Archive for the ‘Foreclosed Homes’ Category

Cambridge based Real estate consultant Paul Martinez recounts the experience of his client – a novice investor. He built castles in the air around a two-family house in Somerville. The 30-year-old debutante in this field was greatly influenced by shows and advertisements about buying, renovating and converting units into condominiums that could be sold at a higher equity within a month. But 18 months later he had run out of breath after having bought when the tide was high. But now with funds running out the retreating tide in the housing market left him high and dry. The unit remained unsold and overpriced by $60,000. It did not take long for foreclosure clouds to loom large and darken his horizon.

Martinez is skeptical about these house-flip shows on HGTV (Flipping Out, Flip the House, Property Ladder) that highly influence viewers. Novices lack the experience and knowledgeable friends to realize that the numbers are wrong. It is all show talk. Reality and actual income from real estate is quite another thing. Here there is no surety. It is the first timers who are the worst hit. They lose money and peace of mind to foreclosures.

According to figures released by ForeclosuresMass.com, during the first quarter of 2007 foreclosure listings rose in Massachusetts by 75% compared to that of 2006 during the same time. Suffolk County alone stood out with 83%. Simultaneously the number of non-traditional mortgage numbers also rose.

Many green horns had forayed in the real estate field for the first time about a year and a half ago to come out with their fingers burnt. Their units remained unsold either because they could not cope with the spiraling mortgage rates or because they had invested in the wrong locality opines broker Paul Turcotte, owner of Re/Max Destiny, Newbury Street, Cambridge.

Realtors tell the newcomers to follow a ‘golden rule’ – never to buy unless the pocket permits it and do not invest without a ready exit route. The buyer must be there even before the investor buys. Jeremy Shapiro of ForeclosuresMass.com echoes this view and adds that cautious steps should be taken backed by licensed contractors. One should know the law before anything else and also keep in mind that laws are continually changing. There is no doubt that increasing foreclosures have complicated matters making it impossible for individuals without ready resources to own a house.

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In Carpentersville the Parrish family realized their house dreams with just the right touch in everything from the kitchen to the swimming pool. But soon the milk curdled. The man got ill. The woman lost her job. They both lost the house with memories and mementos unable to meet monthly mortgage payments. The foreclosure cancer closed in.

The Parrishes were only one in thousands in the Chicago region and across the country caught in the tentacles of the deadly foreclosure. In Elgin and South Elgin the first half saw a 32% hike since last year. It was the same elsewhere.

The blame is put not merely on unrealistic borrowers but on the general economic slowdown and changes in the lending sector. It is a raging storm. There has been a sharp shift from the traditional 30-year mortgage schemes to others with teasers like interest-only and the like. This has led to chaotic foreclosures.

Borrowers walked into it without giving a second thought to the rise in rate hake after a year or two. Many like the Parrishes complain that they were smart talked into the scheme. It was not just the borrowers but the lenders too faced a crisis. These new loans gave no importance to the equity issue. Without equity there is nothing to lose in a foreclosure. The way is open to bankruptcy. Stay put until the house is forcibly taken away.

The bitter pill for curing this ailment is to pay off the loan by selling the property and move into affordable rented quarters without the hanging sword of debts. But with hectic development work going on all around it gets difficult to sell the house. With stiff competition prices are bound to fall. The headache is not only for the borrower but for real estate agents as well where auctioneers find themselves unable to off load the weight at the end of the session. In fact the house of the Parrishes remains unsold even after a knocking off blow to the asking price.

The foreclosure numbers of 2007 will put to shame those of 2006! The faint ray of hope is that perhaps the crisis has reached its peak. This means that it couldn’t get much worse in some localities. The experience has been a shock to the Parrishes now living in rented accommodation where they continue to dream.

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At the eleventh hour a Norwich Superior Court Judge cancelled the foreclosure auction proceedings against Waterford Speedbowl property that was scheduled to be held on Saturday. This means hope for short track racing enthusiasts. The weekly event will continue to be held in Southern Connecticut.

A spokesperson of Waterford Speedbowl, Terry Eames, confirmed that his group had managed a financial solution to the foreclosure. This has enabled them to continue with its racetrack operations. Rocco Arbitell of Southbury and Peter Borelli of Derby refinanced and bailed out Speedbowl from the ignominy of Foreclosure.
In the first half of 2006 Washington Mutual Bank had initiated foreclosure proceedings against the property owners and had got a date on Saturday noon for holding auctions. But on Thursday Eames and his group completed refinancing formalities. A new mortgage was availed of through two private individuals – Rocco Arbitell and Peter Borelli. This allowed Norwich Superior Judge to cancel the auction on Friday morning. Eames and his organization have now nothing to do with Washington Mutual Bank. It was a narrow victory. The victims had till 5 pm on Friday to scrape out of the auction.

