Equity And Truth
A report from the Tennessean. “Williamson County is known for its expensive housing stock, yet new homes coming onto the market are still smaller and cheaper than they were five years ago. In some cases, a developer would file for bankruptcy and when its developing neighborhood was later bought out of foreclosure by another developer, the new developer would often choose to build significantly smaller, less-expensive homes on the remaining lots, a trend seen all over the country.”
“In the New Urbanist community Tollgate Village in Thompson’s Station, the original developer, Tollgate Farms LLC, defaulted on its loans after federal regulators shut down its bank in 2009. Homebuilder Dock Street Communities bought 450 undeveloped lots in Tollgate in spring 2011. Dock Street has built a variety of significantly smaller homes starting at $190,000. Much larger homes under the previous builder generally sold for $400,000 to $500,000 and as high as $900,000.”
“‘I think a lot of Americans realized what got us into this mess was overextending. They realize that they just don’t need a five-bedroom home for a family of four,’ said Judy Inman, an onsite sales representative at Tollgate.”
The Sun News on South Carolina. “Area real estate sales agent Kevin Mayberry pleaded guilty last week in federal court to a mortgage fraud charge, joining nearly two dozen area buyers, sellers, brokers and others who either have admitted their roles or been found guilty in widespread fraud schemes that helped to hasten the Grand Strand’s real estate crash.”
“Ford Shelley, the developer of Pineapple Bay, previously pleaded guilty to one felony charge of mail fraud and is facing a maximum sentence of 20 years in prison and a $250,000 fine. On Friday he filed an objection to a pre-sentence report. Shelley said in the objection that GMAC bank — which claims to have lost $873,536 on mortgage loans at Pineapple Bay — actually didn’t lose any money because the bank immediately packaged the mortgages into securities and sold them at a profit to investors. When the loans went bad, Shelley said, GMAC then foreclosed on the properties and re-sold them, keeping that money as well.”
“Shelley also said that GMAC ‘knowingly abandoned all underwriting standards and made bad loans without verifying income or assets and with knowledge the borrowers could not repay the loans.’ ‘GMAC knew the buyers falsified their loan applications,’ Shelley said in court documents.”
The Virginia Gazette. “A foreclosure auction on supervisor Mary Jones’ home has been rescheduled for later this month, an auctioneer said Tuesday. The foreclosure auction was set to satisfy a 2007 deed of trust for $342,400, according to legal advertisements. County property records show the two-story, 3,300-square-foot home is assessed at $326,300, down a bit in the last reassessment cycle. The Jones family bought the home for $428,000 in October 2007.”
“Jones has refused to comment, last addressing the troubles in a Gazette essay more than a year ago. She summed up the situation as ’simply a failure to see the massive economic dislocation that was coming our way, and respond to it in a timely fashion.’”
The Baltimore Sun in Maryland. “Throughout Maryland, finished home lots are becoming few and far between. Rachel and Josh Jennings, who are expecting to move into a new M/I townhouse at the Pointe in the next few months, said they did not have difficulty finding new homes near Fort Meade — so long as they were willing to pay well over the amount they originally expected to spend. When they started the homebuying process this summer after moving to Maryland from Florida, they were willing to spend as much as $275,000.”
“But the couple, both 29, had trouble finding a home, new or pre-owned, for that price. They looked at about a dozen new-home developments and as many existing homes during their two-week search, they said. In the end, they settled on a 2,300-square-foot end unit at the Pointe for close to $414,000. ‘It was worth the extra money to get this close to the base,’ Josh Jennings said.”
The Herald Mail in Maryland. “It pains Henry Stiles to look a few hundred yards down Reno Monument Road and watch the deterioration of the historic farmhouse where he was raised. The overgrown yard and wild-weed fields around it have alarmed neighbors for nearly two years. Sheri Anne Stewart, who bought the old house, barn, outbuildings and their 8.63-acre site a few rural miles south of Boonsboro in 2007, moved out in 2010 after she stopped paying on the mortgage.”
