The Housing Bubble

It’s Friday desk clearing time for this blogger. “Wilfredo Guzman bought his Indian Orchard home in 2001 with what he says was a predatory mortgage, taking up seventy-five percent of his monthly income. After losing his full-time job, Wilfredo struggled to provide for his nine children while on unemployment. He eventually found a new job, but it was too late to stop the foreclosure. Now Fannie Mae owns 78 Healey Street, and they want the Guzman family out. The Guzman family has offered to pay rent or even buy back their home at its current market value, but they say Fannie Mae hasn’t responded to their offers.”

“‘I’m not leaving. I’m not going to leave,’ he said. ‘I’m going to stay here and they’re going to have to remove me by force. I will refuse to let go of my home for my children.’”

“Six activists protesting bank foreclosures were arrested after occupying Chase bank on Market Street in downtown San Francisco. They’ve been released, and Brenda Reed made the following statement to the crowd: ‘Chase Bank is trying to steal my home of 38 years.’ She said, ‘It’s government-sanctioned, nationalized fraud,’ and added, ‘there are thousands and thousands and thousands of people like me, all over California.’”

“Like many homeowners selling in a stubbornly depressed market, Candy Spelling didn’t get her asking price. Her 14-bedroom, 57,000-square-foot mansion in the Holmby Hills section of west Los Angeles was on the market for 28 months — at $150 million, the priciest private home ever listed in the United States. Spelling eventually accepted $85 million.”

“‘At the time it was listed, $130 million was the bottom line. If market conditions had been better, maybe I would have gotten more,’ says Spelling, who pocketed another $6 million from artwork and furnishings after closing the sale this summer.”

“Idaho-based Stoney Burke of Hall and Hall ranch listings include a 1,750-acre spread near Wyoming’s Grand Tetons on the market for $175 million. Burke has weathered several recessions and depressed markets over nearly a 40-year career. ‘In the past, the very best properties would flat line for two or three years and go back up in value,’ he says. ‘This time, despite substantial price cuts, things are different. The buyers aren’t there.’”

“Former wrestling star Hulk Hogan has revealed he blew ‘hundreds of millions’ on a lavish lifestyle during his glory years. The 58-year-old admitted he was now living in a rented home having slashed the price of his Florida mansion by $16m in a bid to get it off the market. ‘There are houses being bought, and cars being bought, and vacations for family members,’ he said. ‘There was eight, nine, $10 million, $11 million going out, so it got way off,’ he said.”

“Nearly one out of every seven mortgages in the Sacramento region is somewhere in the foreclosure pipeline, according to a Bee analysis of local foreclosure data. Based on the average monthly sales in the capital region, it would take a year and a half to exhaust this ’shadow inventory’ of distressed properties. This figure includes three categories of distressed properties: 12,285 houses already owned by lenders but not sold. 19,367 units whose owners have received an initial foreclosure notice, or notice of default, but have not yet been foreclosed upon. Another 21,604 borrowers who are 90 days or more behind on their payments but have not yet been served with a foreclosure notice.”

“‘This problem has been lingering for a long time,’ said Doug Covill, president of the 5,500-member Sacramento Association of Realtors. ‘The sooner we get through this inventory, the sooner the economy improves.’”

“Of seven economists interviewed by the Palm Beach Post, six said they generally believe speedier foreclosures will lead to a swifter rebound in the housing market and a more rapid healing of the economy at large. ‘There might be a painful adjustment process at first but is it better to take the pain up front or have it hanging over our head for 10 years?’ said Mark Vitner, the Wells Fargo economist.”

“Pasco County’s legislative delegation listened for four hours Monday as speakers took turns. J. Thomas McGrady, chief judge of the 6th Judicial Circuit, which includes Pasco and Pinellas counties, asked the delegation to oppose a bill that would take courts out of the foreclosure process. ‘If we’re going to take judicial oversight away from that, I think it will take due process away from homeowners,’ McGrady said.”

“Weatherford said foreclosures take too long in Florida compared with other states. ‘It’s prolonging the depression,’ he said.”

“McGrady said the lenders, not judges, are causing delays. ‘Banks don’t want to own the property because they don’t want to pay the taxes, insurance and upkeep,’ he said. ‘We can move them faster if the lenders want to move them faster.’”

