Putting The Cart Before The Horse
8 News Now reports from Nevada. “Short sales now account for half the properties on the Las Vegas market. For some people, it means putting their lives on hold. ‘It’s complete chaos sometimes,’ Cortney Wood said. She lives life half-packed, half-unpacked. She bought her house in 2008 for $285,000. She and her husband lost their jobs and her new business, making custom cakes, isn’t bringing in the same money. They opted to do a short sale after their bank’s mediation offer fell far short.”
“‘When we finally went to mediation, they finally offered us a modification. A dollar off our payment,’ Wood said. ‘We were figuring out where we were going to spend it. People really need to just let go of it and make the best of what their situation is. Move on. It’s just a house,’ Wood said.”
The Deseret News in Utah. “America’s suburbs, a long-time iconic symbol of middle-class prosperity, are now home to the largest and fastest-growing poor population in the country. In Roy, cars line up in the parking lot of a local strip mall once a month, waiting for volunteers from the Utah Food Bank to heft big boxes of pasta and vegetables into their trunks. Sandwiched between a big SUV and an old, broken down Toyota that’s holding onto its bumper with a mess of twine, there’s a shiny silver Pontiac. Inside, a prim little grandmother in a smart cardigan and pink lipstick shyly admits, ‘Once upon a time, I was middle class.’ Her husband’s insulation business crashed during the recession. The couple lost their house in the suburbs and are now living with their daughter.”
“‘You see people in all these nice cars lining up to get free food,’ said Jennie Probert, volunteer coordinator for the Utah Food Bank for Roy and Layton. ‘You’re quick to judge, ‘Can you afford that car?’ But it’s just a sign of the times.’”
The Spectrum in Utah. “With the Utah Association of Realtors reporting increased home sales and decreased prices and inventory throughout the state, Cindy Campbell, president of the Washington County Board of Realtors, said she feels confident the local market is going ‘back to normal.’ In St. George, home prices have decreased by 41.4 percent since 2006, according to Fiserv.”
“‘One of our prime discussions during Realtor meetings is what’s happening with the banks, in Washington, D.C. and with regulations,’ Campbell said. ‘I think the pendulum swung so far to one extreme that everyone with a heartbeat was getting a loan, and now it’s swung back so tight that we have more normal, stable lending practices.’”
The Salt Lake Tribune in Utah. “With the help of an auction earlier this month, Salt Lake City real estate developer Ken Millo said he has sold nearly all the condos in his long-stalled 35-unit Broadway Park Lofts development in downtown Salt Lake City. Selling prices of the 29 units were not disclosed, but Kennedy Wilson said $4.4 million worth of condos were sold. That works out to an average selling price of just under $152,000 per unit.”
“With most of the units in Broadway Park Lofts sold, Millo plans to finish the second building in the development. South of the first, it is planned for 51 condominiums and 10,500 square feet of retail space on the ground floor. Salt Lake City Realtor Tracy Thomas brought a buyer to the Nov. 5 auction who purchased a top-floor unit with 1,127 square feet of space and a deck for $206,000, plus the auction fee of 5 percent, for a total sale price of $216,300.”
“‘I was shocked at how low the selling price was for that unit,’ she said, adding that the condo was valued at $349,900 just one month ago.”
“Although the popularity of condos soared during the real estate boom of the early to mid-2000s, demand for these living units — as well as for single-family homes — has plummeted. But that was only one of the problems facing Millo’s development. Because of a backlog, it took him nearly two years to get Federal Housing Administration certification. The designation, which came through in January, is a necessity in today’s market, one that enables buyers to take out loans insured by the federal government.”
The Arizona Republic. “In 2008, Congress approved the U.S. Department of Housing and Urban Development’s Neighborhood Stabilization Program, an initiative that aimed to cut down on foreclosures and abandoned properties. Phoenix, with its high foreclosure rate, was awarded a sizable portion of NSP1, NSP2 and NSP3 funds - more than $115 million to date. But a couple of years after the program’s creation, Phoenix resident Karen Williams still had ‘mixed feelings’ as to whether the program was working here.”
