Archive for the ‘Foreclosed Properties’ Category

In only three months time Round Rock, the home of the Stony Point Tigers registered 248 foreclosures. This makes it the 182nd most foreclosed in the country. In Texas it ranks 6th. Pflugerville ranks 450th in the country.

Mortgage experts of the locality pin down the cause to the usual disasters that grips the populace from time to time – divorce, death and unemployment. The situation gets aggravated with natural calamities. Unfortunately this reasoning is not holding water this time.

McCoy, President of Mission Mortgage points her experienced finger at the investors who speculated in Austin. Based on promises investors would walk in and buy up units. But reality did not live up to their dreams. These investors are now having problems tackling their mortgage payments in their home territory. So they want to get rid of units here in Austin, which is having to shoulder other people’s crosses.

Mortgage broker Bray of Lone Star Lending warns borrowers never to sit idle on default notices. Communication lines between lender and borrower must be kept open at all times. The lender doesn’t want the house but wants the money coming from it. It is to their interest to see that the borrower is doing the utmost to keep the home fires burning.

There are five clear instructions. Take the initiative and contact lender for discussion. Secondly arrange for debt counselling with the object of refinancing the deal. Thirdly if the house has equity then the monthly payments may be lowered for a short term with high interest loan to tide over the immediate crisis. Fourthly grace periods are not impossible to get. Lastly directly sell the house. This option is much better than slipping into the foreclosure coma. A foreclosure victim has rights. Know it.

There are agencies of renown that buy these loans and do whatever is feasible to help people keep the roof above their heads.

Many Americans are losing hearth and home because of defaults in the sub-prime market but that is not happening in Texas. Of 7,000 loans here not a single one is ARM. It is not saleable here in Austin, Texas. This means that the people here are not those who cannot afford the readjustment in instalments. It is good news for the market. Texas is standing out as an island in the turbulent sea all around.

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It was no easy matter for Coconut Grove Playhouse to extricate itself from a jumbo financial mire by raising more than $470,000 to calm down a creditor and plug a scheduled foreclosure aimed to slice away a part of its property. The portion of the Playhouse property is a vacant plot next to a theatre – The Bike Shop. It was scheduled to go in for auction on Wednesday morning.

Playhouse is South Florida’s oldest theatre set to celebrate its half-century when it was closed down in April 2006. As a fallout of this imbroglio the employees were let off with a big question mark on their dues. The long-standing controversial art director, Mittelman, resigned in May. Other board members have followed suit.

The legal representatives of the principal creditor James F. Perry & Co confirmed that Playhouse had taken a loan of $350,000 on November 2004 but by last Tuesday night they had repaid the loan together with interest and incidental fees in its entirety. It was settled with the payment of $471,705.51 involving a lot of hard work, grit and determination.

Playhouse chairperson Spivack was not available for commenting on how the money was raised. Former board members of Playhouse who had a stake in the Perry loan, Wiener, Steinberg, Mitchell and Ruwitch, were also silent on that point.

Miami-Dade County’s department for cultural affairs actively came forward to sort out the knot. Most of the dues of the former employees have been cleared. The sanction of a grant for improvement of the building from Florida Department of Sate amounting to $125,000 went towards clearing some salary dues. But since some are still pending the theatre as well as Mittelman remains on the default list of unions. No actor or manager can work here until debts are cleared. The county came forward with a budget of $500,000 to help managers, lawyers and accountants who had worked on the salvage operations. Theatre lovers had bought advance subscriptions for 2006 – 20007 but to their dismay the theatre closed down without refunding their money. However the cultural affairs department of the County has come up with a plan why which these subscribers will be able to see play at other theatres for the specified season, in the region without paying further money. The hope is that if Playhouse reopens the subscribers will be again offered vouchers.

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One out of every 47 houses is popping into the foreclosure oven making it one of the hottest cities in the grips of the reigning real estate crisis. It ranks 8th among the leading 100 cities buzzing with foreclosure activity during the first half of this year. The figures have been released by one of the premier tracking groups online, based in Irvine.

The apprehension is that things are going to get worse. 82 of this group of 100 consisting of the prime metro cities in USA are reporting a year-over-year escalation in the number of foreclosures. The numbers are taking everyone by surprise. Things were bad but nobody thought it was that bad. Kern County stood 8th in the first quarter of this year.

According to reliable figures the foreclosure pot continues to boil in California. Stockton, Sacramento and the combined Riverside and San Bernardino region having the dubious distinction of being including among the top 10 rankers. The tracking group makes use of records given out by the counties. The figures are inclusive of default notices, pending lists, sales by trustees and real estate owners. Stockton ranked first. Here one out of every 27 units came under the foreclosure cloud. Among the prime ten defaulters were Las Vegas, Detroit, Denver, Miami, Memphis, Tenn. and Cleveland. The least foreclosure activity was noticeable in Richmond and Va.

