stable, but sales aren’t necessarily balanced. Sales of high end homes have been slow, while homes marked at $150,000 or less have been selling more, he noted. Blecker frequently works with foreclosed homes, and he said that market has remained steady. ‘We have our fair share of the foreclosures,’ Blecker said. ‘I’m a very busy person right now,’ he added.”

“Numbers comparing 2010 and 2011 don’t show the whole picture, according to Blecker, because the home buyer credit drove sales last spring. Despite positive showings this year, it may be difficult to truly compare 2011 and 2010. Real estate agent Joe Fuhrman described last year’s numbers as ‘artificial’ because of the home buyers’ credit, even though it did encourage sales.”

The Star Tribune in Minnesota. “With plenty of developable land and easy highway access 30 miles west of the Twin Cities, Otsego became one of the metro’s fastest-growing suburbs in the housing boom. It also became a hotbed for the froth and fraud that helped fuel the greatest housing downturn since the Great Depression. Now, word that one of the biggest developers in the country has bought 72 lots in a financially troubled development is raising hopes for a rebound.”

“‘The market has been slow to realize how quickly the [housing] market is actually improving,’ said Bill Burgess, Minnesota division president for Lennar Corp.”

“Up until the early 2000s, Otsego was a sleepy rural community dominated by family farms. But the town had the advantage of a location along Interstate 94 just west of Maple Grove, where development — and home prices — were skyrocketing as supplies of developable land dwindled. As development pushed farther beyond second-ring suburbs, developers pounced on Otsego, where land prices were still cheap.”

“But not for long. As developers and speculators stocked up on huge parcels of land, including big parcels that some planned to hold in inventory for the next decade, prices started to skyrocket. Then the housing market crashed, forcing several projects into foreclosure and leaving some developments looking more like ghost towns than the bucolic neighborhoods developers had envisioned.”

“One of the casualties of the downturn was Martin Farms, where Insignia Development had already built expensive infrastructure, including quiet cul-de-sacs and a pool and gazebo. The buyers never came, and all that remained were empty houses and undeveloped lots filled with weeds and weather-worn for sale signs.”

“Richard Palmiter, a vice president with CB Richard Ellis who handled the transaction and is marketing the remaining lots, isn’t declaring an all-out victory. There’s still plenty of inventory to burn through before there will be significant upward pressure on prices, especially in projects that are inferior in quality and amenities to Martin Farms. ‘In 2005 it tended to be the place where people wanted to be, and now we’re getting the sense that it is coming back,’ he said. ‘But it’s going to be a slow comeback.’”

The Journal Sentinel in Wisconsin. “Milwaukee property values have flattened out after two years of declines, but city officials say the echoes of recession and the shadow of foreclosures continue to stymie economic growth. Yet in the wake of the recession, homeowners appear to be more cautious about putting their houses and condominiums on the market, said Chief Assessor Peter Weissenfluh. Condos led the residential decline, falling 2.3% to $1.98 billion.”

“‘They still are selling, just a lot slower than they had been,’ Weissenfluh said. Would-be condo sellers are finding they have to lower their asking prices, keep their units on the market longer or rent out their condos, he and City Assessment Commissioner Mary Reavey said.”

“Overall, the city found just 1,800 arm’s-length real estate transactions last year, or 1.3% of the market, Reavey said. That’s down from 2,216 sales in 2009 and 3,015 the year before. In a normal year, 4% to 5% of city properties change hands, she said. By law, those figures exclude foreclosures, Reavey and Weissenfluh said.”

“Because foreclosures account for most if not all of the housing transactions in the central city, assessors personally inspected thousands of central-city properties, roughly doubling the number of inspections…Reavey said.”

The Wisconsin State Journal. “Existing home sales and median price continued to sink in Wisconsin in March, even as housing industry advocates continued to blame the lack of federal incentives for the year-over-year slump. Home sales were stimulated in the first half of last year at least in part by a federal tax credit that expired for most in June. That makes comparisons with this year’s sales through June suspect, according to John Horning, chairman of the WRA’s board of directors.”

