November 2, 2011

Symbol Of The Boom, Capital Of The Bust

The Ottawa Citizen reports on Arizona. “Misinformation also pervades the Arizona market says Rick Morielli, a Canadian real estate broker with Can-ix Realty, a Phoenix-based realtor geared to Canadian clients. ‘Canadian buyers seem to get old news and bad news,’ he says. ‘We get asked a lot whether houses have had cement poured down toilets by foreclosed owners. What is true is that in Greater Phoenix, real estate is moving briskly … About 15 per cent of buyers in the last quarter were Canadian and some of them are buying properties here for the price of a Vancouver parking spot.’”

The Arizona Daily Star. “The number of vacant homes and rentals has exploded 52 percent in Pima County in the past 10 years, thwarting a housing market recovery and driving even some middle- and upper-income neighborhoods into decline. On West Valencia out past Casino del Sol, Star Valley was once the southwest side’s symbol of the housing boom. Now it is a capital of the housing bust.”

“In the Luna Vistas subdivision, houses that once went for $300,000 can routinely be listed for under $100,000. The development, once packed with people, is much emptier, said Joey Villa, who moved to South Providence Drive three years ago. The house across the street from Villa is vacant, along with the house at the corner and the house across the street from that. Around the corner on South Oakbank Drive is a cluster of homes with signs out front, some for sale, some foreclosures.”

“‘You turn the corner and half the houses are vacant,’ Villa said. ‘When we started here, it was packed. Now it’s just signs everywhere.’”

The Arizona Republic. “Southeast Valley Realtors, mortgage brokers and real-estate analysts expressed a blend of cautious optimism and wait-and-see skepticism about the federal government’s latest program to help qualified homeowners refinance their ‘underwater’ mortgages that President Obama announced last week. Beth Rebenstorf, a realty strategist with Realty One group in Tempe, said although she hopes the program will make a difference, it’s not a cure all.”

“‘If you’re upside down, you’re still upside down,’ she said. ‘It doesn’t solve that part.’”

From KPHO in Arizona. “Los Angeles-based attorney, Mitchell Stein has filed suit against Bank of America, on behalf of clients in several states, including frustrated homeowners here in Arizona, like Tracy Weber. The middle school teacher lost her Scottsdale home six months ago, after trying to work with B of A for nearly a year and a half. Weber says even on the day her home was auctioned off, the single mother of two was on the phone with Bank of America, who told her their records show she was not in foreclosure.”

“‘It’s like they’re crooks, and they’re allowed to get away with it,’ she said.”

“Stein says the heart of his lawsuit is pretty basic. ‘You can’t foreclose without the note. Pretty simple, right? If you foreclosed, you kind of have to be owed the money, right? If you’ve been paid six times, you shouldn’t have to ask the homeowner to pay you a seventh time.’”

“Weber hopes this lawsuit, one of many against the banks, will hold their feet to the fire, and find her foreclosure was illegal. Stein believes there is light at the end of the tunnel for homeowners, but after all she’s been through, Weber’s expectations are low. She sighs, ‘in the back of my mind, I feel like it’s a lost battle.’”

The Deseret News in Utah. “It is easy to spot. The grass is crispy brown. Backyard weeds peek over the top of a 6-foot-tall fence. The trees are dead and swarming with insects. Fading notices are duct taped to the broken garage door and to the front door. Old newspapers and a sack of phonebooks sit on the sagging porch. It is the foreclosure next door — a symbol of pain and sadness and a harbinger of property values dropping.”

“Some banks, particularly with the high number of defaults these days, may wait for more than 12 months of missed payments before starting the process. This means the bank is not the owner of the abandoned home until it is foreclosed. It can’t keep weeds down and secure the property against vandalism. It can’t board up broken windows and tarp a leaky roof to protect the house against further damage.”

“‘Neighbors get upset that the house sits and looks bad and they wonder why somebody doesn’t do anything about it,’ says Gaynell Instefjord, associate broker at Coldwell Banker Residential Brokerage in Sandy, Utah. ‘The reality is as long as the consumer owns the property, the bank can’t do anything to it at all.’”

