Speculators “Feel Trapped” In Florida
The Sun Sentinel reports from Florida. “After a December dose of optimism, Broward County’s housing market backpedaled to start 2007. The county had 458 sales of existing homes in January, down 17 percent from 552 in January 2006, the Florida Association of Realtors reported. The median price was $364,500, off 2 percent, or $6,000, from $370,500 a year ago.”
“The median condo price in January dropped 6 percent, or $12,300, to $199,200 from $211,500 a year ago. Condo sales fell 26 percent, to 556 from 753. ‘It’s not surprising, and I don’t think it’s the end,’ David Levin, a Delray Beach-based housing consultant, said.”
“Broward has nearly 36,000 homes and condominiums for sale, up 24 percent from last year, according to the Keyes Co. of Miami. At the current sales pace, it would take several years to sell that inventory.”
The Palm Beach Post. “For months, a ceaseless routine has gripped the St. Lucie clerk of court’s civil office: New mortgage foreclosure lawsuits arrive in unprecedented numbers - huge stacks, some a foot or 2 tall. But as soon as one stack is processed and emptied from the in-box, another dozen or more foreclosures show up the next day.”
“On really busy mornings, process servers drop off banks’ boxes filled with these documents, which set into motion a process that often means homeowners who haven’t paid their mortgages will lose their homes.”
“As 2006 unfolded, the number of new St. Lucie mortgage foreclosure filings surged upward, culminating in a yearly total of 1,329 cases. That’s a more than a 170 percent increase from 2005’s total of 485 cases, according to the clerk’s office.”
“Take this snapshot: On Wednesday, the last day of February, the St. Lucie clerk’s office received 30 new foreclosure cases. That single day accounted for more cases than the office received in the entire month of October in 2004, according to the office’s records.”
“‘In all the years I’ve done this, I’ve never seen this many foreclosures,’ said Nancy Bennett, supervisor of St. Lucie’s circuit civil clerks division, who has worked in the office for more than 20 years. ‘It has never been like this.’”
“‘Most are just frustrated because they thought their home was worth something more,’ St. Lucie Circuit Judge Ben said.”
The Orlando Sentinel. “Three years after Central Florida’s housing market turned red hot, prompting families and investors to buy, buy, buy, thousands of people are in danger of losing their homes because they can’t make their monthly payments. In January, lenders filed 1,787 foreclosure suits in Central Florida, more than twice the number compared with a year earlier, according to research by the Orlando Sentinel.”
“And early results for February are even worse: In the first two weeks of the month, the number of suits climbed 63 percent compared with all of February 2006.”
“‘You feel so trapped,’ said Jennifer McCall, who bought a $220,000 house near Winter Park in May, then quickly fell behind on her payments and was sued by her mortgage company in January. ‘It’s frightening,’ she said. ‘You have a family you’re trying to take care of and a mortgage that’s eating you alive.’”
“She and her husband, Jason, had never owned a home before and didn’t have much in savings, but they found a mortgage company willing to use creative financing, McCall said. ‘That’s a huge mistake,’ she said.”
“They wound up with a first and second mortgage and monthly house payments of $1,986, she said.”
“Sales of existing single-family homes have plunged to half the May level. Rob Mitchem, sales manager in metro Orlando for HomeBanc Mortgage, said his business was off 25 percent in January compared with a year earlier. ‘Properties aren’t selling,’ he said.”
“Although foreclosures are on the rise in Central Florida, they are not at unprecedented levels, and the local real-estate market is not about to collapse, said Sean Snaith, a UCF economist. Home prices remain far higher than before the run-up, he pointed out.”
From Florida Today. “Early last year, The Preserve at Longleaf in Melbourne was a new apartment complex all set to become a top-of-the-line condominium property, with units selling for more than $200,000. Today, with Brevard County’s condominium market perceived as soft, Longleaf is staying as apartments, with leases starting at $900 a month for a one-bedroom, one-bathroom unit.”
“Jerry Kelleher of Viera said the response for a Satellite Beach condominium he has for sale, across the street from the ocean, so far has been slow. The two-bedroom unit is on the market for $170,000. ‘I’m up from Miami, and, to me, something across the street from the ocean for under $300,000 is amazing,’ Kelleher said.”
“Cypress Cove at Suntree, which converted to condominiums early last year, now is leasing some of the units at the 326-unit complex. Coral Gables-based The Berman Group, owner of Coral Gardens condominiums in Melbourne, which converted from a rental unit last year, also is leasing some of the unsold units.”
“‘They are leasing some of them to make up for cash flow,’ said Lee Slovik, who is a broker for Coral Gardens. ‘Unfortunately, the conversion was made when the market started to change,’ Slovik said.”
