Somebody Was Asleep At The Switch In Florida
The Orlando Sentinel reports from Florida. “Sorrento Springs, an upscale development amid the lush, rolling pastureland of rural Lake County…has an 18-hole golf course, a resortlike clubhouse, tennis courts, walking trails and neat rows of two-story, earth-toned homes with architectural flourishes. Now it is rife with foreclosures.”
“‘When we bought, there was this rumor going around that there was going to be a highway through there that would connect to Interstate 4,’ says Raza Dhanji, a 38-year-old Lake Mary businessman who bought four homes in the subdivision as investments. In fact, the proposed $2 billion Wekiva Parkway is at least 10 years away even now.”
“Dhanji assumed he could flip the houses quickly and make a tidy profit, so he didn’t worry about the interest rate on the loans. But two weeks after he closed, Engle Homes, the builder, dropped the price on the same models he bought by as much as $60,000. Dhanji not only couldn’t sell; he couldn’t find renters for two of his homes either.”
“Now he’s paying $10,000 out of pocket each month just to cover the mortgages, even as the homes’ market value plummets.”
“‘I can’t say it’s not my fault,’ he says. ‘I should have known better. But at the same time, I was misled. Now that I look back, the fact that the builders all of a sudden started dropping the prices tells me that they knew something I didn’t.’”
“Ufuoma Omosebi was pregnant with her second child in 2004 when she and her husband had their Terragona Drive house built. They got to live there just over a year and a half. Then Omosebi’s husband had to move to North Carolina for a job. She stayed behind to sell the house, which had been appraised at $425,000.”
“Six months later, after slashing the price to $330,000, she gave up and moved anyway. The payments were $2,000 a month.
“The worst thing was that the developer started selling the exact same home for a cheaper price — and they were giving the real-estate agent $10,000 bonuses and 10 percent commission,’ she says. ‘How could we compete with that?’”
“They rented the house, but their tenants broke the lease, and soon the couple had used up their $20,000 life savings and taken out another loan. Finally, in October of last year, the Omosebis declared bankruptcy.”
“‘I still can’t look at a picture of it without crying,’ Omosebi says. ‘I wouldn’t wish this experience on my worst enemy.’”
The Palm Beach Post. “Ameribank, the troubled West Virginia bank that saw a lucrative future for itself in Palm Beach County, is closing the branch it opened in 2003, conceding it should never have moved to Florida in the first place.”
“‘There was no reason to ever open a branch in Palm Beach County,’ said David Hartman, the bank’s chief financial officer, who was hired in October as part of an attempt to save the financially challenged bank. ‘We’re not a Florida bank. You shouldn’t go to areas outside your market that you don’t know.’”
“The loans were actually made by Lending One, a Boca Raton mortgage broker. The no-money-down one-year home mortgage and renovation loans were designed for speculators who wanted to buy fixer-uppers and flip them for sale at a higher price.”
“‘I am sorry I got involved,’ said Kim Knaisch, a New Orleans-area homeowner who borrowed around $300,000 from Lending One to renovate three houses in an area ravaged by Hurricane Katrina in 2005. Two of the houses are now in default.”
From Highlands Today. “It was like a slice of heaven for Gary and Bonnie King. A couple of years ago, they found the home they loved in a quiet subdivision of a rural town. Then, last year, trouble in paradise. Their next-door neighbors moved out, abandoning their $259,000 house, leaving it to the bank.”
“Months went by, said Bonnie King. The lawn went unmowed. The swimming pool turned black. ‘It’s a breeding ground,’ she said.”
“The two-bedroom, two-bath house next door to the Kings, said broker Chip Boring, is selling for $139,900. ‘In November 2005, it sold for $259,000.’”
“‘It’s got a screened pool and hot tub in the back,’ said Bonnie King, hoping someone will read this and realize it’s an incredible bargain.”
“What caused the foreclosures? ‘A lot of people bought houses who couldn’t afford the payments,’ said Boring.”
“And then there were the speculators. ‘They bought houses or built houses and never lived in them, and never intended to,’ he said. They were simply flipping houses for the profit.”
The Tampa Tribune. “Hillsborough County property owners may pay a little more in school taxes while the district’s budget shrinks. At the same time, the district is reducing its total budget by more than $46 million.”
“‘Property taxes are down, foreclosures are up, the value of houses is down,’ said Gretchen Saunders, the district’s budget director. ‘We’ve got a lot of property out there where people aren’t paying their taxes.’”
The St Petersburg Times. “After a three-year struggle that left them bankrupt and nearly $40-million in debt, the developers of Trump Tower Tampa still aren’t ready to wave the white flag.”
“At a creditors’ hearing in downtown Tampa on Friday, Frank Dagostino, head of tower developer SimDag, proposed partnering with an undisclosed cash-rich investor to resurrect the tower as a condo-hotel project.”
“The deal remains a long shot. Despite a letter of intent from the joint venture partner, SimDag representatives said the purchase offer has been too low to take seriously.”
“If the joint venture falls through, SimDag raised the possibility of auctioning off the riverfront lot. ‘If we have to do a fire sale, we won’t be able to maximize the value,’ said Dagostino, who added that the hunt for financing has brought him into contact with all varieties of scams and con men.”
