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Foreclosure Alley, CA

Correspondent Lisa Ling

September 23, 2008 11:02 PM

For the past few years, the Inland Empire in Riverside County has been one of the fastest growing counties in the state - home to a major housing boom. But now the Inland Empire is pretty much the poster child for the foreclosure crisis. In the newer developments, house after house sits vacant - either up for auction, for sale by a bank or going for what’s called a “short sale” which is when the owner owes more than the house is worth.

Coming to a subdivision near you?

Geee, No Crap!

Spire pay dispute spurs doubt

Spire pay dispute spurs doubt

Calatrava among consultants filing millions in liens against developer

By Mary Ellen Podmolik and Blair Kamin | Chicago Tribune reporters

October 18, 2008

The Chicago Spire's penthouse may be sold but there is growing doubt whether the project will rise out of the hole that's been created at 400 N. Lake Shore Drive.

Consultants on the project are starting to line up seeking payment for their work on the development, designed to become the tallest skyscraper in the United States and one of the tallest in the world. The most well-known of the consultants, architect Santiago Calatrava, filed a lien on Oct. 8 through his Lente Festina Ltd., seeking more than $11.3 million in payment from Spire developer Shelbourne Development Group Inc.

Separately, Chicago-based architectural design firm Perkins+Will Inc. filed a lien against Shelbourne for almost $4.85 million in payment. The two liens were filed with the Cook County recorder of deeds.

The liens suggest the project's financing, as well as its feasibility, is shaky.

Who wuda thunk it??

Not Getting It

Boy, they just don't get it do they?


Fannie faces glut of unsold homes

Mortgage giants own 44 percent of foreclosed homes

By Bob Ivry and Sharon L. Lynch | Bloomberg News

August 3, 2008

Fannie Mae, the largest U.S. mortgage finance company, couldn't find a buyer who would pay $6,900 for the three-bedroom house at 1916 Prospect St. in Flint, Mich. So broker Raymond Megie, who is handling the foreclosure sale, advised cutting the price to $5,000. He still couldn't sell it.

"There's oversupply," Megie said.

As home prices decline, unsold properties are a problem for creditors like Fannie Mae because taxes, insurance and repairs drain their cash. Fannie Mae acquired twice as many homes through foreclosure as it sold in the first quarter, regulatory filings show, and late payments on its home loans—a harbinger of foreclosures—almost doubled in the past year.

...

Fannie Mae's goal in selling its properties is to get the highest possible price, even if it means hanging on to them longer, said Gabrielle Harrison, a vice president at the company.

"We want to treat that home as if it was your own, or as if you were living next door to it," Harrison said. "You wouldn't want that home to bring down your property value."

They obviously don't understand that by holding the price, the inventories will only continue to grow!

Ugh.

AWESOME!

HAHAHAHAHAHAHAHAHAH

Some Buy a New Home to Bail on the Old

Fannie Plans Rules
To Avoid Practice
Described as Fraud
By NICK TIMIRAOS
June 11, 2008; Page A3

Next month, Michelle Augustine plans to walk away from her four-bedroom house in a Sacramento, Calif., subdivision and let the property fall into foreclosure. But before doing so, she hopes to lock in the purchase of another home nearby.

...

In markets hit hardest by falling home prices and rising foreclosures, lenders and brokers are discovering a new phenomenon: the "buy and bail," in which borrowers with good credit buy a new home -- often at a much lower price -- then bail out of the "upside down" mortgage on their first home.

Homeowners are able to pull off this gambit -- which some lenders and real-estate agents call mortgage fraud -- by taking advantage of mortgage-lending practices that allow them to buy a new primary residence before their existing residence has been sold. And with the lending industry in disarray as it tries to restructure millions of mortgages, some boast they are able to pull off the strategy with ease.

Wow! DiTech was right: People ARE smart!!

Shocking News!

City zoning employees are dirty!

U.S. charges 15 in city bribe-taking probe

By Jeff Coen and Dan Mihalopoulos | Tribune reporters
4:35 PM CDT, May 22, 2008

Greedy city workers and bribe-paying developers have corrupted Chicago's zoning and buildings departments, federal and local authorities said Thursday as they announced criminal charges against 15 people in an undercover sting operation dubbed "Crooked Code."

City Inspector General David Hoffman, who worked with federal investigators on the case, said corrupt developers were motivated by the desire to get things built cheaper and faster. Honest developers are unable to compete as a result, he said.

"There can be no doubt that we're talking about systemic corruption," he said. "This is completely unacceptable in this great city."

Daley's response was: "Whaa?"

How Could This Happen?

Record condo numbers to saturate downtown

With sales slowing in weak economy, oversupply forecast
By Robert Manor | Tribune reporter
May 14, 2008

Nearly 6,000 condos, by far a record number, are expected to come on the market in downtown Chicago this year at a time when mortgages are tougher to get and sales have slowed dramatically, according to a report.

That adds up to a big worry about the Loop-area market, which has seen explosive growth in recent years.

"It's tremendously serious," said Steven Hovany, president of Strategy Planning Associates Inc., a planning and real estate consulting firm. "What you are going to see are buildings going into foreclosure."

Hovany predicts developers will cancel downtown projects for several years to come, until the excess housing is absorbed.

The developers won't even get the construction loans unless there is a large majority pre-con purchases.

Sales of newly built downtown condominiums plummeted by about 83 percent during the first quarter, to 201 units from 1,207 units a year earlier, according to a report to be released Wednesday by Appraisal Research Counselors.

Simple. Prices are too high. Lower the prices and the units will sell. Period.

Mike Hart, regional manager of Hanley Wood Market Intelligence, said developers are inclined to sweeten their offers but not necessarily lower the sales price. He said that means more free amenities included in deals, "whether it's flooring or something in the kitchen or maybe a free washer and dryer."

Well...so much for that idea. If they wait long enough, the cycle will return. But that might take 10-20 years. By then those condos STILL won't be worth it.

Lev said demand can change block by block, and some units are easier to sell than others. For example, Lev said, entry-level homes, meaning those costing less than $300,000, can sell to some first-time buyers because they aren't burdened by having a home to sell, and mortgages are available for people with good credit.

"It's the middle that is having a tougher time," Lev said. He defines middle-priced units as those costing somewhere between $400,000 and $800,000. He said those would-be buyers often have a home they must sell and cannot afford two mortgages for a protracted time.

Again, repeat it until it sticks: Cheaper homes sell. Cheaper homes sell. Cheaper homes sell. Besides, who can afford 2 mortgages for ANY time?? Anyone up for a Bridge Loan? HAHAHAHAH

Heaven and Hell

Privately-Insured Mortgages Up - Housing Tracker

Quotes of the Day

“Capitalism without failure is like Christianity without hell.” and “Lenders and investors who were dumb enough to deal in subprime mortgages should not receive any special help.”– Berkshire Hathaway Chairman and CEO Warren Buffett. (Financial Post, May 6th)

Misc. financial news.