Government Repo Homes Blog

Repo Homes Filings High In Collier And Lee

Chris Carroll — Mon, 06 Oct 2008 13:57:53 +0000

Repo Homes filings have reached record levels in Collier and nearly so in Lee in June 2008. There seems to be no doubt that foreclosures have not reached the peak as yet.

In Collier County there were 751 new foreclosure filings in September creating a record. It was a jump from 674 in August. The highest had been in June – 716 foreclosure listings. This is according to the records of Collier County Clerk.

Lee County lies to the north of Collier County. In August the filings inched to 2,447 and very close to the June number of 2,518 according to Wendy McCabe of the County Clerk’s office. In August the foreclosure numbers dropped – the lowest since January this year. This gave rise to a hope that the trend is reversed. But McCabe cautioned not to be too optimistic because some mortgage rates were ready to reset. This cannot be gauged from the filings.

Side by side with the ballooning of interest rates people are finding themselves out of jobs in southwestern Florida. It makes it impossible for them to be current in their mortgage payments.

Russ Wever one of the best economist analyst of Fishkind & Associates commented’ “Our unemployment rate is higher now. That is causing the increase (in foreclosure filings) as well as the continuation of the sub-prime market.”

In August the unemployment rate spiked to 8.4% and 9% in Collier and Lee respectively. Nationally the employment picture continues to be grim. New applications for benefits from unemployment increased to a record number since the last seven years. For this many factors are play – the general economic slump and the ravages of Hurricanes Ike and Gustav. To add to the woes, credit is extremely difficult to come by for business owners and potential property buyers. The people have been allowed to drift while the government waits for revenue to pick up. Big companies are not immune to the ravages of the foreclosure crisis.

Although sales of foreclosed houses are slowly picking up, new foreclosures continue to surge into the market. The investors and other potential buyers are being attracted to short sales and discount sales offered by the banks. Short sales take place when the bank permits the borrower to sell the house at a price lower than the loan amount. These houses are in good condition. But the foreclosed houses are in a sorry state and buyers need to tread warily before clinching the deal.

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Traditional Banks In Connecticut Safe From Foreclosure Crisis

Chris Carroll — Mon, 06 Oct 2008 13:32:27 +0000

The ordinary American is badly shaken by the foreclosure crisis that has led to, bank collapses and government bailouts. But Howard F. Pitkin, the state commissioner of banking has a word of reassurance. He opines that the section of banking under his supervision is in good health and is continuing with business. It seems that the traditional banks of the sate are safe from the ravages of the foreclosure crisis.

Pitkin argues that although the financial system of today is knocked about by the global markets it is well to keep in mind that financial contracts are between persons who reside and go about their work in the local communities. Here the commissioner has a vital role to play to giving protection to the consumers as well as looking to the safety and soundness of the chartered bank of Connecticut and the credit unions. From as far back as 2001 the commission realized the importance of protecting the borrowers from the risk of sub-prime mortgages. It is the latter that has led to the unprecedented foreclosure crisis. Legislation had been introduced to protect the borrowers from predatory lending. The foreclosure crisis had been anticipated and precautions taken.

In 2007 the agency had an important part in seeing to the passage of a huge bill that gave added protection to borrowers having non-prime loans. Many emergency mortgage help programmes were set up and expanded. In August 2007 the state department of banking started operating a foreclosure assistance hot line. Many viable plans have been chalked out and enforced against the lenders who have failed to grant loans or engaged in questionable practices, engaged in fraud or harmed the consumers in any other way.

The drama being staged out in Wall Street is focusing on the investment banks and not on the traditional banks. The latter offer insurance coverage of loans with the support of FDIC. On the other hand the investment bodies depended on corporate bonds, agreements of repurchase and securitization connected with liquidity. But the conventional banks (including local commercial and savings banks, credit unions etc) have access to liquidity mainly through deposits. Thus these are not exposed to market fluctuations. Consequently it does not have to get entangled with foreclosures.

The traditional banks meanwhile have kept abreast with the latest risk management methods and put into force strong buffers against debacles. Corrective action is in force and this prevents the banks from taking the extreme measure of foreclosing on borrowers.