“‘We expect to return to a more reliable apples-to-apples comparison around the fourth quarter of this year,’ Horning said in a statement , noting the statewide housing market has ‘fallen sharply’ in February and March.”

The Gazette Xtra in Wisconsin. “Jerry Morse did something in February that he hadn’t done since the 1970s. Morse assisted with the sale of a Janesville house for $19,000. ‘It needed some work, but it was probably worth $50,000,’ said Morse, an owner of The Morse Co. in Janesville and the president-elect of the Rock-Green Realtors Association. ‘Five years earlier, it sold for $82,000.’”

“While Morse’s experience might be uncharacteristic, it’s indicative of the state of the local housing market. A continued rash of short sales and foreclosures pushed the average sales price for residential properties in Rock County to $95,976 for the first three months of the year, according to the South Central Wisconsin Multiple Listing Service. That’s a 12 percent drop from the first quarter of 2010. And it’s the first quarterly dip below the $100,000 mark in several years.”

“‘The problem is that our shadow inventory is too high,’ Morse said. ‘These places are being sold for very low prices.’”

“He said he’s seeing pockets in the community where inventory is needed. ‘I’ve got a buyer who wants a three-bedroom ranch on the east side of Janesville,’ Morse said. ‘There are seven available, and he looked at all of them. There’s a need for nondistressed, move-in-ready homes in the $100,000 to $150,000 range. If you’ve got that, you’ll get a reasonable price. Not what you would have got four or five years ago, but a reasonable price in this market.’”

“Morse said the bottom line is that there are opportunities for both buyers and sellers. ‘Buyers can take advantage of lower prices and low interest rates,’ he said. ‘Sellers, if they need to make a move, might not get the price they want, but if they are going to be purchasing another home can save on the price of the new home and enjoy still low interest rates. Once the shadow inventory gets sold, buyers will probably face higher prices and higher interest rates, so the next 12 to 21 months will be the time to buy.’”

The Detroit Free Press in Michigan. “John Scribner is upset about his property tax assessment — it’s gone up. He wonders how can the majority of homes in Grosse Ile where he lives be assessed lower this year with the township’s overall home value dropping 8.6%, but his went up. Scribner bought his 2,600-square-foot home on Chatham in 2001 for $380,000. In 2009, it was assessed at $173,200. Then last year, his assessment dropped to $160,200. Now this year, it went up to $164,500. Assessments are roughly half the home’s market value.”

“Scribner says he’s suspicious. ‘I want my property taxes to reflect what my property is worth,’ Scribner said. ‘We’re being taxed unfairly because what they say these places are worth, they are not worth that.’”

The Dayton Daily News in Ohio. “The majority of residential and commercial property owners in Montgomery County will see their property values fall as part of a 2011 update, including some double digit declines. ‘This is something we couldn’t have imagined 10 years ago,’ County Auditor Karl Keith said. ‘It’s eating into home equity.’”

“Keith said overall valuation loss in the county could be as much as $3 billion.”

The Canton Rep in Ohio. “In November, Brock Bennington signed a contract for Regal Construction to build a condo unit for him at Meyers Lake. He wasn’t afraid of taking a 10 percent loss on the sale of his old condo. He wasn’t afraid the value of his new home could drop. And he was willing to forego the chance to buy an existing home at a substantial discount. All were worth risking to move into his dream home and away from his upstairs neighbor’s noisy 100-pound dog.”

“‘Every day my neighbor left, the thing went berserk across the ceiling,’ said Bennington, 29, who stomped his feet to demonstrate. ‘The money means nothing if you’re not happy, and I wasn’t happy.’”

“Three years after the housing market crashed, local home builders are hoping 2011 is the year they will be seeing more buyers like Bennington. ‘It’s been devastating the last four or five years actually,’ said Regal’s president, Bob Leach.”

