Archive for 'Foreclosure Listings'

Across the country, commercial buildings, condos and mixed-use projects are being added to forclosure lists.

During the first wave of the foreclosure crisis, only houses formerly owned by low-income borrowers were being foreclosed. Now, high-priced homes and non-residential buildings could not be prevented by owners from being added to foreclosure lists.

Among the condos and commercial properties being added to foreclosure lists are South Florida’s Inverrary Plaza; the Ponce de Leon Condo in South Florida’s Coral Gables; the Richardson Heights shopping mall in Dallas; the Sion Estates in Miami-Dade; and the Key International Development projects in Miami.

Bank of America, trustee of mortgage-backed securities handled by Bear Stearns, has lodged in Broward County a foreclosure case against developer Post Time Properties II, which acquired a CMBS loan after purchasing the Inverrary rtail plaza in 2005. Post Time Properties has been in default by over 3 months on its $8.6 million balance.

Similarly, Wachovia Bank has lodged in Miami-Dade a foreclosure case against Shear Construction and Development, which developed the Ponce de Leon condo complex, and other Shear partners. The condo, which has 50 residential units, 9 office units and 11 commercial units, still owes the bank $13.1 million. Wachovia intends to acquire the unsold units, as there were only 26 units sold in 2008.

Shear Construction is facing two other foreclosure lawsuits in connection with unpaid loans for its commercial and residential development projects. It obtained $4.6 million from Pacific National Bank for its River Marina LC project and obtained $2 million from Pacific National Bank for its Flamingo Ranch Estates in Davie. This housing development featured 13 home sites, but only sold 7 sites because of the effects of forclosure lists.

Meanwhile, the Richardson Heights shopping mall in Dallas, which has been operating for 50 years has been added to foreclosure lists after the owner, a Shafer Property affiliate, failed to pay over $32 million in mortgage debts.

According to executives at Foreclosure Listing Service, a bigger number of older commercial properties have been added to foreclosure lists during the past years because they could not compete with newer commercial complexes. Aside from competition, operators have also been unable to obtain credit to continue their operations.

Another housing development that faces the risk of being added to foreclosure lists is Sion Estates, a master-planned community in Miami-Dade. Sion Estates LLC was provided with a $3.9 mortgage loan by Premier American Bank, which it was not able to pay after the project stalled.

The oversupply of homes in foreclosure listings in many areas of the country has pushed down home values to a point that 21.8 percent of all the country’s homes were underwater in the first quarter.

Underwater borrowers are those homeowners whose mortgage loan balances are higher than the current market values of their homes.

According to real estate firm Zillow.com, over 20 million houses were in negative equity in the first quarter, after the prices of homes, particularly houses in foreclosure listings, fell by more than 14 percent.

Stan Humphries, vice president for data and analytics at Zillow.com, said low home prices, including prices in foreclosure listings, plus low down payments have put many borrowers in negative equity. He added that in some areas, more than 50 percent of all houses are underwater.

Among these areas are Las Vegas, where 67.2 percent are underwater; Stockton in California, with 51.1 percent underwater; and Modesto, with 50.8 percent in negative equity.

Zillow.com tracks home prices by gathering sales records and price trends in a community and then comparing price estimates to borrowers’ original loan balances.

Zillow considers mortgage balances at the time the loans were taken out and price changes after. It excludes principal reductions that may have been made through the payment period.

The Zillow.com’s method is conservative, according to Humphries, because more people are reducing the value of their homes by taking more lines of credit and home equity loans than adding value to their homes by reducing their principal balances. He said his firm’s estimates are either right on the dot or a bit understated.

However, some analysts have questioned Zillow.com’s estimates. Richard DeKaser, founder of Washington, D.C.-based Woodley Park Research, said that Zillow.com’s estimates are overstated.

DeKaser pointed out that CoreLogic reported an estimated 8.3 million underwater borrowers as of December 2008 and that Moody’s Economy.com reported an estimated 14.8 million underwater homeowners in the first quarter.
According to Zillow, underwater borrowers are more at risk of losing their houses to foreclosure listings than those with home equity. Zillow.com’s data on sales from foreclosure listings supports the connection of negative equity to foreclosures.

In the city of Los Angeles, where 20.3 percent of homeowners have negative equity in the previous 12 months, home sales from foreclosure listings comprised 34 percent of total home sales. In contrast, in New York City, only 7.8 percent are underwater and only 4.5 percent of all house sales were from foreclosure listings.