“Now, nearly two years after Stewart won U.S. Bankruptcy Court protection from paying off the nearly $400,000 in loans she had on the property, Washington County Circuit Court records show that lender Bank of America still hasn’t pursued the foreclosure needed to sell the property.”
“Now, nearly two years after she moved out of the 20725 Reno Monument house, Sheri Stewart is still devastated by the loss of her hopes for the property. The plan began to fall apart soon after she paid $399,000 for the Reno Monument property in March 2007. To help finance the deal, Stewart obtained $319,200 in a 30-year mortgage from a Frederick, Md., lender, plus a home equity line of credit from the same lender for up to $59,850, according to Washington County deed records.”
“The remaining keys to her attaining her dream included being able to quickly sell her Sharpsburg property, cashing in on the nation’s rapid rise in real estate prices in the early and mid-2000s. ‘Everybody was selling theirs and making tons of money,’ Stewart recalled. ‘Everybody was telling me, ‘I sold my house for like twice, three times what they’d paid.’”
“So when Stewart put he house and shop in Sharpsburg up for sale, she asked nearly triple the $99,000 she’d paid. ‘All the houses had been going for crazy amounts of money. Crazy!’ Stewart said. ‘Then, all of a sudden, I bought that (Reno Monument) place and prices went down. And, eight months this (Sharpsburg) place was for sale and nobody looked at it. Eight months! So then, we dropped it down to like $230 (thousand) and still, nobody looked at it. And then, we tried to rent it — and went for months with no one. … At this point, it’s worth like nothing!’ she said.”
“Stewart said she has mixed feelings about what’s happened with the property and her debts. ‘I think I was stupid and I just didn’t know what I was getting myself in to. In my mind, I was going to be rich. These houses were selling for so much. I really thought it would work.’”
The News & Observer in North Carolina. “After watching property values steadily rise for decades, officials in places such as Orange and Chatham counties suddenly faced the prospect of conducting revaluations that would significantly reduce their property tax base. If the revaluations were completed on schedule, these counties likely would be forced to raise the tax rate in a dismal economy just to bring in the same amount of revenue as before. ‘How do you explain to the public we’re lowering your (property) value but raising your tax rates?’ said Frank Clifton, Orange County’s manager, summing up the tricky political problem revaluations now pose. ”
“For counties that experienced large amounts of speculative building and conducted revaluations at or near the peak of the market, the decline in real estate values posed a number of challenges. During the boom years, new high-end homes experienced the greatest appreciation in value. But since the bubble burst, many of those same homes are depreciating much faster than other sectors of the market.”
“In counties that assessed property at the peak of the market, the listed tax value has now come to mean different things to different people. Owners having trouble coming to grips with the market correction often cite it as proof that their property has not lost value. Savvy investors and other buyers, meanwhile, now use the figure as a signpost to gauge how much a property has been discounted since the peak of the market.”
“‘It’s all about equity and truth,’ said Gary Phillips, owner of Weaver Street Realty in Carrboro and a former Chatham County commissioner. ‘Once you make that commitment to do them every four years, they ought to be done every four years because the entire community needs to know what that snapshot looks like.’”
The Charlotte Observer in North Carolina. “With North Carolina’s economy expected to continue to slow through the end of the year, UNC Charlotte professor John Connaughton said that it’s time for more discussion about jobs in the state. The state’s unemployment remains stubbornly above the national rate, and some months North Carolina is still losing jobs.”
“The finance, insurance and real estate sector — which makes up about a fifth of the state’s economy — is expected to have a strong year, but construction and manufacturing are still leaving gaping holes. Speaking with the Observer, Connaughton said North Carolina will likely need a resurgence in manufacturing and construction to fully heal. ‘This state had been looked at as an economic miracle,’ he said. ‘We’re not only not that anymore, we’re on the whole other side.’”