“Williams will be one of the newest NSP-assisted homebuyers, moving into a home by Thanksgiving. ‘You’d hear about the money, but you wouldn’t see it,’ Williams said. ‘And then you’d see new development going on and say, ‘What’s going on here when we’ve got empty homes all over the place?’”
The Arizona Daily Star. “Arizona law doesn’t require debt holders to record the transfer of a mortgage from one lender to another before the foreclosure process can start, the state’s highest court has ruled. The Arizona Supreme Court issued the opinion Friday in response to legal questions raised in the bankruptcy case of Tucson homeowner Julia Vasquez.”
“Vasquez refinanced her home in September 2005 with Saxon Mortgage Inc. Her note was assigned to Deutsche Bank National Trust Co. as a trustee for Saxon Asset Securities Trust later that month. When the deed assignment was transferred, Saxon didn’t record it with Pima County, court documents say. Vasquez later defaulted on her mortgage, and in September 2008, a foreclosure notice was recorded.”
“With the question of whether Deutsche Bank legally had the right to move forward with foreclosure now answered, Vasquez’s case will return to U.S. Bankruptcy Court, Vasquez’s attorney, Beverly Parker said. And homeowners in Arizona will continue to struggle to find out who really owns their debt, she said. ‘The wild west of home foreclosures will continue to thrive in Arizona,’ she said.”
My Fox Phoenix in Arizona. “A Mesa family is in jeopardy of losing their home — and the bank is blaming it on a clerical error. The Mexins received a letter of approval for a loan modification, but six months later Bank of America said the letter was a mistake — and that the family home would be foreclosed on. This family was thrilled to learn their monthly mortgage payment was going to drop by about $400, only to find that months later they would owe all that money plus late fines and penalties.”
“Six years ago Cheryl and Rick Mexin bought their dream home. They live there with five children they adopted from Ukraine for a better life in Mesa, Arizona. ‘It’s a great house, the inside is just perfect for everything that we like and want,’ says Cheryl.”
“‘The Mexins sent a copy into bank of America they said ‘oh yes we do have a copy but it’s no longer valid because it doesn’t meet our investor guidelines, so you’re going to have to leave the house unless you can catch up on missed payments,’ which equaled about $20,000 at that point,’ says attorney Jonathon Frutkin.”
The Denver Post in Colorado “About two dozen protesters disrupted a foreclosure auction in downtown Grand Junction on Wednesday morning before three were arrested and the auction of foreclosed homes continued. ‘You guys are making money off of people’s dreams, dude,’ protest organizer Jacob Richards told Mesa County public trustee Paul Brown as Brown tried to start the auction.”
“One of the protesters was Cynthia Sexton, whose home was being sold. She was taken away in handcuffs while her adult daughter cried in the hallway and clutched a sale notice where the home she had grown up in was listed for sale. Officers initially tried to force members of the media to leave the protest scene, which had been announced in advance, before the officers peacefully arrested the protesters inside the auction room. Other protesters outside continued to wave signs and chant, ‘They got bailed out. We got sold out.’”
The Durango Herald in Colorado. “While housing is undoubtedly important, I am concerned about being misled by overspecializing on homeownership and construction. The personal savings rate in the United States has been steadily falling since the 1980s, when it accounted for about 10 percent of household disposable income. By 2007, it had reached 2 percent. What happened?”
“Well, we overinvested in housing. Since then, real estate has sucked up resources: Agricultural land has been swallowed up by neighborhoods, strip malls and freeways. Savings that would otherwise have gone to productive capital machines, technology and skills that foster economic growth have been fed to mortgages as households diverted their savings to real estate.”
“Granted, a house is more than just an investment. It is a home, which is just as well because the after-inflation rate of return to housing is, on aggregate, zero.”
“The problem of putting one’s nest egg into a single asset has come to roost: Houses aren’t very liquid, they can be hard to sell and must be fed monthly. Moreover, people’s perceptions were distorted during the bubble. When prices rise at 30 percent per year it’s hard not to be enthusiastic.”
“And in the face of all this, the federal government has looked impotent. All the ballyhooed home-rescue legislation has helped about 800,000 homeowners over four years or so. On the other hand, there were 230,000 new foreclosures – last month.”
“Let’s let homebuilding be a barometer of the health of the economy, not the driver. This is clearly a case of putting the cart before the horse.”
