Entries Tagged 'Foreclosure' ↓

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Back in March I talked about how the Michigan legislature was trying to destroy real estate values in the state with a new tax system. Well, they passed the tax and now it is in effect.

Take a wild guess who it is going to hurt the worst. You got it, landlords and real estate firms.

So a state with a worse than moribund real estate picture is now adding a huge tax to those who are willing to buy real estate. There are some real rocket scientists in the Michigan Statehouse these days.

The first filings of estimated liability under the MBT were due in April, and some real estate firms are seeing six- or eight-fold increases in taxes, said Kirk Profit, lobbyist for Government Consultant Services Inc.

He’s been retained by some local firms to push for changes in the tax, which replaced the Single Business Tax this year.

Profit said the credits in the MBT for personal property, payroll and research and development don’t benefit property owners and managers.

“There’s not a lot of that activity,” he said.

So you have real estate that is dropping like a rock and raising taxes by 6–8 times for the landlords that might be thinking about buying real estate in the state? Smart, huh…

“It’s going to take away a lot of your profit,” he said. The temptation is to pass along those costs to tenants through higher rents, but that might not be possible today, Chaconas said.

“I’m not sure you can get away with that because the market is soft,” he said. Profit predicted that will be the only option for many landlords. “You’ll probably see a dramatic increase in rents,” he said. via MLive.

Sure, increase rents from what. The economy in Michigan is in the toilet, real estate is not far behind, and you have a social welfare system that is bankrupting the state.

No wonder why we have so many former Michigan residents living in Georgia now, they just might be the smart ones.

The carnage is running rampant in California these days in the housing market as in some communities there seems to be a home on every street that is in some stage of foreclosure. For example, Stockton is leading the list and one out of every 30 homes is in some stage of foreclosure.

The one thing I am noticing is that some markets are in free fall. I do feel sorry for those who bought honestly in these markets.

Top 10 Worst Metro Areas For Foreclosures, 1st Quarter, 2008

A Fontana, California man is accused of turning his home into a marijuana grow house after a bank examiner found the evidence during an inspection. This has to be one of the stupidest crooks of all time.

After investing a couple of hundred thousand into the home and equipment to create the grow house, going through the effort of stealing electricity, and then growing the pot, these morons fail to pay the mortgage and go into foreclosure?

The level of stupidity with this guy is unbelievable.

A bank employee stumbled upon a foreclosed house used to grow marijuana, leading to the seizure of an estimated $4.5 million in drugs in two houses and an arrest Saturday. Angel Wayhang Kou, 30, of Rancho Cucamonga was booked into jail on suspicion of cultivating marijuana, maintaining a residence for drugs, theft of utilities and conspiracy…
“They had probably well into the hundreds of thousands of dollars worth of equipment in both homes, between the lights, the electrical, the water, the filtering and venting systems,” Decker said. Police said Kou stole about $100,000 in electricity from Southern California Edison between the two homes by bypassing electrical boxes. Decker said Kou owned both homes, but both were in foreclosure.  San Bernardino County Sun.

Mortgage fraud was rampant in the beginning of the century, that is very obvious to anyone who has watched the real estate market recently. That is why the new legislation coming out of Missouri is good to see. 

Missouri is going to make the crime of mortgage fraud it’s own category of law with enforcement and very specific penalties. The legislators were smart and kept the scope of the law looking forward to stop rampant fraud from happening again instead of a cumbersome legislation that would have tried to right the ills of past issues. Some legislators were hoping to add language that would have funded foreclosure protection and subprime legislation in the bill, but that would have diluted any affect on stopping mortgage fraud in Missouri in the future.  

The legislation defines mortgage fraud as making false statements or failing to disclose material facts. It creates fines and allows for the licenses of real estate brokers, agents and appraisers to be revoked. It also bars attempts to influence real estate appraisals through extortion or bribery.
The bill, which had already cleared the Senate, was endorsed 141-5 by the House on Thursday and now goes to the governor.
“What we were really focusing on were people who were breaking the law,” said Pearce, R-Warrensburg.
Pearce’s bill allows for civil fines of up to $2,500 per violation for those who commit mortgage fraud. It also makes mortgage fraud a felony punishable by up to seven years in prison. via the Houston Chronicle.

I rarely wish bad tidings on people but the career of Jose Canseco has been laced with self absorption, cheating, lying, and other serious character defects. Could this result surprise you at all?

Canseco makes an obligation to pay a mortgage but then decides that it does not make sense to keep paying on it. When a man’s word means nothing then how can he understand what a contract is?

Jose Canseco, the former AL MVP who made millions during his baseball career, has had his home foreclosed.

Canseco told the syndicated TV show “Inside Edition” that he walked away from his $2.5 million, 7,300-square foot home in suburban Encino because it didn’t make sense to continue making payments.

“I do have a judgment on my home and it to me is very strange because it didn’t make financial sense for me to keep paying a mortgage on a home that was basically owned by someone else,” he said in an interview that aired Thursday. via the ajc.com

The top 10 metro areas in the United States for foreclosures include the usual suspects led by 6 California markets, Las Vegas, Detroit, Phoenix, and Fort Lauderdale. There were 2 real surprises for me in the RealtyTrac report, first that Detroit has dropped down to number 6 after being the leader in foreclosures for so long. And the other one was San Diego moving up to the 9^th position. San Diego has gone through a boom and a bust, there is no doubt of that, but overall with it’s amazing climate and location I thought it would be a bit more resistant to the travails of the marketplace.