“Seventy-eight-year-old Norman Harris takes pride in his property, and is tired of looking at overgrown grass, broken windows and transients hanging out at the abandoned home next door. The home in Tampa’s Grant Park neighborhood used to be someone’s investment home. A tenant moved out in 2007, and Harris says the home has been empty ever since. Two years later, in 2009, US Bank filed for foreclosure. But the lender hasn’t taken it back, and it hasn’t taken any steps toward maintaining the home.”

“‘At one time, somebody was sleeping in that shed back there,’ Harris said. ‘It’s ridiculous.”

“The LDS Church has completed all of the 425 condominiums that will be part of its City Creek project when it opens next year. Now the tough part: Getting people to buy them. About two-thirds of the 90 units, priced from the $200,000s to more than $2 million, are still for sale. ‘We have buyers sitting on the fence,” said Mark Gibbons, president of a development arm of The Church of Jesus Christ of Latter-day Saints. ‘They are either trying to get financing, which can be hard in this market, or they are trying to get another property sold.’”

“According to the Utah Realtors Association, homes are starting to sell again. But it’s still a buyers’ market, and many sellers are finding they have to put up some bargain prices to get their homes sold. Like many other homeowners in Utah, Krista Numbers has learned that selling a home right now isn’t all easy. A short sale, she put her home up for a bargain price and got a buyer in just a few days. ‘The thing that I have definitely learned with this market is you have to roll with it. You’re buying high and selling high, or you’re in a market where you’re gonna sell lower and you’re gonna buy lower,’ she said.”

“Realtor Vann Larsen says the good news is homeowners can make that quick sale if they’re willing to face the facts. ‘The sellers aren’t going to get what they thought their home was worth a few years ago, but those values were inflated,’ he said.”

“A departing Federal Reserve official lit into the U.S. central bank’s ultra-easy policies, saying they may be doing more harm than good and could harm economic growth over the long term. ‘When you encourage consumption by inhibiting your interest rates from rising to their equilibrium level, you will in fact buy problems, and we have in fact bought problems,’ Kansas City Federal Reserve Bank President Thomas Hoenig said in his final speech in office.”

“In a little more than two weeks, after more than 33 years on the job, Bill Malkasian will hang it up as president of the Wisconsin Realtors Association. The next day he will start his new job, as a senior political strategist for the National Association of Realtors. And as the Wisconsin market moves out of its current downturn — something Malkasian estimated would take another three to four years — the industry, at every level, needs to mend some fences, he said.”

“‘We’ve lost a lot of trust in real estate right now,’ Malkasian said. ‘We’ve got a whole new generation of people who think homeownership may not be as cool as it used to be. Because (their) mom and dad had a foreclosure. It’s like how Grandma and Grandpa had a Depression. There is a huge psychological change here.’”

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The News Journal reports from Delaware. “It wasn’t so long ago that retirement meant a well-earned ticket to Easy Street. Today, that’s nothing more than fantasy for tens of millions of Americans. More than half of all U.S. households hadn’t saved a penny in their 401(k) retirement accounts and the median 401(k) balance was just $34,000, Pew Charitable Trusts found in 2004. And that was before the recession devastated investments, housing values and net worth.”

“Don Rosado retired after 27 years at the refinery near Delaware City.Rosado said he has some savings and $600,000 in a 401(k) account, which puts him way ahead of most people today. He said he needed surgery to address a foot problem and his wife, Margaret, needed care for a heart ailment. They’re trying to sell their vacation house at the beach, and Margaret, 61, has begun looking for work.”

“‘Now, I’m only on Social Security and my 401(k). I’m starting on that this month to pay the bills,’ he said.”

“Homeownership, once the bedrock ‘nest egg’ for millions, has been undermined by the real estate collapse. Many families won’t have their homes fully paid off by the time they retire. In 2007, 32 percent of households headed by someone age 65 to 74 were carrying home mortgage debt, and nearly 19 percent of households headed by those 75 and older had a mortgage, according to the Federal Reserve Survey of Consumer Finances.”

The Gazette in Maryland. “Like many real estate brokers, AJ Khetarpal, CEO of Maxxum Realtors & Associates in Rockville, knows that the days of the quick, easy home sale — with buyers in a bidding war the minute the home goes on the market — are, for the most part, not going to return for a while, and likely for a long while. ‘So far this year, about 86 percent of my sales have been short sales. The rest have been foreclosures,’ he said. ‘I don’t see a lot of regular sales.’”