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Foreclosures Triggering Off Global Crisis

Chris Carroll — Thu, 02 Oct 2008 16:44:32 +0000

At the core of the global crisis is the foreclosure phenomenon. There are millions boiling in the foreclosure soup. They fell into it one by one. Only if they can be rescued one by one then the crisis will be prevented from becoming a collapse.

Tania Harrigan of South Philadelphia has a happy tale to tell. A beaming 53-year-old Harrigan surfaced through the foreclosure trauma with her title intact and a lower monthly payment schedule. The many Harrigans facing foreclosure pose the next challenge to the government. If the risky loans are allowed to slide into foreclosure and total default then all the government plans of rescue will come to naught. But helping those at risk will give the market a boost and check the flooding of it with new waves of foreclosed units.

Senator Robert Casey (Democrat) together with consumer advocates and some officials tried in vain to push through a national foreclosure mediation programme like the Philadelphia operation that saved Harrigan. Martin Eakes of Center for Responsible Lending commented that the $700 billion bailout plan “simply will not work to stabilize the economy if it does not address the underlying problem of home foreclosures and falling home prices.”

The housing advocates considered the bailout operation the boldest since the Great Depression. It would provide a great opportunity to fashion a plan at the federal level to modify the mortgage industry systematically and make badly designed house loans more affordable. Celia Chen of Moody’s Economy felt that the basic problem plaguing the housing market at the moment is the foreclosure issue. Continuing foreclosures are adding to the already long list of unsold houses. This prevents the price of houses from stabilizing. According to a recent survey of U.S. Census Bureau there were over 2.25 empty houses waiting to be sold in comparison to the previous average number of 1.5 million. Chen added that although policy makers have taken some moves to contain foreclosures but “they are just chipping away at a really big problem.”

In 2007 there were nearly 1.5 million foreclosures. In the first half of 2008 already there have been 1.2 million foreclosure postings said Sheila Bair, the chairperson of the Federal Deposit Insurance Corporation to the House of Representatives Financial Services Committee.

Unemployment is a major factor behind foreclosures. Without jobs there is no money to make mortgage payments. Soaring interest rates continue to be a big contributing cause.

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An Oasis In The Middle Of the Foreclosure Desert

Chris Carroll — Thu, 02 Oct 2008 16:38:54 +0000

In a corner of Brooklyn there is an oasis in the middle of the foreclosure desert.

Patricia Worthy was one of the many who had taken a mortgage eight years ago. With her were other families (690) all of whom, like Patricia were buying their own houses for the first time. The income of the group was modest. Their houses were in an area that consisted of broken down deserted building.

They took over their responsibilities at the onset of a new age of loan taking where there were no regulations or rules. This insanity soon led to first to the housing boom to be followed by the foreclosure crisis gripping America today.

But in the middle of the bleak environment of the march of the foreclosure desert Patrician and her neighbours have remained firmly entrenched in their green oasis where the wells of security never dried up. Patricia comments proudly, “In my area, we have not had one foreclosure!”

Under the Nehemia housing plan 3,900 houses were constructed about thirty years ago when acres and acres of land in Bronx and Brooklyn had fallen into disuse. Some church and community bodies got together with I.D. Robbins, a developer. They thought up the plan of constructing en masse single-family houses on this vacant land and sell them at affordable prices. The programme came to named Nehemia Housing Program after an ancient prophet who had rebuilt Jerusalem.

Since the inception of the plan less than 10 of the houses of the 3,900 houses that had been built and sold have defaulted. The rate can be considered to be zero, said Michael Gecan of Metro Industrial Areas Foundation that had been one of the driving forces behind the execution of the plan.

Gecan explained that they had been insistent about down payments and for this they had go against governmental pressure. There were continuous suggestions about waiving down payment but the organizers of Nehemia Housing remained firm saying, “That’s ridiculous – that’s how you get into mass foreclosures.” Both Democrats and Republicans kept fluttering the hallucinations of the benefits of no down payments. Today the nation is paying the price for this naïve talk.

