It’s What Needs To Be Done In Florida
The Naples News reports from Florida. “Local lenders say the collapse of American Home Mortgage, which has three offices in Lee County, is another sign the mortgage industry is purging itself of high-risk loan practices that are contributing the housing market’s woes and sending shock waves through the U.S. economy.”
“Local lenders said Friday that the troubles of American Home Mortgage and similar companies are unsettling but promise to strengthen an industry that was plagued for too long with easy money for less-than-qualified borrowers.”
“‘I think this is long overdue and I think it’s great. It’s time for the mortgage industry to clean its act up,’ said Benjamin Dona owns Metro Mortgage Company. ‘We’ve seen in the last 48 hours that it’s ripping through the industry as a whole. Alternative programs, like being able to do a no-income, no-asset loan, or not checking loan application information aren’t going to be accepted. All these big mortgage companies we get our money from are discontinuing these programs.’”
“Dona said American Home Mortgage was known for its option adjustable rate mortgages, or ARMs.”
“‘This kind of loan got a lot of people into trouble and it got American Home into a lot of trouble,’ Dona said. ‘I never did option ARMs because it’s only setting people up to get hurt. Getting people into a home if they can’t afford to be there can destroy their lives for years through bankruptcy and foreclosure. There’s not much you can do for them once they’re in that position.’”
“Thomas Budzyn senior loan officer for SunTrust and president-elect of the Mortgage Bankers Association of Southwest Florida, he sees tighter rules in the future for mortgage lending. ‘It’s what needs to be done so the foreclosure rates don’t keep increasing,’ he said.”
“Budzyn also predicts more mortgage companies will close in the short term. ‘They’re not the last one that’s going to go, unfortunately,’ he said of American Home.”
The St Petersburg Times. “Jittery home-mortgage lenders are cutting off credit or raising interest rates for a growing portion of Americans, extending well beyond the market for subprime loans for people with the weakest credit records.”
“‘In the past half-dozen years, if you could fog a mirror, you could get a loan,’ said Greg McBride, senior financial analyst at Bankrate.com in North Palm Beach. ‘Now we’re starting to see that a lot of those loans that were made probably shouldn’t have been made. Investors and lenders are taking a more conservative stance.’”
“The impact can be felt in the Tampa Bay area, where home sales are off nearly 50 percent year over year and housing values have slipped 10 percent or more in many areas.”
“Lenders say what’s making them run the fine-tooth comb on loan applications is the disappearing appetite of mortgage-bond investors for risky mortgages. That includes those dubbed ‘Alt-A.’”
“Alt-A loans accounted for about 13 percent of U.S. home loans granted last year, according to Inside Mortgage Finance, and subprime loans about 20 percent. Industry executives have said subprime lending is likely to shrink by more than 50 percent this year. And much of the Alt-A market is vanishing, too.”
“‘This will help bring reality to the industry,’ said Carlos Fuentes, president of Greater Tampa Association of Realtors.”
The Sun Sentinel. “Foreclosure filings across South Florida continue to rise, as hopes for a housing recovery have fizzled. The number of people behind on their mortgage payments in July almost tripled in Broward County from a year ago, from 517 to 1,430, according to Realestat.com. In Palm Beach County, the number more than tripled from 298 to 1,063.”
“Experts say lenders, court clerks and lawyers are having a hard time keeping up with all the filings. They expect a significant surge by the end of the year as more adjustable-rate mortgages come due.”
“‘Everybody’s inundated and overwhelmed,’ said David Dweck, founder of the Boca Real Estate Investment Club. ‘Sales are taking longer to get to the courthouse steps.’”
“Circuit Court Judge Jeffrey Colbath handles all foreclosures in Palm Beach County. He devotes a day and a half a week to the 7,000 cases in his division but says he might have to set aside even more time in the months ahead.”
“‘There are a lot of different stories that lead people into my world,’ Colbath said Friday. ‘The worst of it has not come yet.’”
“Last month, Broward’s foreclosure sales increased 70 percent from a year ago, from 224 to 381. Deerfield Beach foreclosure lawyer Brian Rosaler said he’s working seven days a week, often into the night, to keep up with all the filings.”
“‘In Broward, they can’t get the cases clocked in fast enough,’ he said. ‘All of us involved in this, we’re working our tails off.’”
“Experts mostly blame the trouble on adjustable-rate mortgages made to borrowers who bought houses and condominiums that shot up in value during the housing boom from 2000 to 2005. ‘A lot of people got into more house than they could afford,’ said Lewis Goodkin, a Miami-based housing analyst.”