The Herald Tribune. “As the once-tight office market recedes in the rear-view mirror, building owners throughout the region are having to negotiate on price and terms to land elusive tenants.”
“‘A lot is related to the construction industry,’ said Tom Streck, a commercial agent in Lakewood Ranch. ‘I don’t think people realize how much of our economy is related to construction. The slowdown has not only impacted builders and architects, but all their suppliers and vendors. Then there are interior decorators, furniture retailers, attorneys and mortgage brokers. We’re so tied to the new home industry that when it collapsed, there were a lot of ripple effects.’”
“In addition to the downturn, there also was some overbuilding. ‘A lot of the problem is new construction. It’s not just people leaving,’ Streck said. ‘Once permits are approved, people have a certain time to build and they often go ahead with their plans.’”
“Joe Hembree, who owns a Sarasota-based commercial brokerage, said he stopped building office condos two years ago. ‘It was such a hot market that a lot of people jumped in,’ Hembree said.”
My Sun Coast. “Can you get a loan? Coldwell Banker’s senior loan officer, Joan Marie Bazo, says it’s a lot harder than it used to be. ‘The lenders got really lax over the last few years. They didn’t verify anything, they were doing loans for people who could not verify income or couldn’t provide asset verification. They won’t do them anymore.’”
“Ray Suplee, chairman of the Landmark Bank, says no more 100% financing. ‘You basically need to put down 30%, and upon reflection, 30 years ago you had to put down 30%, so it’s not anything new. It’s just a cycle.’”
Although with mortgage insurance you might be able to reduce your downpayment. “You can get a conventional loan with 5% down, but you have to have at least a 680 credit score or higher because the mortgage insurance companies won’t insure them. If you have below a 680, they are requiring 10% down for a primary residence,” says Bazo.
“Bazo says says FHA loan limits in the Sarasota-Bradenton market are now $442,500, ‘Anyone can get a loan if they qualify. If they do not qualify for the loan, then they shouldn’t be taking it out in the first place. That’s how we got where we are now.’”
“Suplee says he doesn’t believe the real estate market has hit bottom yet, and neither do a lot of buyers.”
The News Press. “Lee County landlords have begun slashing rents and using other incentives to boost sagging occupancy rates brought on by a limp economy. ‘It’s a smorgasbord of concessions,’ said David Malt, broker for Malt Realty, a Fort Myers-based manager of multi-and-single-family home developments and homeowners’ associations.”
“The ante has been upped at the Lakes at College Pointe, a collection of 424, one-to-three-bedroom apartments in south Fort Myers. New tenants there receive what amounts to three months free rent for a 13-month lease and security deposits are just $300 instead of a month’s rent.”
“Given the bloated rental market and the slow economy, property manager, Tom Goodspeed predicted it will be a long time before rents return to pre-2008 levels.”
“‘If things don’t look better, we may have to go back in the other direction,’ he said. ‘It (rent) may go down. I don’t see it going up. We’re just trying to compete with everybody else and hang on to our small share.’”
“In an ironic twist, the economic slump and housing market woes are also providing some salvation for landlords, who can point to the rising number of foreclosures as a source of new tenants.”
“Daniels View was the crown jewel in rising real estate star Samir Cabrera’s ambitious group of investments in 2006, a chance for investors to get in on a hot land deal in Lee County. Two years later, investors are settling for pennies on the dollar and level allegations of fraud in a civil suit against Cabrera involving the 80-acre project in south Fort Myers.”
“‘I’m not saying Samir should be put to death, but he should go to jail,’ said Robert Caione, of New Jersey, who has a $25,000 investment in Daniels View. ‘I told him, ‘This is my life’s savings. ‘He told me, ‘Worst case, Mr. Caione, you’re going to make four times your money in a year.’”
“Now Caione…has been out of work for 18 months, in part, he says, because of the stress from his investment losses. He said he also lost about $40,000 in another land deal in Port Charlotte unrelated to Cabrera or Daniels View.”
“Caione said the cases may be complicated but the lesson he learned is simple. ‘I will never invest outside of New Jersey again,’ he said.”
The Daily Business Review. “Nearly 16 years after Hurricane Andrew devastated the city of Homestead, the town in South Miami-Dade is in the path of another potential storm: A deluge of residential foreclosures and accompanying economic turbulence.”
“One Homestead ZIP code - 33033 - leads Miami-Dade County with 263 homes in different stages of foreclosure. And 109 homes in that ZIP code have already been taken back by lenders.”
“Foreclosures are pushing prices down more than 50 percent of what they sold at during the height of the housing boom, said real estate broker Hagen Hendrix. He markets repossessed homes in Homestead for lenders. One of his lender clients dropped the price of a two-bedroom town house from $189,000 to $60,000, he said.”
“The town house is in move-in condition on a man-made lake and still isn’t selling, he said.”
“Homeowner Antonio Sueiras’ lender recently began foreclosing on his three-bedroom house near the Homestead Air Reserve Base, one of the few neighborhoods he could afford when he purchased it in 2003.”
“Sueiras paid $140,000 for the 1,564-square-foot house and put down $42,000. He comfortably paid close to $1,000 a month in mortgage and property taxes. But as property values began to rise, he made ends meet by refinancing his home several times, more than doubling his monthly housing expenses.”
