Monday, January 29, 2007

Defaults "Skyrocket" In NY, MA

The Boston Globe. "Petitions to foreclose on Massachusetts homeowners rose nearly 70 percent in 2006, and the number of distressed properties that went to auction increased 46 percent, a report said today."

"In Suffolk County, which includes Boston, petitions to foreclose jumped 79 percent in 2006, the report said. In 2006, mortgage lenders filed 18,926 petitions to foreclose, compared with 11,155 in 2005, the Warren Group said; lenders announced 6,729 foreclosure auctions in 2006, versus 4,620 in 2005."

"'As housing prices decline, people who had borrowed 90, 95, or even 100 percent of the value of their home now find themselves owing more than their homes are worth,' the Warren Group's chief executive, Timothy Warren Jr., said."

The New York Post. "The number of New Yorkers forced into foreclosure is skyrocketing, especially in Nassau County, where foreclosures have jumped a stunning 82 percent in the past year. According to RealtyTrac, the number of city foreclosures went up 15 percent in 2006 from the year before, while Long Island jumped 55 percent. The national rate surged by 42 percent."

"'People in general are living outside of their means,' said wealth manager J.J. Burns. 'This generation wants everything now. People are not saving for the rainy day.'"

"In the city, Staten Island led the pack with a 47 percent rise in foreclosures, usually initiated by banks when homeowners can't pay their mortgages. Foreclosures in Brooklyn and The Bronx rose about 25 percent each and Manhattan saw a 4 percent increase."

"Queens was the only borough that saw a drop, with an 8 percent decrease in foreclosures. Foreclosure increases are higher in the suburbs - Westchester jumped 44 percent, Suffolk County shot up 32 percent and Nassau County rose a shocking 82 percent."

Sunday, January 28, 2007

An Auction In Colorado

The Pueblo Chieftain reports from Colorado. "Temperatures hovered below the freezing mark and snow continued to cover the ground. But the inclement weather conditions didn't deter a handful of people who could be seen stomping around in the snow outside a vacant house in Pueblo’s Highland Park neighborhood on a recent Tuesday afternoon."

"What they had in common was the desire to get a terrific deal on the foreclosed house on Lynnwood Lane that was being auctioned by an Oklahoma-based auctioneer. By 4 p.m., the group had grown to include several dozen. Many waited in the relative warmth of their vehicles."

"Potential bidders were invited to fill out a form and exchange it for a bidding card. The door was opened to the house for the long-awaited inspection. Inside, the 1950s-style tract home appeared the polar opposite of 'staged.' Cold, bare and unadorned, its 1,064 square feet were laid out in a classic FHA floor plan with three bedrooms, two bathrooms and a spot in the kitchen for the clothes washer."

"Snippets of overheard conversation suggested similar questions and observations from the many lookers: 'How old is the heater?' 'What’s with the painted paneling on the living room ceiling?' 'See the water marks on the wall.' People continued to arrive and elbow their way through the house."

"Within the hour, people were asked to the carport area where the auction would begin. Forty bidders congregated on the cement slab in the fading light and freezing temperatures. 'Any questions?' the auctioneer asked."

"One bidder asked if the buyer was responsible for any previous liens or taxes. 'No, title would be free of any liens or taxes,' was the reply."

"Terms and conditions were reviewed. The successful purchaser would be responsible for a $5,000 deposit or 10 percent of the purchase price whichever was greater. Closing costs would include standard expenses such as title insurance and recording fees. The buyer also would pay a $3,000 service fee to get the home out of foreclosure. Closing would take place within 30 days."

"The bidding started and quickly ran up to $70,000. Two of the bidders competed until finally the house sold for $77,000 to Bryan Wilson. Wilson, who also owns 12 other rentals, said he’s not sure if he will rent it or flip it."

"The seller, Bank of New York Trust CO NA, has seven days to accept the high bid. According to the auctioneer, 95 percent of the bids are accepted. Assuming that Wilson’s bid is ultimately accepted, he will pay $77,000, plus closing costs for a home that sold in March of 2004 for $107,000, according to Pueblo County assessor records."

"A second property on Main Street in Rye auctioned quickly for $56,000 and the auction was over."