“Many foreclosed homes will go back on the market, adding to the glut of properties. Palm Beach and Broward counties have roughly triple the number of homes for sale now compared with two years ago, according to the Miami-based Keyes Co.”
“As a result, some experts who had predicted a housing rebound this year now insist it won’t happen until later in 2008 or even 2009. ‘In October, more adjustable-rate mortgages are coming due,’ said Marc Thomashaw, a VP of Realestat.com. ‘I expect much higher foreclosure numbers early next year because of that.’”
The News Press. “The first buyers in The Residences at Coconut Point will begin closing on their condos by mid-August at the regional mall off U.S. 41 in Estero.”
“Joy Selby, spokeswoman for The Residences developer, said more than 225 of 290 total condos were under contract long before buyers could tour the model home, which will also open mid-month.”
“Residents will begin moving into the 35 front units overlooking the shops along Fashion Drive between late 2007 and early 2008. Condos start at $350,000 for 1,100 square feet under air and go up to more than $800,000 for about 2,200 square feet.”
“Selby said many buyers are drawn to the simplified life the community will provide. ‘When you’re at home, you can take the elevator downstairs and walk to dinner. You don’t have to get into your car.’”
“Reggie Morgan, executive project manager, said about 400 subcontractors and employees are on site every day. ‘The job is three to four months ahead of schedule,’ Morgan said, noting the lack of rain and increase in available workers has helped. ‘It allows us to take advantage of the current market.’”
“Real estate broker Diann Masi of Estero was one of the first to buy a condo in The Residences in December 2005. ‘I’m a visionary,’ she said. ‘It’s more of an investment right now. I’m not sure what I’m going to be doing with it. I’ll wait and see what happens.’”
‘I think this is long overdue and I think it’s great. It’s time for the mortgage industry to clean its act up,’ said Benjamin Dona owns Metro Mortgage Company.’
‘Now we’re starting to see that a lot of those loans that were made probably shouldn’t have been made.’
‘Thomas Budzyn senior loan officer for SunTrust and president-elect of the Mortgage Bankers Association of Southwest Florida, he sees tighter rules in the future for mortgage lending. ‘It’s what needs to be done so the foreclosure rates don’t keep increasing,’ he said.’
I believe this is what’s called capitulation. BTW, mainstream media, pushing for an end to this madness was never ‘doom and gloom,’ but a demand for reform. Now it’s being forced on the system.
“‘This will help bring reality to the industry,’ said Carlos Fuentes, president of Greater Tampa Association of Realtors.”
Reality? We are a long ways from that right now.
What a week we had. Lenders are really tightening their belts and a lot of their credit lines are drying up.This is going to cripple the real estate market. This is going to get extemely ugly.
Most Florida realtors are not prepared for the Ramen consuming reality.
I’m buying RAMEN futures.
I’m shorting ramen futures. I’m going long on sawdust futures.
Alpo might be a good bet too.
I’m keeping my dog close by. Too many hungry FBs will be skulking through my neighborhood.
“This is going to cripple the real estate market.”
It looks like the credit tightening will extend far beyond residential real estate. I do, however, agree this is a good thing. It’s about time loans are only made to creditworthy borrowers than can afford to meet their obligation. This will also give some much deserved leverage to buyers with substantial down payments. Finally.
‘This will help bring reality to
the industry,prices’Support for 2005 prices is toast. Big price declines are in the bag.
“What a week we had. Lenders are really tightening their belts and a lot of their credit lines are drying up.This is going to cripple the real estate market. This is going to get extemely ugly.”
It’s already starting. 8% interest, 20% down, 750+ credit, high income, etc. This eliminates over 90% from getting financing and those dumb enough deserve to lose their downpayment and never be able to retire.
“It’s already starting. 8% interest, 20% down, 750+ credit, high income, etc. This eliminates over 90% from getting financing and those dumb enough deserve to lose their downpayment and never be able to retire.”
We’ve speculated a lot about when it will be a decent time to buy a house, with forecasts of pricing bottom anywhere from 2008 to 2015. If the lenders actually get serious and rapidly move en mass (sp?) to such standards, then I think the bottom could arrive sooner rather than later. That would be good enough for me — I’m less concerned with when prices will start to rise again than with being able to buy a house or condo I like and can afford to live in until my nursing-home days. My presumption is that when prices hit bottom, the rent ratios in most areas will no longer be ridiculous and since I’ll be paying cash, mortgage rates matter only to the extent they drop prices.
“I believe this is what’s called capitulation.”
As always, Ben, right on the money.
“‘It’s more of an investment right now. I’m not sure what I’m going to be doing with it. I’ll wait and see what happens.’”