“According to a compilation of monthly reports from the Florida Association of Realtors, condominium resales by Realtors fell 73 percent last year, from 2,537 units sold in 2005 to 679 units sold in 2006. A separate year-end report showed different numbers of units sold than the individual monthly reports, but still a similar percentage decrease in total sales, 69 percent.”
“Median price fell 14 percent to $156,000 in December, down from $181,100 in December 2005. The trend continued in January, the last month in which statistics are available, with sales down 49 percent from the previous January and the median price down 21 percent.”
“Jane McCrea said she and her roommate decided on The Preserve at Longleaf because it was a new, top-grade rental property. Buying a house — along with the insurance and association fees, wasn’t in her budget.”
“‘Buying property right now is really out of reach for a lot of people,’ McCrea said. ‘I don’t know if you get the bang for your buck.’”
The Herald Tribune. “Racked by the headlong downturn of one of the nation’s most robust housing markets, Florida’s home-building giants are shedding workers in an effort to remain competitive. Most recently, Lennar Corp. laid off 35 employees, which represented nearly 15 percent of its work force in Sarasota and Manatee counties.”
“The layoffs last week ‘were a result of reviewing the changing market and how Lennar could best retool its approach so it can continue to compete and be the best choice for its customers,’ said Carol Cassara, a Lennar spokeswoman.”
“In December, Bonita Springs-based WCI Communities Inc. announced plans to cut its work force by an estimated 15 percent. Steven Zenker, a WCI vice president, said Friday the company is now in the process of shedding 1,000 workers, or one-quarter of its total staff.”
“‘This kind of thing affects every industry that is cyclical, eventually,’ said John Challenger, a partner in a Chicago employment research firm. ‘And home building is certainly that.’”
The Star News from North Carolina. “The white sand beaches and still rural feel of Brunswick and Pender counties have been siren songs to scores of retirees and people from less-balmy climates seeking a second home on the coast.”
“But that resort-like quality also could explain why, unlike in New Hanover, the median price for existing homes in those two counties have dipped as sales across the region slowed, said Bernard Helm, president of Market Opportunity Research Enterprises..”
“‘Resort markets retreat very quickly,’ Helm said, noting that the slowdowns first seen along the Carolina coast in August 2005 didn’t hit traditional markets like Charlotte and Raleigh until a few months ago.”
“‘When it softens, it’s just devastating for people who haven’t been through it before,’ Helm said. ‘They are generally a purchase of desire and dreams, not of necessity.’”
“The sales volume of new and existing homes in Pender declined by 6 percent from 2005 to 2006, a softening that tamped down most prices. The median sales price of existing homes, which make up a larger part of the market, plunged from $232,000 in 2005 to $175,000 in 2006, dropping even more to $160,000 in the fourth quarter of last year.”
‘Three local subcontractors who worked on the project have filed eight liens against KB Home totalling $885,001. Turlington Custom Stucco & Plastering claims it is owed $852,096. The first claim of lien was filed Dec. 4 and, in the subsequent weeks, others followed. Turlington was the first to file a claim of lien and has since tried to foreclose on that lien. On Friday, another company, Southeast Framing Inc., also filed to foreclose on its $11,944 lien.’
‘Faced with a firestorm of citizen protest, Florida’s politicians, Republicans and Democrats alike, now feel compelled to act. They’re motivated by dire predictions for the state’s economy, as well as the prospect of having to seek re-election if wrathful voters are still straining under their property tax burden.’
‘This year people started to really feel it,’ said Rep. Martin Kiar. ‘They’ve been hit by property taxes … by homeowners insurance and their gas prices are high … [and] there are no affordable homes.’
‘The people are crying over too-high property taxes. But West Palm Beach Mayor Lois Frankel says they’re not high enough. In an unprecedented move by a city, West Palm Beach is suing Palm Beach County Property Appraiser Gary Nikolits, demanding he boost tax assessments on three new downtown condominiums so the city can collect more taxes on them.’
‘The city obviously wants the most money they can get into their coffers,’ Nikolits said. ‘But it’s an issue of fairness. If you can’t use a piece of property, and you can’t even close on it, how can you be taxed for it?’
‘Rod Senior has lived and worked in Lee County for nine years and owns his home in Gateway — but no matter what he does, he’ll never get the homestead exemption that could protect him from skyrocketing property taxes. That’s because Senior and his wife Sue are Canadian citizens.’
‘Unless the Legislature changes the rule, Senior said, he’s reconciled that he’ll never get the homestead exemption. ‘I’m reaching a dead end on this thing.’
‘Broward has nearly 36,000 homes and condominiums for sale, up 24 percent from last year, according to the Keyes Co. of Miami. At the current sales pace, it would take several years to sell that inventory.’
How come the newspapers aren’t pulling out interviews with RE ‘professionals,’ who loudly proclaimed there was a land/home shortage, and asking them to explain this turn of events?
