The Housing Bubble

The Sacramento Bee reports from California. “First the banks took away C.C. Myers’ pride and joy. Then they moved to take away nearly everything else. The result was bankruptcy. Stripped of his beloved Winchester Country Club housing development and facing the potential seizure of numerous personal assets, Myers filed for Chapter 7 personal bankruptcy protection last month.”

“The bankruptcy puts a halt, for now, to any effort to seize Myers’ assets, although a Chapter 7 bankruptcy generally results in the liquidation of many of a debtor’s assets to pay creditors. And in some ways much of the damage has already been done: Although Winchester will go on, it will do so without the man who brought it to life.”

“‘I think this was his baby,’ said Donna Lucas, a retired Winchester homeowner whose living room overlooks the Sierra. ‘I just can’t imagine the pain of putting your heart and soul into something at his age and losing it all. It’s just tragic; it really is.’”

The Union Democrat. “Developers of Calypso Bay on the shores of Lake Tulloch in Copperopolis left an ocean of debt, shoddy workmanship and phony occupancy permits in their wake when they moved to the Sacramento area to do more of the same. That’s what volumes of official paperwork and individual complaints concerning Volodymyr and Leonid Dubinsky reveal as Calypso Bay residents seek redress of a host of grievances and Calaveras County building officials probe the depths of the problem.”

“‘I was lucky,’ Ron Cloward, a lieutenant in the Modesto Police Department who bought a vacation home in Calypso Bay, told The Union Democrat. ‘My house was built in the first phase of construction in the development, but when the Dubinsky brothers began to run out of money they apparently started cutting corners and the rest of the project is a mess.’”

“At last report, only 60 of the Homeowner Association’s 125 members were paying dues, according to a real estate agent in the area who had arranged mortgages for the Dubinskys over the past few years. Assurances that the Dubinskys won’t return for another phase of development weren’t forthcoming at the Planning Commission meeting. The commission denied a long-pending application ‘without prejudice’ on the advice of Planning Director Bob Sellman.”

“‘If anyone tries to revive the project they’ll have to deal with a lot of dusty paperwork,’ Sellman told the Planning Commission. ‘They’d have to start near the beginning.’”

The Press Democrat. “Exchange Bank survived the Great Depression, eight wars and six recessions by taking a conservative approach to lending. The strategy helped make it the biggest bank in Sonoma County, an icon of stability in a fast-changing world.”

“Now Exchange Bank finds itself atop a different list. The Santa Rosa bank has more bad loans than any other local financial institution, the result of a risky bet on builders in the Sacramento region near the peak of the housing boom.”

“The root causes of Exchange Bank’s difficulty are its level of construction lending and its decision to expand into the Sacramento region to aggressively seek new loans in the then-booming area, analysts said.”

“‘They were proven developers with proven market success. They went to a market with very attractive performance. It was what we perceived as an intelligent risk,’ said William Schrader, the bank’s chief operating officer. ‘If you look back now, you might call that an aggressive move. We certainly didn’t see the full magnitude and I don’t think any of the major players there saw a correction coming like this one.’”

The San Francisco Chronicle. “Bluetooth devices clamped to their ears and computer printouts in their hands, a dozen real estate investors clustered on the Alameda County Courthouse steps. They were there for the day’s foreclosure auctions, called trustee sales, the moment when houses cease belonging to the homeowner who fell behind on a mortgage.”

“‘At the auctions, (many) properties’ (minimum bid amounts) now are being dropped substantially. That’s the best-kept secret,’ said Robert Kramer, an Oakland investor who buys both for himself and on behalf of clients who pay him a commission of 15 to 20 percent of their net equity in a property.”

“In August, 1,360 properties sold at California trustee sales were bought by investors, up from 432 in January, according to ForeclosureRadar. But that represents just 4 percent of the 34,000 properties that went on the block. The other 96 percent reverted to the lenders.”

“When auctioneer Marc Ramsland got to the big house off Skyline, one man whispered urgently into his cell phone and then bid - exactly one penny more than the $517,500 minimum. The man, who declined to give his name, was the winning bidder at $517,500.01 and handed over a series of cashiers checks to pay.”

“Kramer approved of that 1-cent strategy. ‘Why bid $1 over when you can save 99 cents?’ he said.”

The Ventura County Star. “Many people might be afraid to move during what some are calling the worst housing market since the Great Depression. But not Steve Yewell, who is eager to take advantage of the slumping market.”

“‘I think we’ve got quite a number of folks … taking advantage of the massive inventory right now and are able to downsize into something a little more comfortable,’ said Sunny Strait, Yewell’s Realtor.”

“‘In years past, we didn’t have surplus in the market for folks to choose from,’ Strait said. And the fact that home values have dropped by as much as 50 percent in some areas ‘makes it that much more affordable.’”

“Yewell said he is confident the market has bottomed out because he’s seen some listings come onto the market and last just four or five days. ‘I think we’ve flattened out,’ he said. ‘All the cheap and good houses are flying off the market.’”

The Recordnet. “The analogy to Hurricane Katrina that struck the nation’s Gulf Coast three years ago was heard numerous times Saturday afternoon during a congressional field hearing on the foreclosure crisis that drew four members of Congress, nine key witnesses and about 100 interested onlookers to a meeting room at the Stockton Arena.”