The foreclosure fall out is the result of many factors – mismanagement of sub-prime mortgages combined with general economic ill health of the country leading to unemployment. If the reasons are multifarious the results too are many pronged. With too many houses up for sale the real estate prices are plummeting. This is touching those units that are not directly under the foreclosure hammer. The mortgage industry has tightened its belt with the result that there are not enough buyers for houses. The banks are sitting with idle properties and empty coffers. This is sending alarm signals to brokers in Wall Street. The Wall Street sneeze is making international stock markets catch a cold. Closer home vacant houses are happy hunting grounds for vagrants and addicts leading to law and order problems. A new group of advisers have cropped up trying to help foreclosure victims. Politicians take this as an opportune moment to fish in troubled waters and make loud noises about cooling the heat and switching off the oven.

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Birmingham based Shore Mortgage watched with caution the stirring up of the mud in the sub-prime real estate market. But the young lender at the helm is ever ready to jump in and take a chance again. Brian May an office bearer of the company spoke about having helped a Romanian engineer. The latter had no credit roots in USA, which would enable him to take a loan. May justified their action by underlying the human aspect to the problem.

The company comprises of human beings and not just robotic computers. This is the guiding force motivating the action of the company. May went on to add that his company is mainly concerned with government loans to people who can keep up the mortgage commitment but whose credit ratings may not meet the usual loan standards. Shore Mortgage has always been particular about not entering either the sub-prime or Alt-A loan areas if they are not satisfied with the proof of the income of the lenders. They take into consideration people who can show employment records of about two years and are able to make a down payment of 5% in ready cash. Then they overlook the aspect of the credit history being good or bad. If the clients lack traditional credit cards and previous history of repaying loans Shore takes into account their records relating to payment of bills and rent. That is why till date they have not had any problems about foreclosures.

Shore Mortgage advances about 4,000 loans annually and has been in this business since 1984. However the real estate fiasco has meant a slow down in the business of Shore Mortgage. It has under its umbrella 200 employees in six offices across Michigan. Ohio and Alabama too feature under its zone of operation.

Michigan had the distinction of ranking third in the mortgage delinquency rates, new and old foreclosures during the first quarter of this year according to figures released by Mortgage Bankers Association. The President of Michigan Mortgage Brokers Association Paya Leyrer opines that although sub-prime has been mainly blamed for the foreclosure there are other economic factors like unemployment. In Michigan a good number of people have lost their jobs. A lot of effort is being made to make the borrower aware about what taking a loan involves and how to avoid failure and register success.

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There seems to be no second opinion that aggressive mortgage lending during the time of the recent property boom is responsible for the bubble burst. Some seasoned experts see similarities between today and what happened 35 years ago due to a government programme. Flipping is one such practice in which one quickly re-sells a home for a huge profit. In 1970 Congress investigated one such deal in which an investor pocketed $95,000 from one deal. In another instance a speculator got involved in a lawsuit for purchasing 184 duplexes in a run down Indianapolis neighbourhood and by re-selling them quickly raking in $70,000 per home. There is a difference between government and private programmes in the housing sector but in both cases the obvious soft targets have been the borrowers. The immediate neighbourhood has suffered being dotted by abandoned houses, which has become haunts of drug and crime addicts. The worst home sufferers are those living in Detroit, Cleveland, Brooklyn, Baltimore and Atlanta.

Shock waves are now touching the global financial markets. Calvin Bradford, a real estate researcher says that the actors have changed but the same drama with cosmetic changes here and there continues to be played out. In the sixties the housing issue was a big one due to the race riots. Till then the black and Hispanic localities had been sharply defined. But in 1968 an ambitious housing project brought about radical changes. President Johnson surveying the damage had remarked that in black localities those who owned houses had not been overly destructive. During the last decade the number of Hispanic and Black owners have risen although the gap between the white majority and the minority had not shrunk. During both the periods the lenders as well as the government had fundamentally altered lending rules to rule out any possibility of default. Or so they thought. Reality turned out to be different.

But by the end of the first quarter of this year about 20% of loans to sub-prime borrowers had gone into delinquency. Mortgage bankers cite optimistic figures saying that 80% loans are still running and 68% Americans are house owners. But others despair that one out of five houses is abandoned. Other suggestions are that the mortgage brokers be paid monthly as a reward for good performance of loans. The opinion in favour and against down payments swings.

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BIOTA a water bottling company based in Telluride has been ordered to proceed with foreclosure sale as per orders of USA Bankruptcy Court. An attempt to delay it has met with failure.

As per releases of the aforesaid Court in Colorado district, BIOTA (Blame it On the Altitude) owes more than 100 creditors the total amount of $10.5 million. It largest creditor is United Parcel Service’s lending depart UPS Capital Business Credit.