Thursday, January 25, 2007

California Defaults "No Surprise"

The Press Democrat reports from California. "The number of default notices lenders sent to Sonoma County homeowners more than doubled in the fourth quarter of 2006, compared with the same period in 2005, and was the highest in nearly a decade, according to DataQuick."

"'We're in the midst of an adjusting market right now, and we won't know until spring or summer if this is ominous or not,' said Marshall Prentice, DataQuick's president."

"Just over half of the loans that went into default statewide during the fourth quarter were made between January 2005 and February 2006. So those loans were made to buyers purchasing homes around the time the market was peaking in summer 2005, DataQuick analyst John Karevoll said."

"'Just because of the higher-priced homes, that is the product that is in demand in order to qualify,' said Colleen Oller, real estate loan officer for Exchange Bank. 'But now we're seeing a downside to that, especially if they're needing to sell. The value of those homes is not what they paid for them and they've got no equity built up.'"

The Contra Costa Times. "In the last quarter of 2006, about 1,000 more mortgage default notices than last year went out to Contra Costa County homeowners, a 179 percent increase."

"An additional 700 showed up in Alameda County (a 157 percent uptick) and 500 more (or 163 percent) went out in Solano County, signaling the highest rate of foreclosure activity ever for Solano County and the highest since 1998 for Alameda County, DataQuick reported."

"Ed Jeffry, a loan consultant in Walnut Creek said that in the past few months four lenders he has used have stopped providing home loans. The quality of applicants has deteriorated, and he is referring many of his clients to bankruptcy attorneys, he said."

"Many succumbed to the lure of easy home equity or low payments. 'For so long people have relied on the advice of the guy who used to sell shoes at Payless who now sells loans,' Jeffry said."

The Santa Cruz Sentinel. "Mortgage defaults in Santa Cruz County jumped 36 percent last year, part of a statewide trend. 'It's crazy out there,' said Liese Varenkamp, publisher of the Santa Cruz Record. In the first two weeks of the new year, 16 foreclosures have already taken place, up from two last year."

"'Look at that difference,' Varenkamp said, adding the 80 percent of the homes go back to the bank that made the loan."

"The 37,273 default notices mailed between October and December was up 145 percent compared to 15,196 in the same period in 2005. Most of the default notices were sent to Southern California addresses, with homeowners in Los Angeles County receiving the largest number of notices."

"About 32 percent of homeowners who had previously been in default lost their homes to foreclosure in the fourth quarter, up from 8 percent in the same quarter of 2005, DataQuick said."

"The number of foreclosed homes last quarter was 6,078, compared with 874 in the fourth quarter of 2005 and 3,435 in the third quarter of 2006, the firm said."

Inside Bay Area. "In San Joaquin County, default notices hit a record high. Some 1,293 homeowners received default notices, compared with 464 a year earlier. San Joaquin County's increase in foreclosure notices is partly linked to speculators who are finding it difficult to sell homes in today's slowing market, said broker Renee Becker."

"'The market has turned, so maybe (speculators) have not been able to sell the homes,' she said. 'They are stuck with them.'"

The Sacramento Bee. "Hundreds of Sacramento-area homeowners who missed their first mortgage payments early last year fueled the region's most dramatic rise in home foreclosures since the 1990s during the fourth quarter of 2006."

"The 865 fourth-quarter foreclosures compare to 63 the same time last year in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties. 'What's the old saying? 'The chickens are coming home to roost,' said John Arvanitis, president of Sunrise Vista Mortgage Corp."

The Merced Sun Star. "In Merced County, homeowners received 466 notices last quarter, up from 118. That's a rise of 294 percent, second highest in the state. Lenders also warned a record 909 Stanislaus County homeowners in the last three months of 2006 that they are at risk of foreclosure. That's an increase of 471 percent, highest in the state."

"Rick Seymour, House Mart branch manager in Merced, said the rush among homeowners to buy into the housing market before they were priced out is a major cause of the foreclosure rate doubling. 'The problem was that the market turned,' he said. 'When they paid top dollar, and then turn around and it's $30, $40, $50,000 less, they aren't going to be too motivated to make those payments.'"

"'If you are making $5,000 a month, you don't want a $3,000-a-month house payment,' he said. 'I knew three years ago that this would happen based on the people who were buying.'"

