Condo Vultures Are Busy Picking Up Tasty Morsels Of Foreclosed Properties
Peter Zalewski is a busy man handling lots of properties. In South Florida he has for sale 110,000 houses of which 55,000 are foreclosed and 19,000 owned by the banks. 68% of the units are in the distressed category. Somebody has to do the cleaning up and here is where Peter’s firm, Condo Vulture Realty, comes in. Condo Vultures are busy picking up tasty morsels of foreclosed properties.
Times of trouble spell opportunity for some. Vultures play a vital role in cleaning up – they do not kill. The killing is done by others. Vultures actually clean. The developers in Miami, who thought that the booming and zooming party would never end, did the killing. They sold condos at highly inflated prices to people who came to the orgies armed with ARM and Alt-A loans. Peter recalls, “There were red ropes outside. They had hired cameramen, and they had hired photographers to almost set the scene of a paparazzi.” They were selling a lifestyle by making the customers feel extra special.
When Peter was asked what role these exotic mortgages played in the foreclosure crisis of today he promptly replied, “They were essential. They were necessary. Without the Alt A or option ARM mortgage, this boom never would’ve occurred.” Nothing could be more true. Without these fancy super mortgages many of the borrowers would never have qualified for a mortgage loan. The lenders and brokers took their share of fees and commissions and were eager to ink more loans. What happened to the borrowers and the nation later on was none of their concern. The killers did not bother to check if the income was real or not. They agreed to ‘liar loans’ where no down payment was required. Jokingly these were termed ‘ninja loans’ – no income, no jobs and no assets. Just a pulse was sufficient for a loan to be sanctioned.
The key reasoning behind this mad behaviour was the belief that the price of houses would go on increasing. It was a fact that since the Great Depression real estate curve had steadily kept going upwards – it was a steady progress.
People had a heady feeling of climbing up the socio-economic ladder in leaps and bounds. Rula Giosmas was an acupuncturist. Soon she became a real estate speculator investing in six properties paying only 20% down on each being financed by option ARM. Today she is being foreclosed upon and losing on each unit.
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