‘Three local subcontractors who worked on the project have filed eight liens against KB Home totalling $885,001. Turlington Custom Stucco & Plastering claims it is owed $852,096.’
Is “Stiff the contractors” part of the national homebuilders’ vaunted new business model?
C’mon Get….you’re just taking Custom’s position because he’s family. (Just kiddin’) LOL
‘Three local subcontractors who worked on the project have filed eight liens against KB Home totalling $885,001. Turlington Custom Stucco & Plastering claims it is owed $852,096.’
When I worked in the construction business KB was know as a Sub-buster, and that was over 14 years ago.
I can’t believe nobody picked up on the article from the mayor yet (of WPB). She is angry because people are not being taxed at full value when these condos have not been built, or people cannot take possesion of them??
Let me tell you, Gary N (the property appraiser down here) probably rides around (or should) in a bulletproof car. This guy has taken SO much flack, but he is also, imho, VERY FAIR. He follows the law, and I think that he is entierly equitable to the people he appraises. Now, the law that functions after the appraisal (SOH) is entierly inequitable, but that’s another story.
2 things. I can’t believe that WPB would accuse Gary of UNDERVALUING property. This is the same appraiser that has been critized again and again for his high estimates (because of the “best use” clause).
I further cannot believe that WPB would ever say a PEEP about this! Come on, people are dying out there under your tax burden, and your going to complain that the fairest appraiser (IMHO) in Palm Beach is not valuing stuff high enough? Talk about a PR nightmare.
Oh, one more thing.. As property values continue to fall, I expect to see the same fair behavior by GN on the way down. Get ready for a real sh*tstorm from all the local govts in Palm Beach when that happens!!
I also cannot believe that WPB would
I read the article with amusement! If I were mayor and I wanted to stop people complaining about high assessments, I would sue the assessor that his appraisals were to low. An absolutely brilliant strategy to get the residents to shut up.
Or storm city hall with pitchforks.
I suppose this is like Roman justice. If you make the treat of reprisal bad enough from complaining, the idea is that everyone will just shut up. Not so sure how well that is going to work in a democratic society though.
Still amazing to me that anyone would even consider doing something like that in the current valuation collapse we are having here in S. FL.
DAP, did you see this one? I don’t know how closely you follow WPB politics, but this is a good one!
Reminds me of a university professor I once knew who had a great way of dealing with students who complained that their exams were graded too harshly. He said that he was perfectly willing to allow them to submit the exams for regrading, but he reserved the right to regrade the ENTIRE exam, and he could make no guarantee that the new grade would not be lower than the original one. Very few students took advantage of this option.
…”he’ll never get the homestead exemption that could protect him from skyrocketing property taxes. That’s because Senior and his wife Sue are Canadian citizens.”
Does anyone who lives in Florida know if the state verifies the citizenship of all owners? Are illegal aliens who own homes also barred from the homestead exemption?
No they do not check for citizenship or for residency. Not yet anyway. They will when the budget crunch hits.
“‘In all the years I’ve done this, I’ve never seen this many foreclosures,’ said Nancy Bennett, supervisor of St. Lucie’s circuit civil clerks division, who has worked in the office for more than 20 years. ‘It has never been like this.’”
Come on now Nancy, how can you be so surprised? What do you expect from a group of people who can’t even master pulling the lever of a voting machine? After all, for most, they just have to be able to fog a mirror, cart along their oxygen tank, or have an interpreter present at signing.
Long story short — After 6 months of looking for a tenant, my specuvestor buddy leased to a recently foreclosed couple who at the last minute said their first month’s rent would be late and the promised 1 month deposit was undoable.
Very charitable of him.
They are indeed the most charitable couple I know. Rent is below the ARM payment not including annual taxes and insurance. Did I mention they love alligators and keep them as pets? This is their second specuvestment and they are looking for a third.
Is there any way you could give me your buddy’s phone number? I could use a loan.
LOL. Specuvestors and FBs deserve each other. Think Lionel Richie singing “Stuck on You,” the bitter version.
What’s more, my buddy still does not get it!
(Low whispering voice on: He’s walks around talking like a RE mogul. Tells everyone about his properties.)
Sarasota Herald Tribune: Todays Classified Help Wanted: Construction & Skilled, (2) Carpenter- (2) Electrian, (3) Plumbers. In weeks past the norm was 15 to 20 for each. And remember this is Sundays paper. I find the local paper a good gage for the coming “readjustment”.
From 15-20 down to 2-3 would be about an 85% drop in construction labor demand. Does that sound about right for the drop in construction activity?
Of course all evidence is anecdotal because you can’t depend on the “offical” goldilocks data. I do know that in downtown Sarasota 3 big hirise projects have been cancelled or put on extended “hold”. But I do see ground being broken on smaller projects. Mostly infill. Many projects that have been approved or started are sitting w/little activity. New commercial business and warehouse parks built in the last 2 years (at least out by the airport) are sitting vacant.