While the parties indulge in mudslinging the people of the Nehemiah programme, all of whom belong to the minority section, have an excellent record of having met their commitments because from the onset they had a financial stake in their houses.

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Lottery To The Rescue Of Repo House

Chris Carroll — Wed, 01 Oct 2008 12:29:55 +0000

Desperate times call for desperate measures. Cornered by foreclosures one innovative couple has decided to use the old game of lottery to rescue their repo house. Considering the circumstances the idea “didn’t seem dumb” said Karen Crawford. A year or two ago she and her husband had moved in from their old log house to a 1929 farmhouse after purchasing it for $375,000. They put up their old house for sale hoping to pay from this the dues of the new unit. But by that time foreclosures were dominating the real estate mood and the house could not be sold. Meanwhile the costly mortgage on the second house began to weigh down on them. The couple made up their minds that they would have to part with it. It was slowly heading for foreclosure said 60-year-old Crawford who was a schoolteacher.

At this point Karen thought up something novel. She decided on holding a raffle with the tickets being priced at $100 each. The lucky person would get the farmhouse. The problem was they would have to sell enough tickets to be able to walk away without a foreclosure stamp. Not to be put down the couple teamed up with a realtor and local charity group and started publicizing the raffle. The drawings were held at a local country club in March 2008. They had by then sold 6,500 tickets. The fund was enough to cover the cost of the house and leave over about $200,000 for charity. The couple shifted back to their log house, which was lien free, and considered themselves to be lucky to have their own roof above their heads. The last two years had been a nightmare for them.

The idea of the lottery had come as a sudden bolt from the blue for Karen Crawford. Many like her have thought up unorthodox methods to fight foreclosures. Battling rising foreclosures and falling real estates some have found a way out by raffles and other forms of competition. These are last minute efforts to raise money and escape the foreclosure taint. Some potential nest builders see in the buying of a lottery ticket a faint chance to make the impossible become possible in these hard days. The victors of course have to pay taxes from their winnings.

Of late raffles have been catching the imagination of many in Maryland. Raffles are being organized for houses whose price ranges from $550,000 to even $1 million.

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Bobcats Take Over Foreclosed House At Lake Ellsinore

Chris Carroll — Mon, 29 Sep 2008 13:00:22 +0000

It is well known that Mother Nature hates vacuum. Accordingly a family of bobcats has taken over a vacant repo house at Lake Elsinore. One house In the Tuscany Hills locality of Lake Elsinore has been foreclosed upon. All the signs are there – a dead lawn, wilting flowerbeds and ugly notices pasted on the front porch. There is another phenomenon that completes the picture – bobcats!

Caring two hoots about occupational laws and ownership a pair of bobcats has moved in with their young. Bobcats are wildcats – reminders that the wild Nature will take back what was originally hers. She is ever alert and waiting to see when Mankind is off guard squabbling among themselves.

Karen Brown lives nearby. She said that another neighbour came knocking to tell her that ‘mountain lion cubs’ have been seen in the foreclosed house across her home on Vista Palermo. Going outdoors Karen saw the two bobcats – fully grown resting proudly on the rear wall of the foreclosed house flaunting their ownership rights. Brown said, “They were just lounging there. They were literally just lying on the wall looking at us.”

Karen notified the police but the bobcats remained saucy and undeterred thoroughly enjoying their new home. They stayed around for half an hour giving the police and animal control personnel plenty of time to photograph and fuss over them.

The director of Animal Friends of the Valleys, Willa Bagwell said that their personnel stepped into the backyard to complete investigations. The organization is a non-profit body that looks after animal control problems in Lake Elsinore. It was dusk but with the help of a powerful torch the prying humans saw quite a few tiny eyes blinking back at them – not too happy with the intrusion in their privacy.

Bagwell said it is not usual to see bobcats in this region east of Interstate 15. This is the first time she has heard of bobcats taking over a foreclosed empty house. The particular house has an enclosed yard adjacent to a hillside that is covered with shrubs. Easy access to water thanks to a sprinkler system makes the property a haven for bobcats that go house hunting.