“‘The only difference is that Katrina was an act of nature, while our housing crisis was man-made,’ Visionary Home Builders of California CEO Carol Ornelas testified before the House Committee on Financial Services.”

“During the hearing, Reps. Dennis Cardoza, D-Merced, expressed disdain for those critics who say that everyone involved in the mortgage meltdown shares in the blame.”

“‘There are a whole lot of good people who have been devastated by this’ through no fault of their own, either because of language or cultural barriers or because they bought into a mortgage presented by an unscrupulous broker or lender.”

The Bakersfield Californian. “One thousand properties foreclosed in Kern County during August, county figures show, the most ever among records going back to 1995. Default notices also hit a new all-time high.”

“Tony Ansolabehere, the county’s assistant assessor-recorder, estimates there are currently about 5,600 foreclosed properties still owned by lenders in the county. Most are homes, he said. ‘There’s a lot of inventory out there that needs to be absorbed,’ Ansolabehere said.”

“Bakersfield appraiser Gary Crabtree figures in the past 12 months, some 4,538 single-family homes have foreclosed in the metro area. Crabtree estimates roughly one out of every 24 homes in metropolitan Bakersfield foreclosed during that time.”

The LA Daily News. “A down-payment assistance program for aspiring homebuyers could end on Oct. 1 for what seems like an unusual reason. That’s the day the Housing and Economic Recovery Act of 2008, designed to help pull the nation out of an epic housing market meltdown, takes effect.”

“Those who offer down-payment assistance say it helps get people into homes that they otherwise could not afford. FHA spokesman Brian Sullivan says that’s true. Of course there is a caveat.”

“‘It doesn’t help keep them there,’ Sullivan says.”

“‘Loans that are assisted with seller-funded down-payment assistance fail at two or three times the rate of other loans,’ Sullivan said. ‘Common sense tells us we’ve got to end this practice.’”

“In 2000, loans with nonprofit seller-assisted down payments accounted for about 2 percent of the FHA portfolio, Sullivan said. By 2006 they accounted for 32 percent. Now the FHA has a growing portfolio of foreclosures to deal with.”

“‘We’ve got to stop this process,’ Sullivan said. ‘It’s killing us.’”

“At the end of June, Rep. Maxine Waters, D-Los Angeles, joined three others in backing a bill that would reinstate the down-payment assistance. She returns to Washington on Monday and hopes for some quick action.”

“‘We have addressed some of the concerns raised by HUD (the Department of Housing and Urban Development) and the FHA,’ she said.”

“One concern is making sure future borrowers receiving down-payment assistance have good credit scores. And in addition to hope, Waters has confidence. ‘We have a lot of support for this,’ she said.”

The Orange County Register. “There are foreclosures in San Clemente - the week of Aug. 18, there were 24 properties that had gone through the foreclosure process and were owned by the lenders. I visited seven that had been built in the past five years. Nothing rundown about these. In fact, one ’short sale’ was included because it’s being sold half-built. The framing and roof are up, but nothing else - no drywall, flooring or even a front yard.”

“Real estate agent Mike Cotter said foreclosures and short sales are relatively new in San Clemente. ‘Five years ago was a hot market, so people could sell their house with no problem,’ he said. ‘That all stopped when the market stopped going up.’”

“For the week of Aug. 12, there were 92 properties listed in San Clemente as short sales . ‘Five years ago there were no short sales,’ Cotter said. ‘No one (in the public) even knew what that meant.’”

The Seattle Times. “As chairman and the former CEO of Wells Fargo, Richard Kovacevich led the nation’s fifth-largest bank during the run-up to the mortgage and housing crisis. The San Francisco-based bank hasn’t been immune to the impact of the crisis on the financial-services industry. It recently set aside $3 billion to cover loan losses.”

“Q: In the run-up to the mortgage-lending crisis, what did banks do well and what did they do poorly?”

“A: We don’t have to take much time on what they did well. The problem was just excess. It started doing the right thing, trying to get more people into homes. And then it reached levels that were, quite frankly, totally inappropriate.”

“Q: What’s your forecast? A: If I had to pick a date, I would pick that home prices will bottom out by the middle of 2009, with equal probability that it could happen three or four months earlier or later. We’re already seeing some early signs we’re moving in the right direction.”

“The sales of foreclosed homes were at an all-time high last month. The point is it started to move the merchandise. In a very well-priced house today, at least in California, you could have eight or nine buyers as you auction these things off. People are seeing these are prices they may never see again.”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

We wanted a little more input on a possible meet-up in Las Vegas. Because of all the variables involved, I was asked to open up the comments. The following was put together by San Diego RE Bear:

It’s time for an HBB CONVENTION!

In order to plan this shindig we need to have an idea of what would best serve your needs. The following 9 questions will go a long way towards helping us determine dates, costs, events, and meeting rooms needed. If you think there’s a good chance you will be able to attend please answer below in the comments section or by e-mail.