Jungle Jim
Recent articles have stated that commercial projects have absorbed the laid off residential workers. They would not lie.
I thought that was in CA?
I thought that was in Fantasyland.
Ben,
How can anyone including the present cast of clowns in Washington reading the article in the link below and tell me that America and the world itself is not currently facing a financial tsunami of biblical proportions.
http://www.fundamentalfinance.com/stocks/stock-market-crash-of-1929.php
At least they can’t say they were not warned.
Laz,
You are saying that there should be [Pro]gress. The folks in Washington, D.C. are part of [Con]gress, which is the stated antithesis of [Pro]gress.
The present “cast of clowns” in Washington is headed up by a doofus whose own disinclination to read is well documented. The neo-con lunatics he has surrounded himself with are too fixiated on creating their ill-starred Pax America abroad to trouble themselves with abstractions like global financial meltdowns. The Republican and Democratic Parties - two hairy ass cheeks surrounding the same stinking bunghole, predatory capitalism - are too busy trying to sell patronage to the highest bidders and grovel before their Wall Street masters to worry about the rubes on Main Street. The MSM, which is nothing more than the propaganda arm of the “monied interests” Jefferson so cogently warned the new republic about, are in on the con game.
So, Lazarus, your contention that our political overlords “can’t say they were not warned” is accurate but irrelevant. They have long since ceased to represent or care about the well-being of the nation or their constituents, much less doing the right thing.
disinclination to read
What do you mean? He was all over that pet goat book!
Point of correction. The word “reading” in the first line should be read.
“‘Buying property right now is really out of reach for a lot of people,’ McCrea said. ‘I don’t know if you get the bang for your buck.’”
IOW, buying a house does not make any sense; renters get a better value. Wow! The message is reaching the masses.
Maven, I completely disagree with your post. I think if you buy property now you are going to get a HUGE banging for your buck.
“A DELIVERANCE-style reaming for your buck” doesn’t have quite the same appeal to the masses.
“I think if you buy property now you are going to get a HUGE banging for your buck.”
Aaaaannnnnnnd- CUE Auger Inn! Auger?
“In December, Bonita Springs-based WCI Communities Inc. announced plans to cut its work force by an estimated 15 percent. Steven Zenker, a WCI vice president, said Friday the company is now in the process of shedding 1,000 workers, or one-quarter of its total staff.”
If this is the amount of “staff” they’ve laid off, I wonder how many contractors have been told to hit the road. Probably 2 or 3 times the amount.
And now the company is in the oily grasp of the rattlesnake Carl Icahn. These people have no job security whatsoever. Trying to figure out what that parasite is going to do with the company has not been possible. He drove the stock price up from $14 to $23 but I doubt he has any interest in helping the average employee.
One lesson is often overlooked by America. A strong stock price and a strong company don’t necessarily go together. WCI is going to get raped by Icahn and his cabal.
“Although foreclosures are on the rise in Central Florida, they are not at unprecedented levels, and the local real-estate market is not about to collapse, said Sean Snaith, a UCF economist. Home prices remain far higher than before the run-up, he pointed out.”
Now let me make sure I understand this Sean: When you say “Central Florida” your are largely referring to the Orlando area, right? And maybe Tampa? This place where the local real-estate market is not about to collapse…is this the same Orlando that the NAR predicted in their anti-bubble report will only experience a price decline of 5% under extremely unlikely scenarios? Like 10.5% mortgage rates or 64,000 jobs lost? The same Orlando where median prices have now fallen 8.2% and inventory is up 32% over the last 9 months according to housingtracker.net? I guess you must be talking about a different Central Florida. I was thinking of the Orlando/Central Florida where the bulk of the job growth and availability is in low paying Disney and other service related jobs. Surely their will be no impact on those jobs as the economy gets progressively worse. I’ll be sure to start looking for a home in the Central Florida you were referring to right away, since the market will not be collapsing there.
Things really are a mess here, and unfortunately, even well-meaning people who just bought homes as a place to live in are suffering. I’m rooting for a nice family that lives across the street from me, and is looking to move out of state to be closer to family. They’ve had their home on the market for a couple of months now, and cut the asking price by $50,000 from original list, but so far, only showings, no offers. Another house next door to that one has been on the market for more than a year — asking price is now only a smidge above what they paid in 2004. Sometimes we forget there are lots of people behind these stories whose lives have been ruined … or at least made a lot tougher … thanks to the Fed’s reckless interest rate policy, the government’s complete abdication (until very recently) of its lending oversight role, and a lot of greed on the part of individual buyers, flippers, and speculators. Sigh…
I know of a couple that refi’d their WPB home, extracted some equity, and with savings bought a home ‘free and clear’ in central Florida. After a year plus on the market, they are ready to let the WPB home go to the bank. They are unsure about the future.