The number of underwater U.S. homeowners soared to 20.4 million in the first quarter largely due to price declines in foreclosure lists, according to real estate monitoring site Zillow.com.

The first quarter figure marked an increase from the 16.3 million underwater borrowers in last year’s fourth quarter and represent 21.9 percent of all U.S. homeowners, an increase of 17.6 percent from the fourth quarter of 2008.

Housing analysts said that underwater homeowners represent another challenge that need to be addressed by the Obama administration’s foreclosure prevention program. While the increase in underwater borrowers are pushing down prices in foreclosure listings and making foreclosed homes more affordable to lower-income buyers, the declining home prices are preventing distressed homeowners to refinance their loans or to get approvals for short sales to avoid foreclosure.

The loan refinancing scheme of President Obama’s program benefit only homeowners whose mortgage loans are guaranteed by Fannie Mae or Freddie Mac and whose loan amounts are not higher than 105 percent of the value of their homes.

In response to the concern, James Lockhart, head of the Federal Housing Finance Agency that regulates Fannie Mae and Freddie Mac, said federal officials are looking at increasing the limit.

Stan Humphries, a vice president at Zillow.com, said no market has made a recovery from underwater problems, and instead there are additional markets, such as Dallas, where low prices in foreclosure listings are increasing the number of underwater borrowers.

Housing economist Thomas Lawler added that underwater borrowers whose loans are 30 percent more than the value of their homes are likely to abandon their homes to foreclosure listings than borrowers whose loans are just 10 percent more than the value of their homes.

According to data from First American CoreLogic, more than 1 in 10 mortgage borrowers owed 110 percent or more of the value of their homes in December 2008.

Nevertheless, according to the National Association of Realtors, the index of pending home sales or sales contracts has increased by 3.2 percent in March.

Estimates of the number underwater borrowers vary, as researchers differ in their assumptions and in their estimates of home prices and mortgage loans. Sometimes, homes already in foreclosure listings are still included in underwater counts.

The chairperson of the University of California’s Fisher Center for Real Estate and Urban Economics, Kenneth Rosen, said that underwater estimates can become too high if the home price data includes the prices of a significant number of homes already in foreclosure listings, which are priced at a discount.

Last month, the number of houses that received default notices increased but the number of houses added to foreclosure listings decreased, according to Hope Now.

Hope Now said that 290,000 homeowners received notices of default in March, an increase of almost 20 percent from the 243,000 default notices sent by mortgage lenders in February and the biggest monthly total since 2007 when it started monitoring foreclosures.

But despite the increase in default notices, the number of houses added by lenders to their foreclosure listings decreased to only 53,000 units, well below the 87,000 foreclosure properties in February.

According to Hope Now, there have been 1,447,866 houses added to foreclosure listings since the housing crisis began in July 2007.

Hope Now is an alliance of HUD-certified counselors, mortgage lenders, investors and housing nonprofits that provide foreclosure and debt management counseling for free.

The alliance has already helped modify about 134,000 mortgage loans, a jump of almost 20,000 from the average number of loans modified since September last year. Another 115,000 borrowers were given repayment plans, putting the total number of homes saved from foreclosure listings to almost 250,000 units in March.

Loan modifications involve reduction or suspension of rates, extension of loan terms, reduction of loan balances while repayment plans just reschedule payments without restructuring the loans. Loan modifications are more effective because they reduce the monthly payments and make them affordable for borrowers.

Faith Schwartz, head of Hope Now, said that mortgage lenders have been looking for more solutions to help homeowners save their houses from foreclosure listings. She said the provisions of President Obama’s Homeowner Affordability and Stability Plan will lead to more loan modifications.

The sharp decline in number of houses added to foreclosure listings is attributed by Hope Now statistician Michael Bright to lenders and servicers’ decision to suspend foreclosures as they prepare to modify or refinance loans under the Obama administration’s foreclosure prevention program.

Notwithstanding lenders efforts, Mark Seifert, head of Cleveland’s East Side Organizing Project, complained that lenders have not been responding to requests from the group’s counselors for several weeks now.

Lenders explain that they are still putting their systems in place to incorporate Obama’s Making Home Affordable schemes. They said they have given some grace periods to homeowners while they are preparing their tools for modifications.

Schwartz said she hopes more homeowners will be helped by Hope Now after 11 major mortgage services committed to support Obama’s program to cut down the number of houses being added to foreclosure listings.