It would be easier for most people to come out on a weekend (Friday and Saturday nights) but it would be far cheaper to have the conference during the week (Sunday and Monday nights.) I’ve run several scenarios from San Diego to Vegas for two nights’ hotel and flight, and the prices range from $419 to $814 for the Friday/Saturday nights and $249 to $589 for the Sunday/Monday night combo. Also, we may get better group rates once we know approximately how many rooms we will need.)

1.) Do you prefer to meet on a Friday night/Saturday/Sunday morning when it is more expensive or on a Sunday afternoon/Monday/Tuesday morning when it is cheaper?

3.) Would you prefer a nicer hotel or a cheaper hotel?

4.) Do you prefer to stay on the strip or off? (Please send any good recommendations for meeting hotels/suites to the e-mail below.)

5.) Would you pay extra for speakers, i.e. Chris Thornberg, Robert Campbell, Bruce Norris, etc.? (None of whom have been approached in any way for this.) Other suggestions?

If you have questions or suggestions, or would like to input your answers anonymously, please contact San Diego RE Bear at sd.re.b@hotmail.com

It’s Friday desk clearing time for this blogger. “The biggest residential building ever to be built in downtown San Diego will celebrate its topping-off early this month. Sales at the Vantage Pointe began with a blitz one weekend in March 2004, when 337 units — half of the building — were reserved in one day. Buyers stood in line, excited, their refundable $5,000 deposit in hand.”

“‘At one point there was almost a fight,’ said Brad Willis, one of the first people in line that weekend. ‘I had two fellas in line in front of me and there was some debate about who was first, and I stepped in and I said, ‘Hey guys, chill out.’ It was really kind of a frenzy.’”

“Committed to paying $330,000…Willis, one of the first people to reserve a unit in the building, said he and other potential buyers may seek discounts when they move in, but that in general, he understands the developer’s situation.”

“‘They don’t control the real estate market, and that’s a given,’ he said. ‘But from ‘06 to ‘09 — that’s a pretty substantial delay. … I’m guessing that most people who are still in the game are a lot like me. They want to live downtown, they want a fair price.’”

“Randy Klapstein, CEO of Pointe of View, said the developer will work with the buyers, but might not be able to lower prices past the point they committed to sell the units for already. ‘I don’t know how much lower they want us to go,’ he said. ‘We obviously care about them, but they have to care about us. If they think that a developer can actually build at a loss, then that’s not going to work.’”

“Brisbane’s median house price - currently about $450,000 - will hit $1 million in only seven years time and continue to climb, reaching $20 million by 2044, according to an in-depth research report by property firm Johnston Dixon.”"

CEO John Johnston said as ’staggering’ as the predictions sounded, they were based on growth values of the past 37 years. ‘Brisbane’s median house price has grown by 10.8 per cent annually for almost four decades,’ he said. ‘If values continue to grow for the next 37 years the way they have for the past 37 years, Brisbane will move into the sphere of generational home ownership.’”

“Remax Morningside principal John Kubatov said although he considered the figures a little ‘optimistic,’ they were not out of the question. ‘I’m not sure whether doubling the median house price in seven years is completely realistic but you know, I would say you’d go close,’ he said.”

“It is the Mount Isa residents who are feeling the pinch of the falling property values. Skye Wells and her partner bought a property in Happy Valley for $365,000 in August 2007. Despite spending $30,000 on renovations, she only received a property valuation of $370,000 12 months later.”

“Ms Wells said, based on the lower than expected valuation, they decided not to sell the property. Instead, they rented it out for a higher than expected amount. ‘For investors it’s a good situation because the rent is so good but for people who own a home and want to sell it so they can leave town, they’re not able to - they’re trapped in Mount Isa,’ she said.”

“The declining value of the three-bedroom, 1970s’ brick home in Chedworth Park, Hamilton, reflected the local market where demand is relatively weak. But the owners, who didn’t want to be named, bought the home for $280,000 in June, suggesting they bought well in the prevailing market conditions.”

“In Wellington, the drop for the three-bedroom, weatherboard home in the Lower Hutt suburb of Waterloo was also in keeping with easing values in the Hutt down 6% since January. Owner Darren Walton, who bought the property in 2001 for $215,000, wasn’t too worried as he had no intention to sell. ‘As long as it doesn’t go under $215,000, I’m not doing too badly.’”

“Spain today is in the throes of a dramatic downturn. Jose Luis Valdivieso, a professional driver in Madrid, benefited from the boom but now sees the bust destroying his daughter’s family. Like so many Spaniards, Valdivieso bought an apartment in 2000 and was able to sell it a couple of years later at more than double the price. He repeated the deal, acquiring a much larger place after profiting, again, on the sale of the earlier property.”

“Then came the crash. He has had to watch as his daughter, a more recent homeowner, found herself at a devastating disadvantage. She purchased an expensive apartment, its price inflated by the real estate bubble, in one of the so-so southern neighborhoods of Madrid, availing herself of the cheap loans offered at the time. But interest rates shot up and now she can barely make payments, Valdivieso said.”

“‘The economic situation is worse than we all predicted,’ Spanish Economy Minister Pedro Solbes told El Pais newspaper recently. ‘We thought it would happen slowly but instead it has hit fast.’”