You’ll be renting it to the service workers in the “mall” for 10 cents on the dollar, who in there right mind would want to pay that much money to live in a mall. It reminds me of Main St. in Disney World everything is just a facade.
‘Selby said many buyers are drawn to the simplified life the community will provide. ‘When you’re at home, you can take the elevator downstairs and walk to dinner. You don’t have to get into your car.’
It still amazes me that the RE biz bought into this based on proximity to eating out and bars.
Yes that is joke just like the need for a walmart on every corner.There are 7 super walmarts within a 15 mile radius of me.It amazes me how fast they build them.Is paveing over awesome farmland for more walmarts the best planning? There are so many different towns around here and everyone wants the commercial sales tax revenue.We get the same shopping centers; target, ross, walmart, home depot, lowes,circuit city, petco,sbux, kohls etcetera. There is no personality to these developments.The mom and pops are destroyed but with the volume the chain stores just dominate on prices.There is no interaction with the customer so no cares about supporting their fellow man.It is all about price.
‘There are 7 super walmarts within a 15 mile radius of me.’
- I thought that Walmarts intentionally over build the area to kabash all competition … then they close several of their stores.
For those on the planning side of things, these types of beliefs make me sad. I have a friend in suburbia who thought it was the coolest thing when her bank added a Starbucks. “Now I can get coffee and take care of my banking!”
I feel really bad for people who don’t understand that in many places you can walk to get basic amenities, and even sometimes two or three basic amenities in one trip. How novel!
I know there are some Kunstler haterz on this board, but I really prescribe to his version of “the end.” I don’t think we’ll be burying gold in the backyard, but we’re going to have to return to walkable, regionally sustained communities. And perhaps backyard gardens.
‘I feel really bad for people who don’t understand that in many places you can walk to get basic amenities’
- I tried to teach my kids, ‘Never drive anywhere that you may walk too.’ At least it worked with my son…..
Today I locked myself out of my car at a strip mall near Walmart. Ran home about 6 miles, unfolded folding bicycle stored in attic, pumped up tires, and rescued my car. All of this with a heat index near 100.
It was agonizing because this morning I ran six miles in the park, complete with three “burn outs” up the last three hills.
Doh!
(You are reminded how dependent we are on cars and oil when stuff like this happens.)
Got 10% down?
It isn’t that surprising in some parts of Florida. The more affluent retirees like to be close to a good eatery with a bang-up early bird special. The bars are another matter, though. The Ybor City section of Tampa has been a miserable experiment in trying to mix night-life with residential. Not working out for the residents.
Too noisy. Getting car jacked.
Yes, lots of fun.
Ybor City was better when there was nothing there! The Tampa city council only cares about stuffing as much money into their friends pockets as possible. I left Tampa several years ago because it was such a dump, I recently visited to find it is now a bigger dump with sky high prices!
Did you see all the Condos down there? What about the ones in Channel Side? They added a bunch to Bayshore too! There is one right at the corner across the water from international plaza. There is harbor island that added a bunch. The 2 near channel side and then that huge one near the crosstown on the channelside side.
Who is going to live in these?
Meant the convention center, not international plaza.
Tom, do you recall when the historic house was located at Bayshore across from the convention center and Publix, it was a key west style house beautiful. Tampa city council let developers rip it down and build those god awful condos with all the empty retail space on the street level. The retailers never moved in.
Yes, they are empty.
Friends bought investments in those condos around there. They are stuck.
“Who is going to live in these?”
Baby boomers, Brits, Colombians… come on Tom, duh!
My old neighborhood was south of Gandy, I had a 900 sq ft cbc house, while it wasn’t a great neighborhood it wasn’t too bad. I lived in my house (bought and paid for) for six years. When I went back I found they knocked down two house across the the street from my old house and put four Mc Mansions on the two lots. The old houses were all one story, the Mc Mansions (none sold) are two stories and look over the back yards of other residences now. Tampa continue to let this crap happen all the time, the city is an absolute hell hole.
I still think that all of these genius local governments visited New York, one time, and went back home thinking they were New York. Some people live in this city because they love it. Many people flee this city because they hate it. First floor commercial with condos, or apartments above, is what New York city does because it HAS to do it. It makes far less sense when you are not on an island that is 2 miles wide and 13 miles long. Maybe these boobs in Florida should learn this.
That’s what I kept hearing NYCITY boy. My Aunt says, Tampa is like Los Angeles now. People want to live here and prices will keep going up. They can’t drop.
Well, they are dropping.
Actually, I think that there’s something that can be said there - for people who like living that way (as in San Francisco). But two things are necessary for the model to work: 1) Prices have to be in line with rents; and 2) The city has to have something to offer, other than dangerous streets.