“‘These types of actions come from that kind of anger you find at Occupy Wall Street. People get out of control on how they feel about banks,’ says California attorney Stephen R. Elias. Elias, author of ‘The Foreclosure Survival Guide: Keep Your House or Walk Away With Money in Your Pocket. ‘You might say people brought this situation on themselves — and you would be right. But other times you would be wrong. The people were steered into a subprime mortgage when they could have afforded a prime mortgage — and in the end they weren’t able to afford the payments. They were cheated by their broker and the whole system and so they are angry.’”

From KTVN in Nevada. “It all began last month with a protest in a park in the middle of New York City’s financial district. Now it’s in Reno. Kathleen Eagan lost her home. She says when times got tough, the bank wouldn’t work with her. ‘Their goal was to have us foreclosed. And we fought. We did not want to foreclose. We had to take legal action to stop a foreclosure and instead do a short sale.’”

“We heard pretty much the same story from Tina Tillman. She said she never missed a payment, ‘And then they kept hiking the interest rate to a point where I couldn’t go from $900 a month to $1350. I just couldn’t do it.’”

“The pieces of our foreclosure-full market are now ready for bargain hunters. The real estate business folks we met at this National Association of Realtors bus say low prices are the motivator to buy. Here in Reno-Sparks, home prices are now about 60% off their bubble highs. Home prices here have dropped 14% from last year. The single family home median is $150,000. Condos and townhomes, it’s just $53,000, down a whopping 33% from just last year.”

“Yes, the American dream that used to include home ownership as a given has gotten shaky of late. But inside the bus, realtor Mike Young says the big difference now is that banks won’t award loans to just anyone anymore, keeping the flippers and unqualified out. ‘Obviously those people are gone. But that has depreciated the value. That has driven down the value…’ And now we’re buying their houses? ‘Well, they’ve been bought, they’ve been sold. Other people bought.’”

“But falling prices are not helping homeowners. You have to go back almost 12 years to find a lower median price for Reno. Mike says ‘Hopefully it’s going to get out of this thing pretty quickly here.’ How many years has he been saying that? ‘Well, longer than I’ve wanted to say it, that’s for sure.’”

“Realtor Sherrie Cartinella has been touting the joys of home ownership here for 16 years now. She came out to welcome the ‘Home Ownership Matters’ bus as it stopped at Summit Sierra Mal. When I asked her if I should buy a home right now, Sherrie said, ‘Absolutely! You should buy 2.’”




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53 Comments »

Comment by 2banana
2011-11-02 07:10:35

“Weber hopes this lawsuit, one of many against the banks, will hold their feet to the fire, and find her foreclosure was illegal. Stein believes there is light at the end of the tunnel for homeowners, but after all she’s been through, Weber’s expectations are low. She sighs, ‘in the back of my mind, I feel like it’s a lost battle.’”

Did you pay off the mortgage you agreed to pay off in full?

If the answer is no - then you will eventually lose the house.

The note/paper will be eventually found or it will be settled in the courts. In all scenarios - you are not getting the house for free.

Sorry.

Comment by X-GSfixr
2011-11-02 07:29:35

Hey dude………I own your house. I can’t prove it in court, in fact, nobody can prove it because I couldn’t be troubled to go down to the courthouse and file the paperwork with all those pesky unionized public employees, and did it with MERS instead, but it doesn’t matter. You haven’t made a single payment to me. I’m going down to the courthouse tomorrow to start foreclosure proceedings, unless you send me $20K cash. Today.

Sent it to my branch in Lagos, Nigeria.

Comment by Ben Jones
2011-11-02 07:45:05

‘HELP for Homeowners Facing Foreclosure Sale and Eviction’

‘We use highly proprietary procedures to challenge your trustee. The law requires them to verify that your rights are protected and that they followed proper procedures. The trustee must stop the sale while they research and respond to our challenges. Meanwhile you and your family remain in your home.’