“Leanne Donaldson, 28, and her partner Paul Langford, 25, are in danger of losing their home in Cheshire. They earn a combined total of £30,000 and said they purchased their home in September 2007 for £116,500. They borrowed £122,500. Repayments cost them £800 per month.”

“‘We can’t afford to live,’ says Leanne. ‘We also want kids, but we can’t afford to have them. We can’t carry on living like this.’”

“In Greater Vancouver, August MLS sales were down almost 54 per cent to 1,568 units, compared with 3,348 units in the same month a year ago. ‘This summer, sales went off a cliff,’ added economist Tsur Somerville, who is director of the centre for urban economics and real estate at the Sauder School of Business at the University of B.C.”

“‘I think it was not a willingness to pay more,’ said David Watt, president of the Real Estate Board of Greater Vancouver. ‘We hit a level where buyers simply could not. They weren’t able to borrow more money or whatever. That’s a real, true market taking care of itself.’”

“Heidi Samuda listed her Arbutus Village townhouse for $829,000 three weeks ago. Samuda added that she has bought and sold several times, and has managed to get the price she has wanted, even in markets turning down.

“‘It was just a matter of wait and see and the right buyer will walk through the door,’ she said. ‘I think one has to hold firm to that, obviously within reason.’”

“‘It’s no different than markets we’ve seen in the past in Vancouver,’ added Samuda’s agent, Lorne Goldman. ‘It’s a market where 50 per cent of the people are extremely happy: Buyers.’”

“James and Elizabeth Smith said they are in danger of losing their home in Columbia after nearly 40 years. The Smiths bought their Oakland Mills house in 1969. The couple decided several years ago to tap the equity in their home by taking out another mortgage, using it to pay off credit card debts and to complete improvements to the house. They got behind in payments, and the bank is now trying to foreclose on the home, James Smith said.”

“‘We are, quite honestly, seeing people from every demographic, every socio-economic background,’ said Anne Balcer Norton, director of foreclosure prevention at St. Ambrose Housing Center. ‘From people who have $80,000 homes in Baltimore City to $850,000 homes in Montgomery. We’re seeing every end of the spectrum.’”

“Brittney Heincy, who is trying to sell an East Side rental home, said the glut of homes on the El Paso market has caused prices to slow down.”

“‘There’s so much on the market, so we’ve priced it (rental home) a little bit lower’ than other homes she and her husband saw for sale in the same area, Heincy said. ‘My personal opinion is this will all change when the military (Fort Bliss expansion) hits. I think prices will start going back up.’”

“Rita Ruiz is in a vicious financial circle. After digging herself into debt to try to help her son from losing his home last year, the north Phoenix resident is facing foreclosure herself. ‘It’s getting harder and harder for me to make my payments,’ Ruiz said. ‘When my son put his home up for sale, he didn’t get the full amount that he should have. So he didn’t pay me back what he owed, and I got stuck with the bill.’”

“Councilman Richard Alton said the mortgage crisis has affected him on two levels.”

“‘I lost my job about eight months ago in the banking industry,’ Alton said. ‘And my wife, who was in real estate, lost hers four months ago. So we have felt the effects of the economic strain. It has pushed me into retirement a little early. But it’s OK. We’re all in this together.’”

“Realtor Alex Fox is staging a one-man parade of homes that starts today at an upscale Woodland housing subdivision he’s been marketing for more than a year. Fox said he has spent more than $100,000 to decorate and furnish six of the homes for his event.”

“The parade is an effort to overcome changes in the lending market earlier this year that put several of the homes back up for sale. ‘The market changed and lending programs crashed,’ said Fox, also an agent in Vancouver.”

“The mortgage lending debacle did away with jumbo mortgage loans, a product Fox had counted on to finance prospective buyers of the nine high-end homes his event will feature. Six months ago, he had buyers lined up and ready to go.”

“‘But the sales didn’t close,’ Fox said.”

“Britain’s plan to cut taxes and offer incentives to first-time buyers is sure to fail and smells a bit of Ponzi. It would be far better to acknowledge that British housing prices are much too high and likely to fall substantially from here, and to try to do what little can be done to soften the side effects.”

“Attempting to keep the unstable enterprise afloat by luring new buyers is a strategy headed for failure, and where it succeeds is bound to be a disaster for any unfortunate buyer who takes it up.”

“‘Encouraging first-time buyers to enter an over-valued and sharply falling market seems like an odd thing for a government to be doing,’ said Ed Stansfield, a London-based economist.”

“I had to listen to the definition of Robert Shiller’s proposed ‘continuous workout mortgage’ four times to be sure that I understood it. I could listen to it a hundred times and not believe that an educated person could say something like the following: ‘The mortgage contract lowers your balance if home prices fall and protects you against price falls.’”

“Whom, exactly, does he propose to take the loss in such a circumstance? How likely is it that a lending institution would make a loan in a situation in which the value of the house might decline? People who can’t afford to buy in a neighborhood with reliably appreciating values could kiss their chance getting a mortgage goodbye.”

“The previous writer who applied the term ‘ivory tower’ to Shiller was spot-on. I guess that things like this are what I’ve expected from Shiller ever since, years ago, I heard him ask if San Francisco is really a better place than Cincinnatti.”