“Suddenly, his mortgage payments became too expensive. He said his monthly mortgage payment is $2,200, but he makes only about $600 every two weeks. He plans to abandon the house by September. Sueiras said he owes close to $285,000, and the house is worth less than $250,000 so he won’t even try to sell it.’
“‘I am done with it,’ he said. ‘I just want this nightmare to end. The bank can take the house at once. I work and I work, but it never gets better.’”
“Carmen Miranda said he can barely afford the two mortgages he has on his five-bedroom, 6,062-square-foot home he shares with his wife and their 2-year-old daughter in the new Portofino Lakes subdivision.”
“When Miranda bought the house for $272,844 in 2004, he could easily afford it. As the housing market boomed, so did home prices, and he easily refinanced the house. Now, however, he’s had to tap into his savings to cover the second mortgage, he said.”
“‘I will be able to hang on for six to eight months,’ said Miranda.”
“Despite his troubles, Miranda is still betting on Homestead’s real estate market. In May, he purchased a bank-owned house in Portofino Estates. Miranda paid $212,000 for the four-bedroom home, a deep discount from the $285,000 the prior owner paid for it in March 2005. Miranda financed the deal with a $169,000 loan from Sky Investments in Deerfield Beach, according to public records.”
“He plans to rent out his investment property. ‘If I end up losing my home, at least I’ll have the house I just bought,’ said Miranda.”
The Miami Herald. “Amid mounting criticism of his leadership, Florida’s top mortgage industry regulator…Don Saxon, vowed to work with state Chief Financial Officer Alex Sink to tighten mortgage broker licensing standards.”
“Sink, however, has included Saxon’s resignation on a list of reforms she’s demanding to overhaul the embattled agency.”
“The call for Saxon’s ouster was prompted by a Miami Herald investigation that showed more than 10,000 criminals have been allowed to peddle home loans in Florida since 2000. Among them are bank burglars, cocaine traffickers and identity thieves who have gone on to commit at least $85 million in mortgage fraud, the newspaper found.”
“A Miami Herald analysis of the OFR’s database of mortgage professionals showed tens of thousands were denied for technical reasons, such as failing to submit a complete application.”
“But the agency issued only 28 final orders between 2000 and 2007 denying applicants based on their criminal records, the newspaper found.”
“The issues are expected to surface next Tuesday, when Crist, Sink, Attorney General Bill McCollum and Agriculture Commissioner Charles Bronson gather for an already scheduled meeting of the Financial Services Commission. Sink said she’ll also push for Saxon’s resignation — a demand she issued in a press release on Sunday.”
“‘When you’re licensing a high number of brokers, sure, you might expect a few to slip through the cracks. But not thousands. Somebody was asleep at the switch,’ Sink said.”
Just barely able to keep fruit over his head…
“Carmen Miranda said he can barely afford the two mortgages he has on his five-bedroom, 6,062-square-foot home he shares with his wife and their 2-year-old daughter in the new Portofino Lakes subdivision.”
If I had a house that big, I’d get lost and never be found. What would any sane person do with that much space?
Remember the Ramseys house was 7000 sq ft….and look what happened to their kid.
Awesome. Three people and 6,062 square feet, truly living the dream. I bet they have to use cell phones to communicate at home while they’re pretending to live like royalty. But unlike royalty, real soon these fools won’t even be able to afford the air conditioning on their phony Versailles, much less the mortgages.
The sin of Gluttony. Its unfathomable why people would want to take on this burden, which presumes a staff of housekeepers, gardeners and maintenance men. If I were in that “class” I’d certainly not be living in a housing tract with a bunch of FBers.
Here’s the money shot: (IMHO)
“Tom Roses, president of the Continental Group, one of Florida’s largest property management companies, said his managers have found eight to nine people sharing homes in Homestead to help pay for housing expenses. Tenants with government-subsidized rental vouchers are becoming a favorite among investors hungry for income.
Many newer communities in Homestead don’t require tenants to be screened, and few are turned down by desperate owners, Roses said. He said many communities are subject to homeowner association documents drafted by developers who wanted to attract investors to their properties.
Chinchilla said many of the homes around him are owned by investors and he has seen a parade of tenants in and out of the homes.
Miranda said he has had to call police more than once after tenants filling nearby houses caused disturbances.
“If it affects the quality of life, it affects the value of our homes,” Miranda said.
I guess you don’t have any Miranda Rights in that HOA.
Miranda said he has had to call police more than once after tenants filling nearby houses caused disturbances.
I’m sure as the recession/depression continues to erode tax bases and force cutbacks in essential services - do they ever cut any other kind? - cops will just scoff at anyone who expects them to answer ‘disturbing the peace’ calls. They’ll be too busy raising revenue with speed traps.
gold
chiquita
He has two mortgages. He was able to get another mortgage even though he was in trouble with his first mortgate. Hello banks you have a problem still.
it’s a typo.
3778 Northeast 15th Street, Homestead, FL
Single family
5 beds
3.0 bath
3,026 sqft
Still too big for 3 people.
no argument from me!
This thread is a winner in the name department:
Broker Chip Boring
Homeowner Bonnie King
Coldwell Banker’s officer Joan Bazo
Florida CFO Alex Sink
And, drum roll please…………. Carmen Miranda
One of the few neighborhoods he could afford when he purchased it in 2003.” “Sueiras paid $140,000 for the 1,564-square-foot house. Sueiras said he owes close to $285,000, and the house is worth less than $250,000 so he won’t even try to sell it.’