"Merced County Association of Realtors President Scott Oliver said many Bay Area families already stretched thin invested in Merced County homes and took out questionable loans. 'I believe that a lot of loans went into place that should not have happened,' he said. 'It was inevitable that with the market exploding the way it did that you'd see a high rate of foreclosure.'"

The Fresno Bee. "Foreclosures in Fresno County more than quadrupled in the fourth quarter from last year, a sign, analysts say, that a day of reckoning is coming for thousands of home buyers who used unconventional loans."

"'This is just the first wave,' said Shannon Martin of Mid-State Realty in Fresno. 'Within the next few years, you'll see more foreclosures coming.'"

"Locally, real estate agents and credit counselors have seen huge jumps in foreclosure-related activity. Martin, who specializes in selling foreclosed properties for lenders, said such listings he handles climbed from 10 to 70 in the past six months."

"'People who bought their houses within the last year or two with zero down are at the high-water mark,' he said. 'As the values have decreased, they owe more than the house is worth.'"

"Martin said he has foreclosure listings in all price ranges and geographic areas. 'I've got them from $640,000 to $120,000. They are all over,' he said."

"'It's no surprise," said Martha Lucey, VP of a nonprofit credit counseling organization in Fresno. The number of phone calls to her housing credit counselors has increased threefold over the past six months."

"Many of those families are first-time home buyers who have little or no equity in their houses. Many should have thought twice about buying the house they did, she said. 'It is wishful thinking,' she said."

The Daily News. "In Los Angeles County, 7,445 property owners received default notices, up an annual 113.9 percent. In Ventura County, 794 property owners received notices, up an annual 204.2 percent."

"Most of the loans that went into default in the 2006 fourth quarter were made from January 2005 to February 2006. The median age for the loans was 15 months. On primary mortgages, homeowners were a median five months behind on their payments when the lender started the default process. And they owed a median $10,555 on a median $324,000 mortgage."

"'It's what we expected,' said Jack Kyser, vice president and chief economist at the Los Angeles County Economic Development Corp."

The Press Enterprise. "Riverside County saw a nearly 182 percent increase in mortgage defaults compared to the fourth quarter of 2005, while San Bernardino County saw a year-to-year increase of 140 percent. In the fourth quarter, Riverside County recorded 4,631 notices of default. San Bernardino County recorded 3,538 notices."

"Nancy Herrera, a broker-associate with Corona Mortgage, said she gets requests from people who want to refinance, but who have borrowed to the hilt against the properties and don't have enough equity."

"Herrera said in recent years lenders relaxed qualifying guidelines to the point that people with relatively low credit scores could buy a house with 100 percent financing and without documenting their income. She said although lenders have recently begun to tighten their requirements, 'people are still buying homes they can't afford.'"

"A nonprofit credit-counseling agency in Riverside handled 10,000 calls about mortgage defaults in 2006, said the organization's president Dianne Wilkman. 'And the phone is ringing off the hook this year,' Wilkman said. Wilkman said nontraditional loans, especially those that originated last year, are driving much of the activity."

Tuesday, January 23, 2007

Over 5,000 NOD's In Riverside Co.: Q4 2006

The North County Times in California. "Foreclosure activity in Riverside County continued to rise sharply in the last three months of 2006, reflecting overstretched buyers and flattening real estate values, according to a research firm."

"Lenders sent out 5,329 notices of default to home buyers who had fallen behind on their mortgages, up from 1,835 in the fourth quarter of 2005. The notices of default sent out in the fourth quarter include several dozen that went to participants in an unusual real estate investment group centered in Murrieta, according to signed declarations filed last week as part of a civil lawsuit."

"The plaintiffs allege that a Murrieta mortgage brokerage suckered them into buying multiple homes with inflated mortgages and then pocketed the difference in cash, in some cases about 20 percent of the legitimate value of the homes, according to court documents."

"The suit names 11 plaintiffs who said they each bought between two and 10 homes under the arrangement. Many of the plaintiffs have defaulted on multiple mortgages."

Thursday, January 18, 2007

ARMs Put Some "Over The Edge" in Arkansas

The Times Record reports from Arkansas. "The number of foreclosures in Benton, Washington, Sebastian and Crawford counties rose in the fourth quarter of 2006, according to a report. Those larger populated counties, excluding Washington, also had an increase in foreclosures for 2006 compared to 2005."

