Archive for the 'States' Category

Sterling Green South, one of several developments on the periphery of Houston, Texas, is just one of many neighborhoods across the country experiencing deterioration because of too many foreclosed homes. Walls of abandoned foreclosed homes are sprayed with graffiti, playground equipment and street signs are destroyed and a nearby swimming pool is covered with litter.

Sam Campbell, president of the Sterling Green South Homeowners Association, said many of the foreclosed homes in the area have been bought by investors at low prices and rented out to low-income tenants. He however is frustrated that many of the investors do not make the necessary repairs before the foreclosed homes are rented out. He also says that landlords do not pay fees for the use of swimming pools, causing frustration in renters’ children who release their anger by vandalizing the swimming pools.

According to Texas-based Crawford Realty Advisors and Foreclosure Information and Listing Service, almost 2 percent of homes in Sterling Green South became foreclosed homes in 2008 and median home prices fell by nearly 19 percent. Texas is among the top ten in RealtyTrac’s list of state foreclosures in 2008.

One bright point for the redevelopment of Sterling Green South is the inclusion of the area as one of Texas neighborhoods to be rehabilitated under the federal Neighborhood Stabilization Program. Sterling Green South, along with other neighborhoods in Fort Bend County and in Houston, was chosen for its record in defaults, foreclosures and in subprime loans.

John Walsh, head of the University of Houston System’s real estate planning division, said the lack of job opportunities, public services and amenities lead to the decay of suburbs. Lack of civic leadership and efficient infrastructure worsens the situation. In many developments along the Farm-to-market 1960 road corridor, traffic congestion downed residential property values and led to many foreclosed homes.

Walsh also said large numbers of foreclosed homes are concentrated in low-income areas because many buyers purchased houses to get hold of the American dream despite poor credit records and limited incomes. Many brokers who were only looking at sales commissions did not care whether buyers can really afford the monthly mortgage payments.

To hasten the rehabilitation of Sterling Green South and lessen the bad effects of foreclosed homes, Harris County administrator Sylvia Garcia and neighborhood leader Campbell have been working together to facilitate improvements in the neighborhood. Campbell has been campaigning for more resident involvement, payment of homeowners’ association contributions, management of trash and prevention of vandalism. Campbell plans to ask Center Point Energy for more street lights and to ask Garcia and the county’s sheriff for more law enforcement officers in the neighborhood.

The continued rise in Florida foreclosures has affected schools throughout the state, similarly to how lender and government foreclosures have affected schools in other areas of the country.

Because lender and government foreclosures have reduced real estate prices, revenue from real estate taxes have drastically fallen. More than 50 percent of school districts across the U.S. depend on local real estate tax revenues for over 25 percent of their budgets.

In Saint Lucie, schools now lack funds to pay teachers and other staff because the district has lost about $22 million in revenue from real estate taxes. Superintendent Mike Lannon has started cutting down on some activities such as summer school, after school programs and some athletics. He has shortened the workweek of central office employees to four days and has frozen salary increases.

At Forest Grove Middle School where teachers and students have created a marine biology lab with a half-million dollar funding, students have been studying cheaper species in cold water to cut costs.

Bill Montford, head of the Florida Association of District School Superintendents, said there are already several school districts in the state that are almost in financial collapse not because of management failure but because of continued lender and government foreclosures that have pushed down real estate valuation and taxes.

Montford said funding prospects for schools across Florida are gloomy since about 41 percent of education expenses are funded by the state. Because of Florida foreclosures, the state has projected a shortfall of $5 billion in 2010.

Several school districts have started eliminating jobs because the money has stopped coming. Volusia County, near Saint Lucie, has already cut 1,000 jobs in just two years. Saint Lucie’s superintendent Lannon, who has been in education management for 41 years, is expecting a 25-percent cut in his budget of $262 million in 2010.

Obama’s program to avert further lender and government foreclosures has allocated some money for education. This probably encouraged Florida superintendents to write and ask for financial help from what remains from the 2008 Troubled Asset Relief Plan.

Lender and government foreclosures in Saint Lucie have risen to its highest level. In 2008, it had 10,764 housing units in foreclosure, an increase of 8.6 percent from the previous year. Unemployment has also risen, prompting a county official to propose a declaration of an emergency status so that the county could access money reserved for natural disasters.