‘How much LONGER can you STAY in Your Foreclosed Home?’

http://delaytrustsale.com/

Comment by Sammy Schadenfreude
2011-11-02 08:04:43

This just gets better and better. Stupid FBs first bought into the “real estate only goes up” mantra. Now they get “victimized” by shysters offering to fend off other shysters. Meanwhile, the Wall Street-Federal Reserve looting syndicate continues to transfer trillions in liabilities from the banksters’ accounts to the public’s.

Thank you, Obama voters. Thank you, McCain voters. You are going to reap the results of this along with the rest of us.

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Comment by 2banana
2011-11-02 08:37:42

Hey Dude -Did you TAKE THE MONEY?

Someone owns the house.

And it is not YOU…

Comment by X-GSfixr
2011-11-02 08:48:15

Prove it.

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Comment by Realtors Are Liars®
2011-11-02 09:08:27

Prove you’ve met your mortgage obligation.

 
Comment by oxide
2011-11-02 11:30:00

Ben, in a post a few weeks (months?) ago you said that real estate law has been established for every possible situation, including wars, or notes lost in fires, or where everyone was dead. It’s all been figured out.

What would real estate law say for a lost, non-existant, tranche-chopped, MERSed, or otherwise unclear title?

 
Comment by Ben Jones
2011-11-02 11:52:34

When I studied RE law, we’d be given these problems on title to solve. The process could called a decision tree, where you go through and either move ahead or discard a party. After a while, I could come to the answer in a few minutes, no matter what the combination of circumstances were. I’m not saying it’s all been figured out, but that the law developed to establish clear title in any situation. The reasoning, we were told, is it’s important that titles not get clogged up in disputes. As time goes on, any uncertainty in the process will only get worse. So the way it works is title gets granted to somebody. Sometimes the circumstances may seem unfair, like if a person wasn’t attending to a property (they were elderly, etc) and lost title for some reason. We were told that it was more important that the title system come to a reasonably quick decision than to strive for a ‘fair’ outcome every time.

 
Comment by AVOCAD0
2011-11-02 12:50:05

Ben - did you think of being a Realtor? uhhhhh!

 
 
 
 
Comment by Realtors Are Liars®
2011-11-02 07:53:56

The note/paper will be eventually found or it will be settled in the courts. In all scenarios - you are not getting the house for free.

Stay on ‘em with this truth. Lather, Rinse, Repeat.

Comment by iftheshoefits
2011-11-02 09:10:52

A very, very, small handful actually have or will get the house for free. When they do, it’s trumped up as big news. Sadly, that’s enough to keep the meme rolling.

Comment by Robin
2011-11-03 22:30:53

Cloudy, my thoughts are scattered and they’re cloudy….

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Comment by X-GSfixr
2011-11-02 09:20:56

Yeah, but if it takes the banks/government/courts 10 years to un-screw this pooch, and I die/move in 8, I will effectively have a “free house”.

You either enforce 2-300 years worth of laws or regulations, and let things continue as they are, or you give the banksters a pass on all their criminal activity, and pass legislation that basically tells everyone that the oligarchs are above the law, and we are officially a Banana Republic.

Not to mention that there will be a bunch of houses the will eventually be almost “free”, after the local sheriff starts selling houses for back taxes. There will be a lot of houses in Flyover where the cost for the bank to recover/foreclose will exceed the value of the house.

The only question is, when will state/local governments realize that the banks don’t care about abandoned, crumbling houses screwing up the neighborhood out in Podunk, and start getting aggressive/proactive about getting them into the hands of someone who will do something with them?

If we’d let the banksters implode three years ago, we’d be halfway thru sorting out this mess.

 
 
Comment by Sammy Schadenfreude
2011-11-02 08:01:03

Given both parties’ pandering to the Free Sh*t Army - the Dems to social parasites, and the GOP to their corporate pimps - it’s not surprising that moral decay and deadbeatism has taken such root among the general population.

Comment by Realtors Are Liars®
2011-11-02 08:13:28

“Free Sh*t Army”

lmao…. SCHWEEEEET!