Animal control officers went around with warning fliers telling the people to be careful about their pets and little children. Brown had recently moved into this area with her family from Long Beach. This was their first brush with Nature and foreclosures.

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Nightmare Of Foreclosures Breaking Dreams Of House Ownership

Chris Carroll — Mon, 29 Sep 2008 12:42:37 +0000

The nightmare of foreclosures has broken the dream of house ownership. Millions are having nightmares as foreclosures are evicting them from homes to a state of homelessness.

A new group of people is now employed patching up what is left of the shattered dream – the vacant ravaged houses that have been left behind. Machines are trimming overgrown lawns of one time swank houses that were once great to walk into it with ownership papers. Three years ago it was purchased for $660,000. Today it stands a desolate broken dream haunting the lenders who have foreclosed on it and the neighbours who have to bear with it.

The person in charge mows the garden and checks the big garages that can house two cars. On one side lies neglected gardening tools, basketball net and a broken door leading to the fancy kitchen having granite slabs. The workers turn their attention to the stagnant pool with overflowing slime and stench. Shayne Becher who has been appointed for the task is not a regular landscaper but an employee of the city – a city desperate to stop the wild jungle from swallowing up urban gains. He is slugging out in the heat of the Fort Myers – a region saturated with foreclosures.

Becher is part of the rapid action team of the city’s code enforcement division that is trying to grapple with the ever-increasing number of vacant foreclosed houses and its attendant problems. The work is varied – from mowing of lawns to boarding of doors and windows. The payment rate is much reduced from what it used to be previously thanks to the shrunken budget of the city authorities. Five days a week from 7 in the morning till 3.30 in the afternoon Becher slugs it out. Sometimes he is lucky to have additional help. He has to put back some sort of respectability to the houses so as to keep at bay the wild – humans or otherwise like rats and snakes. He cleans the sidewalks and picks up fallen coconuts. At the end of the day he looks back at the nightmare that was once a dream. Thus he and others like him trudge from one foreclosed house to another trying to mend the damage.

This is the scene in Fort Myers that has 60,000 residents and is the seat of Lee County. This is the result of what happens when banks behave irresponsibly duping the gullible borrowers. The entire society and its economy pay the price.

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House Developers Report Losses as Foreclosures Increases

Chris Carroll — Fri, 26 Sep 2008 15:18:26 +0000

Most of the house developers are reporting losses as the foreclosure crisis increases in intensity. Lennar Corporation is one such construction giant that has reported its quarterly loss for the sixth running time. Stuart Miller the Chief Executive Officer of the firm said, “The weakness in the market actually accelerated as a result of increased foreclosures , weakened consumer confidence and tightened mortgage lending standards.”

The raging foreclosure crisis has caused Lennar to reduce prices and take on less number of construction works. Foreclosures have weakened consumer confidence and caused lenders to tighten their purse strings. This has been the steepest decline in the real estate market since the Great Depression of the previous century.

Lennar will be projecting a net loss of 60 cents on a share for the third quarter this year that ended on 31st August as per a survey conducted by Bloomberg involving 12 analysts.

Many incentives are being offered to buyers by the house-building lobby including Lennar. The average price of a Lennar house in the third quarter fell by 9% from what it was a year earlier. Most of the sales took place in Arizona, Colorado and Texas. In July the average price of a new house in USA was $230,700. Eric Landry of Morningstar said, “The sentiment is still pretty darn bad. The headwinds are still numerous and stiff.”

In the third quarter revenue from house sales dropped by 54%. The company said that this decline was because of a drop in deliveries and 9% average fall in sale prices. The number of house sales in this foreclosure-ridden market fell by 50% to 3,791. The new house sales fell by 42%. The value of the houses that are under contract but not yet sold dropped by 53% calculating to $1.05 billion.

The consecutive losses have caused Lennar to do some spring-cleaning. General expenses were cut down by $148 million – all related primarily to job cuts. Dan Poole of National City Bank, Cleveland said a lot of investors will take heart in that the margin of the of the gross profit of the company on house sales, not including those units that have been written down, was 18% in the third quarter as compared to 14% a year ago.