For Eames it was a moment of great relief after the close shave. Although for the last few days the redress plan was taking shape he could not sit back on his oars until the thing was finally done. It was only on Thursday evening that he could put up his heels and sit back.
1080 Hartford Road, LLC purchased Speedbowl in September 2000. Eames has been running Speedbowl since its inception but had surrendered operational control of the track since the last season. The track has now been leased to Jerry Robinson, a local businessman and to the general manager of the Track Bill Roth.

Harvey Industries will be purchasing 8 of the 39 acres of Speedbowl land and plans to set up on the site a distribution centre.

Eames waxes eloquent as he ruminates on the recent happenings. The Roccos and Borellis as family units refinanced the deal as a personal favour to him. Also as racing enthusiasts they were keen to see the track running and alive. Eames also expressed his deep gratitude to Attorney Tom Londregan who was a pillar of steady support and a perfect gentleman striking at the opportune moment to clinch the issue on the correct legal point.

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The city of Chula Vista in San Diego County is one of the fastest growing cities. Over the years the city has witnessed an increase in its single-family homes. However, the increase in number of homes came along with an increase in adjustable-interest loans. This led to an increase in homeowner’s payment, and many homeowners were unable to keep up with the payment. As a result of which several properties in the city of Chula Vista are facing foreclosures.

The rising rate of foreclosures has led to an increase in number of vacant homes. According to officials in South Bay city, the area has witnessed more than 700 vacant homes. Doug Leeper, the city’s code enforcement manager says that city has nearly 3000 distressed properties, due to which nearly 700 to 800 properties are lying vacant.

In fact in several areas of the city, one will witness abandoned homes, which one can easily identify due to the condition of the property. Several properties are seen in pathetic condition with dried up front lawn, broken windows, dirty swimming pool etc. In this regards Art Deford a local resident who lives near such vacant foreclosure property says that the look of the beautiful looking home has changed ever since the lender has taken it over.
While the rising foreclosure rate in Chula Vista has not only led to an increase in empty homes, but due to conditions of these empty homes, rates of near by areas is getting affected. According to former City Councilman Leonard Moore, people walk away from areas having such properties.

To handle this situation, and to prevent property values from falling further, the Chula Vista administration has adopted a program. Based on similar programs formulated in Chicago and Detroit, under this program lenders will be compelled to maintain homes, which they seize and register vacant properties with the city and a $70 fee will be charged to titleholders on registering the property. Besides as the property is security for loan, the lender will be held accountable for a home even before the foreclosure procedure is over.

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Yuba County has the dubious distinction of leading in foreclosure trippings. During the second quarter of this year the fall out was four times more than during the same period last year, according to La Jolla based real estate services, DataQuick Information Systems.

The first step is issuing of default notices. This increased by 280% in this county. The number this year was 171 as against 45 in 2006. There had been an increase in 2006 in relation to 2005 but that had been negligible and not spectacular like this time. It was the highest number of notices in ten years. The causes were pinned down on rapid fall in prices and slow sales. The balloon of frenetic buying during 2004-2005 seems to have burst. Till now property owners had been able to survive because of real estate boom. They sold their homes and refinanced.

But of late the noose of foreclosure is tightening with few being able to slip out of it. Nearly more than half of property owners are in the red. 54.6% scramble out somehow by refinancing and getting some equity on their houses. A year ago this route had saved 88%.

DatQuick puts the blame on the slow market and homes bought with multiple loans financing method. In Yuba County the average prices of property fell by 10.4% in June 2007. A year ago it was 8.5%. Sacramento is the weakest spot in the region. Till last Tuesday there were rumours that the foreclosure crisis would make a u- turn but nothing happened. This is just the reverse of the coin when the atmosphere had been such that lenders came forward to give loans even to those who were not technically credit worthy.

Many questionable loans were made during summers of 2005 and 2006. The price of property was hopping and jumping up by double digits allowing lenders to tease borrowers on to stretch beyond their maximum financial capacity. It is the latter that is kicking off the storm.

The prediction is that there is little hope in sight. Foreclosures will keep on rising as a fall out from loans of 2006 that had 2 year fixed rate periods. The interest would be reset in 2008 at a higher notch – thus putting more pressure on monthly installments.
Coupled with this are unemployment problems making it impossible for owners to remain masters of the house.

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Jacksonville is being sucked into the whirlwind of foreclosures ranking among the top defaulters in the country. Lake Forest area with a high concentration of houses is the worst hit. The virus has infected all levels of income and localities. Jacksonville has one foreclosure per 123 households – with the highest focus on Lake Forest area. Catchy signboards offering help are sprouting like mushrooms. The phone line however does not connect directly with the owner but with mortgage brokers fishing in troubled waters, trying to rope in more clients.

Some residents are living in an island unaware of the surrounding roaring waves. Leaflets jamming their letterboxes are taken to be normal junk which all have to bear with.