Some cities can meet #2 (like New York and a few others), but most of these high rises are massively overpriced.
Coconut Point did not spend much money on their landscaping, usually in southwest Florida tons of money are spent on this. Several weeks ago when we were walking around we were constantly trying to find the shaded areas, very few exist. Also with the heavy rains we get here it won’t be long for people to be wondering why they didn’t provide cover from store to store.
I think that whole area around Estero is a half-built bubble-marketing project gone bad. There is nothing to do. In the summer the place is a ghost town. I can’t fathom how that mall will stay afloat. There is nothing else around. And people there think they are on the beach, but they are really on a bay and they have to drive miles out of the way just to get to Fort Myers beach.
Sounds like a sister to my fav development here in Palm Beach, The Landmark at the Gardens. It is a high rise condo in a mall parking lot (with prices over 1M for some of the units).
If you have a M to spend on a condo, buy one for 900K on the beack down the street, and then buy a 100K SL55AMG to drag your lazy a** to the mall to go shopping!
Somehow the charm of winding one’s way past panhandlers, muggers, and the criminally violent mentally ill to walk to a nearby eatery escapes me.
“Real estate broker Diann Masi of Estero was one of the first to buy a condo in The Residences in December 2005. ‘I’m a visionary,’ she said. ‘It’s more of an investment right now.”
If you a visionary, do you envision destroying your personal finances?
A lot of people wouldn’t mind living the “Mall Life,” a place where everything is a facade and easily had. For many, the goal in life is to live each day in a mindless, Disneyland-like haze. A mall is a close approximation of Disneyland.
Encouraging a mindless haze is what credit is for, Walt!
And, it’s also for shoring up one’s own feelings of inadequacy, of course. Why not one-up your family, friends and neighbors by running up huge unpaid bills?! After all, they don’t know you’re up to your eyeballs in debt - AND - more importantly, one must always impress one’s neighbors and friends through hedonistic ostentation.
If you don’t look like you’ve made it, life is a pointless waste of time.
“‘It’s more of an investment right now. I’m not sure what I’m going to be doing with it. I’ll wait and see what happens.’”
Walt cut her some slack! After all, she is a VISIONARY! Ha ha ha!
Got
10% downa vision?She’s more of a dingbat!
What was the word from BB a couple months ago-”The subprime problem is contained…”
So…the market is now down 900, the dollar crumbles against the British pound and Euro, foreclosures hit all time records, as all the lies and deceptions get blown out of the water by billions of hedge fund losses essentially tied to the racketeering and corruption in the mortgage lending process.
Based on my experience during the bust of ‘09/’91, the carnage has only just begun.
Henry Paulson, the former CEO of Goldman Sachs and now the treasury secretary, said the same thing.
GS stock is down now. So are most banks.
“Dona said American Home Mortgage was known for its option adjustable rate mortgages, or ARMs.”
If you believe you no longer have to make a mortgage payment after your lender goes bankrupt, you’re an FB.
If you believe a mortgage is something that you never need to pay back then you are an FB.
Ben Stein is making me ill. He’s on Fox News Channel saying that the defaults in real estate are such a miniscule part of our economy that it has nothing to do with the stock market.
The reality that a loan is something that has to be paid back is the underlying fact shaking all markets right now. For 5 years everybody forgot this fact. I can’t believe how low the Financial Lackeys (Fox News, CNBC, etc.) will stoop to try to make money. Cry Cramer cry!!!
That’s so weird because Ben Stein said “no soft landing” a year ago. How can he be so smart and so dumb. Anyone? Anyone?
http://finance.yahoo.com/print/expert/article/yourlife/10255
Buehler? Buehler?
LOL
It’s worth noting that AHM did not make subprime loans, they did Alt-A, many of them made to people with decent credit and reasonable incomes who took “creative” mortgage options–1/0, option ARMs, and the like–in order to shoe-horn themselves into overpriced homes. The idea is that they would get a foothold on the property ladder, instead of being priced out forever, and would stop throwing their money away on rent. These were “better-informed” customers, if you like.
Now these loans are being discontinued, and the damage is working it’s way up the food chain. With prime jumbos now at 7% if done directly thru Wells Fargo, for example, with full doc and income/assets verification required, markets like Manhattan will start taking the hits. The middle income here, say 100-200k before taxes, cannot swing a 700k one-bedroom, as they cannot qualify for a jumbo prime. Can you say, market seizure.
“if you could fog a mirror, you could get a loan…”
Ahh, the beloved mirror-fogger loan. I’m going to miss those. Good morning, Florida! Happy, happy Saturday!