"In northwest Arkansas, where the housing market has cooled drastically since 2005, Benton County had the most foreclosures in 2006 with 905, a 16.3 percent increase compared to 778 the year prior. For the fourth quarter, it also had the most foreclosures with 285."

"Todd White, senior vice president of Arvest Mortgage Co. in Lowell, said many factors other than adjustable rate mortgages and subprime loans lead to foreclosures. 'While that may very well have some effect, I think it’s a combination of a housing market that has cooled, short term rates and an economy that has been positive but flat,' he said."

"People who took out an adjustable rate mortgage in late 2003 when rates were low are now seeing their rates adjusted up, White said. 'There are certain people who live paycheck to paycheck. That extra $50 to $100 a month is enough to put them over the edge,' he said."

"Carroll County also had a rise in foreclosures, increasing 42.1 percent to 27 in 2006 from 19 in 2005. But for the fourth quarter, foreclosures dropped 60 percent."

"South of the tunnel, Crawford County had the largest increase in foreclosures, jumping 33.7 percent from 312 in 2005 to 417 last year. The county also had a rise in the fourth quarter, increasing 23 percent over the third quarter."

"Sebastian County’s slow economic growth hasn’t kept it immune from defaulting on mortgages. There were 811 foreclosures in 2006, 12 percent higher than 724 than the previous year. In the fourth quarter, it had 181 foreclosures, a 21 percent jump from 150 in the third."

"In the Fort Smith MSA, Sequoyah County in Oklahoma had a 72.7 percent increase from 11 foreclosures to 19 last year. Crawford County had the largest number of households in foreclosure in the fourth quarter at 0.52 percent — one foreclosure for every 192 households."

Monday, January 15, 2007

Low Income Areas Hit Hardest: N. Carolina

The Charlotte Observer reports from North Carolina. "Last year, more N.C. families were threatened with losing their homes through foreclosure than ever before, a new state report shows. Hardest hit were homeowners in Mecklenburg and surrounding counties, where foreclosure filings are among the state's highest and rising fast."

"North Carolina recorded more than 45,500 foreclosure filings in 2006, according to the Administrative Office of the Courts in Raleigh. Mecklenburg County had the highest concentration; 35 per 1,000 homeowners, according to the Observer's analysis. Gaston County was fifth with 27. The N.C. average was 19."

"Foreclosure filings are growing faster in most Charlotte-area counties. They're up 13 percent in Mecklenburg, compared with 6 percent statewide. Experts estimate that about half of foreclosure filings result in owners losing their homes. In Mecklenburg since 2003, it has been at least 40 percent annually."

"Why are foreclosures rising across the state, and especially in the Charlotte area? Certainly, more homeowners are straining their budgets tighter than ever to purchase homes. But growing numbers of new mortgage loans help them do it, experts say, especially high-interest and adjustable-rate subprime mortgages."

"The subprime industry was designed for borrowers with credit problems, and it offers mortgage loans to consumers who couldn't qualify for them in the past. But subprime loans carry high interest rates and are more likely to foreclose. 'These are one-way, exploding mortgages,' says Mal Maynard, director of the Financial Protection Law Center in Wilmington. 'They never drop below the original rate; they can only go up.'"

"Al Ripley, of the nonprofit N.C. Justice Center in Raleigh, says his group typically sees lower-income home buyers whose payments rise suddenly from about $900 a month to about $1,250. 'That's a big jump for most people -- especially when they were barely able to afford the $900-a-month payment to begin with,' Ripley says."

"Subprime loans make up 14 percent of all mortgage loans in Mecklenburg, according to the most recent data. In Wake, the state's second-largest county, it's about 10 percent. Wake, where Raleigh is located, also has far fewer foreclosure filings, 19 per 1,000 homeowners compared with Mecklenburg's 35."

"Another factor may be Mecklenburg's higher concentration of lower-priced homes, which make up a majority of foreclosures. Forty-one percent of Mecklenburg's housing is valued under $150,000, compared with 33 percent of Wake County's, according to the U.S. Census."

"The Observer recently examined Mecklenburg foreclosures from 2003 through early 2006. The findings include: More than 80 percent of foreclosures involve homes valued at $150,000 or less. Most foreclosures cluster on the county's west, north and east sides, where houses and land often carry lower price tags."