 
 
Comment by doom
2011-11-03 09:34:50

That is the simple answer if you miss payments then you have to vacate the home.
No lawyer is going to save you maybe by you time but in the end you are getting tossed out.

 
 
Comment by 2banana
2011-11-02 07:13:14

When I asked her if I should buy a home right now, Sherrie said, ‘Absolutely! You should buy 2.’”

Just shaking my head…

 
Comment by Realtors Are Liars®
2011-11-02 07:44:25

“Stein says the heart of his lawsuit is pretty basic. ‘You can’t foreclose without the note. Pretty simple, right? If you foreclosed, you kind of have to be owed the money, right? If you’ve been paid six times, you shouldn’t have to ask the homeowner to pay you a seventh time.’”

And the heart of my response is just as basic. Your client was delinquent or in default.

Comment by Ben Jones
2011-11-02 07:49:20

Yeah, I don’t know what this means:

‘If you’ve been paid six times, you shouldn’t have to ask the homeowner to pay you a seventh time’

Makes about as much sense as this:

‘inside the bus, realtor Mike Young says the big difference now is that banks won’t award loans to just anyone anymore, keeping the flippers and unqualified out. ‘Obviously those people are gone. But that has depreciated the value. That has driven down the value…’ And now we’re buying their houses?

‘Well, they’ve been bought, they’ve been sold. Other people bought.

 
 
Comment by Sammy Schadenfreude
2011-11-02 08:06:02

Flippers are gone? What parallel universe is he living in?

Comment by iftheshoefits
2011-11-02 09:13:35

There’s just no porpoise for housing prices to be propped up any more.

 
Comment by Steve J
2011-11-02 09:23:54

Spike TV has a new flipper show on.

 
 
Comment by Carl Morris
2011-11-02 08:25:16

I find it amusing the language used to say that it’s not the bank’s fault that the abandoned house isn’t being maintained because they don’t own it (yet). They say that while at the same time trying to avoid owning it for as long as possible…

Comment by Ben Jones
2011-11-02 08:59:30

It’s unbelievable what’s going on. The other day I was in Tucson. I came across a house in a good neighborhood that looked abandoned. The security door was locked but not the door. Turned out that doors lock was busted.

I made some calls and found out the owners hadn’t made a payment in 3 years. They were long gone and couldn’t understand why the bank hadn’t foreclosed. Meanwhile the roof has been leaking and the ceiling is caving in. The guy who lives across the street told me kids get in there to do drugs, etc. Not foreclosed, not on the market. No robo signing problem, just another house waiting to be claimed, while the people around it pay the price.

Another house I found was unlocked with all the doors standing open. Thieves had been stripping copper out and had ruined the furnace. I checked and discovered this was a Fannie Mae house. The listing had expired in May and apparently it fell through the cracks or no one cares.

Comment by Arizona Slim
2011-11-02 09:49:05

Ben was in Tucson and didn’t e-mail or call. Well, hmmph! I feel snubbed.

But since I got a good night’s sleep, I’m not grouchy this morning. So, Ben, next time you come down this way, look me up. And, fellow Tucsonans, let’s host Ben at a Tucson HBB meetup. You know you want to…

With that bit of business out of the way, permit me to pivot back to what Ben said up above. About the owner not making payments in many years and disappearing, I can point to a case of that right up the street. Just one of many here in Tucson.

Guy bought the place to rent out and it’s listed in the county assessor records as owner-occupied. His tenants had to move out last November. I guess that they saw one of those foreclosure notices in the mailbox, but I don’t know for sure.

This past spring, there was one of those “we’ll pay you to move out” notices. House wasn’t exactly what you’d call lived in at that point. More like abandoned. I reported it to the city as an unkempt property. That got the weeds cut, which is what the neighborhood needed.

Since this past August, Frauddie Mac has been trying to sell the place for $98k, and all I can say is good luck with that.

