Archive for the 'States' Category

Banks are overwhelmed by the number of vacant lots and unfinished houses in subdivisions in Georgia. According to industry expert, the foreclosure crisis not only affected individual houses but entire subdivision developments.

Many idled subdivisions, with vacant lots and unfinished houses, dotted the landscape of metro Atlanta. However, they are most prevalent in suburban areas where developers are having the toughest time selling them, with some houses placed on the market for sale for months without a single interesting offer.

Bank foreclosed houses in these subdivisions are rising and huge losses are incurred by lenders as they sell them at significantly reduced prices. Already, 16 banks in Georgia have failed because of huge losses in residential real estate market. And dozens of banks are struggling to survive the current market condition.

Meanwhile, residents who purchased properties in these distressed subdivisions are seeing their property values plummet, with some still waiting for agreed amenities to be constructed, including swimming pools and clubhouses.

According to industry experts, the housing market in Georgia is beyond sluggish. They added that the market’s major problem is the sheer number of vacant housing lots, totaling 150,000, representing over 10-year’s supply.

Adding to the problem is the drastic decline in the median home sale price to $30,000 from $57,000 during the peak of the housing market in 2007.

Experts said that the situation is expected to get worst because there are just too many vacant lots and not enough demand. Areas hardest hit by the volume of vacant lots and bank foreclosed homes and few sales are the counties of Jackson, Newton and Bartow.

In the upscale subdivision of WaterLace in south Fayette County, construction had stopped after only a few houses were built. The original plan for the 600-acre subdivision was for the construction of 400 properties. But the development was closed last year, leaving the subdivision a ghost town.

When or who will finish the project remains a big question as its developer, Stephen Macauley filed for bankruptcy. Security Bank of Macon, the project’s lender, attempted to sell the subdivision through an Atlanta-based real estate company. However, Security Bank also failed leaving the Federal Deposit Insurance Corp. to take over the task of selling the properties.

For the meantime, to prevent incurring more losses, banks are unloading properties in huge quantities with prices dropping to as low as 30 centavos on the dollar.

Industry analysts are considering the possibility that the residential real estate industry in Tucson, Arizona has started to show signs that it hit bottom. They noted several signs of market improvements, such as reduced inventory, increased median sale price and home sales volumes.

However, the high number of foreclosed houses that still flood the housing market is causing some of them to be a little bit reserved and cautious in saying that the market has really hit the bottom. They claimed that thousands of foreclosure properties are still out there which could jeopardize any progress made towards market recovery.

Analysts explained that many homeowners have given up hope on their properties while trying to modify their loans. They will walk away from their distressed properties and lenders will file for trustee sales. Typically, a trustee sale occurs 3 months after the filing for foreclosure.

However, analysts said that many lenders are not finalizing foreclosures six months or a year after a foreclosure filing. They pointed out that this is the reason why many unlisted empty, foreclosed properties are flooding the housing market. They added that lenders chose not to foreclose on troubled properties so as not to burden their inventory.

According to analysts, national mortgage lenders including Wells Fargo, are swamped with foreclosures and would prefer to shift the losses they will incur rather than report or release the properties on their portfolio.

A report about foreclosure rates in several major metropolitan areas in the country ranked Tucson as among the top ten cities with high foreclosure rates. For the first six months of this year, Tucson earned the 40th position in the ranking with over 7,000 foreclosure filings or 1.67 percent.

Other areas in Arizona that were higher than the 1.19 percentage point national average rate for foreclosure were Phoenix-Mesa-Scottsdale in the number 9 position and Prescott in the 27th spot.

According to analysts, foreclosure used to be a small portion of the residential real estate market before its collapse. Families or investors would immediately grab distressed properties. However, when property values dropped and credit became difficult to obtain, new home sales declined and homeowners started to default on their mortgages, leading to excess in inventory.

They projected further rise in the number of foreclosed homes due to unemployment and resetting of adjustable rate mortgages.

The 428-unit W.D.M. apartment complex in West Des Moines, Iowa is under bank foreclosed threat for defaulting on a $43.8 million loan it took out from the limited partnership of New York Credit Funding.

Last February, New York Credit filed foreclosure action against CMS Apartment Portfolio, owner of one of the biggest apartment buildings in Des Moines. Robert Hanson, District Judge of Polk County has been requested to put out a foreclosure summary judgment on the Wellington Apartment.

The apartment complex was built sometime in the 1990s and its $18.6 million appraised value is among the highest in the said county. But court records showed that the apartment complex’s $18.6 million appraised value dropped by almost 33 percent from the 2003 assessed value of $27.9 million.

According to court documents, New York Credit is claiming that owners of the apartment complex owed around $47.6 million in loan principal as well as interest.

In 1998, CMS acquired the apartment complex for $21 million by using Wellington Apartments as well as its apartment complexes located in Peoria, Illinois and Indianapolis, Indiana as loan collateral. According to court documents, the apartment complex offers market rate rental units unlike other apartments which offer federally subsidized, low rents to moderate-income families.

Conlin Properties has been appointed receiver for the apartment complex last February. The receiver was under contract with New York Credit. Conlin Properties President Jim Conlin said that 94 percent of the apartment complex is under leased.

Under the foreclosure lawsuit, owner CMS Apartment Portfolio has defaulted on its loan when Edward Carlson, a partnership member, filed for a bankruptcy in the Chicago, Illinois-based federal court.

Furthermore, the foreclosure lawsuit noted that Carlson as well as three of his partners defaulted on the loan when their individual net worth declined and amounted now to not below $35 million.

Additionally, the lawsuit contended that the total liquid asset of the partnership is not over $500,000.

Lawyers representing CMS stated that the said partnership has never missed even a single mortgage payment on its loan with New York Credit and the apartment complex has an occupancy rate of 90 percent.

Based on court documents, CMS attorney Mollie Pawlosky stated that the said partnership has enough cash flow available to allow it to meet its loan obligations.

Also, CMS pointed out that the court must avoid repossession of a property that is leased 90 percent on the basis of technical defaults.

Abandoned and vacant bank foreclosed homes for sale will have a chance to be renovated using federal funds from the Texas Department of Housing and Community Affairs (TDHCA). In Midland County, the number of foreclosure properties continues to increase since last year, albeit in a slow pace.

In 2005, Oregon home builder Buena Vista Custom Homes Inc. was recognized by Builder Magazine as the fastest-growing home building company in the U.S. Its founder Roger Pollock was featured on the magazine’s September issue.

The auction for the foreclosed bank owned Abbey Grill and Great Hall in Fall River, Massachusetts has been scheduled on August 20. This is the third auction date that Millennium bcpbank, the holder of the property’s mortgage, has set for Abbey Grill and Great Hall. The first two dates were set in March and May.

Last month, the number of bank foreclosed house in Arkansas rose by almost 50 percent, compared with figures of the same month a year ago. Also in June, foreclosure filings were made on 1,667 properties in Arkansas, representing a 48 percent increase from 1,146 filings posted for the same month last year.

The large volume of bank foreclosed homes for sale in Lee County, Florida is affecting taxable values of properties, according to Ken Wilkinson, a property appraiser.

Recent changes in Arizona’s law on home loan payment deficiency from foreclosure for sale have been the subject of a repeal move by real estate agents across the state.

Real estate analysts seem to think that home and condominium prices in South Florida are bottoming out. But they noticed the dwindling number of bank foreclosures on the market, prompting them to conclude that some lenders may be controlling the flow of foreclosures being released on the market.