“‘We will not have a full recovery until the economy improves overall,’ said Linda Simpson, with Weichert Realtors in Rockville. ‘Some buyers still do not grasp the idea that it is a buyers’ market and still a good time to purchase.’”

The Star Democrat in Maryland. “The sluggish economic growth experienced so far this year is expected to continue throughout the rest of 2011 and into 2012, according to two economists who presented their forecasts Sept. 15. After predicting last year that the economy would modestly move forward in 2011, as it did in 2010, Gary Keith, VP in the commercial banking division of M&T Bank, said he’s not as optimistic this year, given what actually has occurred to date in 2011.”

“‘We’re in a much deeper hole than we originally thought,’ he said.”

“With no short-term fix in sight, though, Keith said the jobless numbers most likely will be ’sticking stubborn,’ as the economy isn’t expected to grow fast enough over the next year to bring those numbers down. Couple that with a still-struggling housing market and the near gridlock in Washington, D.C., on important economic issues, and meager growth can be expected for the foreseeable future, Keith said.”

“‘This is not just a one- to two-quarter event,’ he said. ‘This will be a multi-year phenomenon.’”

The Greenville News in South Carolina. “Greenwood County, hit hard by the double whammy of recession and decline in the textile industry, had the highest increase in poverty of any county in the nation with a population above 60,000, according to Census figures. ‘It is very tough times here,’ Greenwood County Councilman Mark Allison said.”

“Allison, a Realtor, said he ran for the council seat to try to help bring jobs to Greenwood. Since taking office in January, though, he’s seen a continued downturn, particularly in housing sales. ‘One of our big issues is foreclosures. The housing market has just plummeted,’ he said. ‘It’s a national issue. It’s not just Greenwood.’”

The Star News in North Carolina. “The company that owns the sprawling Sea Trail Golf Resort and Convention Center in Sunset Beach filed Tuesday for Chapter 11 bankruptcy protection. In the filing, Sea Trail Corp. listed assets of more than $34 million – most of that in real property. The company owns parcels within the Sea Trail community. The resort is connected to the Sea Trail Plantation residential community, which is not affected by Tuesday’s filing.”

“Sunset Beach Mayor Ronald Klein lives in Sea Trail Plantation, which uses the resort’s facilities. ‘Having the golf course in good condition and good operating order means quite a bit to the people here,’ Klein said Tuesday, and for people ‘to get full value out of their houses if they should decide to move on.’”

“The Chapter 11 will have some impact on the development’s condominiums, said Mary Ann Bechtel of Mary Ann Bechtel Real Estate in Ocean Isle Beach. ‘The biggest thing is that it is in a state of flux,’ she said.”

From Nooga.com in Tennessee. Chattanooga remains a relatively stable real estate market because of steady economic growth, Anne-Marie Wheelock, affiliate broker with ReMax Renaissance, said. Wheelock weighed in on the slight uptick in foreclosures and said she isn’t significantly concerned with those numbers. ‘When banks release foreclosures, it is important that they not flood the market and dilute the value properties,’ she said. ‘An increase in foreclosures could be the result of lenders finalizing backed-up foreclosure paperwork that had been put on hold during the robo-signing controversy last year,’ she also said.”

“Dwayne McMillen, a real estate broker with Crye-Leike Realtors in Hixson, said that—overall—he is positive about the future of his business. Although he said foreclosures are always a concern, the biggest issue is the national economy. ‘There is this shadow inventory that is still going to hit the market,’ he said. ‘That has been a concern. We obviously don’t have a real clue on how many of these units will be local, how many nationwide.’”

The Tennessean. “In an interview with The Tennessean before addressing area real estate professionals at a luncheon, Frank Nothaft, VP and chief economist at mortgage giant Freddie Mac said he expects local home prices and sales to pick up steam by next year, though gains will be modest. Q: Can you talk about Middle Tennessee’s housing recovery? Have home prices here finally hit bottom?”

“A: ‘In Nashville, prices in relationship to income have come back in balance. If Nashville is not at bottom, it’s very well close to the bottom,’ Nothaft said. ‘I’d be surprised if there was a further slip in prices.’”

“Q: Many reports note how tight lending remains in the aftermath of the credit crisis. How would you evaluate it? A: ‘We don’t want to compare lending to the standards of five years ago. Underwriting standards have swung away from high-risk lending. Lenders are no longer dealing with borrowers with low credit scores with subprime ratings, and they’re not doing, what we call, ‘no-doc’ lending anymore,’ Nothaft said, referring to loans made with little or no documentation of employment, income and other key data.”