Sadly,
quite a few middle class families are going to let homes just “go to the bank.” We’re starting to see it here in California. My favorite remains a blingy neighbor of a coworker who’s mortgage went up $600/month and just refused to pay the difference.
Most of the resets this year will be far more significant…
I feel for the families… but so many were so greedy. It makes it tough. Far too many just wanted to sell to the next sucker… that’s mean spirited and cuts deep into my sympathy.
Got popcorn?
Neil
No sympathy from me. When I moved to Salinas and went house hunting the RE’s wouldn’t even talk to me unless I was prepared to out bid someone. I saw people walking in the door that I knew weren’t qualified and knew some type of game was going on but didn’t know what was really happening behind the scenes. Bottom line is that we chose to rent and now unless rents in the area ever come close to ownership costs will just keep renting and know that at any time we can just pick up and walk off into the sunset at a time of our chosing.
I feel for the families… but so many were so greedy. It makes it tough. Far too many just wanted to sell to the next sucker… that’s mean spirited and cuts deep into my sympathy.
Yup. Even “normal”, average middle-class people caught the McTrump disease. To hear them talk, everyone was on their way to being a real estate kingpin.
Just remembering the $hitload of crap I heard when I was ready to sell my house. Lifelong friends were telling me my house was worth twice what I eventually got for it. Everytime someone said to me, “Don’t take a penny less than $xxxx…” I would respond, “if a buyer shows up at my door with $xxxx, then I know that’s what my house is worth. Can you find me that buyer?”
Of course they couldn’t.
“reckless interest rate policy”? Please elaborate…
IMO, if used correctly the low rates offered 2001-2003 could have proven a HUGE money-saver for those with any brains… Those that stretched themselves too thin even under such low rates (post-2003 too) deserve little to NO sympathy.
Rintoul, I partly agree with you. While I think lowering rates to 1% and leaving them there so long caused the start of the bubble, it never could have gotten to where it is without the reckless practices of the lenders, they were the real facilitators. We all have heard the “fog the mirror” lending standard over the last few years, they in fact have lent to people who could never repay the loans, the only way for the loan to work out was for appreciation to kick in and then sell at a profit. They never had an out if the real estate appreciation stopped or even worse properties lost value. The worst is yet to come and I fear it will be much bleaker than any one thinks.
Crazy,
Bleaker than most people think. There are some people on this blog with a far more negative view than you just hinted at =)
There are some people on this blog with a far more negative view than you just hinted at…
Some?
reckless in the sense that it slashed rates to 45-year lows, then left them too low for too long, thereby helping inflate the biggest U.S. housing bubble in recorded history. Then when it started hiking again, it took too long to do so and basically telegraphed each and every step. This allowed investors to price out any risk of unexpected interest rate moves, ironically causing financial conditions (credit spreads, long-term interest rates, etc.) to loosen even as the federal funds rate rose (that’s my theory, anyway).
Finally, once it started becoming clear to anyone with half a brain that housing was in bubble territory, the Fed basically said “It’s not our problem.” Officials either wouldn’t acknolwedge a nationwide bubble or essentially said, “Sure house prices are surging, but that’s ‘asset inflation,’ not ‘real inflation’ like what we see in the CPI. So it doesn’t count and we’re not going to take it into account when setting monetary policy.”
The result: Too many people got in over their heads. The bubble got way too out of control. And now, we’re all stuck with the consequencies — unaffordable homes, surging delinquencies and foreclosures, plunging construction activity, layoffs, ruined lives. Need I go on?
Sorry, Mike.
You are personally involved because it is your “neighbor”.
But 2004 pricing was already too high. Your neighbors could have just said “NO”. That’s too much money. We will not buy at that price. Then, selling at the 2001 price, which was just starting to rise too far above its historical trend would have been easy. But, they did not do the math. They just looked at the prices around and what everything else was “going for”…..and listened to the Realtors ™ bulls**t about a new paradigm and how they would be rich beyond the greatest visions of avarice if they would just “BUY NOW”………….And they did.
If you are not planning on staying in a house for 5 years, you have no business buying unless you plan on losing money.
They bought the house when? Why?
Screw them! They cost me 3 years, going into 4 of waiting out the market for prices to correct to “affordable”, by traditional metrics. I hope they pay for the education they failed to get.
Well, let me defend Mike a bit: It is not a good thing for our public policy to put its citizens in a position where what would usually be financial responsibility (buying a house) is actually a species of irresponsibility. I take it that his point is that interest rate policy is one such example (and I won’t dare correct mike on information regarding interest rates!). I agree with his point.