Comment by Ben Jones
2011-11-02 10:35:09

I thought about you Slim, but I was working and didn’t have a spare minute. I’ll be back down there soon I’m sure, and I’ll let you know ahead of time. BTW, Tucson looks like Florida, foreclosure wise.

I like Tucson. The people are nice and downtown has a cool vibe.

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Comment by zee_in_phx
2011-11-03 09:37:38

Ben, I’m hoping you’ll be passing thru Phoenix - give us locals a heads-up and lets have a mini-HBB-get-together.

 
 
Comment by X-GSfixr
2011-11-02 09:01:59

You really have to laugh about a lot of this stuff. They couldn’t have screwed this pooch more, if they had set out to do so intentionally.

The banks don’t want to own the house, they just want the payment money. But can’t prove they “own” the house, so they can’t enforce payment.

The “Free-renters” want the house, but don’t want to/can’t pay for it.

The RAL crowd doesn’t care who does/doesn’t own it, they just need to generate activity/commissions.

Government at all levels, and the banks have bet their lives on keeping property values high. (government needs property tax revenue, banks can’t mark to market, because they will be immediately insolvent). The plan is wholly dependent on Bernanke’s printing press, banks being above the law, and generating a new generation of knife catchers.

Many people still believe any house is a “good investment”.

Comment by Carl Morris
2011-11-02 09:09:22

The banks don’t want to own the house, they just want the payment money.

I think they’ve given up on that in the cases we’re talking about. They just don’t want to have to take the loss on paper that would result from admitting they’re not going to get the money. There were already laws in place to deal with that (mark to market accounting). Early in my HBB education process I was so glad to hear that would prevent these sorts of shenanigans.

And then it was gone…

Comment by X-GSfixr
2011-11-02 09:25:11

That’s the thing that bothers me the most. Finding out that all our laws/rules/regulations, instead of being bound like a Bible, are actually in a three ring, Chinese made, loose leaf notebook.

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Comment by Carl Morris
2011-11-02 09:47:55

Yeah, they’re written in stone for the 99%. I had no idea they were so flexible for the 1% until recently. At the top it’s more like Lord of the Flies.

 
 
 
 
 
Comment by Arizona Slim
2011-11-02 09:52:59

“‘Neighbors get upset that the house sits and looks bad and they wonder why somebody doesn’t do anything about it,’ says Gaynell Instefjord, associate broker at Coldwell Banker Residential Brokerage in Sandy, Utah. ‘The reality is as long as the consumer owns the property, the bank can’t do anything to it at all.’”

Count me as one of those upset neighbors. But you know what? I can sit here and get upset. Or I can do something.

One of the things that I do is report unkempt properties to the code enforcement people at the City of Tucson. It’s easy. It’s fun. And it can be done in the comfort of one’s home at the computer.

Comment by oxide
2011-11-02 11:39:12

The consumer doesn’t own the property either. Who owns the property? I’m guessing that Fannie Mae owns the main level, the master bath is owned by a middle manager at JP Morgan Chase, and the bedrooms are owned by the citizens of some little town in Norway.

 
Comment by clark
2011-11-03 01:20:52

“One of the things that I do is report unkempt properties to the code enforcement people at the City of Tucson. It’s easy. It’s fun.”

That’s terrible. Just plain terrible, and one of the worst by-products of the Housing Bubble, the creation of even more: busy bodies, snoops and sadistic snitches.

See something, say something, right?

Eck.

Comment by zee_in_phx
2011-11-03 11:26:42

yeah - so lets all keep mum when we see something uncommon going down - just stick to our business when we see our institutions being heisted by the 1%’er..
it starts from taking ownership of your street, your neighbourhood and your district, and having a stake in how things are run in your ‘hood. Now i’m not advocating that you do this 24/7 and report your neighbour’s grass being 1/2″ above ordinance - but when you see a trashed house that IS going to attract vagrants its your duty to report it and of course its your duty to show up for the bi-annual neighbourhood cleanup as well. What i’m advocating is that you just don’t be ‘talkers’ but also ‘doers’ if the city’s staff has been cut-back and they can’t send in a cleaning crew…

 
 
 
Comment by Erik
2011-11-02 10:46:07

I have a foreclosure right behind a business I own. The owner walked 4 years ago and the bank took it back 2 years later. It sits empty and unmaintained and there have been no attempts to sell it. It’s ultimate destiny will be as a vacant lot…

 
Comment by Cantankerous Intellectual Bomb Thrower©
2011-11-02 10:55:19

‘About 15 per cent of buyers in the last quarter were Canadian and some of them are buying properties here for the price of a Vancouver parking spot.’