“‘In the primary market, the emphasis is now on full documentation. We verify income, verify jobs, and verify other assets and other liquidity in case of a rainy day. We’ve gone back to the underwriting fundamentals of the 1990s.’”

“Q: Why wasn’t this the case in the run-up to the housing boom? A: ‘I think some of the challenges we faced at the time when the subprime market was beginning to collapse, in the early part of 2007, was that we still felt the responsibility to provide stability and liquidity to the home mortgage market, and at the time, we lowered some of our internal standards for mortgages,’ he said.”

“‘We underestimated the risks in the marketplace at the time. We had the mistaken view that ‘no-doc’ loans would be of lower risk. In retrospect, those were not good decisions because those loans performed poorly.’”

The Suffolk Herald in Virginia. “In case there was any question about it, the effects of the recession, of the failed housing market and of the nation’s banking debacle continue to linger — even in Virginia and even right here at home in Suffolk.”

“When state regulators showed up at Bank of the Commonwealth locations around Hampton Roads on Friday to take the keys to the doors and the combinations to the safes, they put an end to a long, painful process that had cost the bank’s investors millions of dollars and — if not for the Federal Deposit Insurance Corp. — could have cost depositors even more. As with so many of the bank failures the nation has seen in recent years, the culprit was bad loans.”

“But looking even deeper, one must consider that someone had to approve those bad loans, despite the likely evidence that they were risky at the time of that approval. And, as we’ve seen in other cases in the ‘too-big-to-fail’ banking industry, there likely was a corporate philosophy of unchecked greed that encouraged approving even the riskiest of loans. As it turns out, Bank of the Commonwealth was not too big to fail.”

“The good news is that depositors were protected from the results of the failure. The FDIC did its job, and when all is said and done this failure will have cost American taxpayers very little, compared to the bailouts and stimulus programs that have been designed to save some of the nation’s biggest institutions during the past few years.’

“But Friday’s surprise announcement by the State Corporation Commission that the bank’s assets had been seized — including a branch right here in Suffolk — was a grim reminder that even here we are not isolated from the most extreme examples of the economic uncertainty that pervades our nation.”

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The Paragould Daily Press reports from Arkansas. “Dr. Michael R. Pakko, state economic forecaster with the University of Arkansas at Little Rock, addressed the Paragould Chamber of Commerce, telling the audience that Arkansas was dragged into the recent recession by the rest of the country. He said Arkansas has farerd fairly well in the recovery in part because of the housing market. ‘We never really saw the big run up in housing prices during the early part of the decade, so we never saw the subsequent crash afterward, and it didn’t bring the stress on our banking system,’ he said.”

Arkansas Business. “Condo and townhome developers have embraced tenants as the next best thing to buyers in a market long on supply and short on demand. Better to have a rent-generating unit than an empty, unsold one. Two years ago, eight projects in Little Rock and North Little Rock were home to 434 residential units, backed by more than $140 million in bank loans, accounted for 120 units sold through September 2009, mostly in the 300 Third project, one of the first to open.”

“Since then, the developments have attracted 55 more sales and reduced the overall inventory to about 60 percent. To improve the cash flow of projects, owners have turned to leasing unsold units and often offering residents a rent-to-own option. Rett Tucker, partner in the 20-story project at 315 River Market Ave., said five of these deals were now under contract to become sales. ‘It certainly isn’t like it was before the bubble burst,’ Tucker said of the market.”

“Entry-level condos on floors 6-11 at the River Market Tower, the largest condo project in town, start at $239,000 for one-bedroom units and $349,000 for two-bedroom units. These white-box units have plumbing, electric and heating/cooling in place along with all walls and doors but await flooring, painting and other finish-out details. From these units, the prices ascend and top out at the 19th floor, where a 2,946-SF unit sold for $1 million. Prices for Riviera condos range from $185,000 for 695-SF units on floors 2-4 to $879,000 for 2,850-SF units on the 11th floor.”

The Oklahoman. “Gary Gregory was talking about the sky falling before most people were — or at least before most folks willing to talk where I could hear them — five years ago. Gregory, commercial realty broker and managing director of Colliers International-Oklahoma, recalled those days. Q: Well before most people were talking about a potential housing bust and recession, around 2005 or so, you talked about seeing signs of trouble ahead. What did you see?”