Search Homes in Foreclosure Listings by City:

• Atlanta Foreclosure Listings
• Chicago Foreclosure Listings
• Detroit Foreclosure Listings
• Miami Foreclosure Listings

Optimistic economists and housing analysts are enumerating signs they see as portending the bottoming out of home prices and the subsequent start of recovery despite the reality of foreclosed homes listing.

One of the first signs they cite is the slowing decline pace of the Standard & Poor’s/Case-Shiller home price index for 20 large cities in the U.S. The index dropped by 18.6 percent in February compared to February 2008, less than the 19 percent drop in January.

The S&P/Case-Shiller price index is computed monthly, using home prices for the current month and the previous 2 months. This means that the February price index included home prices in December 2008 and January 2009, months when home price declines were worse.

Thomas Lawler, a Virginia-based economist who worked previously with Fannie Mae, said the February price decline rate would have been smaller if it used only data for February.

Another positive sign spurring optimism among some economists is the record rise in consumer confidence in April. According to the Conference Board, its consumer confidence index rose by a record percentage since 2005 to 39.2, its highest level in 6 months. The percent of consumers who hope there will be more jobs through the rest of the year increased to 13.9 percent, the highest it reached since June 2007.

Other factors that economists believe can overcome large numbers of properties in foreclosure listings are the decrease in mortgage rates, the recent rally in the stock market, the tax credit offered to first-time home buyers, increased loan modifications by lenders and efforts by states and nonprofits to mitigate the effects of overloaded foreclosure listings.

Increased sales of existing homes, including homes from foreclosure listings, are also increasing optimism. The National Association of Realtors said that low prices of properties in foreclosure listings have pushed up home resales in March. The realtors’ group also added that about 50 percent of all existing-home sales in March were sales from foreclosure listings and that over half of buyers of foreclosed homes were first-time home buyers.

Another sign of rising optimism amidst foreclosure listings is increased activity from the home building sector. Los Angeles-based KB Home is one of home builders seeing positive signs. The company’s losses in March decreased as it received more orders for the first time in 3 years.

Internet-savvy Americans, mostly young and new couples, have been taking advantage of new online search tools to look for their dream house through online foreclosure homes listing and home selling web sites.

They gather data from the foreclosure listings, including photos, neighborhood statistics, demographics and prices, using search tools offered by the web sites. Many of them make spreadsheets and monitor price movements by setting bookmarks and alerts.

According to Zillow, visits to its web site last month soared by 71 percent over visits in March last year. Amy Bohutinsky, spokesperson for Zillow, said the visitors are monitoring sales and foreclosure listings near the areas where they are residing. She also said that younger first-time homebuyers and investors tend to research a lot before buying.

Trulia.com has added another tool to its web site to attract more buyers – a tool that would help home buyers to find only houses that have had their prices reduced. Trulia offers tables that monitor foreclosure listings and price movements in various communities.

Couple Kevin and Laura Wolfe, in their 20s, are examples of relatively young couples using everything what the Internet has to offer in their search for their home. Among the web sites they have used are Redfin.com, Long & Foster, Zillow and Washington Post and other home selling sites. They can even quickly describe which site has the better graphic interface, the more updated foreclosure listings and the more targeted search tools.

In their rented home in Fairfax County, they have been monitoring home prices on online foreclosure listings for about 3 years and they hope to finally buy their dream home this spring. They said they have gone to about 60 open houses, visited about 15 homes and have submitted bids on 5 houses. The first four bids failed because either their bid was too low or the seller refused to do needed repairs.

Redfin agent Fernando Ferrufino said the Redfin web site attracts buyers who like to control as much of the home selection and buying process as possible. They want to assure themselves they are getting the best price.

Phipps Realty agent Matt Phipps said he understands the can-do and skeptical attitude of young buyers as he is also only in his 20s. He said young buyers do not like aggressive marketing because they like to look at the foreclosure listings and numbers themselves and then compare, analyze and decide.

Search Foreclosure Homes by City:

• Bronx Foreclosure Homes
• Miami Foreclosure Homes
• Los Angeles Foreclosure Homes
• Dallas Foreclosure Homes

Artists have always been known for occupying blighted neighborhoods, gentrifying them and spurring commercial and residential development.

Now that thousands of houses are being abandoned to list of foreclosure homes, artists are now again rejuvenating neighborhoods battered by foreclosures.

