The US economy is going through one of its challenging phases. Unemployment is at its peak and people are faltering on mortgage payments. Hence, foreclosures are common. Now the value of the foreclosed properties has crashed to an all-time low. Normally home buyers buy a property with the notion that its value will appreciate over time. But in certain counties of the US, exactly the opposite has happened. Buying a home is no longer a long-term profitable investment.

In fact, in certain counties, home prices have crashed to 1999 levels. At the time, the housing boom had not even taken place. There are nine ZIP codes in Palm Beach and Broward counties where houses sold in July at prices which were even lower than July 1999. Take, for instance, Michael Keigans, who stays in the Deerfield Beach. The ZIP code of the area is 33441. Here the average price was merely 6 per cent off what it was in 1999.

Keigans says that investment in homes no longer pay off. Gone are the days when a person increases his net worth by purchasing a property. Owners who bought homes a decade ago in the Hallandale Beach ZIP code of 33023 paid an amount of $120,000. Now these homes are carrying the price tag of $100,000. That means the people who had been clinging on to their homes with the hope that their value would appreciate have lost money in the process. The Delray Beach residents also have a similar story to tell. Most of them have taken a 40 per cent hit on their home values.

So what are the factors that are responsible for the plunging home values? Many of the people living in these areas belong to the low-income category. They are sub-prime borrowers with bad credit history. Hence, when these people defaulted on loans, foreclosures became a common phenomenon. As one house after the other became a foreclosed property, prices of homes dipped in the area.

Small wonder, then people are taking a hit on their homes. It’s very sad that many of these people were not propelled by the housing boom. This was revealed by a housing analyst Mike Larson. Naturally, there are some big losers in the game. In the Deerfield Beach Zip code of 33441, the average sales price of homes is $135,000. This has climbed down from the figure of $144,000 in 1999.

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The real estate market in most regions in the US is in doldrums. As people falter on mortgage payments, foreclosures have become common. Hence property values in most areas have plummeted. But now according to new statistics available not all regions have suffered. Property values in Marin for instance, have remained stable.

There are many homeowners in Marin who ask developers about the values of their properties and how much they have depreciated in the recent past, but there is no answer to this. The answer actually should be zero but then property values differ across segments. For instance, Novato’s market is weak. In the first quarter of 2008, most homes sold for price of $706,250. But in the second quarter the price was lower at $625,000. In 2009, the prices had plunged further to $535,000.

Studies also suggest that 55 per cent of home sales were of foreclosed homes. Many of them were short sales too. Hence, the median values are skewed. However, when short sales or foreclosures are not considered, then the median price of homes becomes higher. In the first quarter of 2008, the price was $1,129,500; while in the second half of the previous year, it was $1,071,250. In 2009 so far it is $1,200,000.

This could mean a lot. Regulators are constantly keeping lenders and banks under tight vigil. The problem is that these regulators are reading the same articles that an ordinary reader is reading that home values are plunging. It is sad that these regulators are not analyzing the data. They simply take it for granted that home values are down and apply this to every property.
That surely is depressing for a homeowner in Marin. He is huddled along with homeowners in other regions of Vallejo, Merced and Stockton. Developers are saying that the market is bad and although the figures in Marin do not support this, yet the general conception is that the market is indeed bad.

In other words, the home value depends not only on the location, but also the condition in which it is in comparison to the other homes in that market segment. The market in Marin has been more or less steady except for San Rafael and Novato where condominiums have depreciated in value. To protect a home from further depreciation, it is important to keep it in prim and proper shape. After all, the home is still the best investment.

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The US economy is going through one of its challenging phases. Unemployment is at its peak and people are faltering on mortgage payments. Subsequently, foreclosures are becoming common in various regions. In Fort Lauderdale, foreclosed properties are becoming an eyesore. In fact, the city looks more rundown because of the foreclosed properties.

At various foreclosed houses, the lawns are overgrown with weeds and swimming pools have turned green because of algae. Mosquitoes are breeding freely in some of the water bodies. In fact, many homes are below the 2004 standards, the enforcement records reveal this.

The record logbooks are replete with references to “trashy homes and overgrown lawns et al. Most Americans want to know how the city can be kept clean. South Florida, for instance, has been hit by a deluge of foreclosures. People are losing homes almost everyday. Mike Maloney of Fort Lauderbale says that there has been no respite from foreclosures. He also says that banks are better at keeping the properties clean.