“A: I began to bring to the market’s attention the real possibility of a significant bubble building in real estate driven by easy money. In a presentation to the Oklahoma Affordable Housing Conference I suggested that increased liquidity in the form of subprime and relaxed lending standards would create a problem. I also presented a supply-and-demand study showing overbuilding in subdivisions and large single-family homes. …”

“My goal was to tap the brake on a runaway truck. The lender’s toolbox had grown from a simple box to a wall-sized Snap-On rolling cabinet. This was created by both Wall Street money looking for a home in mortgages and banking regulators overwhelmed by the volume and more than two years behind on audits. I felt the market was on the knife’s edge from 2006.”

The Times Picayune in Louisiana. “The federal government was able to halt the cascading 2008 financial crisis by acting with “overwhelming force and speed,” and regulatory reforms enacted over the past three years have given economic policymakers better tools to analyze systemic risk and deal with future crises, the Treasury Department official in charge of the Troubled Asset Relief Program said on a visit to New Orleans.”

“‘The actions we took to stabilize the crisis worked. We really did arrest the panic,’ Timothy Massad, assistant secretary for financial stability at the U.S. Treasury Department, said in an interview and speech at Tulane University’s Freeman School of Business. ‘The key lesson of this crisis is you have to act with overwhelming force and speed.’”

“The cost of TARP and other federal actions in the crisis will cost less than the 1980s savings and loan crisis as a percentage of gross domestic product, Massad said. Massad said in an interview that regulators can’t force banks to lend, and demand for loans declined in the recession, but TARP’s financial cushion helped banks to withstand losses during the economic hard times. There’s more work to be done to loosen credit, he said.”

The Houston Chronicle in Texas. “Despite a volatile stock market and tight lending standards, Rockspring Capital president and CEO Jim McAlister IV is optimistic about the market for undeveloped land. Q: What trends are you seeing in land transactions, especially in the Houston area? A: Since 2008 the amount of land transactions has been down generally 90 percent. It’s been a huge drop off a cliff because of the illiquidity in the marketplace. We’re seeing it’s harder to get a loan for a house. Before the downturn, it was too easy. Now it’s too hard.”

“Q: What’s happening to prices? A: Land prices are still holding on. Houston never had the artificial bubble in pricing, so most of the sales that are occurring are occurring at good pricing, not much different than the downturn. The really good buys are being made when someone is leveraged and needs to dump a property, and there aren’t a lot of people who can close quickly with cash. It’s only if somebody is in a tough situation or a bank foreclosure and the bank wants it off their books.”

“It’s been to the surprise of everybody the current policy from Washington on down has been to extend and pretend. There are a lot of nonperforming notes banks could have foreclosed on, but they continue to extend them.”

“Q: Does that mean we’ll see a slew of foreclosures at some point or that borrowers are getting more time? A: I think it’s buying them time. A lot of borrowers will get through and never see foreclosure. Because there are no mass-foreclosed land sites on the market trying to be dumped, they’re not bringing the market down at all.”

“Q: What will it take to get back to normal? A: There’s good news and bad news. The good news is that Texas is leading the nation in population growth and employment growth, and not just leading a little bit but by a massive amount. On the other hand, illiquidity was created by the housing bubble and bust. It basically busted all the lenders, and so even in Texas or Houston, developers should be able to get loans based on today’s supply and demand. But they’re still not able to.”

The Coeur d’Alene Press. “Recently, the Federal Housing Finance Agency (FHFA), the U.S. Treasury Department and the Department of Housing and Urban Development (HUD) announced they would seek new options for selling single-family real estate owned (REO) properties held by Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).”

“Now, according to the recent article in Inman News, ‘The government is looking for approaches that achieve a reduction in foreclosure volume but also for current renters to become homeowners - and to assist former homeowners with affordable rentals in a cost-effective manner. There have been examples that have worked. For example, from 1986 to 1988, one-third of all Fannie Mae’s national REO inventory was situated in five Houston-area counties. The sheer volume of localized foreclosures and the severity of the absolute value decline rivaled the worst financial performance in U.S. history.’”