BIOTA is disputing its claims of $7.5 million. BIOTA says that it will first go through the foreclosure and then stake counter claims against UPS by asking of $10 million as damages for unethical lending, says Jeffrey Hart the attorney of BIOTA based in Plymouth, Michigan. Hart opines that things are just warming up for the big battle ahead.

UPS Capital was not available for comments regarding the imminent war drums except for a vague statement that BIOTA’s attitude was most unfortunate.

A part of the disputed $7.5 million is about a loan of the Department of Agriculture, USA, which UPS Capital was responsible for collecting. Unfortunately BIOTA failed to repay. These loans are federally guaranteed. It is the taxpayer who is the actual lender. It went into default two years ago. But since then all avenues have been probed without any favourable result.

BIOTA came into name and fame using biodegradable bottles. They have now negotiated with a group willing to buy its assets and save it from the debt trap. The group will either buy during the foreclosure sale or at a later date during the redemption period of 75 days. Hart was unwilling to disclose the name of the investors or say how many there are in the group. BIOTA owner David Zutler could not be contacted while another company executive refused to comment on what Hart had said.

Things have been rather down for BIOTA for quite some time. Last year their financial troubles became worse when independent laboratory tests detected mould, bacteria and e-coli traces in the plant’s water. Luckily the findings had been timely discovered and none made its way to the unwary consumers. But for BIOTA it spelt doom. The plant had to be shut down last year in September. It limped back to operations in December. However legal action by UPS Capital had initiated legal proceedings against BIOTA much earlier in May last year.

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Thursday16th August is the scheduled auction day for the former fish camp in Estero near Coconut Road. The bell will ring at 11 am on the upper floor at Lee County Court House, Monroe Street, downtown Fort Myers. The court has given this information. As per ruling of the Judge Paskay of the US Bankruptcy Court in May this year, the owner Michelle Pessin, residing at Bonita Springs, was given time up to the end of July to sell the marina. Failure to do so will result in the creditor, First Integrity Bank of Minnesota to proceed with foreclosure sale. The attorney of Pessin, Foster was not available for comments.

Pessin owes the bank more than $11 million and has been trying to negotiate with a Florida developer for nearly a year but to no avail. Consequently a bankruptcy suit was filed y in April 2006 to delay a foreclosure that had been previously fixed. The idea was to give protection to four companies under its umbrella while reorganizing the dues.

The developers initially wanted to construct a condo hotel and public marina with dry dock facilities at the west corner of Coconut Road along the Bay of Estero. But the plans did not bear fruit. Pessin then took the help of chief restructuring officer McHale to fix a land deal with the developers. But the latter already had some land projects under contract with many other owners. They dido not want a marina and tried to work out a plan with the bank on a different programme. If the bank failed to be interested they will choose a different path. A new rescheduled plan for the property has been already chalked out. It can be made viable with the green signal from Pessin’s creditors and if Judge Paskay also approves on moving forward at a hearing set to be heard on 6th September.

The fish camp has a long history going back to 1900 when the Weeks family opened the fish camp, which is now near the Hyatt Regency Hotel. They lived off catching and selling fish. They also took people on boating trips showing them in and around sites of interest in the Bay of Estero. As such the fish camp is a historical spot with may years of memories linked with the history of the country.

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The word foreclosure has ominous connotations for the borrower. It means the latter loses the opportunity to clear the mortgaged estate and secure the bolts and nuts on the roof above his head. Crudely put a foreclosure means the roof is about to blow away. To foreclose means to shut out and stop the borrower from his rights as a borrower. The property now becomes the exclusive domain of the lender.

The trickle of foreclosures has now become a flood with numbers growing astronomically. There are about 120 million houses in America. Of them 4.8 million, which work out to approximately, 4% are on foreclosure listings. Few have been able to scrape through but the majority remains in the soup of falling far behind in their dues with little hope of catching up.

The foreclosure process is a legal step. It starts when the borrower fails to pay their dues during a specified time. Usually there are many reasons for this. The cause may either be divorce, unemployment, unforeseen medical expense, rising terms of loan, failure to manage property or the greatest cause of all – death. But none of these reasons will hold water with the lender. Money has to be paid – the unequivocal pound of flesh.

Through the process of foreclosure the lender tries to realize his dues. It is done by taking over the property and selling it. Borrowers and lenders are both facing each other over the net. One wants to keep the fires of the home hearth burning while for the others it is plain business – the basic bread and butter on which the lender survives.

The foreclosure proceedings kick off with a notice sent by the lender to the borrower demanding payment. This letter is known as the Notice of Default or NOD. The usual grace period is three months after which the notice is issued. The notice should not be taken lightly. There is no point in burying one’s head below the sand like the proverbial ostrich. The notice implies that the borrower is threatened that together with forfeiture of all rights on the property the house will be sold. This ultimately means dispossession and eviction.

The problem has become so extensive that a sideline business has opened up with groups vying with each other to give detailed information about foreclosed listings to investors and buyers or organize counseling about how to stall foreclosure.

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