Cue the Edwin Hawkins singers (c’mon, sing along with old Palmetto now): O Happy Day, O Happy day…
Counted the RE transactions for the week in our county newspaper in Ohio. There were 46 and 10 of them were bank transactions (3 transferring to the bank and 7 being sold to someone by the bank). That’s getting really close to 1/4. So at least in our area they are moving some of the foreclosures. The problem is with the laws, it can take almost a year before the bank follows all the steps and finally puts the house on the market.
We’ve always only gone up 1-2% a year even during the boom times. We’ve actually been totally flat since the end of ‘04. The one thing I see here is that you can still buy older nice houses in small towns for 50k-150k. Even with the average income of $29,000 there are still people who can afford to buy that don’t make a lot of money. They would still quality up to $87k and there’s tons of houses @ that price and lower. Of course we have our 250-800k houses and some way over a million. But there’s a lot of different price ranges to pick from. The lower priced houses are also in the small towns and small cities, so crime is relatively low and most are 15 min driving distance from the big cities. The town we live outside of has never had a bad or slum area so anywhere you buy is fine. I’ve noticed thru all the booms and busts we barely inch up and we barely inch down. Sometimes you wish you lived somewhere that really appreciated fast, but then later see the downside of that. It’ll be interesting to see where prices go here. Hopefully lending will go back to where it was, because like everywhere else, people bought here who shouldn’t have been qualified for a loan.
There is nothing worth living anywhere in Florida for under $150k and I am leaving FL, much better deals elsewhere.
My friend that walked away at $2500 a month from an apartment to condo conversion in Sarasota for $1100 rent in a nicer place is trying to work a short sale. I’ll let you know what happens. he owes $215k but has lots of late payments and fees, and the mortgage was 1 year old. The offer is a family friend from up north looking for investment property down here. He is offering $147k.
RE: apartment to condo conversion
Your friend bought the worst of the worst as far as types of property for residential ownership.
Now he’s wrecked his credit and the collection hounds of hell will be after him for the short sale $$$ deficiency plus lender foreclosure aggravation costs.
Interestingly, The Beantown Globe ran an article last week about a couple with a severely disabled son who was about to be foreclosed on by Chase Bank.
When they asked for forebearance, Chase said go talk to Duestche Bank of Germany, who told them to get lost.
Essence of the story is that these legions of FB’ers don’t know who the hells holds their mortgage.
Your friend’s liquidation process has a long way to go.
“Florida Condos: Option One will not accept submissions secured by condos in Florida”. Looks like condos in Florida are toasted.
Amazing. Option One didn’t create tougher standards for Florida condos; they just cut ALL Florida condos out completely. I wonder how many others will follow.
What do you think will happen to condo prices in Florida if most of mortgage companies cut this market off?
It’s going to get REALLY ugly.
There are very few things that I read anymore that have me go WOW! But this is huge.
Not fixable with a high down payment…
Improved credit score gets you no where…
If too many lenders follow… that means Florida condos go to an effective “cash only” basis. Wow! I know a few areas in Florida where I would *love* to own a condo… for a low-low price.
But for some condo towers, the HOA will kill the project.
What the current number of Florida condos under construction?
Got popcorn?
Neil
Ok… my response went to the either… so here it is again.
If Florida condos are cut off from mortgages… they must be priced as “cash only” assets. Those with high HOA’s are doomed. That said, there are some older Florida condos I *really* like.
But the implications are… scary.
Recall everything seems to be starting in San Diego or with Florida Condos. While I don’t expect this to spread nationally… some form of this credit tightening will spread. Interesting and scary…
Now what happens Monday? Can the ABX index drop much lower? Ok, the AAA, AA and A can… but at sub 40 cents on the dollar
Got popcorn?
Neil
Neil
>That said, there are some older Florida condos I *really* like.
Can you share which ones? It looks like the time to pick up a bargain for cash may come sooner than I thought.
Years ago a friend of mine told me that he had the opportunity to get in a FL two bedroom condo for about $5,000 in the ’70’s. He told me that when FL RE tanks the FL condos always depreciate disproportionately.
Got 10% down?
I recall standing in line one morning at Starbucks. This was about 5 years ago. I stood there for 20 minutes on a business day morning.
Suddenly I snapped to attention and said to myself. “What the hell am I doing?” I turned and left the store and drove to a gas station down the road and got a cup of coffee immediately.
I am wasting my time waiting for some pierced Goth to make me a cup of coffee for $3.00 or so. Looking around I saw all the little hotty moms in their spandex chatting about little Johnnies new braces and how their workout went this morning. I was ashamed to be in the same place as these shallow, silly, leaches.