DON’T YOU THINK THE HOUSE IS ACTUALLY WORTH $140.000. BIG TROUBLE IN MIAMI-DADE
Someone should read him his Miranda rights.
Homestead is the same crime against humanity by the developers that Victorville is. A sea of roofs. Poor area. Possibly previously citrus plantations, but don’t know. Next to swamp. End of Turnpike, end of world. Jobs? Construction, probably. Not your best and brightest, down there. Who gave these people loans?
I want to whack those who actually got rich from this.
“Dhanji assumed he could flip the houses quickly and make a tidy profit, so he didn’t worry about the interest rate on the loans.”
What’s that old saying about “never assume things, because when you do, you make an a** out of U and ME.
but, but, but, everyone was doing it.
Now that I look back, the fact that the builders all of a sudden started dropping the prices tells me that they knew something I didn’t.
That’s right, Raja. They knew you were the Greatest Fool.
I heard of a RE agent who went into one of those subdivisions - either Sorrento or one nearby in the Leesburg area, and wangled something like 6-10 lots & pre-construction homes by sucking in family members to participate. As we noted the past couple of Fall seasons, Thanksgiving dinners probably aren’t nearly as much fun as before the bubble, for a lot of families who got caught up in the bubble mania.
Yep - I can just picture those sullen Thanksgiving forced-family-fun gatherings, where the family circle of FBs glower at the genius who suckered them into bitterly-recalled “investment opportunities.” That sleepiness the Judas Goat feels - the one who led his relatives to the slaughter - won’t be from the triptophan in the Turkey; it’ll be from the cyanide in his cranberry sauce.
“Hillsborough County property owners may pay a little more in school taxes while the district’s budget shrinks.”
Hillsborough County is second only to LA in gang activity. Gotta pay more in school taxes to warehouse the future gangbangers.
There is “tagging” going on in, of all places, Davis Islands. Particularly targeted has been what appears to be a permanently unfinished McMansion near TGH.
I read about that in the Tampa Tribune a couple of Sundays ago, snake. Some police official in charge of the investigation said it wasn’t gang activity, just some kids with “misplaced communications”. I about messed myself over that one.
As long as the cops can pretend its not a problem, they won’t have to deal with it.
Me, I’d change the law to make it legal and encouraged for any law-abiding citizen to beat the living s*** out of any punk who tags public or private property with graffetti. The only condition: you have to “tag” the vandal’s face with their own spray can afterwards.
There is “tagging” going on in, of all places,
Look at the town and country area as it has a big problem with gangs and tagging.
I saw a little tagging on the asphalt outside my work yesterday. The cops always say they’re wannabe’s here…
Kids who are raised by get-rich-quick flipper parents are likely not to have any sort of moral compass.
Shocking that kids dumped in kiddie kennels from infancy, tended by indifferent minimum-wage “caregivers”, who then transition to become latchkey kids while their parent(s) devote all their energies to grasping more material goods and status, would grow up to be devoid of morals or values and with a strong urge to break or deface things.
‘If we have to do a fire sale, we won’t be able to maximize the value,’ said Dagostino, who added that the hunt for financing has brought him into contact with all varieties of scams and con men.”
And therein lies the problem. Everyone wants to “maximize the value”. Good luck. As to making contact with scams and con men, welcome to the world of high finance.
“As to making contact with scams and con men, welcome to the world of high finance”.
Con men… As if this fellow hasn’t been trying to ‘con’ people into investing into his dead deal so he can slip out the back door.
Even Donald Trump didn’t want any part of it.
“has brought him into contact with”
( That’s ‘code’ for Craigslist I take it? )
“He plans to rent out his investment property. ‘If I end up losing my home, at least I’ll have the house I just bought,’ said Miranda.”
Carmen Miranda. LMAO! Sing along with old Palmetto, now: “La Cucaracha, la cucaracha, dee-dee-dee-dee-dee”.
“In addition to the downturn, there also was some overbuilding.”
Well now, THERE’s the understatement of the year.
“THERE’s the understatement of the year.”
I’d say the understatement of the century. 1920’s here we come!
“What caused the foreclosures? ‘A lot of people bought houses who couldn’t afford the payments,’ said Boring.”
Here’s another genius. Duh.
I don’t agree with criticizing people who make these statements. If someone asked you why we’re having these foreclosures you would probably say the same thing. You might throw in a “duh!” or something but that wouldn’t be printed in the article.
And the simple fact is that there are people who claim all other bogus reasons for foreclosures (falling prices, not low enough interest rates, etc). We need more people to state the obvious - that people bought houses they could not afford over the long term.
I applaud people who are willing to state the obvious and I make no assumption about whether they thought they knew they were stating the obvious or whether they thought their comment was truly enlightening. I bet in this case it was the former.
Sorry, I just think we need to step back and not criticize every single person who is quoted in these articles.
JJ,
In 2005 I could agree. A full 3 years into this thing? Personally I’d love to hear just (1) person stand up and take some accountability.
“I’ve cancelled my cell phone, disconnected my cable TV and my health club membership but one way or the other I’m going to make good on my obligation!”