In Florida, school districts are required to balance their budgets every year. Increasingly, they have been balancing their budgets directly using money from taxpayers. Ten years ago, the state government accounted for about half of education funding and local taxpayers provided about 42 percent. Two years ago, as lender and government foreclosures battered the state, the sharing pattern has changed, with the state sharing only 41 percent of education funding and school districts giving almost 51 percent.

The Obama Administration’s tax break proposal has caused quite a stir among homeowners who have gross income not less than $250,000.

Under the tax deduction proposals for property and mortgage interest, wealthy homeowners could avail of a tax break until 28 percent of the marginal rate in the tax bracket. Most wealthy homeowners are concerned that the tax break cap would cause housing prices to drop and may not bode well for efforts to control Florida foreclosures.

For example, a homeowner who belongs in the 35 percent tax bracket rate and has nearly $20,000 of property tax, mortgage interest and charitable deductions is a prime target of the Obama proposal.
For a homeowner belonging at the 28 percent rate, he could receive a tax break of $5,600. His tax due would increase by $1,400. Homeowners do not consider this proposal as a positive way to prevent Florida foreclosures.

Experts agree that the tax break plays a role in controlling the rapid spread of Florida foreclosures.
The Obama Administration proposed to cap the tax break for wealthy people in order to generate tax revenue to allow the U.S. government to spend the money on other projects, such as health care. The annual cost of property and mortgage interest write-offs has been depleting the Treasury’s coffer.

Meanwhile, the Joint Committee on Taxation predicted that this year, the mortgage interest rate tax break would cost the U.S. government unpaid taxes for about $89.4 billion.
According to the joint committee, the mortgage interest write-off will cost the department about $433.6 billion from 2008 to 2012. Furthermore, a property tax deduction has an additional cost of $112 billion for the same period.

The property and mortgage interest tax break is opposed by realty brokerage, banking industry officers and home building. They believed that the proposal could lower home values, adding that the timing of the measure is not right considering the growing Florida foreclosures and the vulnerability of the real estate and foreclosure market nationwide.

Mortgage Bankers Association President John Courson explained that homebuyers will begin incorporating the reduced tax benefits and discounting the amount they would pay for property because of lower future tax deductions.

National Association of Realtors Chief Economist Lawrence Yun pointed out that the tax break cap would have a devaluation ripple effect that will extend to low and middle-income strata and eventually worsen Florida foreclosures.

Search for Florida Foreclosures in USA Top Cities:

• Miami Foreclosures
• Fort Lauderdale Foreclosures
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Orange County property valuator Bill Donegan said Florida Governor Charlie Crist’s property tax proposal would transfer the tax burden from first-time homebuyers to existing-home owners. Previously, Crist released his property tax proposal which was aimed at energizing the state’s housing market downed by Florida foreclosures. The tax proposal would lighten the tax bill of first-time homebuyers to attract more new homebuyers.

As Florida foreclosures continue to soar in January, courts in the state have been conducting rocket docket hearings to clear their backlogs of foreclosure filings. Rocket docket takes just a few seconds.

In rocket docket, the judge just asks two questions: whether the homeowner is currently occupying the home and whether he is current with his monthly amortization. While the answer to the first question could be yes or no, the answer to the second question is always no. The judge will then inform the homeowner how many days he is allowed to stay in the house if he is unable to negotiate a deal with the lender.

Atlantic City, New Jersey’s first casino operator, Resorts Atlantic City is facing a threat of foreclosure from its mortgage servicer, Column Financial Inc. Because of this, the troubled casino has asked the New Jersey Casino Control Commission to block foreclosure attempts of Column Financial.

The building of affordable housing for people with low income in San Diego County are affected by the increase in California foreclosures and lack of tax credit investments.

Alaska Department of Labor economist Dan Robinson answered that they seem to be a lot better than other states in the country. But oil prices are going down. Oil is the major payer of the state and runs the Alaskan economy. Crude oil recently closed at $35.61, far from July’s $144.

The current economic state has triggered the Utah Department of Commerce to issue a warning against foreclosure fraud.

The state of Nevada ranks the highest in the nation for foreclosure rates. Nevada foreclosures have a rate of 1 out of 74 households, with Lyon County leading the state with the highest foreclosure rates.