But you make a good point also - 2004 prices are still too high. A realtor friend of mine secretively told me that the word in the weekly meeting was to not dream of transactions above 2004 prices - this was word from the “top”. But while that sounds great, there are factors now that were not here in 2004. Namely, SOH together with insurance makes 2004 prices WAY more expensive in 2007 than those prices were in 2004.
I’d bet we’ll be seeing this as a big “sell” in the near future - BUY AT 2004 PRICES! But that’s misleading to say the least.
Cleaning up after a wild party is always disgusting.
“[Broward] county had 458 sales of existing homes in January, down 17 percent from 552 in January 2006, the Florida Association of Realtors reported.”
I assume this is really bad news. Doesn’t January fall into the meat of South Florida’s selling season? Yet sales are even lower than last year, with a bloated inventory.
I looked into this further. The data doesn’t support my assumption. Instead, the meat of Florida’s selling season is the same as most other markets — March through June.
“According to a compilation of monthly reports from the Florida Association of Realtors, condominium resales by Realtors fell 73 percent last year, from 2,537 units sold in 2005 to 679 units sold in 2006….”
Is there a typo or some kind of arithmetic problem with these numbers? They don’t look too good — 73 pct!
In general I wonder about the sales figures frequently thrown around “sales are down 20% from lat year” and wonder why the realtors are complaining if they still had 80% of 2005 which was a gangbuster year by any account. I’ll bet a lot of areas are off 60 -75%
Orlando MLS sold in February in 07….1226…Orange and Seminole Counties.
For Sale through MLS end of February…..17.5 months supply at this rate.
“The median sales price of existing homes, which make up a larger part of the market, plunged from $232,000 in 2005 to $175,000 in 2006, dropping even more to $160,000 in the fourth quarter of last year.”
“No bubble in the Carolinas,” they said. “It’s a great time to buy,” they said. “Take the pay option interest only ARM,” they said. All freindly advice from your local REIC member. What are they saying now?
THESE RAMENS ARE GOOD! slurppp..slurpp..slurppp
Ooops and the number of FSBO’s and builder specs is at least double that number. Have a nice day!
A friend of mine used to live in Tucson, and after I sent her a long Word document telling her what’s going on with market, she sold last Thanksgiving with only a slight haircut. She now rents a new-partment (new condo tht they couldn’t sell) in Broward county, and thanked me for forcing her to sell. She says the construction of this brand new condo is really shoddy — they didn’t even bother to mitre the corners of the baseboard, and instead just left 3- inch gaps. I should ask her what else they didn’t do.
New definition alert!!!!!!
Condo that couldnt sell = “new-partment”
I like it!
I think rentominiums was also a candidate for that category.
ALERT : !!
house hunters” on HIVtv finally used the word transitional market in FL
must be a fall 2005 show
Actually, this week they had “Flordia week”, and I think in 3 of 5 episodes they referred to “transitional” or “slowing” or “many options to choose from” or “can buy more house for less” or similar.
Some of the episodes were in Naples (at least 2 of them). I was surprised to see how expensive Naples had got, even after the correction.
It was almost sad seeing people buying those places. One that struck me, a couple just out of college who were buying in Naples. They couldn’t have been older than 24. They were living in an apartment, and their “office desk” was an old bathroom countertop propped up on chairs with a computer sitting on the “desk”. She was pregnant. They said “we’re looking in the $400,000-500,000 price range”.
I almost passed out. 24 yr olds in $500,000 houses!!! Yikes. (and they had a BMW as a car)
I was happy when at the end they chose a home for $350,000 instead. (still pretty darn high though)
What is going on in America???? I must have eaten crazy pills.
Side note: It’s nice how House Hunters now shows how much asking prices are and the eventual sales price. wonder how long that will continue with the oncoming downturn.
Repartment
all these down from jan 06 numbers
why not use 05 ?
oh , the brutality
‘You have a family you’re trying to take care of and a mortgage that’s eating you alive.’”
What part of borrowing 220K does not lead one to believe there will be substantial payments, taxes etc to be made? I gather the gentleman involved in this transaction does not earn the minimum $75K necessary to support this. This is an example where mortgage fraud, either on his part or on the part of the lender or both results in disaster. It is very simple. Credit is hard to get for a good reason. When you borrow, you should have the intent and ability to repay the loan. Clearly, many buyers from the past 4 - 5 years and the lenders that loaned the money believed price increases would take care of any problems. They are wrong!
If this FB couple had had any real concern for their family, they wouldn’t have taken on such an irresponsible financial burden. Oh, but wait: some NAR snake-oil saleswomen no doubt used her “research” to assure them “you can do this, prices only go up, everyone wants to live here, buy now or be priced out forever, yada yada yada.”
“When you borrow, you should have the intent and ability to repay the loan.”
Blasphemy!!
Sorry, I forgot Real Estate only goes up. So who cares if you can afford the loan since you can just sell or refi …
OH Wait! what is happening I cannot sell, the price has gone down and I cannot refi. What do I do now?