Top 10 Metro Areas For Foreclosures - 1st Quarter, 2008

1. Stockton, California
2. Riverside, San Bernardino, California
3. Las Vegas, Paradise, Nevada
4. Bakersfield, California
5. Sacramento, California
6. Detroit, Livonia, Dearborn, Michigan
7. Phoenix, Mesa, Arizona
8. Fort Lauderdale, Florida
9. San Diego, California
10. Oakland, California

Nancy Pelosi, Speaker of the House, must be the Queen of the FUD (fear, uncertainty, and doubt). Instead of talking about the positive things that have gone on in the country over the past 2 years of her speakership, she instead decides to be a fear monger to those in the fear mongering business.

Addressing a mixture of housing volunteers and families facing foreclosure at San Francisco City College, Madame Speaker decided to scare the bejesus out of them by stating that 5 percent of all California homes will enter foreclosure in the coming 2 years.

This is especially galling as the election is coming up in November. What makes me think that if the Democrats, Pelosi’s party, win both the Congress and the Presidency she will be speaking to these same people that the economy has turned around and all will be well now.

The problem is affecting not only individual families, but the country’s economy as well, she said, adding that in California, one in 20 homeowners are projected to be in foreclosure in the next two years.via SF Gate.

Countrywide Financial has joined into a partnership with New Vista Asset Management to sell their foreclosed upon properties. What is different that most property sales by bank owned real estate is that Countrywide is not just dumping the properties. Instead they are trying to sell them to minorities and first time buyers as part of an outreach plan.

Now I am not expecting them to lose money on the deal, but it is a noble effort especially as it will be combined with educating these buyers so they may be more successful than the homes previous owners.

In light of Bank of America’s purchase of Countrywide it is especially intriguing to watch. I would instead be expecting Countrywide to dump the properties on the market to get them off the books before the sale is completed. Instead they are attemting to do the right thing. Congratulations to the staff at Countrywide.

The two companies will work to ensure that homes are made available to qualified first-time and minority homebuyers. The companies will be hosting several community seminars for first-time buyers to teach them about buying real-estate owned homes and different financing options.

The seminars initially will be held in Los Angeles and Dallas. However, the companies are also working in the San Diego, Sacramento, Las Vegas, Fort Worth, Houston, San Antonio and Atlanta markets.

“By marketing and selling REO units directly to first-time and minority home buyers, New Vista and Countrywide are advancing our mutual commitment to increase affordable housing opportunities and act as responsible contributors to the local housing market,” New Vista’s Chairman Gary Acosta says. via  San Antonio Business Journal

If you are interested in making money off of the foreclosures that are occuring and that programs like these are probably only going to make worse, get a free trial and see all of the foreclosures in your area.

With a large percentage of homes that are selling being ones in foreclosure across the country, RE/MAX Regions has decided to partner with RealtyTrac and add foreclosure data to their websites.

I can not find the report I read saying nearly one in three resales in California are foreclosures, but it is not surprising (found – via Inman News). Doug Quance has noticed the same issue here in Atlanta.

But for some RE/MAX brokers to put foreclosure information on their listing page in competition with their full listings is intriguing. What it tells me is that foreclosures are the dominant housing product on the market and that even full service real estate firms are having to focus on the market to remain viable.

This new feature is the result of a strategic partnership between RealtyTrac (http://www.realtytrac.com), the national leading source of foreclosure data; Reliance Network, a leading developer of Web-based applications for real estate companies and four independently owned RE/MAX Regions.

In 2007, more than 2.2 million foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on more than 1.2 million properties nationwide. This represents a 75 percent increase in total filings from 2006. The number of foreclosures continues to increase significantly in 2008 as millions of adjustable rate mortgages with teaser rates are reset.

What should not be a big surprise for any who read this site, now the states are blaming the federal government for not slowing down the rate of foreclosures hitting the market. There has been no slowing of the rate of foreclosures no matter what efforts the states take at counseling or programs they have implemented. And now the states need someone to blame for squandering the taxpayers money.

Of course, it is the Federal Government they are blaming for not throwing even more money at the problem.

The truly sad thing is that we all live under the illusion that bad decisions and circumstances can be re-mediated by the government. Well folks, bad things happen to both good and bad people. But trying to stop it is like King Canute trying to stop the tides. Markets are too powerful and we need to let this housing period run it’s course. Then the markets can get back to normal and people can start feeling positive.

The only thing the government can do is make matters worse and extend the pain for others. Oh, and spend more of our tax money making it seem like they really care.

“While there’s been a lot of effort put in by mortgage servicers and government officials, there has been little change in outcomes for homeowners,” said Mark Pearce, deputy banking commissioner for North Carolina. “We’re still treading water.”

The report comes as state officials, frustrated by what they view as the federal government’s inadequate response to the mortgage crisis, are taking increasingly aggressive steps to address the rising rate of foreclosures.

States such as Maryland, Massachusetts, Minnesota and Virginia are looking at extending the foreclosure process or have already taken such steps in an effort to give borrowers more time to work out repayment plans with their lenders. Rising foreclosures hurt not just troubled borrowers, state officials say, but also their neighbors and communities. via the WSJ.com.