“It made me wonder when the last time was when he got out of New Haven…or, even, the house.”

The Dahlonega Nugget reports from Georgia. “Lumpkin County began feeling the the building bubble burst in mid-2005, says Clarence Stowers, who has been in the construction business for 29 years. That’s when ‘calls and inquiries sort-of went away,’ he says. ‘With so many houses available, there just wasn’t any need to build more.’”

“‘I listen for good news, but these days it’s hard to find in construction, or anything development related,’ says Lumpkin County Development Authority Executive Director Bruce Abraham. ‘I’ve had grading contractors calling just begging for work. Engineers and architects are offering to do free consultations just to get a foot in the door in hopes of a contract.’”

“‘I usually have had two or three on-going jobs,’ Stowers says. ‘In the past I’ve been able to pick and choose, but right now I’m basically bidding just to get a job, and there are 30 contractors bidding on the same job. Profit margins are really, really low.’”

“Michael Gilstrap’s grading business had 17 employees last year. Now he is down to three-himself, his son and one other long-time employee. ‘We haven’t got anything to do. I’m looking at selling two or three pieces of equipment and probably going to work for someone else for a while,’ Gilstrap says. ‘I can’t compete with all the people who are underbidding jobs. If there’s no money to be made, what’s the use of going out there’”

“‘It’s amazing what this slowdown has done to people’s morale and attitudes,’ Stowers says. ‘There’s a place I’ve been doing business with for years, and they are not longer allowing people to charge. I had to wait the other day for them to clear my check. It’s tough, it’s hard times. Never in my life have I seen it this bad in Lumpkin County in construction.’”

“The glut of houses on the market, a cautious buying public and the increased difficulty of getting loans is having an effect on the residential real estate industry as well. Local realtor Vic Dover of Dover Realty says he began seeing the slowdown at the end of 2007.”

“‘There was a brief flurry in January, but it’s dropped off to very little activity. The number of phone calls and of people actively seeking to buy has dropped off precipitously,’ he says.”

“Sue Jones with Coldwell Banker says last year her sales were $6 million, but ‘this year is a lot different. Eight months into this year I’m probably not at $2 milliion.’ Raw land sales for residential sites are down. ‘I have parcels listed with some of the lowest prices in ages and it’s just not selling,’ Jones says.”

The Palm Beach Post from Florida. “A Palm Beach County real estate investor has pleaded guilty to one count of conspiracy to commit bank fraud and one count of mail fraud. Berry Louidort agreed to forfeit $6.5 million and a 2008 Mercedes, according to a plea agreement filed Wednesday in federal court.”

“According to the latest indictment from federal prosecutors, Louidort was part of a scheme to land bogus mortgages on 37 properties in Palm Beach County and seven in Naples.”

“In one example, Louidort convinced a lender that he had paid $1.03 million for a house west of Delray Beach and walked away from the closing with an ‘assignment fee’ of $250,000, federal prosecutors said in April. The house soon went into foreclosure.”

“The ring also enlisted straw buyers, such as the part-time Publix cashier whose income on loan applications was inflated from $13,000 to $344,000 so she could qualify for $1.3 million in loans on a Boca Raton home.”

“After nearly half a century of building Florida neighborhoods, Oriole Homes Corp. finally met an economic downturn it couldn’t survive. ‘I have shut them down,’ said Phil von Kahle, the court-appointed assignee.”

“The liquidation means Oriole Homes has stopped work on its Mayfair at Lawnwood condos in Fort Pierce and another development in Celebration, von Kahle said. Founded in 1963 by the Levy family, Oriole Homes survived deep real estate recessions in the 1970s, 1980s and 1990s. It also weathered a stormy spell from 1995 to 2002, when losses rose as high as $21 million a year. The company eked out only two profitable years.”

“The economic vise gripping many of Florida’s businesses and residents is prompting Florida Power & Light Co. to slash expenses, and is expected to stunt profits for its parent company.”

“Meanwhile, FPL’s parent company, Juno Beach-based FPL Group Inc., announced Wednesday that its earnings would be less than expected in 2009 - largely because of the housing-driven downturn. ‘This one is much longer and much steeper than we would have ever expected, and it has not bottomed out yet,’ Chief Financial Officer Armando Pimentel Jr. told investors.”

The Marco News. “As with many financial institutions, Marco Community Bank suffered significant losses due to unpaid loans and foreclosures over the past two years. But Marco Community Bank is among one of the smallest to date to file a lawsuit against the mortgage lenders who may be responsible for the situation.”

“The suit alleges that Atlantic Capital, a loan originator and underwriter, along with the other two companies, caused the bank to suffer nearly $20 million in damages by creating, marketing and selling impaired mortgages between June 2006 and April 2007.”

“‘All (mortgage lenders) were thinking about were the fees … They wanted to just push stuff through the pipeline. Far too many people put in sludge that turned to sewage and sometimes it was toxic,’ said Mark F. Raymond, a litigation attorney with Broad and Cassell Associates which is representing Marco Community Bank in the suit.”