“Leach said that in 2005 Regal was building about 70 homes a year that sold for $150,000 to $300,000. And it was easy to find a bank willing to provide financing to build 10 homes at a time. Then the market collapsed in 2008. ‘There’s a lot of builders that didn’t make it through,’ Leach said.”

“Building Industry Association of Stark County executive director Joe Race, said one stumbling block is that prospective new home buyers have problems selling their current homes. But, he noted, ‘whatever they stand to lose on a home sale on an existing home, they can make up on building a new home right now.’”

“Bennington was willing to take that loss. After buying a 1,500-square-foot condo at the Fountains at Meyers Lake in 2008 for $142,000, Bennington sold it in November for $128,000. He then signed papers to buy a 1,700-square-foot, two-bedroom Regal condo in the same neighborhood for about $170,000. This time, the home, which is in a two-unit building, would come with soundproof walls and other amenities.”

“Bennington is not perturbed that the value of his new home could drop. ‘I don’t treat my home as an investment. It’s an investment in myself.’”

Home Ownership Looked Like A One-Way Bet

The Herald Tribune reports from Florida. “Sarasota real estate agent Gerard Pirot was not the only person who broke the county’s ordinance against short-term rentals last year, but he was the only one who got punished. In May, he was cited by the county’s code enforcement department for renting a house on Siesta Key for less than the 30-day increments allowed by law. Then, in September, he was fined $250 per day for repeating the offense, court records show.”

“John Lally, a code enforcement officer for Sarasota County, is the first to acknowledge that Pirot is just one of an increasing number of landlords who have been renting properties illegally throughout Florida since the onset of the Great Recession. ‘It’s a problem,’ Lally said. ‘People are trying to get money to pay mortgages on houses they may have bought at the height of the market in any way they can.’”

The News Press. “The ACLU’s lawsuit challenging Lee County’s ‘rocket docket’ may be about one person facing foreclosure, but it has implications for anyone who has stood before a judge and had only seconds to argue to try to keep his or her home. Whether this lawsuit succeeds, it should move courts, the state, federal government and lenders to take a bolder, more comprehensive approach toward solving the foreclosure crisis — the epicenter of which is Lee County.”

“The ‘rocket docket’ was implemented in the 20th Judicial Circuit — Lee, Collier, Charlotte, Glades and Hendry counties— specifically to handle foreclosure cases as expeditiously as possible. Hundreds of cases might be handled in a single day.”

“Eddie Felton, executive director of the Home Ownership Resource Center, who has helped borrowers resolve their issues, sees the situation getting worse. A combination of lender intransigence, poorly funded homeowner counseling programs, and soon-to-balloon variable interest rate loans will add fuel to the fire. ‘The economy hasn’t gotten any better — it’s gotten worse,’ he said. ‘If people had jobs, we would not be in the predicament we’re in.’”

The Palm Beach Post. “Nearly 9,500 homeowners applied for Florida’s Hardest Hit foreclosure prevention program during its statewide debut last week, only a quarter of the estimated 40,000 borrowers the $1 billion plan is intended to reach. With 5 percent of Florida’s 3.2 million home loans between 30 and 60 days delinquent, foreclosure defense attorney Ron Kaniuk said the initial turnout for the program was ‘pathetically low.’”

“A year-end Mortgage Bankers Association report found nearly 20 percent of the state’s home loans were in foreclosure or at least 90 days late. Kaniuk, who is based in Boca Raton, said there is a lack of awareness and understanding of the Hardest Hit plan. ‘Also, those who are hardest hit are worn out,’ he said. ‘They’ve been so jerked around by the banks with HAMP and HAFA and a dozen other acronyms that they don’t want to apply for anything else.’”

The Naples News. “Naples City Council last week said it plans to give more than $180,000 to Habitat for Humanity of Collier County. The nonprofit organization will use the money – given to the city in 1994 as part of Coastland Center mall’s development plan – to purchase and renovate foreclosed homes within city limits.”