“‘Working with Fannie Mae in Washington, D.C., a group conceived a plan to brand ‘Fannie Mae as the Best Housekeeper in Houston,’ celebrating the like-new condition of restored Fannie Mae-acquired properties. Offered with below-market, fixed interest rates, a maximum of a 97 percent loan-to-value for owner-occupants, reduced closing costs, 30-day closings, and refurbishment to a like-new condition, Fannie Mae homes were extremely popular in the Houston residential real estate market for several years.’”

“‘To accelerate the rehabilitation process, Fannie Mae’s Houston office operated like a consolidated real estate disposition and construction company. A contractor/builder partner bought carpet, paint and roofing material by the container load directly from the warehouse, reducing the costs of refurbishing the foreclosed homes.’”

“It worked once and with the government likely to become the largest landlord in America, perhaps it is time to get creative once again.”

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The News Journal reports from Florida. “West Volusia Realtor Kim Laney has been trying to sell a three-bedroom, 1,216-square-foot home here since January. The home on Catalina Boulevard was initially listed at $89,900, the same price the current homeowner paid three years ago. However, that is far below the $216,500 a previous owner paid during the housing boom in 2005. Interest was slow at first before the asking price was dropped to $69,000, almost the same price it sold for in 1999, she said.”

“Laney remains hopeful that the house will get sold — eventually. ‘Right now the price is key,’ she said.”

The Herald Tribune. “A dangerously high percentage of mortgage-holders in Sarasota, Charlotte and Manatee counties are now spending more than 35 percent of their income on their mortgage, property insurance and taxes, and other major home expenses, new census data shows. Economists say that phenomenon is a definitive warning sign of further foreclosures.”

“Port Charlotte’s John Cannon says he paid way too much — about $210,000 — for a home during the boom that he would be lucky to sell today for $125,000. ‘It’s a gorgeous house,’ said Cannon, who is no relation to the Lakewood Ranch builder of the same name. ‘I gave them way too much money, I don’t know what I was thinking. But I make the payments. It hurts every month I write that check.’”

“But not writing it is simply not an option for Cannon, who says walking away from an agreement is unthinkable. It is not the kind of message he would like to send to his 16-year-old son.”

The St Petersburg Times. “Keith and Bernadette Grindley have three homes in foreclosure yet found a way to make money from the experience. They put up the homes for rent. Over the last two years, the Grindleys collected more than $150,000 on their luxury homes in St. Pete Beach and Belleair. As of last month, the Grindleys and at least 2,009 others in the Tampa Bay area were renting out homes in the foreclosure process, collectively taking in millions of dollars. And those numbers are conservative.”

“A 2009 article in the DuPont Registry magazine said that Keith Grindley worked for Hammerscotts Homes. It is not listed in Florida corporate records. The article quoted the Grindleys as regretting having to sell the Belleair home. ‘What I’ll miss most is the scale and scope of the rooms and the immediate proximity to the Belleair Country Club, where I play tennis several times a week,’ Bernadette Grindley told the magazine. The Times could not reach the Grindleys for comment.”

The Orlando Sentinel. “A 2010 Sentinel analysis of foreclosures versus short sales in neighborhoods throughout Orange County found that about 80 percent of all ‘distress’ sales were foreclosures in ZIP codes with high numbers of renters and large numbers of families living below the poverty level — mostly, though not exclusively, black and Hispanic neighborhoods.”

“Former Pine Hills resident Sylvia Ruiz said that, even though she dutifully paid her rent there, she came home one day last year to find paperwork warning that her house was headed to foreclosure. Her absentee landlord, like many others, had pocketed her rent payments without paying the mortgage. ‘I have a 10-year-old and a soon-to-be 7-year-old. I chose to move right away,’ the single mother said. ‘The one thing I did not want was for them to move my stuff outside and for those children to experience that.’”

“During the 2003-07 homebuying frenzy that preceded the recession, a disproportionate share of minority buyers were persuaded to finance their purchases with dangerous, ’subprime’ mortgages. ‘We were targeted, no doubt,’ said Vickie Johnson, a black homeowner and full-time worker in Altamonte Springs who is also taking a full load of college classes. ‘People were coming to the house and asking if we needed extra cash — so we could take out a mortgage.’ Johnson’s recent attempts to get Bank of America to permanently modify her mortgage have failed, and she hopes a lawyer she has hired can save her house from foreclosure.”