The Naples News. “Southwest Florida’s largest privately held community bank has caught the eye of federal regulators. The Federal Reserve Bank of Atlanta and Florida’s Office of Financial Regulation have taken a formal enforcement action against Naples-based Orion Bank, requiring it to strengthen its board oversight, improve its assets and change its loan policies.”

“The bank will also have to develop a plan to better manage its real estate loans, including reducing its risks, and revise its loan policies, including its standards for renewing, extending, or modifying existing loans.”

“Within 10 days, the bank will have to ‘eliminate from its books’ all assets, or portions of assets, that have been classified as a loss that have not be charged-off or already collected.”

“Since 2007, Orion has filed more than three dozen foreclosure actions in Lee and Collier counties. The bank has branch offices in Fort Myers, Cape Coral, Estero and Marco Island. It’s also had problem loans in such counties as Manatee and Sarasota, and on the east coast of Florida, where it has a handful of branches.”

“Orion has been making adjustments in its operations since the shift in the market, said Jerry Williams, Orion’s chairman, president and CEO. Last year, it formed a special assessment department to deal with problem loans, he said.”

“‘You don’t know your roof leaks until it rains,’ Williams said.”

“In August, new foreclosure filings fell for a second month in a row in Lee County. There were 2,154 filings last month, down from 2,301 in July, according to the Lee County Clerk’s office. They reached a record high of 2,518 in June.”

“‘It’s trending per day downward, but the backlog is increasing,’ said the county’s Clerk of Courts Charlie Green. ‘We now have over 22,000 that have not been disposed of. There is not a final judgment.’”

“He expects to see more declines in coming months. ‘The number one reason is they are just running out of foreclosures. There are just not that many more properties to be foreclosed.’”

The Bradenton Herald. “The number of foreclosure filings in Manatee County fell slightly in August from the record-breaking heights the month before. August saw 456 foreclosure filings, according to Manatee County Clerk of Court records, bringing the total for the year to 3,616.”

“The number of foreclosures so far this year has eclipsed the number of foreclosures in all of 2007 by nearly 1,000, and there are still four months to go.”

“While local Realtors report that much of their recent business has been in distressed sales, it doesn’t necessarily mean that the property is being given away. The median price of existing homes sold in Bradenton-Satasota in July was $230,100, well above the state average, according to the Florida Association of Realtors.”

“‘It’s very difficult to work with a buyer who is looking at short sales or foreclosures because they think they are going to get it for a steal,’ said Ron Cornette, director of training and marketing for Wagner Realty.”

“Since the beginning of the year, only two homes in Manatee County have been listed in MLS as being sold in time to stop the home from becoming bank-owned. What many people making offers on these homes or even the bank-owned homes aren’t taking into consideration is that the banks are hurting, too, Cornette said.”

“In some cases, banks will have to take losses because they are owed more than the home is worth, but that doesn’t mean they will sell the home at half of its market value. ‘We spend a lot of time making offers that are never going to fly,’ Cornette said.”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

The San Francisco Chronicle reports from California. “ACORN, an advocacy organization representing low-income communities, staged a rally at a Wachovia branch at Mission and First streets in San Francisco on Wednesday, with about 30 people calling on the bank to be more flexible in adjusting loan terms to prevent foreclosures. Wachovia is aggressively trying to get homes in or near foreclosure off its books, by quickly initiating the repossession process and aggressively selling them.”

“Susan Fallis, a communications professor at Saint Mary’s College in Moraga, so far seems to fall into the ‘get the loans off the books’ camp of Wachovia customers. In 2004, she sold the Santa Cruz parking lot her father bought in the 1960s for his mobile home business. She reinvested the approximately $3 million into 20 single-family houses in and around Reno, with a 40 percent down payment on each one.”

“Because Reno rents dropped as her minimum payments climbed, she is now losing about $7,000 per month. She has asked Wachovia to temporarily lower the interest rate on her loans by less than two percentage points, without asking for any adjustment on the loan principal.”

“If Wachovia doesn’t allow any modifications, Fallis expects she will have no choice but to default in the next few months.”

“‘It’s absolutely insane,’ she said. ‘I’m about ready to become the Cindy Sheehan of real estate; this is just making me so angry.’”

The Oakdale Leader. “President Bush has just made it even more difficult for those people to own their first home by shutting down the Nehemiah program. Casey Knowles, a PMZ senior loan officer who’s been in the business for eight years, said even though the program is scheduled to end in October, most banks have already stopped offering the program.”

“‘It’s definitely going away quickly,’ Knowles said. ‘I don’t think it’s going to come back. I’d be happy if it came back but I doubt it. It’s definitely going to affect home prices.’”

“‘The program has done a lot of good for a lot of people. I love it. It helps me get a lot of people into houses but it’s pretty easy to walk away when you have no money put into it. If you put three percent into your house you’re more likely to make the mortgage payment,’ Knowles said.”

The Merced Sun Star. “County Bank laid off about 20 employees Tuesday — the first time in its 31-year history that the bank has been forced to cut back on staffing. Company spokesman Thomas Smith, noting the bank’s parent company’s $12 million loss last quarter, said the decision was due solely to the troubled Valley economy.”

“Though no more layoffs are in the works, Smith didn’t rule them out. ‘Are housing values going to decline further?’ he asked.”