I am sorry to say that I am more than a little happy about seeing the lines disappear in the finer spots in town, here in Orlando. The pain is beginning to sink in fast around here. Restaurants and bars are hurting as well as the upper tier malls.
I was in the field yesterday and was asked to appraise a home of about 3500 sf in an upscale area. On the way I passed many fields of broken dreams. All along the Greenbelt are empty lots with high grass and street lights and streets but no activity. I tell you there are thousands of lots just sitting. The money spiggot has long been turned off here.
I arrive at the home of 3500 sf on a 5000 sf lot. I mean small lot. I approach a large gate like a monastery and I can hear a waterfall in the background. The gate opens and the happy homeowner is there smiling broadly. My guess he is about 35 and he shows me the home as if it were the holy grail. Room after room and every closet. He usher me through it. At the end I am sitting at the granite topped counter in the kitchen when he drops the bomb. “My wife and I knew we were going to have to really extend ourselves to buy this place and we had to do an option arm.” AHA…..now I get it.
My appraisal is the second one to be done for a major lender. The other appraisal is 2 years old. They are worried about this guy. He is about to reset and they want to know he is not losing ground. He is and has been for some time.
Frankly, the whole thing is going to come down around his ears and he knows it. That is why he was attached to me at the hip the whole time I was there. As I got in my car he asked, ” How long will it take for me to finish my report as we were supposed to close today?”
The foregoing scenario is quite common today. As soon as I arrive at the house I can sense the apprehension. The more talkative the homeowner the more desperate they are about the value. The more desperate the homeowner the more conservative my instincts become.
Most of them will fail in the long run. I will not be sued over an appraisal that is not absolutely airtight. It is just that simple.
On another note I was asked to review an appraisal in the largest area of conversion from appartments to condos here in Orlando.
I began to search the records and noted that the sales velocity was astoundingly fast. I also noted that many many buyers were apartment dwellers in the south Florida area. Something is wrong with this picture.
I pulled 30 names of the buyers and began to cross reference them and trying to find them and their addresses. I took most of the day and was unable to locate a single person shown as a buyer. This is unheard of in the industry. None lived in the unit they supposedly bought and why would someone living in an apartment in Clewiston, an agricultural area, be buying a condo in Orlando?
I began to check into the latest fraud scam dujor. The converters of many of these projects are out of South Florida. Apparently they purchase the leasing applications from the projects in south Florida which contain all the vital data on each applicant and then do a straw closing through their own sources. Utter complete fraud. Identity theft. Many buyers were also shown as being in Venezuela. They could be real but I would never find them.
I hear the FBI is working many such cases in South Florida now. I am still working on this and will post more when I learn of the details.
DD : Great post. Thanks for your time to put this together.
I agree. It reads like a dirty mystery novel.
Great work, you might check to see if all these renters went through the same RE company when they rented, so all it would take is for one person in the office to copy their applications and the fraudsters would have all the info they needed for their fake purchases
Graspeer-Indeed I am doing just that. It is amazingly easy to follow a transaction as it generates a huge paper trail.
Annette-
As for mortgage brokers, they are toast and will disappear as a group or will be so heavily regulated as to make it impossible to perform. Let’s face it they are a bunch of people who, for the most part, should be barred from access to money. They are a slimey bunch on the whole. I have a couple I will work for but they do nothing but prime work and never ever push me. One push and I am gone.
I recently had a developer approach me to do 400 appraisals. I told him that most of my work is review work and litigation. He said, “whoops, sorry”.
From my reading ,talking and written communication the FBI is working Florida in a massive way. We, who do review work are being told to stay away from certain projects as they are targets. The word is they are building RICCO cases based upon Federal Statutes set in place to fight organized crime. Certainly this systemic fraud should be so classified.
Agreed, this post is just astonishing. Thank you dimedropped.
The first thing I thought was “oh my god” this guy is like one of those characters in some thriller that accidentally find themselves in a middle of a crime with all the goods. By the time this character realizes they are in a wrong place at a wrong time the chase is already on and so the story goes….With all the money involved you might want to be careful…
Funny you mention tht but I was telling an attorney friend about this scenario and he said the same thing. BE CAREFUL who knows what you know.