The Tampa Tribune. “Former Florida Highway Patrol trooper Shaun Leo Reid pleaded not guilty Wednesday to charges of mortgage fraud involving more than $100,000. Reid was arrested earlier this month for allegedly lying about his income on federal loan documents used to buy a south Tampa investment home. His lawyer, Ray Lopez, said Reid had no idea he was part of a fraudulent home deal and was ‘duped.’ He said he questions whether investigators went after Lopez in part because of his job in law enforcement.”

“Lopez, Reid’s lawyer, said someone else added this information of Reid’s loan application. ‘It’s pretty conceivable how this could happen if you’re not the one sending the info to the bank,’ Lopez said.”

“Reid, who collected a salary of $41,000, paid $500,000 for a home in Tampa’s posh Beach Park neighborhood in 2008. Wells Fargo foreclosed on the Azeele St. home earlier this year and sold the property for $280,000 in June.”

From WPEC. “Many Floridians facing foreclosure get to stay in their homes for a couple of years before losing their houses. But that could change. A plan to take the foreclosure process out of the courts is gaining support with Florida lawmakers. A similar proposal introduced last year was defeated after an uproar from homeowners. But it’s expected to be filed again.”

“Bankers say it’s a more efficient way to manage foreclosure cases and get thousands of properties back on the market to help pull Florida out of it’s housing rut. But Foreclosure defense attorney Dustin Zacks disagrees. ‘If we speed up the process and eliminate judicial oversight there’s gonna be more problems there will be more houses back in the market which will further depress the market,’ said Zacks.”

News 4 Jax. “Clay County deputies arrested Marcellous Dunbar, who claims to be a pastor at a local church, Friday evening on accusations he’s been squatting at a $500,000 home in Oakleaf Plantation for the past few days. Marcellous Dunbar appeared in court Saturday morning. He was charged with grand theft and burglary. Dunbar said he filed paperwork for adverse possession– a controversial Florida statute that allows change of ownership to a home.”

“But Clay County officials decided he didn’t have the right to the home and charged him with felonies. The arrest comes after Channel 4’s Jim Piggott questioned Dunbar earlier Friday about living at the home he doesn’t own. ‘What’s going on with the house?’ Piggott asked Dunbar. ‘It was adversely possessed,’ Dunbar said. ‘It was in foreclosure. Do your homework.’”

“‘I did my homework,’ Piggott said. ‘We are allowed to be here. This isn’t your house. It isn’t in adverse possession. It was taken illegally,’ Piggott said. ‘There has not been any taxes paid on this. There is a new homeowner moving in today. Your furniture is going out on the street. This is all according to police. They are looking for you to make an arrest. How could you just come into a place? This isn’t your house.’”

“There are three other houses in the neighborhood for which Dunbar and others have filed similar paperwork. At one of the homes Friday, the front door was left open and no one was in site.”

First First Coast. “The housing market has been mired in the foreclosure crisis, but it looks like the industry has finally found solid ground. ‘We see drastic improvements,’ said Dane Leslie, president of the Northeast Florida Association of Realtors, adding that home sales are up and inventory is down. Leslie said supply is low and rental rates are up. ‘We saw 20 percent drop in the number of homes that came on the market versus August of last year,’ he said.”

“Leslie is also optimistic about the future. ‘I think the picture is strong; we’re not going to get back to the wild days we had for several years in the early 2000s, but I think we’re going to get back to a more realistic housing market that we can sustain. I think we’re there,’ he said.”

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Readers suggested a topic on the current economic situation. “Are we once again in a bear market now?”

A reply, “Darnit, I seem to remember predicting that this country would go to pot in Summer 2011. It’s the only time they could allow it to happen and still have time for a ‘turnaround’ before the 2012 elections. Fannie’s 6% –> 4% will probably go nowhere and Op Twist is not enough liquidity and too hard for people to understand anyway. I suspect that somebody shut off the spigot, which is why BoA is rushing to the exits and why the stock market is reverting to goods and services.”

One added, “China’s been escalating their threats. Maybe they’ve finally made a move that supports the idea they finally mean it and we’ve moved beyond the saber rattling.”

Another said, “If I were owning both parties, I’l let them switch places in 2012. It will settle the sheep down for a while, while they wait for change that isn’t on its way.”

One had this, “Let’s look at some basic facts: America is old and tried and broke.”

A reply, “I take it your a non-skateboard, non-iPhone, non-wii-chess user. How about Kite-surfing ever try that?”

The Associated Press. “The world economy is in a world of hurt. Europe is wrestling with a debt crisis. Economic growth in powerhouse China appears to be slowing. And in the United States, political paralysis has left policymakers with few tools to fight a slowdown.”