The San Gabriel Valley Tribune. “In an economy dominated by high fuel costs, rising food prices and mounting home foreclosures, many people are having a tough time making ends meet. This year, some are supplementing their income by working at the L.A. County Fair.”

“This year, Lisa Barnhouse is part of that work force. Barnhouse used to work in the customer service department at an Acura dealership, but her job was eliminated when the business was sold.”

“‘This money will be used to pay my bills,’ she said. ‘Jobs used to be a dime a dozen … but now I can’t find anything.’”

The County Sun. “Price wars are being waged in north Fontana’s upper middle-class neighborhoods as home builders drop prices, hoping to stave off multimilion-dollar losses. They’re competing against one another, but collectively, their products are going up against bank-owned properties, foreclosures and short sales on homes that were built just two or three years ago around the corner.”

“Maybe Centex is more stubborn than other Inland Empire home builders, and it might bode it well. That’s because its smallest Coyote Canyon floor plan, a 2,470- square-foot home, is going for about $430,000 - a price that other builders would’ve drastically slashed by now.”

“But homes being built by Riverside-based Van Daele Development Corp. down the street start are comparable in size and are in the high $300,000s.”

“Even short sales, which are sometimes super deals, are having a hard time living up to their potential. Real estate broker Jeff Hill has about 20 short sales that aren’t moving because banks and sellers are desperately trying to salvage any value they can.”

“One of them, a 2,572-square-foot home, lies a half-mile away from the Centex tract and is on the market for about $315,000.”

“‘They’ve postponed the sale four times,’ Hill said about the sellers. ‘We have an offer, and then they go out and do their own appraisal … and by the time they come back, the buyer finds something else. Meanwhile, the values decline even further.’”

“Sellers should be happy with buyers’ offers, Hill feels. ‘Everyone saves a lot more money that way, including the lender that’s foreclosing,’ he said. ‘Buyers walk away when sellers try to counter the offer.’”

The Press Enterprise. “Maurice E. McLeod, one of three Riverside County businessmen whom the Securities and Exchange Commission has accused of operating a massive real estate scam, accepted a court settlement that could require him to return ill-gotten gains.”

“McLeod, James B. Duncan and Hendrix Montecastro are accused of defrauding at least 95 investors in multiple states of more than $11 million and forcing many of them into foreclosure.”

“The defendants are accused of directing investors to purchase more than $118 million worth of homes, falsifying loan applications so families with middle-class incomes could qualify to buy multiple homes. According to the SEC lawsuit, the defendants would obtain inflated appraisals on the houses and take the excess mortgage proceeds as a fee.”

“The defendants temporarily made the monthly mortgage payments on the investment homes, allegedly in order to attract more investors. In the process, investors became dependent on the organization.”

“During summer 2006, Pacific Wealth began applying for credit cards in the names of individual investors who were directed to draw the maximum amount of cash on each card for additional investments, the SEC suit stated.”

“‘Investors who questioned the wisdom of this strategy were told by, among others, McLeod, that (Pacific Wealth Management) would stop making mortgage payments if they refused to cooperate,’ the lawsuit said.”

“When the defendants ultimately stopped making the mortgage payments on the investors’ homes amid a cooling real estate market, the properties fell into foreclosure.”

The Union Tribune. “At Magnolia at Bressi Ranch in Carlsbad, about half of the 25 homes have been built and sold for prices approaching $2.3 million. But a few months ago, builder Barratt American abruptly halted construction on six more, and a seventh stands completed and unsold. Work never started on five lots.”

“The reason: The locally based builder, like many home owners, lost its financing. ‘We’ve come to a screeching halt,’ said Barratt’s president, Mick Pattinson. ‘We’re looking for money to pay bills.’”

“Today, virtually no one is showing up at model-home complexes. More than 40 percent of buyers canceled their purchases in July, according to one market research firm. And builders and developers have cut their staffs by as much as 90 percent.”

“‘July was absolutely awful,’ said Steve Doyle, president of the San Diego division of Brookfield Homes. ‘It was the worst month I’ve ever seen.’”

“New-housing market analyst Sharon Hanley reported 193 sales at 1,090 projects in the county in July, off substantially from the July 2007 count of 639. Just three years ago, the all-time July peak sales total was 1,578. Early indications are that sales in August were up a bit but not much better.”

“Hanley’s other findings for July: a cancellation rate of 43.1 percent, up from 27.4 percent in July 2007; weekly traffic to sales offices down to an average 22 visitors per tract, a record low for July; and 84.6 weeks of unsold inventory, more than double the 35.3-week level a year earlier.”

“‘What’s hurting right now is builders can’t sell when there are foreclosures only 10 blocks away that are two or three years old,’ Hanley said.”

“Bill Davidson, an upscale builder and winner of many industry awards, said he understands the future will be different. ‘The world is not ever going to be like it was,’ he said. ‘We’re second-guessing, we’re scared.’”

The Malibu Times. “Only about 60 homes have sold in Malibu through the first two-thirds of the year. Steep price reductions are rampant, but the lower prices are still not sufficient to draw buyers.”