( Keels over clutching chest )
nah, that just happens in after school specials……
JJ, your point is well-taken. You’ll have to forgive me for being a little cranky, but I’ve been living with this crap in Florida for a number of years now. I wish there had been more people stating the obvious well before this. Now, it is kind of like closing the barn door after the cow has gone over the moon.
“Now, it is kind of like closing the barn door after the cow has gone over the moon.”
Nice turn of phrase.
I think it is funny chit to make fun of the statements. Its a blog, its informative and entertaining and palmetto comes up with some good ones.
One more thing,
I don’t agree with people that don’t agree with people that criticize people who make these statements.
Department of Redundancy Department.
“The call for Saxon’s ouster was prompted by a Miami Herald investigation that showed more than 10,000 criminals have been allowed to peddle home loans in Florida since 2000. Among them are bank burglars, cocaine traffickers and identity thieves who have gone on to commit at least $85 million in mortgage fraud, the newspaper found.”
Yet one more indication that the real estate industry was wide open, if not a haven for all manner of scam artists during the bubble.
With numbers like that, this couldn’t have been a secret in the industry. Yet no one said anything or did anything at the time. The industry didn’t care. As long as there was lots of money to be made, they didn’t care if some were making it fraudulently or that others might suffer as a result of that fraud.
Only in Florida. One of the residents here in the complex where I live is in the title business and has been real scarce lately. I’m wondering if there was some cocking around with escrow accounts or something.
“Only in Florida”
That must be true because in Oregon 10,000 “people” would be a fair sized town. Good Lord. SDGreg is absolutely right. With that manner of scale how could “regulators” *not know something was up?
That is something else that would worry me if I were an owner, Palmy - title insurance. Will all of the title companies survive? I sure hope so. I liked it a lot better back in the ’70s when we still had abstracts of title done. You got to lock up that abstract in your SD box - not some piece of paper that “might” protect you if a cloud or lien appears.
Among them are bank burglars, cocaine traffickers and identity thieves who have gone on to commit at least $85 million in mortgage fraud, the newspaper found.”
Cocaine Traffickers? Holy smokes, I would think there is a lot more money to made selling ‘bugger sugar’! Perhaps they thought fraud would be a little safer.
RE was the perfect money laundering tool. Tons of cash flying around needed to find a home.
You don’t get mandatory life sentences for mortgage fraud.
not surprised by the scam artists in Fl.. chances r these “mortgage” brokers r still in the business of scaming people. Have a buddy of mine who went to work for a “foreclosure help center”..turns out the guy/owner has a criminal background…was a subprime broker before…and is now loaded with haitians and jamacians and Hispanics “trying” to help them keep their house for a nice high monthly fee…my buddy left after 3 days worried about his law license…said the place is a huge scam..
So the beat goes on….
Why don’t we just criminalize the NAR?
“The issues are expected to surface next Tuesday, when Crist, Sink, Attorney General Bill McCollum and Agriculture Commissioner Charles Bronson gather for an already scheduled meeting of the Financial Services Commission. Sink said she’ll also push for Saxon’s resignation — a demand she issued in a press release on Sunday.”
I was just looking up the definition of “circle jerk” in the dictionary and whaddya know? There was a picture of this crew next to it. Way to go, Alex, “Miss I’ll Stand Up to the Special Interests”. Day late and a dollar short. Let’s hope you have enuf stones to eject Saxon. In any organization, things come from the top down. Like Enron.
No wonder Crist is trying so desperately to get another job as the VP. If he stays governor, by the next election cycle he’ll be damaged goods. While I don’t think any of this is his fault because it’s the result of years of bad decisions, he’ll be blamed for the fact nothing can be done to fix housing, insurance, taxes, fraud, water shortages, unempoyment, etc.
Don’t forget, though, Crist was Attorney General before becoming gov. Too busy gladhanding and smiling to see his state rotting on his watch.
“Sueiras paid $140,000 for the 1,564-square-foot house and put down $42,000. He comfortably paid close to $1,000 a month in mortgage and property taxes. But as property values began to rise, he made ends meet by refinancing his home several times, more than doubling his monthly housing expenses.”
“Suddenly, his mortgage payments became too expensive. He said his monthly mortgage payment is $2,200, but he makes only about $600 every two weeks. He plans to abandon the house by September. Sueiras said he owes close to $285,000, and the house is worth less than $250,000 so he won’t even try to sell it.’
Let’s see; he owed (approximately) $100,000 after he bought the house in 2003. After five years he owes $285,000, a difference of $185,000. Divide that by the five years he has ‘owned’ the house and we get five years of $37,000/year untaxed income. Which he proceeded to blow on something (I assume the ends met). Sweet deal!!!! And no repercussions at all, except a hit on his credit report.
SteveH,
That’s the much fabled “Third Income” many Americans have grown reliant on. I work, my wife works and my house provides a 3rd source of income! What’s best is that ( as you point out ) there is no withholding, FICA, SITW, SS or cap. gains taken out. Why do you hate Amerika?
I remember many, many years ago (20+) that I would wonder out loud (to friends) on where families would get more income (now that mom and dad both worked) to keep up with the skyrocketing cost of living in SoCal. Would they send their kids out to work?