“U.S. markets sank this week even though the Federal Reserve offered a bigger dose of economic stimulus than investors had expected: The Fed plans to reshuffle $400 billion of its investments in hopes of pushing down interest rates on mortgages and other long-term loans. But economists say the Fed’s effort probably won’t make much difference. Rates on mortgages and other loans are already the lowest in decades. The Fed’s announcement underscored the fear that the American central bank had run out of tools to stimulate the economy.”

“Despite China’s rising power, experts say its economy is still not big or strong enough to compensate for meltdowns elsewhere: Chinese investment and spending is only one-sixth that of the European Union and United States. ‘From a global perspective, China’s domestic demand is still way too small to offset the impact of a recession’ in Europe and the U.S., Deutsche Bank economist Ma Jun said in a report.”

“To make up for a 3 percentage point drop in growth in those economies, China would have to grow by 18 percent this year, he says. ‘This is mission impossible.’”

The Kansas City Star. “Kansas City Power & Light Co. officials were optimistic that 2011 would be the year the economy — and electric meters — started humming along again. But after six months some troubling figures emerged. The utility’s residential customers were using 4 percent less electricity than a year ago, when the numbers were adjusted for the weather’s ups and downs. Commercial and industrial electricity use also was down, but just 1 percent.”

“Frugal homeowners’ conservation measures, such as replacing inefficient furnaces and air conditioners, had something to do with the decline. But a starker symbol of the troubled economy also played a part: A growing number of vacant, foreclosed homes are using little or no electricity. ‘These are homes that were getting bills, and now they aren’t,’ said Chuck Caisley, a spokesman for Kansas City Power & Light, which has 725,000 residential customers in Missouri and Kansas.”

The Salt Lake Tribune. “Utah has the nation’s 10th-highest foreclosure rate in the country a new report shows. But the Beehive State, which has been in the top 10 for more than two years, has a foreclosure problem that pales in comparison to No. 1 Nevada, according to RealtyTrac. Nevada was followed by California, Arizona, Georgia, Idaho, Michigan, Florida, Illinois and Colorado.”

“There are about 3.7 million more homes in some stage of foreclosure now than there would be in a normal housing market, according to Citi analyst Josh Levin. ‘This bloated foreclosure pipeline now presents the greatest obstacle to a housing market recovery,’ Levin said in a client note this week.”

The Providence Journal. “The average monthly rent in 2010 for a two-bedroom apartment in Rhode Island, $1,165, is more than 50-percent higher than it was in 2001, when it was $775. The ‘affordable’ rental price for a two-bedroom apartment, the amount that is 30 percent of the average private-sector wage in Rhode Island ($41,808), is $1,045.”

“Despite declines in home values, affordability continues to be an issue for home ownership as well, the report found. The income required to afford a $210,000 house (the 2010 median sales price) in Rhode Island is $64,766. But the median annual household income in Rhode Island is $54,120. Rhode Island’s unemployment rate, 10.6 percent in August, has been in the double digits since March 2009.”

“‘I still think we’re seeing the numbers artificially depressed due to delays [in the foreclosure process],’ said Joy Riley, broker-owner of Westcott Properties, of Providence, which specializes in selling foreclosed properties. As a result, ‘the shadow inventory of at-risk properties is continuing to grow.’ ‘There are hundreds of foreclosure cases in limbo due to the pending legal actions,’ she said. Riley said it’s taking close to 400 days to process a foreclosure.”

The Douglas County Sentinel. “Georgia ranked fourth nationally in foreclosure rates for the month of August, with Douglas County posting the state’s second highest foreclosure rate. Chris Collier, executive officer of the Westside Homebuilders Association, said seasonal factors may also contribute to a rise in foreclosures.’

“‘The summer selling season is coming to an end for people who want to buy homes before school starts. Banks may be saying that now that the season is over, they have no choice but to move forward with foreclosures. Government regulations can force banks to process foreclosures as well,’ said Collier.”

“Kim Hargrave, a real estate broker who works with Douglas County on neighborhood stabilization programs, was not surprised by the statistics. ‘I don’t see it getting better in the near future. We are trying to use local companies to get some foreclosures occupied. The county is doing a lot to try to combat that through classes for new homebuyers and other programs, but the biggest thing right now is we need more jobs,’ said Hargrave.”

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