In Cleveland, where the population has declined to only about 430,000 from the peak of almost one million in 1950 due to the collapse of manufacturing companies, artists are taking advantage of cheap rents, bargain-priced homes, large spaces and lots of choices in foreclosure listings.

In March, artists Sunia Boneham and Michael Di Liberto moved from New York to Cleveland, into a three-bedroom home in the Collinwood community, where more than 200 homes are unoccupied and included in foreclosure listings.

The couple said their home is one of several houses acquired by a community development nonprofit from foreclosure listings. The nonprofit plans to turn the neighborhood into an artist village in Collinwood.

Similarly, in other cities, artists are also buying homes from foreclosure listings. In Detroit, architects and artists are purchasing houses for as low as $100. In Hamilton, Ohio, an abandoned property has been acquired by the nonprofit development group Artspace Projects for a planned artist community. In Saint Louis, artists are turning empty store spaces in malls into artist studios for as low as $100 a month.

In Cleveland, where about 15,000 homes are vacant and waiting for buyers in growing foreclosure listings, artists have been spearheading neighborhood rehabilitation. A local painter, Katherine Chilcote, bought a house for only $5,000 and later bought an adjoining empty lot for just $500. Her plan is to buy four more abandoned houses from foreclosure listings and convert them into artist studios and residences.

The city of Cleveland has also allocated $500,000 to finance efforts by citizens to turn abandoned properties in foreclosure listings into facilities for artists and the promotion of the arts.

In September, the Community Partnership for Arts and Culture of Cleveland will hold another conference of artists, city officials, civic leaders, real estate agents and local bankers to discuss strategies in transforming Cleveland into the arts center of the region.

To respond to claims that artists are transforming formerly affordable neighborhoods into unaffordable enclaves of the financially endowed, artists are now putting more efforts into buying their own homes rather than renting. Cities like Cleveland are providing financing schemes to artists in exchange for their help in preventing blight caused by growing foreclosure listings.

Search Foreclosure Listings by City:

• Cleveland Foreclosure Listings
• Detroit Foreclosure Listings
• New York Foreclosure Listings
• Saint Louis Foreclosure Listings

Foreclosure listings are getting to be like earthquakes these difficult days; they now affect everyone in the area, whether rich or poor.

A former mayor of Eagle, Nancy Merrill, and her husband, are now offering for sale their four-bedroom dream house built in 2000 through a short sale to prevent their credit record from being stained with foreclosures listing.

Nancy Merrill served as Eagle mayor from 2002-2006 and served for 16 years on the city’s Planning and Zoning Commission and on the city council. Her family also donated land for a park named for the Merrills’ patriarch Reid Merrill.

Next week, the Merrills will be asking their lender to approve one of two purchase offers under a short sale transaction. If their bank does not accept the offer, their home will be sold through an auction scheduled on May 29.

The Merrills’ financial problem started when they took a mortgage on their home in 2000 and spent their retirement benefits to take over a ranch-based poultry business that supplies eggs to all Treasure Valley Albertsons supermarkets and in surrounding areas.

When the business, later called Merrill Egg Farm, accepted demands by Albertsons stores to deliver eggs to out-of-state distribution centers, operating costs shot up as gas prices and feed costs soared. Soon, the Merrills’ profit margin plunged to two cents per 12 eggs, and in 2007, the egg farm closed, and in September last year, the business followed the fate of other assets added to foreclosure listings.

The Merrills considered selling their farmland to raise funds to save their home, but foreclosure listings have pushed down property prices to more than half of what they were worth two years ago.

Additionally, their home has deteriorated in value as foreclosure listings battered the market and as the credit crisis made affordable consumer loans scarce. Based on appraisal from the Ada County Assessor’s Office last year, the Merrills’ home, valued in 2007 at $1.2 million, declined to more or less $700,000.

Worse, the Merrills’ mortgage balance of $898,601 was still higher than their original $865,000 loan and even much higher than the 2008 valuation of their home at $700,000.

According to notices announcing the trustee sale of their home on May 29, the Merrills have not been making their $3,563.16 monthly payments since October last year. Such is the fierceness of business failures and foreclosure listings, encroaching on all levels of society.

Search Foreclosures for Sale by City:

• West Palm Beach Foreclosures for Sale
• Tucson Foreclosures for Sale
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Property restoration contractors are getting a new source of income — repairing foreclosed properties that the banks and other lenders want to include in foreclosure listings or sell through auctions.