Fifty six year old Thomas Petkevich had lost his home to foreclosure and he blames a city code financing for the state of his house. His fee was $250 per day and many like him were forced to cough up an extraordinary amount when they failed to pay for a few successive months. Petkevich laments that he did not even earn that amount and yet the enforcement agencies expect him to pay that. He says that they officials are harassing him.

These cases come up for hearing in the City Hall and Petkevich says he was not given the opportunity to present his case well. Petkevich now lives on rent and he says that it breaks his heart every time he thinks about the incident.

People like Maloney are trying hard to keep the city clean. They try not to fleece money from people. By June 2008, the enforcers had filed 8792 cases. The number of cases had dropped to 7,949 this year. Northwest Fort Lauderdale Commissioner Bobby DuBose says that individuals are not being able to maintain foreclosed properties. Rather banks are maintaining these homes better.
Experts agree that the housing market is in doldrums. The situation will be bad so long as

the economy is depressed. The need of the hour is to create more jobs. As more people find employment, they will be able to maintain their homes.

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In Hawaii the worst of the foreclosure crisis is not yet over. Filings increased by nearly 427% in June 2009 in comparison to 2008. In one year this is the second worst rate. Over 87% of the total foreclosure postings are in the initial stages of the process.

The housing market in Hawaii saw the total number of foreclosure filings spike to 706. It is only just starting to feel the pinch of the crisis that has battered the mainland markets said Darn Blomquist of RealtyTrac. In June of the total number of foreclosure postings (615) are yet to be repossessed by the lenders. Blomquist said, “Hawaii’s main increases are in default notices and auction notices, the first and second stages of foreclosure. That tells us that the full impact of foreclosures hasn’t hit the market.”

The foreclosures in Hawaii are not concentrated but spread out across diverse localities having different income zones. Some are harder hit than others said Gerogia Roerson of Coldwell Banker Pacific Properties. Condotels comprising of condo properties being part of a rental pool of hotels have been massacred by the fall in tourist numbers as well as the credit freeze. Roberson explained, “Nobody on the island will lend on a condotel, and there just aren’t that many cash buyers for them in this market. I’ve had several listings in the Ilikai and there are a few more coming up.”

The median selling price for houses in Oahu has fallen dramatically from what it was one year ago. Most of the drop is related to foreclosures said John Riggins of John Riggins Real Estate. He has estimated that nearly three fourths of his business in now concerned with properties that are in some stage of foreclosure.

Blomquist said, “You could already be experiencing price declines in neighborhoods, but you won’t feel the full brunt until the lenders take back their properties and put them on the market.” These states have kept up its lead in foreclosure activity in USA. Blomquist commented, “At a certain tipping point, REOs will pull down home prices more, and that creates a vicious cycle. Blomquist said. "Since foreclosures in Hawaii only began to increase in July of 2008, it’s safe to say that you are still early in a cycle that will last years rather than months.”

For this same reason, Riggins who has been dealing with property in Hawaii apprehends that foreclosures will be touching record high numbers in this cycle.

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Previous Treasury Secretary Henry Paulson has justified the steps he had taken during his tenure to tackle the foreclosure crisis. He admitted that although the response of the Bush government to the crisis was not perfect it had “saved this nation from great peril.” He said recently in a written statement prior to a hearing, “Many more Americans would be without their homes, their jobs, their businesses, their savings and their way of life.” The losses were enormous but that pain would have been much greater and acute if the government had not stepped in, was his view. He would be placing his views before the House Oversight and Government Reform Committee.

Paulson’s statements came in the wake of an independent bipartisan investigation being initiated by the handling of the catastrophe by the government. The effort has been given the lead by Phil Angelides (Democrat) and Bill Thomas (Republican). $5 million has been earmarked for the commission to complete the investigation by 15th December 2010.

Angelides had unsuccessfully faced Arnold Schwarzenegger for the post of the governor of California. He said that the target was to conduct a scrupulous nonpartisan investigation. Speaking in an interview he said, “Our job is to do the best possible job of shining the light of day on what really happened so it’s less likely to happen in the future.”

Both the Congress and the White House are mulling over the next step the government should take to address the grave economic crisis – the worst in decades. This is against the background of increasing foreclosures and surging unemployment that is expected to touch 10% this current year.

One suggestion that came forth from government officials was to permit those facing foreclosure to continue to stay in the mortgaged house as tenants but hand over the ownership to the lenders. The Democrats, who had not been told about this plan said despite being skeptical about the measure, they would keep their minds open.

