Everything Went In The Opposite Direction
The Smoky Mountain News reports from North Carolina. “Developers in Western North Carolina and across the nation have seen business grind to a halt because of the crippled housing market. L.C. Jones and his investors recently purchased The Ridges, better known as Wildflower, the Macon County subdivision’s original name for a cool $1 million. BB&T was eager to get the property off its books after foreclosing on the former developer of Wildflower after that company failed to make payments. BB&T was owed $1.9 million on the property when the bank foreclosed.”
“Jones’ plan is to generate ‘life’ into the subdivision by selling lots that were previously priced at highs of $100,000 to $300,000 for $14,000 to $30,000. Higher-priced lots were available, too, but even they weren’t priced anywhere near those heyday numbers of the real-estate boom. The previous developer, Ultima Carolina in Atlanta, sold more than 160 lots in Wildflower before the company went belly up. The largely out-of-state buyers were primarily looking to ‘flip’ the properties they bought, selling for higher prices than they paid.”
“Peggy Patterson, who has sold real estate in Macon County for four decades, doesn’t see a return of the market at this juncture. ‘I don’t think it is rebounding at all,’ Patterson said. ‘If anything, it seems a little worse.’”
The Baxter Bulletin in Georgia. “The number of properties subject to foreclosure action in Baxter County increased more than threefold during the Great Recession, creating a category of real estate inventory that needs to be sold. Many of the bank-owned properties are owned by banks that don’t have local branch offices and are headquartered outside the Twin Lakes Area. Some of those are not quickly responsive to sales proposals, said Real estate seller Tim Walker.”
“‘The big banks want to be bailed out for what’s owed against them,’ Walker said. ‘They need to get real on the price and adapt to the market. I hope they will cut loose and sell.’”
The Atlanta Journal Constitution in Georgia. “There were 8,845 foreclosure notices in the metro Atlanta area in October, up 16 percent from September’s 7,634, according to Equity Depot of Kennesaw. Among residential properties, about 70 percent of notices have run in a prior period, the numbers say.”
“‘This indicates serious delinquencies remain very high,’ Bramlett said. ‘There’s no way to know how many new properties are becoming delinquent based on foreclosure notices here,’ he said. ‘It may mean that lenders are simply running notices on the most serious delinquencies. I know [Fannie Mae and Freddie Mac] had instituted some one-year moratoriums for the unemployed. There may be too many factors to really know anymore.’”
The Marietta Daily Journal in Georgia. “After hitting the lowest number of the year in October, foreclosures in Cobb have once again jumped over the 1,000 mark with 1,030 homes set for foreclosure in November. Greg Martin, president of ERA Sunrise Realty based in Smyrna, said he attended a Freddie Mac conference earlier this week and was told by Freddie Mac officials that, with new regulations coming down on banks from the federal government to take extra steps in modifications so previous foreclosure mistakes are not made again, foreclosure volume in the near future will likely be slowed.”
“In Georgia last year, there were 3,300 HUD homes on the market. Right now, there are 1,000 in Georgia. We keep hearing about the shadow inventory, that there are as many as 1.5 million homes in some stage nationally in the pipeline but with the state attorney general filing against mortgage companies for mishandling the foreclosure process, a lot of the banks are playing political games with Washington and holding back on this inventory,’ Martin said.”
“Martin said his job has shown him that the main reason homes are going into foreclosure is that buyers took out loans they could not pay out and did not anticipate the consequences of a fallout in the housing market.”
“‘People overextended and borrowed too much money in order to maintain a certain lifestyle because lending was so liberal; people borrowed more than they could afford on the premise thought that real estate always goes up in value; that they could refinance later if they wanted to; and they could take advantage of lower interest rates in the future or sell their home for more than they paid,’ Martin said. ‘But with the home price dropping 25 percent in metro Atlanta, everything went in the opposite direction.’”
WMFE in Florida. “Florida lawmakers are looking for ways to speed up the foreclosure process. The courts are dealing with a backlog of a quarter million foreclosure cases, and the court system is running short on money. The state’s chief economist says for every home that’s sold, three go into foreclosure.”
“Amy Baker told a state Senate Judiciary Committee Wednesday that it may take a few years before low housing prices attract enough buyers to turn the market around. She said each foreclosure case in Florida now takes an average of 676 days to complete. Baker told committee members that unsold inventory is the biggest problem in Florida, and foreclosures keep adding to it. ‘It’s backlogged and it’s not moving.’ Baker said. ‘It’s just freezing us in place for a housing adjustment that has to occur for us to move forward.’”