“Marcy Krumbine, director of Collier County’s housing, human and veteran services division, said Collier County government has been administering a similar foreclosure rehabilitation program since 2009. Krumbine said the county can spend up to $150,000 to purchase a property and $50,000 for renovations. Anything over that amount needs to be approved by county commissioners.”

“‘It’s a smart move to use money this way,’ Krumbine said. ‘There’s a lot of housing out there, and a lot of it is abandoned and foreclosed.’”

The Miami News Times. “Earlier this week, Miami New Times sat down with restaurateur Jonathan Eismann to discuss the disappearance of his restaurant empire and his new pizza venture. At the helm of four successful venues last year, Eismann had seemed like Mister Miami. Then, little by little, the empire crumbled. Bills piled up, restaurants folded, and lawsuits were filed. Even Eismann’s six-bedroom house dropped in value by almost a million.”

“Eismann’s biggest problem might be his enormous waterfront home at on the Venetian Islands. In a filing dated January 22, 2011, mortgage holder BankUnited filed foreclosure proceedings against Eismann and wife to the tune of $1,384,368.89. According to Miami-Dade property records, the 4,900-square-foot residence was purchased in 1999 for $1,150,000. The house and property had a staggering market value of nearly $2.9 million in 2009. That fell to just more than $2.1 million in 2010.”

The Guardian. “The US housing market has been on the slide for five years and there is no sign of an imminent recovery. Home ownership levels are now back at levels seen in 1998. Some economists are even worried that the US’s may have fallen out of love with property ownership. It’s as if the boom years never happened.”

“Estate agent Mark Shore’s British Homes Group, based in Kissimmee, caters specifically for foreign buyers. Shore, a Briton, has been in Florida since 2003 and knows a lot of people who were burnt by the collapse, including himself: ‘A lot of people are very pissed off. A lot of people have just walked away.’ This has been the worst property crisis since the Great Depression, worse than the 1980s, he says. ‘You don’t just bounce back from that.’”

“‘You would have to go back to the Great Depression to find anything similar,’ says Paul Dales, US economist at Capital Economics. ‘It will recover at some point, but we are probably two or three years away.’”

“High unemployment, the tightening of lending criteria by the banks and the fact that so many homeowners are in negative equity have undermined the foundations of the housing market, he says. ‘The top end of the market has done OK, but the bottom end is doing badly and I wouldn’t be surprised if the top end sees a further drop off too.’”

“Perhaps there is something else at work here, a deeper shift in America’s attitude to home ownership. Dales believes there is hard evidence that Americans have fallen out of love with bricks and mortar. Historically Americans have not been as keen on home ownership as the British, he says. ‘In the boom, home ownership looked like a one-way bet – there was a greater incentive to get on the ladder. Now I think attitudes have changed.’”

“He believes the official numbers on the state of the US housing market may be 20% worse than they appear. The National Association of Realtors is currently reassessing its figures and they are not expected to be revised upwards.”

“There is a war of sorts brewing between the National Association of Realtors and housing data provider CoreLogic about the NAR’s reporting of home sales. CoreLogic contends that the NAR inflated sales figures going back to 2000 — and the NAR is not completely disputing the allegation. ‘It’s been widely reported that the National Association of Realtors existing home sales data fell only 5 percent to 4.9 million in 2010, down from 5.2 million in 2009 and flat relative to 2008,’ CoreLogic wrote in its February newsletter. ‘CoreLogic existing home sales data indicates otherwise. Existing home sales data did not experience an increase in 2009 and that sales fell again slightly in 2010.’”

“Drew Peterson, a broker who specializes in selling bank-owned foreclosures, said his guess is the truth probably lies somewhere between the two data sets. ‘I forgot who said it, but the quote, ‘There are lies, damned lies, and statistics’ probably applies here,’ he said. ‘Both NAR and CoreLogic have a heavy interest in how the market numbers appear, so both likely use the market studies and surveys that best support their position, whatever that is.’”