Teeing Up The Pig For The Python
It’s Friday desk clearing time for this blogger. “It was surprising to me several years ago when a legal aid attorney I knew became a go-to foreclosure crisis expert. April Charney has pointed out the dark clouds lurking behind whatever silver linings are being touted by those who claim the housing market has stabilized and is getting healthy again. Foreclosure stats, she said in an email, are often manipulated by too many factors to be meaningful. One factor she has talked about for years is still in play: Banks acting as mortgage servicers often aren’t the ones that lose when mortgages they sold go bad, so government efforts aimed at reducing foreclosures may cause delays more than than actual preventing foreclosures.”
“‘Servicers are financially better off with a foreclosure,’ she explained. ‘They are fee-incentivised to keep a loan in default limbo for as long as possible.’”
“Portland senior housing inspector Mitch McKee has become the point man for the city’s recession-fueled stock of dilapidated homes. McKee focuses most of his time dealing with houses in the limbo between foreclosure and repossession. Take, for example, a home on North Buffalo Street that has long drawn the ire of neighbors. Christine Duffy, the chair of the Arbor Lodge Neighborhood Association who lives on the same block, said the house found its way onto Craigslist as a free place to stay.”
“According to Multnomah County records, the home was first scheduled for foreclosure sale in December 2010, but the bank called off the sale. It’s now scheduled for auction next month. ‘You’d see all kinds of people coming and going in the middle of the night,’ Duffy said. ‘It’s what can happen to any vacant property when they sit vacant for a while.’”
“Most lending institutions don’t invest a lot of money in making repairs. Rather, the properties are ‘broom swept’ or tidied up, real estate agent Patti Syme said. If the home is vacant but not quite through the foreclosure process, it’s likely no one is maintaining it, said Julie Sundquist, an associate broker with Coldwell Banker in Nampa who works on Fannie Mae properties, because lending contracts don’t allow for it.”
“In May, there were about 30 REOs, or bank owned homes, on the Treasure Valley market, said Pioneer Title Co. CEO Tim Bundgard said, compared to about 250 a year ago. It’s hard to predict how much shadow inventory banks are holding back, but Bundgard doesn’t foresee another flood of distressed properties hitting the market. ‘I think (banks) are more cautious and they’re taking their time to process so they don’t knock the values down,’ he said.”
“For-sale homes in California are sparse, even in areas with high foreclosure rates. It has led to buyers like Jennifer Bryant, who is willing to throw money at just about anyone willing to sell her a house. Since February, Bryant has made 35 offers on homes in Riverside, only to be elbowed out by other bids. With few houses available and many bidders chasing these properties, she feels she has, at most, an hour to consider each house.”
“The cruel irony for Bryant is that she sees vacant homes everywhere, from her drive to work to a neighboring home where she resides. But vacant does not mean available. The house may still be in the process of foreclosure. ‘Some of these houses that I’ve offered on, I haven’t even actually seen,’ she says. ‘If my husband can’t go by it, I’ll just make an offer on it. If I haven’t seen pictures of it, I’ll just make the offer on it.’”
“The recording of deed-of-trust assignments in Colorado — the ownership rights of mortgages and the ability to foreclose on them — has more than doubled in the first five months of the year compared with the same period last year, The Denver Post has found. Assignments of deeds of trust in Boulder County are up by 72 percent for the first five months of the year compared with last year — the lowest in the seven-county region — and exploded by 213 percent for the same period in Adams County, where some of the highest concentrations of foreclosures occurred since the housing bubble burst.”
“Jerry Hansen, a real estate broker who said he has expected foreclosure papers on his Aurora home since 2008, is among several homeowners interviewed by The Post who said they’re merely waiting for their lender to make a move. All said they were unaware their deed of trust had been assigned. ‘We’ve been sitting on this bubble for the longest time and I have no doubt it’s coming,’ said Hansen.”
“‘With an election year, you’d think the probability is low that these are indicative of foreclosures to come,’ said Lou Barnes, a mortgage banker with Premier Mortgage Group in Boulder. ‘But it could well be they’re teeing up the pig for the python. If that’s the case, it’s going to be very bad for the pig.’”
“Canderel Group is racing to build Canada’s tallest residential building with its 78-storey tower called Aura. Canderel executive VP Ben Rogowski said that, inevitably, many of the people buying units in the skyscraper are investors, but he doesn’t see a problem with that. ‘I know there’s a lot of concern but these investors all want to make money,’ Mr. Rogowski said.”