Excellent! Canadian investors make much better bagholders than U.S. investors, as the negative economic impacts of investors catching falling knives will land on the Canadian side of the border.

Comment by oxide
2011-11-02 11:44:24

Are these Canadians using phantom equity to buy these houses outright? That would make for fun times when the Canadian bubble pops. We’ll be re-conquista’ed by illegal Canucks jingle mailing their underwater parking spots and sneaking across the American border to take up residence in their paid-off home in Phoenix. Will Joe Arpaio will dress them in pink underwear?

 
 
Comment by CarPort Pirate
2011-11-02 12:09:47

Testing, testing test

Comment by oxide
2011-11-02 13:58:59

You pass!!! :grin:

 
 
Comment by Cantankerous Intellectual Bomb Thrower©
2011-11-02 12:31:54

‘The people were steered into a subprime mortgage when they could have afforded a prime mortgage — and in the end they weren’t able to afford the payments. They were cheated by their broker and the whole system and so they are angry.’

Perhaps these angry homeowners don’t realize that subprime loans (I/O, neg-am, liar loans, etc) made it possible for the buyer to leverageup to a much higher monthly payment than they could have mustered on a 30-year-fixed mortgage, enabling them to buy a lot more house than they should have, given their incomes.

Comment by Arizona Slim
2011-11-02 13:13:24

Perhaps these angry homeowners don’t realize that subprime loans (I/O, neg-am, liar loans, etc) made it possible for the buyer to leverageup to a much higher monthly payment than they could have mustered on a 30-year-fixed mortgage, enabling them to buy a lot more house than they should have, given their incomes.

When I was looking to take out a mortgage, the sales pitch I got was “It’ll lower your monthly payment!!!” In this case “it” was a subprime loan. This despite the fact that I was qualified for prime rate, and that’s what I insisted on and got.

However, I’m one of those people who aren’t that easily swayed by enthusiastic sales pitches. I do my homework — thoroughly — before I even approach the sales folk.

And, if the deal looks to be a lousy one, I get out of it right-quick. Witness my recent dalliance with the former coworker-turned life insurance agent. Not only did I cancel that policy, I also got all of my money back during the “free look” period.

 
 
Comment by AVOCAD0
2011-11-02 12:52:19

Gotta love the people who HELOC’d all the money out in 2006 and now claim they are losing “their” house.

Comment by Realtors Are Liars®
2011-11-02 13:30:24

Yeah. The Free $hit Army.

 
 
Comment by CarPort Pirate
2011-11-02 14:23:14

To Oxide
Testing “Is that how it works”?
shinanigans stuff to see if I mess up

I want to buy the world a coke, and teach it how to sing…

 
Comment by CarPort Pirate
2011-11-02 14:24:51

I messed up
shenanigans,
to see if i ken larn this.

Comment by Arizona Slim
2011-11-02 15:30:00

It takes time to learn how to use the strikeout tag. But once you do, your life will never be the same.

 
 
Comment by Realtors Are Liars®
2011-11-02 18:02:22

test

Comment by Robin
2011-11-02 22:06:05

jealous

 
 
Comment by Realtors Are Liars®
2011-11-02 18:08:24

cite

 
Comment by Realtors Are Liars®
2011-11-02 18:34:19

strong

 
Comment by traderjack
2011-11-02 23:16:59

Perhaps, just perhaps, the people leaving their homes like that, should just sign quit claims deeds to the IRS, the State, The County, the City, and the Tax Collector.

Wouldn’t that be fun for the banks.

 
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