Senator Christopher Dodd (Democrat), chairperson of the Banking Committee said, “I don’t know if this is the right idea or not, but given the scope of the crisis – more than 10,000 Americans found themselves in foreclosure last month – we should consider any option that might help keep people in their homes.”
Already the approval has been given by the Congress to a bail out amount of $700 million to help the financial houses that had fallen. This was during the tenure of Paulson. In February under President Obama another $787 billion stimulus package has been released in February.

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As the American real estate market goes through a tailspin, the number of foreclosures peaks. The consequences are there for everyone to see – banks taking over the foreclosed properties and the owners fleeing them. As a result, neighborhoods with vacant houses are a plenty in various counties. Crime is rampant in these neighborhoods. But now certain neighborhood associations are trying to give a facelift to these decadent areas.

Brown Kinloch says how Phoenix Hill area had once sported ugly rows of vacant houses. Crime thrived in the area but now the unsightly plots wear a new look, thanks to the neighborhood association. Even a small playground and a park have come up in the area. That gives the much-needed touch of green to an area that had degenerated into an abandoned neighborhood.

Kinloch, a renewable energy developer, says people were given to believe that new housing cannot be built inside Louisville. “But we have proved that it is not true. If the houses are affordable they can be sold too,” says Kinloch.

Not only Louisville, efforts to rebuild neighborhoods are on in several areas like Philadelphia, Pittsburgh, Cleveland and Detroit. Local governments and community groups are working hand-in-hand to buy land. They are also tearing down old buildings and erecting new ones in their places. Sometimes, a speck of green is being added to attract business into the area. Such welcome signs are becoming common now.

However, giving a new touch to a degenerated area is not an easy task. Above 1.2 million homes were foreclosed in 2008. This means there is a vast stock of bank-owned spaces in the market that has caused housing prices to dip. As people lost jobs, crime became rampant in many neighborhoods, says Alan Mallach, a non-resident senior fellow with the Brookings Institution.

Now the National Vacant Properties Campaign wants to pull out the areas from decadence. Both the government and private properties have joined the fight to reclaim cities. According to the group, there are millions of vacant properties in the region. Another million will be added soon as foreclosures keep on increasing. Mallach says that there will not be a turnaround in this situation soon. Louisville still has many abandoned homes and vacant plots.

Still efforts to renovate properties are on in full swing. The demolition budget has been doubled in Pittsburgh. The task is no doubt a big one in a city that has about 6,000 vacant houses and 24,000 plots.

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There is no respite for condo associations in Florida who are faced with the problem of foreclosed vacant units. This has led to a dwindling of subscription towards the fees for the association making it difficult for them to continue with providing services to those owners still residing in the condos and who have not as yet faced foreclosure.

A reform bill had been introduced that would have brought good news to condo associations but Governor Charlie Crist vetoed the bill. He argued that it was done keeping in mind safety norms. He wanted to ensure that the condo associations immediately upgraded their fire sprinklers.

The bill (714) was thick with various items related to condo problems, safety requirements of the state and insurance issues.

The veto by Cristo threw out the suggested postponements of the state ordered mandate on upgrading fire sprinklers. The veto also threw cold water on the temporary financial relief that the bill was due to offer to the hard pressed condo associations. The complex insurance conditions were to have been cleaned up thus benefiting both the condo associations and the owners.

The veto came at a critical time when thousands of condo associations across southern Florida are struggling to pay proportionately high bills resulting from the increased number of foreclosures. The new clause about mandatory safety installations will put further pressure on the owners and association.
Barbara Zee of Alliance of Delray said, “The governor’s veto was [about] safety However, these are extraordinarily tough economic times. It was a true necessity for financially struggling associations to get an extension of time.”
As a result of the veto no extension has been granted for retrofitting fire sprinklers in condos – it has to be completed on specified date – 31st December 2014. Single and two storied building have not been exempted from the rules laid down by the state government.

Secondly the condo owners would be expected to buy HO6 insurance and to mention the name of the association as additionally insured. It means that in the event of a cheque coming from damages caused by a hurricane both the owner and the association would be mentioned in it. Dick Herman of Burgundy Association of Delray Beach (Kings Point) said, “The veto means associations such as mine still have unresolved issues concerning insurance, such as who is responsible for deductibles on the association policy when damage is caused by unit owner action. And how much does the association board want to police unit owners?”