Then I met a guy (foreign) who told me that he was serially refi’ing his house and spending the equity (this came up because I asked him how he could afford his BMW). And this was in the late 80’s!! It all became clear at the point.
In Colorado,
It got so bad at one point the NYT ran an article on “MEW Dads”. Guys in their 50’s basically living off the cash-out “equity”. When asked what they would do when the money ran out they typically replied; “Do another cash-out re-fi”. ( Like the reporter was a total idiot ) Love to see a follow up to that article?
Just once I’d love to hear a reporter ask them what the money went for, or show a picture of the two BMW’s in the driveway. Or before and after pictures of the cosmetic surgery they deemed vital to their self-image.
SFC,
As would we all. In the case of MEW Dads I’d love to see a W-2 or 1099? Look, if someone wants to quit working I can’t blame them. If you can well afford it and have good cause to believe you’re at “critical mass” then good for you! Can’t wait to join you.
But in altogether too many instances, this was not the case. Now that the Appreciation Train has derailed what do they intend to do now? How does your wife feel now that the bank won’t lend you any more against your house and your job skills/resume are dated?
“Suddenly, his mortgage payments became too expensive. He said his monthly mortgage payment is $2,200, but he makes only about $600 every two weeks. He plans to abandon the house by September. Sueiras said he owes close to $285,000, and the house is worth less than $250,000 so he won’t even try to sell it.’
$300 a week? That’s worse than the Cali strawberry pickers, although if I recall, their home was $700,000. So maybe not, but surely he’s a housing bubble Hall of Famer, er, Shamer.
It’s the same story over and over and over.
People moving into houses they clearly cannot “afford”.
Thank the Realtwhores for upselling every schill they met.
From the same story………..the house….which had been appraised at $425,000.”
“Six months later, after slashing the price to $330,000, she gave up and moved anyway. The payments were $2,000 a month.
Clearly, they were not PAYING off the mortgage. they were renting and hoping to flip it to a sucker.
didn’t work out.
too bad.
This is another sob story for a theif.
He supposedly put down $42,000, that I doubt is true, but let’s go with that.
$285,000 - 42000 = $243,000 borrowed from the bank.
I say, STOLEN from the bank. Where’s the money?
He spent it all. It’s that simple. Now he’s walking away, leaving he debts to the stupid bank that let him have the money.
This story has been repeated a million times and the papers always cry for the poor thief who has stolen more money than I have in my retirement account.
Sueiras paid $140,000 for the 1,564-square-foot house and put down $42,000. He comfortably paid close to $1,000 a month in mortgage and property taxes. But as property values began to rise, he made ends meet by refinancing his home several times, more than doubling his monthly housing expenses.
Suddenly, his mortgage payments became too expensive. Property values stopped rising, and his fuel expense shot up.
He said his monthly mortgage payment is $2,200, but he makes only about $600 every two weeks as a courier for a private company.
“About $275 goes to pay gas,” said Sueiras, a single man. “The rest goes to pay the electrical bill, the water and to buy food.”
After the price of gas jumped above $2.50 a gallon, the number of his deliveries dropped significantly, as fewer customers can afford the rising courier fees, Sueiras said.
He plans to abandon the house by September. Sueiras said he owes close to $285,000, and the house is worth less than $250,000 so he won’t even try to sell it.
———————
I don’t think I’ve read a narrative here with more more holes or where the numbers are just as utterly incoherent as this one. And given the amazing array of stories told here, that says alot.
““Ameribank, the troubled West Virginia bank that saw a lucrative future for itself in Palm Beach County, is closing the branch it opened in 2003, conceding it should never have moved to Florida in the first place.”
I’ll bet alot of people are saying that.
I like it fine here, except for the housing bubble. I looked at a Fannie Mae repo from the outside this AM and then called the realtor. Whew! I wish I had a transcript of the conversation, talk about incoherent. I got a real sock of crap about how “rehabbers buy places like that sight unseen”.
I got a real sock of crap about how “rehabbers buy places like that sight unseen”.
These people are so caught up in the realtor hype it make used car sales people look good. However, when it came down to some of my posts on the sptimes.com blog site, none of these realtors could counter my information. Why, because they lack the education and ability to research. All they can do is preach hype which has no basis whatsoever!
They are the sheeprealtors or the realestate industry.
“They are the sheeprealtors or the realestate industry.”
They are the reason teachers at my wife’s school own 3 and 4 houses. Anyone who didn’t see this coming had blinders on. When someone making $39K per year has 4 houses, look out!
“…conceding it should never have moved to Florida in the first place.”
I for one really enjoy it here. Now that the air is going out of the bubble, you actually have real, genuine, hard working people living in my area. Most of the specuvestors have moved out of state or have declared bankruptcy and have had to get real jobs. We probably could have done without the bubble, but that’s life.
I really like Florida too. This comment made my day:
“Caione said the cases may be complicated but the lesson he learned is simple. ‘I will never invest outside of New Jersey again,’ he said.”
This is the best thing I’ve seen since Spring, when I rejoice at seeing the Jersey plated cars going North on the car carriers.
New York and NJ plates headed North are just plain exciting to me. That’s why I love the summers here…as long as the hurricanes leave us alone.
Looks like we are entering the, “Greater Fool Period”. A house near me has been on the market for almost a year and has been sold. Another sold 2 weeks ago just around the corner. The asking price on this latest sale was dropped but not by much since it was put on the market but the same type of house was selling for $700,000 2 years ago. It sold for $575,000.