“This is not happening” (Monty Python)
“You have a family you’re trying to take care of and a mortgage that’s eating you alive.’”
I call BS on this plea for sympathy. The jerk put greed ahead of caring for his family, and now he’s crying victim.
I can’t help but think that in 40+ years when all these people hit retirement, how screwed they are going to be. I mean who is contributing to their 401k when they are looking at a $220k home and earn only $75k?
This letter from FMT message board on Yahoo. Employees are saying it’s True.
—–Original Message—–
From: Brian Daily
Sent: Sun 3/4/2007 4:22 AM
To: *Tampa 2 Office; *Tampa 1 Office; *ResRe Tampa 1 AE
Subject: Fremont ceasing doing business.
Teams,
It is with great regret that I must inform you that Fremont Investment and Loan will cease funding loans and doing business.
At 12:35 (pst) Saturday, Fremont General received notice from the FDIC that they are not permitting any more loans to be funded by Fremont. In short, our funding available was terminated by the Federal Home bank.
The suddenness of the change and the shift from our communication literally less then 24 hours previously simply perplexes me. However, this simply validates the volatility on our business. None of us in Hawaii realized or appreciated the gravity of the situation we were facing.
There are many questions that many of you have. There is a conference call that will be conducted on Monday that will answer many of these questions that you will have.
Jerry Casanova will be able to communicate with you more specifics on Monday morning. Please show up for work to receive these instructions. I will be leaving the meeting here in Hawaii early and attempting to return to the office sometime on Monday.
In order to assist our clients with some instructions- I have listed some Q and A’s to assist you in your communications:
Q: Do I continue to solicit loans?
A: No. As of the 3rd, we are no longer sourcing new business.
Q: Will I close what is in the pipeline?
A: This will be clarified on Monday. I would suggest to sent back all loans to the broker
Q: What do I tell the brokers?
A: Fremont Investment and loan is no longer conducting business. Any files that are pending or have been submitted will be returned to you.
Q: Will I get paid for the loans closed?
A: Yes.
Q: Does termination take effect immediately?
A: Clarification on this item will be determined on Monday.
Q: What about benefits and severance?
A: This will all be clarified on Monday or the early part of the week.
Everyone, I cannot tell you how sadly I am disappointed this industry has trended so deeply in this direction. You all have accepted me so warmly upon my arrival at Fremont and I will always cherish those relationships forever. At this point, I wish I had more information to share with all of you but I simply do not. My travel logistics are extremely complicated right now and hopefully I will have more information in the next 24 hours.
So I do not lose valuable contact with any of you, please forward to Jo Haynes your cell phone, home phone and home address. I would like to keep this information as we begin to search for alternative strategies to consider.
“My travel logistics are extremely complicated right now”
LMAO! Priceless! In other words “I’m on the skyphone in my Lear trying to locate a country without an extradition treaty”.
Stand by for a low-speed chase in a white Bronco, with Brian Daley inside with a wig and fake passport.
“So I do not lose valuable contact with any of you, please forward to Jo Haynes your cell phone, home phone and home address. I would like to keep this information as we begin to search for alternative strategies to consider.”
Translation: I’m already in the Caymans so if you need to talk to me, call my attorney or call my now destitute wife who I left after I had transferred all of our money to my off-shore account.
LOL!
“At 12:35 (pst) Saturday, Fremont General received notice from the FDIC that they are not permitting any more loans to be funded by Fremont. In short, our funding available was terminated by the Federal Home bank. ”
If true - WOW. Almost overnight this thing is turning. I remember in 1997/1998 the spigot turned off for some lenders we audited, but not this fast…
Has anyone seen anything official?
My travel logistics are extremely complicated right now and hopefully I will have more information in the next 24 hours.
Translation: I’m frantically scouring the globe for countries that don’t have extradition treaties with the US.
Yeah, some of the people at Broker’s Outpost are confirming similar tidings.
I wonder if he same thing will happen for NEW?
Maybe he’s entering the Witness Protection Program?
“So I do not lose valuable contact with any of you, please forward to Jo Haynes your cell phone, home phone and home address. I would like to keep this information as we begin to search for alternative strategies to consider.”
It would be par for the course for this guy to turn around and sell all those e-mail addresses to spammers, as a last great gesture of self-enrichment at the expense of his minions.
FMT is ceasing doing Business.
Link?
Can you find any sources going back to this? This is BIG news!
I assume the banking side is still in business, this only applies to the loans side.
Go to finance.yahoo.com and put in stock ticker FMT. Click on Message Boards on the left. Employees are posting. The email is contained above but also there and the title of the message is HAWAII???