The News Press in Florida. “Tarpon Point Marina in Cape Cora needed help when a foreclosure lawsuit against the developer stalled a huge project in the Rose Garden area of the Cape. The condo association at Tarpon Point brought in KW Property Management & Consulting, a Miami-based company with a Bonita Springs office, to deal with the situation.”
“KW president Paul Kaplan said his company’s strategy in high-foreclosure communities is to take advantage of the banks’ ‘dragging their feet’ in foreclosures to avoid having the responsibility of taking possession of a unit and being forced to pay the maintenance fees. Instead, he said, KW urges associations to file for foreclosure themselves, take the property back before the bank can get it, and then rent it out to get the delinquent maintenance fees.”
“‘It’s costly, but most of the time you’re going to get title before the bank because the banks are so slow,’ Kaplan said.”
The New Journal in Florida. “For most homes, the cycle of foreclosure goes like this: Home is built. Home is bought. Residents fail to pay their mortgage. The bank forecloses. The home is vacant for months, possibly years, then someone new buys it and moves in. Inevitably, though, there are exceptions. In Deltona, residents are starting to see what happens when nobody buys that foreclosed home and conditions snowball beyond all hope for repair: demolition.”
“In Deltona, more than 2,000 homes are in some stage of foreclosure. As the roster of foreclosed homes for sale grows nationally, the glut locally has dramatically reduced property values. Deltona residents have seen a devaluation of their homes of more than 60 percent in the past three years.”
“The Dellbrook Drive property became a shell of its former self, neighbors said. Once a three-bedroom home built in 1988, it was vacant earlier this summer when it was finally determined to be uninhabitable, unfixable and unsafe to remain as is. The bank paid to have it torn down, giving the land over to the city to cover the liens that had been placed on it for previous code violations. For Maryanne Natoli, a next-door neighbor, the demolition couldn’t come fast enough.”
“‘Rat droppings,’ she said. ‘This block is alive with rats. The eyesore is gone.’”
The Palm Beach Post in Florida. “A Lake Worth attorney who once railed against foreclosure fraud and two Miami businessmen have pleaded guilty to conspiracy to commit mail fraud and money laundering in connection with a lucrative scheme in which they recruited straw buyers for mini-mansions in Wellington’s tony Versailles community.”
“Carol Asbury, a title attorney who founded the Save My Home Law Group in late 2009, and Patrick Brinson, of Miami, pleaded guilty to the charges last month and face up to 20 years in prison and a $250,000 fine when they are sentenced on Nov. 18. Carl Alexander, who recruited phony buyers from the some of Miami-Dade County’s poorest neighborhoods, pleaded guilty to the same charges Wednesday. He will be sentenced on Jan. 6.”
The Herald Tribune in Florida. “In the madness and frenzy of the housing boom, hordes — from Wall Street bankers to New Jersey plumbers — suspended logic and ethics for a fleeting chance at riches. That’s the message veteran mortgage bankers John Pettit and Bob Saltzman are trying to get across in ‘Stated Stated,’ a screenplay they have written about the historic boom-to-bust cycle.”
“‘Somebody asked me not too long ago what I do for a living and I told them I was male prostitute because I was ashamed to say I was a loan officer,’ said Saltzman. ‘But now I realize I was being made to feel guilty by people who were deflecting the blame from themselves.’”
“In an email message, Saltzman followed up that thought by saying it is Wall Street and members of the U.S. government in their push to expand homeownership who really should be held to blame for the housing crisis. ‘It’s a classic case of heat reversal by big banks and big government,’ Saltzman said. ‘Rather than admit any role in their greed and fraud, they kicked the cat by trying to make the public believe that street loan originators were the perpetrators of what was actually institutionalized fraud of reduced quality control and underwriting scrutiny to satisfy the insatiable global appetite for mortgage-backed securities.’”
“That is not to say mortgage bankers were angels. Pettit and Saltzman make that perfectly clear in their screenplay. Their characters cover the ethical spectrum from a mortgage banker who refuses to make ‘no-doc,’ liar loans that became the staple of the mortgage industry during the boom to a mortgage executive who believes the only way to make money in the business is by operating in the gray area of the rules and ‘walking close to the fire.’”
“As one of the main characters says in the screenplay: ‘We will absolutely, positively not tolerate any fraud as soon as we determine that we can’t deny it’s happening.’”
“Yes, mortgage bankers forged documents and falsified income and asset data so their customers could get loans they could not afford. But they were not the only ones who were committing crimes and suspending good judgment, the pair contend. ‘They keep saying the housing crisis was the fault of greedy professionals,’ said Pettit, who has worked in the mortgage business for 13 years. ‘The truth is, it was everyone’s fault, including the consumer.’”