“For about the price of a HDB 4-room resale flat in Bukit Merah, you can get to own a home in a five-star mountain resort located at the gateway of the Canadian Rockies. Canadian developer Stone Creek Resorts will be conducting sales events from next month in Singapore, Hong Kong, Beijing and Shanghai of The Residences at Silvertip Village in Canmore, near Calgary, Alberta.”
“They are available starting at C$550,000 (S$682,000). Mr Julian Sedgwick, director, head of business development at marketing agent Savills, said: ‘Alberta is a secure and fundamentally solid Canadian real estate market. For investors, there are two potential tenants’ streams - the vacationers and long-term renters. This market has a lot to offer Asian investors as their economy continues to boom and with their stronger currency.”
“Water usage figures suggest more than 90,000 homes in Melbourne are possibly unoccupied. Casting doubt on regularly reported vacancy rates, Deakin researcher Phillip Soos used City West Water and Yarra Valley Water figures to look for homes that consume less than 50 litres of water per day, saying these are all most likely unoccupied. The average water use by households is 350 litres per day, with a single toilet flush using up to 12 litres of water.”
“Soos says 5.9% of homes he looked at were vacant and says the bulk of these are speculative homes, which rely on capital gains rather than rental incomes. ‘Landlords have an incentive to withhold properties from the rental market, as they profit substantially from realising capital gains upon sale rather than from long-term rental income. Surprisingly, many of these suburbs are in inner and mid-rim locations,’ Soos writes.”
“Earthsharing spokesperson Kath Fitzgerald says the figures are ‘jaw-dropping’ and that property speculators ‘create a media atmosphere that there is nowhere to live. Australia has one of the most generous residential property taxation regimes in the world. Capital appreciation has dwarfed rental income for years. Withholding properties from the market is a rational investor strategy. The National Housing Supply Council claims a 228,000 housing shortage nationwide. We say there is nearly half that locked up here in Melbourne.’”
“Martha Wright lives in the beach town of Avalon, N.J. Her house is on the bay — she built it — in a vintage barn style more than a decade ago. Although Wright had a high-paying job as a marketing executive and a strong credit score, she ended up with a subprime mortgage loan for more than $750,000 from Washington Mutual. Wright: My mortgage was originally a Jumbo No Doc loan. A liar’s loan.”
“When Wright’s salary got cut in half four years ago, she refinanced, but still had trouble making payments. Since then, Wright has spent countless hours fighting to stay in her home. She hasn’t made a monthly mortgage payment in more than two years. Wright: You’re looking at late fees that have compounded on late fees and interest that has compounded on interest.”
“Nationally, the average distressed homeowner is delinquent for nearly two years before losing their house-that can be longer in states like New Jersey, where foreclosures have to be approved in court. And all that time carries a personal cost, says Wright. ‘It’s the depression, it’s the limbo, it’s the ups and the downs. It’s the ‘I’m making contact with somebody, I’m making progress.’ It’s two steps forward, you think, and then all of the sudden, it’s four steps back.’”
“RealtyTrac reported that foreclosure filings in the U.S. rose 9 percent in May compared to April. The Grand Strand area saw an increase in foreclosure filings as well. ‘I just feel like foreclosures are part of any economic downturn,’ commented Anthony McMinn. Just two doors down from his Carolina Forest home is a foreclosure, but he does not mind. It is an easy stance for him to take, since he is not trying to sell, and because his house was a foreclosure when he bought it a year ago. ‘We were able to get this property at a great deal,’ he explained.”
“However, he understands others who bought their homes years ago may worry about foreclosures in their neighborhoods. Neglected foreclosures just add to a drop in values. So the new report showing a spike in foreclosures last month may add to the concern. ‘If I was one of the people who bought a property in here when it first opened and almost $200,000 for it and somebody came in a bought it for 50 percent less, then I would have a problem because I’d have a problem with my mortgage,’ McMinn explained.”
“Realtor Cliff Nolan said he is beginning to see more foreclosures on the market, probably because banks are now working through a back-log. ‘They’ve been careful not to saturate the market and drive it down, but there will be an influx here over the next couple of months of foreclosures on the market,’ Nolan said.”
“He says it will still be a good time to buy, but anyone looking to sell or refinance will have to deal with low prices and current values. ‘Sellers are going to have to price it realistically, and they’re going to have to willing to compete with foreclosures,’ Nolan advised. ‘The foreclosures are go to sell more quickly, and they have been, because they are willing to adjust that price every 30 days until it sells.’”