Typically, these contractors are hired by real estate agents connected with banks or asset management companies that oversee bank repossessed properties and foreclosed properties already in foreclosure listings.

What the contractors do include cleaning the interiors and exteriors of the forecloser houses, removing trash, repairing damaged parts, painting surfaces and do other finishing jobs.

Eric Johnson, partner of San Jose-based contractor Gibraltar Construction, said the work is fast, taking only about five days. Lenders want to put foreclosed homes into foreclosure listings as quickly as possible to lessen their holding costs. Johnson’s company specializes in flooring work, carpet installation, painting and other repair work required on foreclosed properties.

Caleb Buczek is another contractor increasing his income sources because of lots of properties being added to foreclosure listings. His company Buczek Inc. is operating in New York, but the high number of California foreclosures attracted him to the area, especially in Stockton, Modesto and San Jose.

Buczek said lenders want to put their foreclosed properties into foreclosure listings as quickly as possible to get better prices in a market battered by home prices falling rapidly.

The Mortgage Bankers Association estimated that the average amount spent by bankers in each foreclosure is $50,000, which includes costs for administration, maintenance, repair and improvements.

Real estate agents Gina Piper and Chris Kamali said the amounts they spend to restore foreclosed properties depend on the banks, which base their estimates on property condition and market competition. They also added that they can save repair costs by persuading former owners to leave the house before a deadline and in good condition in exchange for a check from the banks.

However, according to realtor David Kerr of online real estate seller Zip Realty, some banks do not have enough funds to repair foreclosed homes. Oftentimes also, the banks have lots of properties in foreclosure listings they do not have enough staff to determine which foreclosed properties are profitable to restore and which are not.

Nevertheless, restoration contractors like Buczek and Johnson said they have been getting lots of repair jobs one after the other and sometimes in bulk. Indeed, foreclosures wrecked the lives of many families, but many other families, like the families of contractors, realtors, investors, new homebuyers and restoration contractors, are benefiting from the crisis.

Search Foreclosure Listings by City:

• Atlanta Foreclosure Listings
• Fort Worth Foreclosure Listings
• San Jose Foreclosure Listings
• Staten Island Foreclosure Listings

In the Twin Cities, taxpayer advocacy groups like the Taxpayers League of Minnesota, have criticized housing valuations distributed to homeowners in preparation for property tax payments in 2010, claiming that the valuations did not reflect home value declines largely caused by growing houses listings.

Despite the 20-percent decline of median housing prices across the Twin Cities region, tax assessors in Dakota, Ramsey, Anoka and Washington counties recorded median home prices declines as only six percent to nine percent.

Stephen Baker, the tax assessor of Ramsey County, argued that home price studies indicating a decline of 20 percent are not accurate because these studies have overestimated the impact of Minnesota foreclosures and foreclosure listings.

Baker added that foreclosures, especially bank owned foreclosure properties, are different transactions. He said bank owned foreclosed homes are limited to a small market. Besides, he said, properties in foreclosure listings do not sell at a good price because they need costly repairs and some are not even livable.

The difference in the home price declines arises because home sale price surveys include sales transactions involving properties sold from foreclosure listings or auctions. Tax assessors however do not typically use foreclosure listings prices in their estimations.

In the two cities, around 60 percent of houses sold through the Multiple Listing Service and other foreclosures listings providers in January were foreclosure properties.

For nationwide assessments, the arguments of the analysts of Standard & Poor’s Case-Shiller Home Price Index are instructive. The Case-Shiller Index, among the most reliable indexes for home prices, considers the prices of properties in foreclosure listings in its assessment of home prices in 20 major markets across the country, including the Saint Paul and Minneapolis metro areas.

David Guarino, a spokesperson for Standard & Poor’s, explained that it is not logical to exclude prices of properties in foreclosure listings. He argued that many of the properties in foreclosure listings now were purchased during the housing boom with subprime and high-risk mortgages, the major reason for the fall in home prices today.

As a commentary on the arguments, Phil Kirkie, leader of the taxpayer advocacy organization in Minnesota, said the difference between home price assessments by tax assessors and home price researchers indicates the arbitrariness of tax assessment, depending on the impact of home price levels on their interests. Tax assessors, he argued, do not want to recognize the decrease in home values because they do not want to reduce the base of their revenues.