Miller feels that the federal government should be more proactive about helping the housing crisis. As yet the plans are not producing the desired results.

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Foreclosure Related Anxiety Is Beginning To Tell On Children

Chris Carroll — Thu, 25 Sep 2008 15:33:30 +0000

The game of repo homes played out between lenders and borrowers cannot remain confined to the playing fields as it involves the basic question of shelter for survival. As such foreclosure related anxiety is beginning to tell on the children as they react in a bewildered manner to the adult scenario.

The economic squeeze is pinching families and this is having its repercussion on the forgotten category of foreclosure victim – the children. The little ones are worried seeing the frowns on their parents about the grocery bill. Sometimes they have to suffer of moving in with other families having seen with their own eyes their own houses being gobbled up by foreclosures. It can be dubbed trickle-down-tension.

This is noticeable in schools where children are complaining of pains in the stomach and sleepless nights. This is making it hard for them to focus on their lessons in the class. Uppermost on their minds are the big questions – where will they live the next day, will the lights be off when they return home, will there be food on the table when they return hungry, will there be no one to pick them up from school because there is no gas in the car? Jennifer Porter-Smith of Nap Ford Community School in downtown Orlando was elaborating on the effects of the foreclosure crisis on the children in school.

According to research being done about 2 million children will be affected by the foreclosure tsunami lashing America. Jobs are vanishing. In Florida the unemployment spiked to 6.5% in August in comparison to 6.2% in June.

The children of Kara Smith are one of the many innocent sufferers. Only two years ago they had everything – video games, toys and passes to local theme parks. But when their father lost his job as an electrician in a construction firm in December 2007 things began to turn sour. Kara had to change her lifestyle and go down the socio-economic ladder. They shifted from an apartment to a mobile unit, stopped eating out and cut out on school trips with other school children. This is telling on Kassidy who is 11. She has started getting angry. 12-year-old Keyaira has reacted by going inside and becoming more withdrawn.

From public schools similar reports are coming through. Seminole County is one of the richest in the state. Here the percentage of children getting free or subsidized meals has shot up from 29.7% in 2006 to 34% this year.

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Repo Houses Haven for Illegal Immigrants

Chris Carroll — Thu, 25 Sep 2008 15:11:19 +0000

Repo houses are a haven for illegal immigrants in Phoenix, Arizona. Each and every vacant house is an open invitation for smugglers to walk in.

A survey of the foreclosed units show that whenever the owners of houses show signs of being in financial trouble the ‘coyotes’ sniff around. The leaders of the trade hole up immigrants in these ‘drophouses’ until cash comes in and then they are let loose. The areas with the highest number of foreclosures are also those having the most number of drophouses.

These foreclosed cum drophouses are not quiet havens. A record of 41 such houses in Phoenix show that violence has often broken out here during the past year. 12% to 30% have been raided. Since 2005 there have been 600 raids.

The conditions are ideal for such games – weak housing market and tight border security. It is little wonder then that drophouses are flourishing in Phoenix making use of the foreclosed houses.

Many landlords have complained to federal authorities and detectives of Phoenix about the menace. To avoid foreclosures and make mortgage payments they rushed to find tenants only to walk into the fire from the frying pan.

In October 2007 Karla Solano was in a desperate fix. When she lost her job as mortgage loan office she had already invested in three properties. At this point the real estate market began to tumble bringing down the value of her houses. Her bank was poised to foreclose on one of her houses in south Phoenix that had been lying vacant for about a month. She put it up for rent and three men who said they were construction workers agreed to her terms of cash and paid $1,300. After four days the police got a tip and raided the house. 20 illegal immigrants were found. They had been bullied by the ‘coyote’ and made to pay heavy extortion fees amounting to $2,500. Finally the coyote was accused and convicted. For Solano it was shattering experience. The police did not spare interrogating her wanting all the papers. Although she was not considered a suspect Solano began to live with the fear that the coyotes might return in a bullish mood under the impression that she and her family were responsible for giving information to the police. About two months after the ugly incident, the bank repossessed the house.

Another trouble for the landlords is that the raid usually leads to trashing of the premises.