Of course, this happens after all “Boom and Bust” periods. After the tech meltdown, knife catchers were jumping in all the way down (the QQQQ’s for example) from $120 at the peak - to $20 at the bottom. Anyone who bought the QQQQ’s above $55 (this year’s high) got their fingers bitten. It always happens.
I’m sure that during the Tulip Mania, there were Greater Fools buying Tulip bulbs all the way down (until they were worthless) thinking prices had reached bottom. Once again - another 2 years to go before bottom.
In Tampa, if you bought with a 20% down payment in April 2007, that money has not only now gone poof, but you are underwater. I can think of no better cautionary statistic, yet I still have relatives who in their optimistic ignorance and cheerful disdain for facts are disturbed by my decision not to buy.
In Tampa, if you bought with a 20% down payment
If you bought in January to March of 2008, you probally have lost your 20%. In fact I know of several cases like this where the consumer listened to the NAR advertisments and bought trying to time the market and have now lost their 20% down payment and now have to buy PMI because the lender has determined that they do not have 20% equity.
Have you noticed their latest tactics??
The “BEST TIME TO BUY” Org that had billboards all over Tampa.
They did not put REALTOR ™ on the billboards, but if you to the website, it is sponsored by them.
Apparently, they have a bad enough reputation that they don’t want to be up-front about sponsoring their latest propaganda campaign.
Have you noticed their latest tactics??
The latest has been the ad on how home prices double.
The NAR says, “On average, home prices nearly double every ten years” is what the NAR advertisments say.
This could not be further from the truth no matter how you look at it. What did happen is between 2000 through the end of 2006 home prices did double as a result of a market that was artificially created. There is no other period prior to this that would provide evidence to support the NAR position. As a matter of fact, if prices did double every 10 years, home prices would have exceeded the affordability range of most consumers years ago.
The old saying, if it sounds too good to be true, is usually is not true.
“The swimming pool turned black” LOL!
I’m no expert and I’ve never taken an art class but I thought it was more of an… aquamarine, green..? Oh screw it. It was black. These things have to be a real safety/health hazard. Is there a point in FL where they just fill them in?
The Highlands today piece has a great picture of a green pool. I said this a couple of years ago, but anyone paying $250,000 for a house in Sebring, Florida has been ripped off badly: that area’s economy is entirely agriculture and fixed-income retirees and could barely support house prices that are a third of that figure. And no, neither the boomers nor wealthy foreigners will be coming.
I had a business meeting with someone last month who claimed that Germans were coming to southwest Florida by the planeload to invest in property. I came close to asking him why he thought they would be so stupid, but I checked and there are indeed Lufthansa flights, although I think the last leg, Charlotte to Ft. Myers, is via code-sharing with US Air.
“I said this a couple of years ago, but anyone paying $250,000 for a house in Sebring, Florida has been ripped off badly…”
That’s the truth. I was driving by a month ago and saw the signs reading homes from the $90’s including the lot. Back in 2005 stupid specuvestors were paying $225K to start…
You invaded Poland!
There are german LTU flights to Ft Myers, Orlando, Miami. Vacationers won’t take Lufthansa. Flights are quite full too. Included in the seat pocket infront of you is a glossy magazine in German, full of RE buying advice. Did not seem that there is buying lust, though.
“Now he’s paying $10,000 out of pocket each month just to cover the mortgages, even as the homes’ market value plummets.”
The price of greed! Now he has gone from flipper to flopper.
This guy had a $20,000 “life savings” and bought 4 homes? He knew EXACTLY what he was doing! He reasoned from the get-go that if this doesn’t work out, all he has do to is go BK and he’d only be out 20K. I don’t think for one instant someone who has the wherewithal to purchase 4 homes didn’t plan on this….
Palmetto- You are in rare form today. Thanks I needed that.
From the field-Appraisals have STOPPED. The market is frozen in place, period. The only thing moving is a steady decline in values. The pain is spreading upwards dramatically.
Over the past 3 months I have been in more 2-10 million homes getting HELOC’s than I have in 35 years in the business.(total) This is a harbinger of things really going nuclear here.
I took a few days to get out of town and just see something else but here. I headed up to the Carolinas to see some old college buds and was shocked to see so many Uhauls and the like headed north. None coming south.
While there I decided to do a little research and looked up some friends in the RE biz. ( I used to be in RE up there working my way thru college) It is no different in the escape zone than here other than there are fewer homes. Relatively speaking it is basically the same scenario.
From the piedmont region I headed to the coast and went from Charleston to St. Simonds Island. I ran into the same bartender I had met 3 years ago when on a visit and asked how things were on the coast. He was glum to say the least. All the projects we talked about 3 yrs ago are toast and values are halved.
He said that they are down about 50% from this time last year in the restaurant and bar business to include their catering services. He stated that the big corporate retreat business is non existent. The new Sea Island project which cost many millions is one step away from foreclosure. I think this is the new Cloisters project. Top shelf stuff that.
I returned home full of joy as you can imagine. However, the first Robin of spring was sighted once I turned into my area of town and saw a D-7 bulldozer pushing down 1/2 to 3/4 completed townhouses that have been sitting for 3 years. The same guys who did the site prep are now demolition crews.
