May 23, 2018

You’ll Find Money, It Falls From The Sky

A report from WMUR in New Hampshire. “New Hampshire is in the midst of a record-breaking housing market. Real estate experts said sellers can often get above their asking prices, while buyers must battle in a bidding war. More than 17,000 homes were sold in the state last year, the most ever in one year. The median price was $266,000. The only time the median price was higher was in 2005, before the market crashed, when it was $270,000. Realtors recommended that if you’re going to buy, be prepared to act quickly. ‘You have to use all your tricks,’ said Realtor Ofe Polack of Coldwell Banker. ‘This is a race. You have to be ready like you are for any race.’”

“Polack said houses that are furnished nicely, priced right and in a good location are selling in 24 hours. She recommended that buyers have a preapproval letter on hand, be ready to stretch their budgets and consider distinguishing themselves from the pack by writing a letter to the homeowners. As the housing market continues to improve, so, too, does the economy. ‘In general, we’re just paying more for housing, and that’s good for banks, because banks are getting larger loans at higher interest rates,’ said Michael Tasto, professor of economics at Southern New Hampshire University.”

From Fox 4 Kansas City. “It looks so easy on those HGTV home improvement shows. It’s no secret that Johnson County, Kansas, is enjoying its hottest real estate market ever. The high demand for quality housing in Kansas’ most-populated county has house-flippers competing for homes at the same rate as families and realtors. What looks like an old house to you looks like a goldmine to others. Drive down most any street in Overland Park, Prairie Village or Leawood, and you’ll see the mobile dumpsters and hear power tools working in the distance. The sound of people working rings like a cash register in this industry.”

“The race to purchase distressed houses still includes flippers who don’t have experience. John and Melanie Zahner said it’s been three years since they attended a seminar on house rehabbing they heard advertised on the radio. ‘They were saying, ‘You’ll find money. It falls from the sky,’ Melanie Zahner laughed.”

The Cullman Times in Alabama. “Cullman has garnered plenty of accolades for its expanding economy and low unemployment, but during this burgeoning economic drive the population has grown at a slow pace. The Cullman Area Chamber of Commerce has launched a housing study that will seek to verify one that is already suspected — a lack of housing. ‘One point that stands out is that since 2014, the number of housing units sold has increased but the inventory of housing has decreased,’ said Chamber of Commerce CEO Leah Bolin. ‘Marshall County has grown more population while Cullman has enjoyed tremendous economic growth. We think it comes back to housing. While this has occurred, the average price has increased and affected affordability.’”

From KGW 8 in Oregon. “The housing market has slowed a little in Portland. The real estate website Zillow even says it’s a buyer’s market right now. But prices are still high. According to Zillow, the median home price is just under $460,000. One developer, Eli Spevak, is using some city incentives to get a few more affordable homes on the market. It comes as Portland city planners are trying to re-zone areas to fit more people into established neighborhoods. Instead of high-rise apartments, or McMansions, the new zoning will allow for more duplexes, triplexes or multi-family structures.”

“Asking price for those 3-bedroom, affordable townhomes is $219,000. The rest of the units will be market rate priced, $300,000 to $500,000. ‘That way I know there’ll be some legacy, so if prices go through the roof again, some homes will stay affordable,’ Spevak said.”

“A lot of developers in Portland are hated; seen as bulldozing perfectly good or historic homes, or building ugly, overpriced ones.”

The Houston Chronicle in Texas. “A half-dozen flooded houses mostly in Meyerland will hit the auction block next month, a process expected to help set the value of Harvey-damaged properties in the area. Meyerland was one of the hardest hit neighborhoods during Hurricane Harvey and previous storms. It now has a glut of properties for sale. A recent count of listings by real estate agents came to 147. ‘Sellers have been hit by all these low-ball offers. They just don’t know how to act or react,’ said Houston real estate broker Paul Lynn, who is handling the auction. ‘Here’s another way to get it sold, to get confirmation of what the value is. Meyerland is really soft and there are a lot of for-sale-by-owners that are out there, too.’”

The Democrat and Chronicle in New York. “A federal grand jury has indicted the son and nephew of Rochester real estate mogul Robert ‘Bob’ Morgan on fraud charges. Todd and Kevin Morgan are named in a 62-count, 32-page indictment along with business associates Frank Giacobbe and Patrick Ogiony, each of Aurora Capital Advisors LLC, a Buffalo-based mortgage broker. They are charged with conspiracy to commit wire fraud and bank fraud; wire fraud; and bank fraud.”

“The charges involve seven properties, including apartment complexes in Buffalo, Syracuse and Avon. ‘The defendants are charged with fraudulently obtaining over $167.5 million worth of loans relating to seven residential apartment complexes located here in New York and in Pennsylvania,’ U.S. Attorney James P. Kennedy said in a news release, also including properties in the Pittsburgh, Pennsylvania area that were the subject of a recent search warrant that was mistakenly unsealed last week.”

“Kennedy continued: ‘As a result of the fraudulent conduct alleged in this indictment, defendants’ conduct not only unjustly enriched them but threatened to undercut the very foundations upon which our mortgage banking and investment systems are based.’”

“Between March 2011 and June 2017, the Morgans, Ogiony, and Giacobbe allegedly defrauded financial institutions such as Arbor Commercial Mortgage LLC and Berkadia Commercial Mortgage and government-backed enterprises like the Federal Home Loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae).”

“Authorities allege the Morgans received inflated loans to pay off debt that didn’t exist. Prosecutors said the four acted in a variety of manners to persuade mortgage lenders to issue loans for residential apartment complexes for ‘greater amounts than they would have issued had they known the truth’ and ‘that the lenders would not have issued at the time of issuance had they known the truth.’”

“They allegedly inflated the rent rolls, the records that showed how many people were residing in their properties, and with higher rent rates than were actually being charged. They also allegedly ‘conspired to inflate income for storage units’ at one of the properties. In an email, Giacobbe asked Kevin and Todd where an extra $72,000 in storage unit income came from, and Kevin replied, ‘Magic.’ Prosecutors allege the defendants provided lenders with ‘fraudulently altered leases.’”

“At one apartment building in Pennsylvania during a lender-required inspection for Freddie Mac in January 2015, the Morgans allegedly tried to make some of the apartments appear occupied by turning on the radio and placing mats with shoes outside the apartments. Giacobbe also allegedly arranged for a woman to ’stage an apartment’ to make it appear occupied and to tell inspectors that her boyfriend was asleep in the bedroom.”