September 30, 2011

This Time Things Are Different

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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