"'My business just keeps coming,' says Tony Smith, a Charlotte real estate broker who specializes in foreclosures. 'My best clients are still sending me new assignments every week.'"

Friday, January 12, 2007

Bankruptcies To Grow: Poll

The Kansas City Star has this report. "A majority of respondents to a poll by the American Bankruptcy Institute expect an upsurge in bankruptcies among middle-size private and family businesses this year."

"According to the poll by the national organization, which monitors bankruptcies, 27 percent of respondents 'agreed strongly' and 44 percent 'somewhat agreed' that middle-market business bankruptcies will substantially increase."

"The poll is significant because business bankruptcies were down in 2006, due in part to a stronger economy, lower interest rates and an improving market."

"The decline last year led to speculation of when, if at all, the next restructuring 'boom' would occur, bankruptcy institute officials said in a statement released today."

Thursday, January 11, 2007

Pre-Auction Negotiating

Inman News reports on the protocol for buying foreclosures. "DEAR BOB: A house is about to go to foreclosure auction sale. I am interested in buying it. Can I make a cash offer directly to the foreclosing lender before the property is offered at the public auction? --Cathy T."

"DEAR CATHY: Negotiating with the foreclosing lender before the foreclosure auction is usually a waste of time. Until the auction takes place, the lender has no authority to sell the property to you or anyone else except at the required public auction sale."

"If no bidders show up at the foreclosure auction, then the lender owns the property (subject to any redemption right of the defaulting borrower) and can make a deal with you. That's the time to contact the lender, immediately after the public auction."

40B Red Tape In Massachusetts

The Independent reports from Massachusetts. "The Charles Ridge condominium complex is going on the auction block on Jan. 24. The 17.5-acre site off Beaverbrook Road is in the hands of T.D. Banknorth, holder of the mortgage on the property. The development was granted a comprehensive permit in September 2005, according to Board of Appeals Chairman Sherrill Gould, but racked up permitting problems and delays that may have caused the financial setback."

"Minutes from the Appeals Board from last August reveal substantial problems. Plans for the multi-unit buildings deviated materially from what was approved, and developers changed hands without seeking a new comprehensive permit."

"Under the state’s 40B law, a developer can build housing that may not meet local zoning standards so long as some of the units are offered at 'affordable' prices. Another feature of the law is that the plan that is granted a comprehensive permit must not be altered in any meaningful way without re-approval."

"But Gould said the management team changed at Charles Ridge, and changes were made to the units that caused the board to rethink its decision. She said the new team moved walls and amended the floor plans in a manner that was 'inconsistent' with what was approved."

"'The new management team was not as familiar with the 40B process, and changes were made to plans that were inconsistent with the comprehensive permit,' said Gould."

"For instance, she said the firewall between units was moved 'without permission of the board,' which put safety at risk. Other issues the ZBA found include a septic system that was 'marginal at best,' and walls that had obstructed Fire Chief Steven Carter from performing an inspection."

"Building Inspector Roland Bernier said Charles Ridge includes 43 condominium units in 10 buildings. In order to maintain its 40B status, 25 percent, or 11 of the 43 units must be for low-income residents. Bernier said seven units have been approved, or 'released for occupancy.'"

"'One building is complete, and a second one is very close to receiving its certificate of occupancy,' said Bernier. 'The rest are in various stages, but it will stay a 40B development even if it changes hands.' He said two buildings were set aside for over-55 residents."

"Bernier said if there is a new owner, that entity must be approved by the Board of Appeals and state."

"Gould said an independent engineer was hired to insure the units’ safety, but the added costs and delay most likely affected the project’s marketability. Stepping away from her role as appeals board member, Gould said as a lawyer, foreclosure means that the owner of the mortgage defaulted on payments to the bank that lent the money, and the bank has taken back the project for which the mortgage was given."

"She said in that case, the lender, or bank, will 'make an effort' to recoup as much of the cost as it can."

Monday, January 08, 2007

"Unrealistic Appraisals" In North Carolina

The Winston Salem Journal reports from North Carolina. "The pace of foreclosures in Forsyth County slowed in 2006 but still rose by 2.8 percent, according to data released yesterday by the N.C. Administrative Office of the Courts. There were 1,864 foreclosed homes in Forsyth last year, compared with 1,813 in 2005 and 1,592 in 2004."