As for me I have thrown in the towel on mortgage work and am back doing what I made my bones doing. Litigation. Currently working on a major fraud case against a national builder. If this pans out I will be busy for years on just this one case. I was hoping to hang up my guns in a couple of years but that is not going to happen. More later……
Will you be able to chat about that?
I live over in Titusville. My wife and kid are big fans of Red Lobster (I despise it) so we drive down to Merritt Island on occasion. Last year it was a 1/2 hour wait minimum to get in and sometimes up to an hour. The last 2 times we went (over the last couple of months) we walked right in and were seated. Same with all the restaurants in the area.
The economy is dead. And Kennedy Space Center shuts down in 2 years, the only real income generating place in the area. Hard, hard times ahead.
As I have some substantial savings and have lost all respect for my fellow Americans, I’m thinking of getting into the payday loan business. Becoming an “entrepreneur” if you will. Might even become a Republican.
In general avoid Red Lobster. I had some insightful years employed in food service, several good friends who were career environmental health (LA/NY/Miami) inspectors, as well as a good working relationship with Sysco food service drivers/managers. The conversations I’ve had with people who made their livings visiting kitchens reinforced my suspicions that some of the rankest food service practices often involved the Red Lobster, Olive Garden, and Sizzler’s (and their ilk) of America, and (of course) many nasty independent food operations. Personally I’ve never eaten in a Red Lobster (or Olive Garden, or Sizzler), but I did frequent a Morrison’s Cafeteria (near my work site) back in my Florida days because I knew the manager and liked the free coffee (convenience foods mostly from mixes/freezer packs/#10 cans) and it was a generally clean and safe place for a slice of meatloaf, some sweet potatoes, green beans, and a glass of tea (boring but safe food). My advise to the people I knew has remained steadfast since my mid-twenties (along time ago) - avoid chain and family food establishments like the plague unless you know the management and see consistently high health inspection scores (but that’s no guarantee you’re good to go). I say choose your restaurants carefully, patronize them as a special treat, and let the rest of your meals emerge from your home (which is becoming the norm now that people’s finances are stretched) cooking where you control the ingredients, sanitary conditions, and fat amounts. Even the most respected chain dining establishments load on the saturated fat, sweetener’s, and sodium if you aren’t careful in your selections.
I remember going up to your area after the hurricane hit and u r right about the area without the space schuttle program… Which was grounded for a while after the hurricane …that area will be a ghost town…
Excellent, dime, I’m glad to see you working on litigation. Now is your time to shine and I hope you make a bundle on all of this, you deserve it.
Wow, on that demolition thing, that’s really interesting to hear that this has started in Florida already. Hope to see more of this in the future. Wish it would start happening around here. I cruised some of the development out at Bahia Beach (now known as Little Harbor) in Ruskin. Woof! Here and there it looked like the back balconies of some of the units already have rotting wood. Yep, this is happening FAST!
Dime
Thanks for the great post.
“‘I still can’t look at a picture of it without crying,’ Omosebi says. ‘I wouldn’t wish this experience on my worst enemy.’”
Well, I would wish it on MY worst enemy. My worst enemies are all builders. So, I’d get some schadenfreude AND the chance to appreciate dramatic irony at the same time. Ahhhh, shivers of pleasure just thinking about it…
Shiver me timbers!
Hey, that made me think of Disneyland and “Pirates of the Carribean” . . . maybe you have a new ride idea here we can all experience . . . the fire/drama/irony/conflicts of the RE bubble - use builders and re agents instead of pirates, and call it “Schadenfreude”, a ride for adults. : )
OT
gold stocks
aauk, gfi
any good ones w a div ?
tia
Litigation. Currently working on a major fraud case against a national builder.
Good post Dimedropped! Litigation in realestate is a growing field in Florida. Tons of opportunities in the Tampa Bay area as many mortgage brokers, realtors, adjusters, etc. clearly were involved in fraud!
“…a Miami Herald investigation that showed more than 10,000 criminals have been allowed to peddle home loans…”
The dogs are barking now. Why now?? Maybe it’s because the flood of REIC ad revenue is drying up and there’s no incentive to keep these ‘investigations’ on the back burner.
‘If we have to do a fire sale, we won’t be able to maximize the value,’ said Dagostino, who added that the hunt for financing has brought him into contact with all varieties of scams and con men.
Starting with the Don
“Ufuoma Omosebi was pregnant with her second child in 2004 when she and her husband had their Terragona Drive house built.
Omosebi…sounds like the name of that nice man, a member of the Nigerian Royal Family, who was wrongfully deposed as the ruler of Nigeria by very bad men, and who even now seeks my help, prayers, and most of all, my bank account number, so he can reward me most generously for helping him get his $19 million (or was it $29 million?) out of Nigeria. Once I have recieved the $500,000 I was promised for helping this gentleman in his time of need, I will seek out deserving FBs to bail out, just because I’m that kind of guy.
How are all those Miami condos doing?? Any of them selling at all?? I remember 3 years ago when the entire skyline of Miami was crane to crane…in 30 years of travelling to Miami I had never seen anything like it….now when I read the blogs i see alot about Tampa and Orlando, Palm Beach but i don’t hear so much about Miami…not as big a problem there?