Dimedropped, look at this slimy MB (from Broker’s Outpost)- just what annoys any appraiser:
“OK… First let me say this, I have no issue with appraisers charging $350 to $450 for an appraisal. But I do have an issue with the appraiser when he/she charges my customer who is on a fixed income, living alone and disabled a $350 fee and then not even come close to the,,, Yes “ESTIMATED VALUE” that I came to him with. I mean we are talkin about a $27,000 difference in the Value that I was under the impression was gonna be. Obviously I was way off. And thats fine, I have no issues with that at all. I am by no means an appraiser, home inspector, nothing to do with anything like that. BUT,,, When I tell the appraiser “I need this value to be XXX amount to make this loan work to my clients benefit. But please let me know right away if you are going to run into issues with this estimate, I know that I could be off due to my lack of resources in this area.” Secondly when I called this appraiser to be sure that he received my fax I again reiterated my need for this particular value. He tells me “No Problem, When I inspect the property and look at the comparables to his home I will let you know if I see an issue in getting that value. But if I do run into a problem I will send back $200 and just charge him a trip fee of $150.” My reply was “Thank You, I appreciate it.”
“Well here I am with an appraisal that is $27,000 less than what I expected and an appraiser saying that “The value is what it is and I put in a lot of time on this appraisal. I cant help the fact that his home just didnt hit that mark.” Hahahaha…. As I chuckle to myself on the phone, he asks me if I have any other properties in his area that he could do for our company. So I ask him “Well what are we going to do about this appraisal and the fee. You knew that I was unable to make this work for anything less than what I estimated. Yet you still put all the work into it like its all good…” “Are you seriously going to keep the entire appraisal fee??”
“After all is said and NOT DONE… My client is out $350 and a loan, all in one swing of the bat.”
The proper answer is “if you want an appraisal I will do it, order it, Thanks for calling.”
Great post, DD. When I first found this site back in 2004, I felt a little like I’d stumbled onto the small band of “good people” from Stephen King’s THE STAND, who were congregrating somewhere in the Midwest while the Forces of Evil, not surprisingly, were converging on Las Vegas. Poster after poster since then has shared epiphany-moments that really struck a chord, showing that among the Shawn-of-the-Dead swarms of zombies lurching all around, there were smart, reflective individuals who had an instinctive sense that something in the basic order of things had gotten badly out of whack. It is good to be in such company.
Great cautionary post. Please keep us updated in this, dimedropped.
I hope everyone reading this post has filled out the forms at the Direct Marketing Association’s website. Doing so will wipe out about 80-90 percent of unsolicited mail, making you less susceptible to theft of your mail, but also much harder for would-be sellers of your personal information to find you.
About a decade ago, I had a credit card stolen out of my mailbox. A month went by before I discovered the theft (I got a surprise credit card bill of $5219.39) as I wasn’t aware I was sent a pre-approved credit card by a company I had never spoken to. The thief (a woman who bought over $3000 worth of shoes) got away with the goods…and after three months of work I cleared my name and owed nothing.
A royal pain in the behind that was.
Awesome stuff, dd. This is exactly what feeds our addiction!
Dimedroppd, You should be be writing for the New York Times.
As I have been saying for a long time..this business of aquiring a mortgage is going to be removed from the mortgage brokers and go back to the bank directly or the mortgage broker is going to have STRICT GUIDELINES to follow in order to do business with financial institutions..no more easy monkey files or easy money…back door payments are going to have be disclosed to the buyers so that they can make the determination if the loan being provided is the best to them or the broker..too many loans be were being “approved” based on the spread provided by the lenders..they deserved what they got..
sounds kinda 90’s
It is..but look at the ratio compared to then..at that time the boat may have taken on a little water..right now its like “abandon ship”
What an awesome week. Right now, at this very minute, there are many Wall Street Gangsters trying to figure out how to save their boat.
I love it.
Deerfield Beach foreclosure lawyer Brian Rosaler said he’s working seven days a week, often into the night, to keep up with all the filings.”
“‘In Broward, they can’t get the cases clocked in fast enough,’ he said. ‘All of us involved in this, we’re working our tails off.’”
Oh, Oh. A foreclosure bubble!
I believe we’re going to see a drop in foreclosures soon. For no other reason than the paperwork process must be stopped and re-organized in order to handle the volume and better interact with fraud tracking services (ok, the last bit is a hope). This will artificially drop the reported foreclosures as the system is restructured.
But that isn’t the same as saying people aren’t going to be foreclosed on. This will just be a paperwork hickup. A one month delay. So do not be surprised if we see press reports of a drop in foreclosures.
The foreclosure systems in Florida, California, Michigan, Ohio, Las Vegas, and Pheonix have to be on their knees. Hit the pause button and fix the process. Time for the NRT.
Got popcorn?
