Archive for the 'States' Category

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.

This June, the corporate registration of Buena Vista has been canceled by the Oregon Secretary of State after it failed to file its annual report even two months after the deadline. Later, its license as a contractor has also been suspended.

The home builder was battered by its failure to sell its new homes, as low-priced foreclosure for sale attracted the majority of home buyers.

In the last months of 2007 and the first months of 2008, Buena Vista held two big auctions at the Oregon Convention Center to wipe out its 240 unsold homes and raise cash. It was able to sell 177 houses, including14 lots, and raised $75 million in cash.

After the auctions, Pollock was optimistic. He said Buena Vista was in the best position to fight competition from foreclosure homes.
But he was proven wrong.

In the first months of this year, Buena Vista was clobbered with foreclosures and lawsuits due to failure to pay its construction loans. It was even sued for faulty construction at a condo complex it developed in Southeast Portland. Its Happy Valley development project caused a $10.7 million judgment against Pollock and Buena Vista. Its partially-developed home lots in the southwest portion of Portland have been lost to foreclosure.

Pollock started Buena Vista in 2002 as his second home building enterprise as soon as his non-compete agreement with the buyer of his first homebuilding venture expired. His first venture, RMP Properties D.R. Horton Homes Inc., was sold in 1998.

Buena Vista targeted move-up buyers and married professionals looking for new and large houses in the suburbs.

The company targeted the right market because it became wildly successful, achieving $17.6 million in revenues in 2003, its first full year of building homes. By 2006, the home builder achieved almost $150 million in revenues.

In 2005, Buena Vista was honored as the fastest-growing company in Oregon by Portland Business Journal based on its stunning revenue growth rate of 12,899 percent from 2002 to 2004.

When the housing market started to collapse in 2007, Buena Vista’s fortunes reversed. Its 2007 revenues fell by 42 percent and it had to lay off more than half of its workers.

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.

The auction has been set based on the breach of conditions case involving the property’s $1.6 million loan taken out in 2004. The mortgage is under the name of International Institute of Culinary Arts, owner of the foreclosed bank owned Abbey Grill and Great Hall.

The two buildings of Abbey Grill and Great Hall house a banquet hall, restaurant and cooking school under the management of master chef George Karousos. A Bank Street-located building used by Karousos as central office for his cooking school was put on foreclosed bank owned auction last June 30.

The brick-veneered building that stands on a .15-acre lot was sold for about $150,000. The property is mortgaged for $285,000 with Sovereign Bank.

Meanwhile, the assets of the Abbey Grill and Great Hall building, including kitchen equipment and a 6-foot fountain, were auctioned off individually last July 9. Additionally, the liquor license of the building was also sold for $13,000.

According to industry experts, buyers’ interest on the Abbey Grill and Great Hall has waned following the disposal of assets. Developer Jerry Donovan has expressed his lack of interest to buy the building after the equipment and liquor license have been sold off.

According to the terms of the sale, the buyer of the property will pay for back taxes and other financial encumbrances. Data released before the assets auction showed that Karousos owed $425,000 in unpaid taxes for the property and about 60 creditors are seeking payments for breach of contracts and unpaid services, totaling $743,000.

Nationwide, the commercial real estate market is expecting more foreclosures as recession continues to plague the country. According to industry analysts, the number of commercial properties in trouble has increased almost twice this year, with assets in default, under foreclosure or bankruptcy reaching almost $108 billion.

But the influx of foreclosed bank owned commercial properties is expected to deluge the market in the first quarter next year in anticipation of the unloading of foreclosed banks from the Federal Deposit Insurance Corp.’s portfolio.

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 volume of bank foreclosed house filings in June was slightly higher than the May filings of 1,671. Last month, one out of 772 homeowners received at least one foreclosure notice, making the state 22nd in terms of high foreclosure rate in the country.

Year-over-year foreclosure increase in Arkansas varied from 16 percent in March to last month’s annual increase of 48 percent.

University of Arkansas’ Center for Business and Economic Research director Kathy Deck said that the increasing number of bank foreclosed house will continue to put strain on the state’s economy. She pointed out that the longer the economy languishes, the less likely that homeowners who are struggling to pay their mortgages can hold on to their properties.

According to Streetsmart Data Services economist Jeff Collins, the foreclosure crisis in Arkansas and the rest of the country were linked to subprime loan borrowers. He said that the devastating effects of subprime lending in Arkansas have been washed out and the foreclosure that the state is currently experiencing is brought about by the effects of recession.

Both Deck and Collins agree that the major cause of foreclosures in the state is unemployment. They explained that when borrowers lost their jobs, it may be impossible for them to continue paying their mortgages. The unemployment rate in Arkansas was 7 percent in May.

Meanwhile, another foreclosure contributor is the financial difficulties facing both real estate developers and builders. Collins explained that it has been so long that real estate demand was at an all time low and developers who have the means to fulfill their financial obligations are now under so much pressure. Some of them could no longer pay their debts and are forced into foreclosures.

Collins said that he expects more developers to go into foreclosures and to file for bankruptcy.

Nationally, the number of bank foreclosed house jumped by 33 percent last month, compared with the same period a year ago. And one out of 380 homeowners received foreclosure filings in June.

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.

Another Georgia bank is facing financial trouble because of its bad real estate investments and its bank foreclosed home inventories.

As the foreclosure crisis persists nationwide, Cape Cod banks have started cooperating with federal and state officials in the implementation of the Making Home Affordable Program and have helped curb the number of bank repo homes in the area.

The Illinois Housing Development Authority has offered short-term loans that are interest free to help buyers make home purchases, and at the same time address the growing number of bank foreclosed houses in Illinois.

The value of foreclosed bank owned apartments, offices, warehouses and shopping centers in North Texas could hit $1 billion by the end of 2009 as foreclosures on commercial properties keep rising.