Here is the link to the thread
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_F/threadview?m=ts&bn=7128&tid=14332&mid=14332&tof=7&frt=2
And to the exact posting…
http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_F/threadview?m=ts&bn=7128&tid=14332&mid=14414&tof=7&rt=2&frt=2&off=1
Everyone, I cannot tell you how sadly I am disappointed this industry has trended so deeply in this direction.
Yeah, industries just sort “trend along” randomly, their destinies determined by the Zodiac signs and vageries of fate, with CEOs merely helpless, hapless passengers with no ability to affect the outcome. Accountability?–sorry, I don’t recognize the word.
Yes I think the loan side. They will do commercial lending, but in analyzing their portfolio of commercial loans, 60% were to construction projects like Subdivisions, Condo Projects etc. So they are exposed there. If these people were smart they would have sold this business a year ago wen they could get something for it. Now it’s worthless and a liability / albatross. The violations are HUGE.
Here is the list of Violations.
Fremont General Credit Corporation (”FGCC”), will enter into a
voluntary formal agreement, to be designated as a cease and desist order (the “Order”), with the Federal Deposit Insurance Corporation (the “FDIC”). Among other things, the Order will require FIL to cease and desist from the following:
o Operating with management whose policies and practices are detrimental to FIL;
o Operating FIL without effective risk management policies and procedures in place in relation to FIL’s brokered subprime mortgage lending and commercial real estate construction lending businesses;
o Operating with inadequate underwriting criteria and excessive risk in relation to the kind and quality of assets held by FIL;
o Operating without an accurate, rigorous and properly documented methodology concerning its allowance for loan and lease losses;
o Operating with a large volume of poor quality loans;
o Engaging in unsatisfactory lending practices;
o Operating without an adequate strategic plan in relation to the volatility of FIL’s business lines and the kind and quality of assets held by FIL;
o Operating with inadequate capital in relation to the kind and quality of assets held by FIL;
o Operating in such a manner as to produce low and unsustainable earnings;
o Operating with inadequate provisions for liquidity in relation to the volatility of FIL’s business lines and the kind and quality of assets held by FIL;
o Marketing and extending adjustable-rate mortgage (”ARM”) products to subprime borrowers in an unsafe and unsound manner that greatly increases the risk that borrowers will default on the loans
or otherwise cause losses to FIL, including (1) ARM products that qualify borrowers for loans with low initial payments based on an introductory rate that will expire after an initial period, without adequate analysis of the borrower’s ability to repay at the fully indexed rate, (2) ARM products containing features likely to require frequent refinancing to maintain affordable monthly payment or to avoid foreclosure, and (3) loans or loan arrangements with loan-to-value ratios approaching or exceeding 100 percent of the value of the collateral;
o Making mortgage loans without adequately considering the borrower’s ability to repay the mortgage according to its terms;
o Operating in violation of Section 23B of the Federal Reserve Act, in that FIL engaged in transactions with its affiliates on terms and under circumstances that in good faith would not be offered to, or would not apply to, nonaffiliated companies; and
o Operating inconsistently with the FDIC’s Interagency Advisory on Mortgage Banking and Interagency Expanded Guidance for Subprime Lending Programs.
Assuming the FMT deal is true - I think this might actually be good for the stock - 1) Shit can tons of fradulent employees 2)BK the loan division and let the creditors go after the wortheless shell company 3)Fire all the Loan mgmt and blame them for the mess
Website still says they do non-prime loans (aka sub):
Wholesale Residential Lending
Fremont Investment & Loan is a nationwide wholesale lender offering non-prime first mortgages up to $1,500,000.
.
Fremont understands that non-conforming borrowers have special situations and require flexible underwriting guidelines. We offer:
Ø Competitive rates
Ø Flexibility and fast service for quick loan closing
Ø The ability to structure loans that meet both your customers’ and your objectives
.
With over $11 billion in assets, Fremont offers residential mortgage loans through a network of Wholesale Mortgage Brokers in 46 states. Our five regional business centers are located in Southern California, Northern California, New York, Illinois and Florida.
How can a non-prime borrower get 1.5 mil? I just don’t get it.
Roidy
Just saw an add on TV in Jax for 300k loans with monthly payments of 60 bucks a month. One millillion dollar loans with payments of 208.33 a month!
It looks like the reckless lenders are keeping the pedal to the medal as the drive off the cliff
“‘You feel so trapped,’ said Jennifer… a mortgage that’s eating you alive.’”
Under House Arrest.
So much for the ordely shut down they announced on Friday?
This blog was probably never intended to be a “stock” blog but due to the transcendence of the “houing issue” becoming a “liquidity issue” and further morphing into a “stock market” issue I now demand that this blog be renamed to:
Wholebigballofsh!tblogthatencompassesthecollapseofthe knownworld.com
LOL!
I just registered THAT domain name, without the ! in shit.
I take Paypal ™
lol
…knownworld..andthensome.