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There are discounted properties galore in Miami but it is necessary to check these before purchasing. People today are rushing to buy quality houses at the cheapest possible price. They are calculating on the savings to be made from these bargain offers. Most of these houses are newly built or hardly occupied by one owner. When the housing bubble burst these went into foreclosure and has been lying vacant for quite some time – enough time to be vandalized.
Thus first the condition of the house has to be thoroughly checked. There may be hidden costs. The latter could become exorbitant and unaffordable. It is not true that all the foreclosed houses in Miami are in a derelict condition. Some are crisp, fresh and new. But even then a close inspection with the realtor and repair experts should not be overlooked.
One should plan ahead about the changes to be introduced to give the personal touch to the unit. It should not be left to chance and thought of later on after the purchase. It might prove disappointing later on to find out that certain changes cannot be made even if one wants to. There are many engineering rules to be observed. This will require budgeting – something that should be thought out ahead and added to the asking price of the house.
Generally a cheap unit can be purchased for about $80,000 in Miami or if one is lucky it may be even less. The renovation approximately will cost $50,000 to $100,000. Even then the deal will be handsome considering the location, size and beauty of the unit purchased.

If one is hunting for properties on the Internet there is all the more reason to be cautious about scams. The unit should be checked personally with the help of experts in the field. The house must fit the taste and the pockets of the purchaser. Photographs can only give a visual description of the house but it does not ensure a full detailed picture – something that can be got first hand only if the potential buyer visits the site. The inspection should be thorough and close before one buys it up.

It is only by sales picking up that the tide of foreclosure can be turned. But with credit freeze continuing and the mortgage companies reluctant to advance house loans it is difficult to get the required money to buy the houses.

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Residential Strategies is a firm that keeps track of the housing market According to its experts fewer than 0.1% of house owners in Central Texas who had bought houses during the years stretching from 2005 to 2007, are foreclosing because of sub-prime mortgages The reason, opines the experts, is that the capital of Texas, Austin, is still one of the most affordable places to reside in. Here house prices did not spike during the beginning of the zoom years like they did in other states like Florida and California. This region has seen less than 1% difference in the cost of purchasing a house.

Nevertheless the foreclosure numbers have affected the construction industry in Central Texas. Seventeen thousand houses had been built in 2006. But so far in 2008 fewer than 10,000 units have started to be built. Builders now do not have any incentive to continue. The fact is that 35% to 60% of those who qualified to avail of a mortgage about two years ago cannot be considered as eligible nowadays.

The reason for this is not only the foreclosure related crisis. The seller-assisted arrangement of finance was done away with. In that method the builders or the sellers could purchase down a rate of interest. But that option is no longer there. This was the opinion of Mark Sprague of Residential Strategies. The result has been a sharp fall in the number of those who could qualify to buy a property.

According to predictions of experts, the second half of 2009 will see a spurt of residential building activity. Over and above this there will be a rise in condo sales in the downtown markets – the latter not having slowed down. It is a sure indication that the economy of Austin is still strong and continues to thrive. Texas has always has a record of bouncing back because of its own resilience.

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In Melville New York is located Lend America. It makes itself known through infomercials and toll free numbers. Borrowers in foreclosure trouble are encouraged to refinance and take fixed-rate mortgages that are guaranteed by FHA. Lend America had anticipated this foreclosure crash and had changed business tactics from 2005 by shifting over from peddling sub-prime mortgages to those backed by FHA. At the helm of this brilliant move is Michael Ashley. This year the firm will be advancing 7,500 loans amounting to a total worth of $1.5 billion. Ashley confidently said, “FHA is a big part of the future. It’s the major vehicle for the government to bail out the housing industry.”
It is strange and perplexing that the federal government should work in tandem with Lend America. Ashley has an uncomfortable past of legal wrongs. In 1996 he pleaded guilty in court in Uniondale New York on two counts of fraud related to mortgage scam of another company run by his family under the name of Liberty Mortgage. He was fined ($30,000) and sentenced to probation (five years). Kenneth Ashley, his father has the dubious distinction of having served a jail sentence of four years. Younger Ashley, now aged 43, defended himself and said, “ I was just a pawn in a chess game between my father and the government”. The current default rate of Lend America’s FHA insured loans is 5.7% or 53% – much higher than the national average.
Lemar Wooley of FHA was asked about overlooking the transgressions of firms that had formerly dealt with sub-prime loans. He replied, “FHA has taken appropriate actions, where necessary, with these lenders with respect to their participation in FHA programs.” According to him First Magnus, Lend America and Nationstar have all met the conditions laid down by federal rules. He however admitted that since 2000 on two instances, Lend America lost its right to issue FHA backed loans because of increased default numbers. Wooley also said that he did not know about the previous convictions of Ashley. Lend America had not projected Ashley as a major representative of the firm. As per rules the lenders working under FHA are expected to disclose past sanctions and not to employ personnel with criminal history.

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