"By comparison, Guilford County's foreclosure rate rose 7.2percent, Wake County's was up 6.8percent, Durham County's was up 8.4 percent, and Mecklenburg County's was up 12.9 percent. Forsyth's foreclosure rate was up 174 percent from 1998, when there were 680 foreclosures."

"'But overall, what we need to focus on is that Forsyth's rate, like most counties in North Carolina, has gotten dramatically worse in the past eight years,' said Al Ripley, the director of the Consumer Action Network for the N.C. Justice Center."

"The three main causes of foreclosure, according to analysts, are typically divorce, health crisis or job loss. There also has been an increase in foreclosures connected to lenders and potential homebuyers pursuing increasingly creative, and risky, mortgage strategies."

"Local officials said they believe that more consumer education on mortgage loans, along with programs aimed at assisting homeowners who have lost their jobs, have contributed to the slowdown in foreclosures. 'I will tell you that the calls are coming in fast and furious here for foreclosure-prevention counseling, a trend we expect to continue as the ARMs adjust upward,' said Kathy Banks, an official with Consumer Credit Counseling Service of Forsyth County Inc."

"Banks said that Forsyth has been fortunate not to have had entire neighborhoods go into foreclosure, which has been the case in some neighborhoods in the Charlotte area. She said that the main detrimental factors in those neighborhoods have been 'unrealistically high appraisals of homes' and mortgage products that result in homes being financed at more than 100 percent of market value."

"In Northwest North Carolina, Davie County had the highest rate of increase in foreclosures at 28 percent - from 137 homes in 2005 to 176 homes in 2006."

Friday, January 05, 2007

Insurance Or Extortion In Florida?

The Venice Gondolier reports from Florida. "Norm Finn, who is retired, has lived at 181 Cocoanut St. in downtown Englewood for 10 years. His wife, Marilyn, owned the home 20 years before that. More than a decade ago, the home's $40,000 mortgage was paid off. In ensuing years, it has been refinanced."

"Finn has a $242,900 mortgage through Bank of America. Sarasota County assesses the homesteaded lot at $260,000. His tax valuation increased from $13,000 to $19,000 in 2006. He has replaced windows, walls, and put a new roof on the home. 'I've got about $200,000 in improvements in this place,' he said."

"Finn carried enough insurance through a national provider to cover the mortgage. That's all he thought he needed. That's all he wanted, especially since rates increased twice within a year."

"In September, Finn saw a man on his front lawn, 'measuring off my property.' The man was conducting a 'home care review' for Finn's insurer. It included questions about furnishings and interior amenities."

"Finn didn't think much of it until a letter arrived in October telling him his policy was being rewritten to cover the home's '100 percent total replacement value.' Instead of covering the $242,900 mortgage, it would now cover the home's $304,866 replacement value."

"Starting Jan. 1, Finn will pay $4,560 a year for insurance, or about $400 monthly -- nearly $100 a month more than what he now forks out. And that's not all."

"Apparently, Finn's carrier 'passed me off to Citizens,' the state's 'insurer of last resort.'"

"The whole thing angers Finn. 'It's extortion,' he said, noting his insurance agent said if he didn't renew the rewritten policy 'the bank can foreclose on me' because he wouldn't have insurance."

"But when Finn went to the bank, it told him, 'I only need to be insured for what my mortgage is.' Finn said he is confused and uncertain if he's required to insure at replacement value."

"The short answer, said Dave Dignam at Englewood's Key Agency, is 'yes.' 'That's correct,' he said. 'We don't insure mortgages, we insure houses.'"

"Dignam, an independent broker, said Finn is typical of many homeowners ensnared in the state's insurance crisis. 'He's taking a double hit,' he said. 'The premium is twice as much, and they are also getting the increase of the house structure price.'"

"While he is unfamiliar with Finn's specifics, Dignam said the situation seems common. A bank and an insurance company have different priorities, he said."

"'The bank is trying to protect its interests,' the mortgage, Dignam said. 'The insurance company's obligation is to protect the replacement value of the home.' He said it's difficult to explain the difference to people, even to Realtors and mortgage brokers."