Neil
here is a MAJOR issue with Estero and anywhere between exit 195 on I75 and Naples Florida….I75 is a FOUR LANES and in the past few years there has been a tremendous amount of big box building along 75 and now many times the highway is at gridlock…TWO LANES in both directions to handle all of the traffic? You gotta be kidding me! Can you imagine the heartache and mess in the very near future?
““Residents will begin moving into the 35 front units overlooking the shops along Fashion Drive between late 2007 and early 2008. Condos start at $350,000 for 1,100 square feet under air and go up to more than $800,000 for about 2,200 square feet.”
LOL what a ripoff! Even if this was oceanfront, it aren’t worth the price. Those are worth about 1/3 the price, if even that.
““Real estate broker Diann Masi of Estero was one of the first to buy a condo in The Residences in December 2005. ‘I’m a visionary,’ she said. ‘It’s more of an investment right now. I’m not sure what I’m going to be doing with it. I’ll wait and see what happens.’”
I can tell you right now what’s gonna happen. You will lose big money. Either you will resell at a huge loss or walk away and kiss your credit rating bye and pay taxes on the banks forgiveness of debt.
I’m visualizing Ms. Masi living in a cardboard box, or getting into a catfight with Suzanne over who gets to work a particularly lucrative street corner.
‘I’m a visionary,’ she said. Is that the same as an acid head? Kool Aid Head?
Roidy
She’s a dingbat! ROTFLMFAO!
“Joy Selby, spokeswoman for The Residences developer, said more than 225 of 290 total condos were under contract long before buyers could tour the model home, which will also open mid-month.”
“Residents will begin moving into the 35 front units overlooking the shops along Fashion Drive between late 2007 and early 2008. Condos start at $350,000 for 1,100 square feet under air and go up to more than $800,000 for about 2,200 square feet.”
Now since credit has tightened and will probably go away for many - how many of these folks will even be able to get a loan?
Seeing that more and more lenders are going out each day…most of these people will not be closing due to financing…or will leave their deposit and walk away…Already Option One has said that they will not give loans secured by Florida Condos…
The next boondoggle will be in the commercial markets here in Florida. The word is this liquidity crisis is impacting on commercial lending and also impacting on small businesses. I would suggest that fully 50% of the commercial space out there is tied to real estate in one way or another, from stores who sell tile to title companies, to mortgage brokers, to real estate offices. Downtown Orlando Sports about a 20% vacancy rate in offices now and we have a ton in the hopper. Apartments are running less than 90% and that is with a bunch of incentives thrown in. Condos are converting back to apartments by the 1000’s of units. 3,000 sf new houses can be rented for $900 a month.
I have personally been in a new house, staged to sell and all 4 bedrooms are rented out by the week to 4 different people. A boarding house. Very very common.
While I am glad to see this high velocity impact I am becoming more and more convinced that we will see a real depression, not just recession. When this huge housing machine seizes up completely we could all be thrown through the windshield. I am not an alarmist by nature but this could get out of control and I cannot come up with a scenario to qwell it. Seriously, how could we tame this? When cheap money will not change the market, we are out of options.
Welcome to the “depression camp”. None of us is happy about it, but (as they say) denial isn’t a river in Egypt.
There is no scenario to quell it, other than time.
However, do remember that most areas of the country are not nearly as bad off as Florida, California, Arizona and Nevada. Conditions are not good by any means, but hardly off the scale as they are in Florida.
You are sheer poet, Dimedropped.
My neighbor rings my door a while back. It was around noon. I opened it and there was a little kid asking me if we wanted some cheeseburgers. Evidently they bought too many.
So the wife and I are looking at each other, wondering why the neighbors are feeding us cheeseburgers. We look in the bag and there are 4 cheeseburgers. We wonder how anyone can order that many extra by mistake. Then it hits us. McDonald’s was “giving away” some plastic toy made in China and the neighbors bought a bunch of Happy Meals so they could get the toys. The only thing they didn’t need was the food.
A depression is exactly what this country needs to wake the hell up.
Ive seen that done when there was a beanie baby craze. One time, this gentleman ordered like 10 happy meals and was giving them away for FREE to everyone waiting in line. We all smiled and said thanks! He just wanted those beanie babies as an investment. Too bad its worth maybe 50 cents each now.
‘I’m a visionary,’ she said.
Where do they find these morons?
They can be found concentrated in the RE businesses.
The only vision she’s going to have is that of a parking lot.
“Welcome to the “depression camp”. None of us is happy about it, but (as they say) denial isn’t a river in Egypt. ”
I think it’s inevitably and RE problem is just a part of the whole thing. It is a penalty for all those years of “easy money” madness, they called it “new economy”, can’t forget as one “expert” on CNN once said something “.. there is no problem, all we need just everybody buy a new SUV “.