Realtor Peggie Wattron acting for Lighthouse Realty informs that she has her arms full with about 90 foreclosures to deal with. Her experience is varied. There are ex-house owners who refuse to budge until the police come with assistants and literally kick them out bag and baggage. Then there are city campers who calmly break in and squat on foreclosed properties.

Wattron has often tried to contact the victims to show them the dignified escape route but they usually prefer to remain like ostriches and protest that they are unaware of the coming eviction. Even when she goes and pastes a notice on the door the evictees tend to look the other way and pretend that nothing is there to read or see. Nobody contacts Wattron by burying their heads in the sand.
The Lake Forest region is a scene of devastation with piles of trashcans and personal knick-knacks strewn in front of crumbling houses with broken doors and windows. Sometimes the frustrated ex-owners do their utmost to damage the structure before leaving by pulling out as many fixtures as possible.

In the middle of the mess lenders, investors and advocates of borrowers throw mud at each other. The large number of defaults has had a snowballing effect on Wall Street and forced some lenders to down the shutters.

The story started with people with dreams and low income being refused loans. Cashing in on this scenario mortgage brokers came forward with teaser loans – tempting in the beginning but turning bitter with each passing day. Details of the agreement were purposefully kept in small print.

The grave situation has caused USA Senate to regulate sub-prime lending by legislation.

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For the third consecutive year Rick Enszer, treasurer of Midland County will officiate as auctioneer on Tuesday evening. Nine foreclosed properties will be up for bidding at Midland County Service Building on 220W Ellsworth Street. Five of these units with minimum price tags ranging from $1,500 to $5,800 are drawing the attention of future buyers. Four others would be of benefit only to its adjacent neighbours. Enszer said that the offer would go to the highest bidder.

Cash, cheque or credit card would be accepted as payment on the very evening of the sale. Those who have to obtain loan will be given consideration to obtain a letter of credit approval from a financial institution. The understanding would be that the treasurer’s office of Midland County would receive the money within three days of the sale.

Among the properties is a modest unit in Jerome Township lying to the east of West River Road that has access to Black Creek. The special attraction of this property is that the owner will be able to build a dock on the creek for a private boat. The bottom price line is $5,800.

On South Nine Mile Road in Porter Township is another parcel of 10 acre, which also has tremendous possibilities. However there is no information in the file about well and septic provision related to the Environmental Health Department. The minimum bid is $4,000.
In Mills Township on Family Lane is a 1.5-acre dream. Also in Mills Township is a 40-acre landlocked parcel of land.

The office of the County Treasury added that it does not guarantee accessibility, easement or condition of the building with its amenities that have been foreclosed because the previous owner failed to meet mortgage payment dues and/or tax dues from 2005. They repeatedly cautioned those who were interested to do thorough searching and researching about what they intend to buy because more often than not properties are foreclosed because there is no possibility of any vertical or horizontal extensions.

A roll of the properties up for auction with photographs and other relevant details have been posted on the entrance of the County Service Building. As an alternative these may be viewed on the website of the county at www.co.midland.mi.us/ as well as on the website of the treasurer. For more information the interested party may contact the office of the County Treasurer over phone – (989) 832-6850.

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Desperate house owners about to be disposed and thrown out on the streets will clutch at any straw. There was quite a stir and talk about ways and means out of the foreclosure mess. It seemed all that one had to do was to seek help. But the victim’s state of mind was such that the helper’s bona fides were not property checked. Fortunately in this one instance this person extending the helping hand to people under the cloud of foreclosures was pinned and accused. Last Thursday the fellow was sentenced to serve a five-year term in federal prison for swindling borrowers and duping lenders.

On Thursday 35-year-old Christopher Craig was ordered by USA District Court Judge, Morrison England to a five-year stint in jail. This was to be followed by another five years of supervised release in addition to payment of $1 million as compensation.
Craig had seen the end of the road when on 10th May he had pleaded guilty in USA District Court at Sacramento. He was charged for falsely helping himself to $1.2 million on home equity loans from Washington Mutual Bank. The houses involved were scattered over Auburn, Lincoln, Stockton, Elk Grove, Sacramento and Manteca.

Craig went about his scheme with a purpose. First he found out details of those properties that were about to be foreclosed and then came smilingly forward with an extended hand of help. His trick was to offer assistance by forwarding them loans. But in reality he prepared documents to give their property to a straw buyer who would in his turn apply for home equity loans.

The straw owner in his turn lied to the lenders by stating that they were the one and only owners of the said units. This meant that the units were free from mortgage restraints. In this way Craig pulled into his net $1.2 million into this account. From this haul he paid up only one loan due to Washington Mutual. The loan was for $974,452.

From Craig the focus has now turned to the straw buyers. Donald Edgecomb and Jacob Esteves are both in their mid thirties and came from Auburn. They too pleaded guilty to misprison of a felony – that is they failed to report a crime connected with the Craig affair. Their case will be taken up the following month.

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