"'I tell them, 'For you, it's a date. For me, it's a marriage,' Dignam said. Insurance clients 'are with me. If it's done wrong, I have to deal with it.'"

"Replacement value is assessed differently than tax and market values, he said. 'You are basically reproducing, on paper, the cost to replace the house, broken down to actual costs at today's current building code,' Dignam said."

"Finn is among Floridians hammered by this 'double whammy' because some insurers, overwhelmed by hurricane claims in 2004-05, are leaving the state. 'We've had to rewrite a tremendous amount of people,' Dignam said. 'In reviewing these policies, we found a large amount of clients were underinsured. It is a complicated thing to explain to a client.'"

"'It's a bad scene. We can't have any more companies leave the state or we'll be left just with Citizens,' he said. 'It's a mess and there is no silver-bullet answer out there,' Dignam said. 'They can't keep raising rates like this,' Finn said. 'People can't afford it.'"

Wednesday, January 03, 2007

300 Homes To Be Auctioned In Detroit

A Press Release from Michigan. "In a wilting real estate market with foreclosures rising, buyers are now in the driver's seat of home sales and can find even greater bargains in pursuing property through auction. Hudson & Marshall, the country's largest auction firm of foreclosed property, will auction over 300 Detroit homes on January the 20th and 21st. All the foreclosed homes are owned by banks or financial lenders and come guaranteed with title insurance."

"'Real estate auctions accelerate the selling process, making it a win-win proposition for everyone. Motivated buyers and sellers come together in a competitive bidding environment that allows a property's true market value to emerge,' said Dave Webb, principal, Hudson & Marshall."

"The Detroit metropolitan area continues to experience a surge in foreclosures. According to RealtyTrac®, in November 2006 Detroit posted the nation's second highest foreclosure rate for the second month in a row with 3,333 properties entering some stage of foreclosure."

"Foreclosed property doesn't mean distressed property, it means a homeowner defaulted on his mortgage and the lender took back possession of the property. Because lenders are eager to sell foreclosed homes quickly to avoid the high carrying costs of bad debt, buyers can typically purchase foreclosed homes below their market value at auctions."

"All properties are sold 'as is' and interested buyers are encouraged to visit all properties beforehand. Buyers can view an entire listing of properties online. Winning bidders will be required to write a check for 5% of the purchase price or $2,500, whichever is greater."

"Making the buying process even easier, buyers may also purchase property online prior to auction. This hybrid online program allows buyers to submit bids through the company's website and receive an immediate response from sellers, usually within 24 hours. Over 30% of homes sell through the Bid Now program before auction, giving sellers another great vehicle to move properties quickly from the market."

Tuesday, January 02, 2007

Upside-Down A "No-Win Situation" In Texas

The Statesman from Texas. "Travis County home foreclosure postings for the first month of 2007 will rise slightly in today's auction, to 300 from 295 in December, according to a report. Compared with 278 postings in January 2006, however, foreclosures will be up 8 percent."

"Still, the postings are far lower than those filed in the January auctions for 2004 and 2005. The January '07 postings are 13 percent lower than the 345 filed two years ago and about 20 percent lower than the 373 record three years ago."

"Many of the upcoming residential foreclosure auctions 'had an upside-down loan-to-value ratio,' said George Roddy, president of the Addison-based firm that tracks foreclosures. 'Simply put, the homeowner has borrowed more money on the home than it is worth,' he said. 'So, generally, the homeowner cannot sell the property for the amount that he or she owes on it, and the lender has invested or loaned more than the property is worth. This creates a no-win situation.'"

"The highest percentage of upside-down postings in the Austin area for January will be in Bastrop County. 30 percent of the postings filed for January are upside-down. Upside-down postings make up 21 percent of the notices filed in Travis County, 21 percent in Williamson County and 23 percent in Hays County."

"Of the 20 counties tracked by Foreclosure Listings Service Inc. in North and Central Texas, Travis ranked sixth in total commercial and residential postings for 2006, with 3,713. That's a 6 percent decline from 2005. Leading the state was Dallas County, with 19,184 postings, followed by Tarrant, 12,763; Bexar, 8,837; Collin, 4,477; and Denton, 4,181. Williamson County, with 2,435 postings, ranked seventh, just behind Travis."