“Even during the worst of years of the last down market-from 1991 to 1996, about 150 homes sold per year. In the glory years, it was more than 300. Last year, when the slow down seemed in full swing, about 175 homes sold in Malibu. If records could be traced back to 1960, possibly this is the slowest year since then for number of units sold.”

“Because so few homes are selling, it is impossible to accurately gauge how far prices have dropped, or at what rate. Everyone has a guess. Fifteen percent? Twenty-five? Thirty percent down so far and heading to 50? Hardly any homes that last sold in 2006 or 2007 have resold this year, so that measure is incomplete.”

“About 220 homes are for sale now and only about 100 will sell during the whole year. Conclusion: Rapid price declines.”

From Bloomberg. “The US housing crisis arrived on July 14 at Stonebrook Court, the 26,000-square-foot Tudor-style home of California venture capitalist Kelly Porter. On that day, four months after putting the house on the market, he cut the price by $US7 million ($8.4 million).”

“It’s still for sale.”

“The mansion sits on 7.5 acres in Los Altos Hills. It boasts a wine cellar, Venetian- inspired ballroom, Italian statuary and swimming pool. At the reduced price of $US38 million, the property is a bargain, the owner says.”

“‘It’s worth every bit of $US45 million, and I reduced it reluctantly,’ said Porter in an interview. ‘We touched up every square inch.’”

“While Porter declined to say how much he spent on Stonebrook Court, real estate records show he paid $US5 million in 1999. He did say refurbishing the place cost ‘tens of millions’ of dollars.”

“‘The upper end is not immune to this decline,’ said Kenneth Rosen, chairman of the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley. A worsening economy means ‘these people will have less wealth and they will spend less.’”

“A 10,340-square-foot home in San Francisco’s Pacific Heights neighborhood is for sale at $US14.8 million, 17% below last year’s asking price. A home in Marin County’s Tiburon was acquired in August for $US900,000 less than the $US7 million list price in 2007.”

“‘You have smart buyers seeing a softer market, looking to negotiate a good price,’ said David Lichtman, chief credit officer of First Republic Bank, a San Francisco-based private bank and unit of Merrill Lynch & Co. ‘Nobody wants to overpay.’”

“High-end sellers must lower asking prices by 20% compared with a year ago, when initial listing prices didn’t reflect stricter credit conditions, said James Chalke, a broker in Beverly Hills.”

“‘What’s really happening is that sellers are taking value off their own markup,’ Chalke said. ‘A property is only worth what a buyer is prepared to pay for it.’”

“An 11-bedroom property in the Bel Air section of Los Angeles didn’t attract potential buyers until the asking price dropped by $US10 million, to $US35 million, Chalke said.”

“To be sure, the price cuts may often mean only smaller profits on property acquired years ago. Cinthia Haan bought the Pacific Heights home for about $3 million in 1992 and spent $3 million on renovations, she said. She stands to make an $8.8 million profit at the current asking price.”

“Haan spent three years redoing the six-bedroom house in Pacific Heights. ‘I’m ready to let go now,’ Haan said. ‘I’m ready to sell.’”

The Rocky Mountain News reports from Colorado. “The price of homes in the Denver metro area fell 9.4 percent in June from June 2007, according to a report from a New York firm that tracks the 25 largest housing markets in the U.S. Some local experts are critical of the report. ‘It’s garbage in, garbage out,’ said Lou Barnes, principal of Boulder West Financial. ‘The problem with price analysis is that it is over-weighted with distressed properties. The sales data is as accurate as far as it goes. But the question is: How is the market that is not for sale doing?’”

“Chris Mygatt, president of Coldwell Banker Residential in Colorado, said while the data is interesting, it does not reflect what is going on in popular neighborhoods.”

“‘I would suggest that this information is heavily skewed by all of the properties in places like Aurora and Adams County,’ Mygatt said. ‘If you would take out all of the REOs (real estate owned homes sold by lenders), you would have a much different picture. Homes aren’t losing value in the popular neighborhoods where people want to live. Anyone who thinks they will wait to buy a home in Washington Park, will be paying more a year from now.’”

The Arizona Daily Star. “At the peak of his success, developer Michael F. Teufel had acclaimed projects all over Tucson, earning praise for innovative designs and community accolades for business growth. Then things went bad.”

“Now, Pathway projects across Tucson sit unfinished or with residents complaining of poor workmanship. While Teufel blames the downturn in the housing market, others blame him.”

“In cases where homes are unfinished, buyers say they lost from tens of thousands to hundreds of thousands of dollars in upfront payments. Other buyers whose homes were completed have laundry lists of repairs, including leaking windows, ceiling fans with no switches and hot tubs that don’t heat up.”

“‘I think they bit off more than they could chew,’ said Sky Ranch buyer Lucia Zegarski, who is dealing with stucco cracks.”

“Meanwhile, people who bought homes from Teufel are finding they have limited recourse. Buyers who filed lawsuits are giving up, assuming Pathway has no money to cover any judgment they might win against the company.”

“One buyer, Preston Schrader, paid $38,000 in deposits to Pathway in 2005 for a home and waited for more than a year without seeing construction begin. He ended up losing in arbitration because the contract did not specify when work would start, Schrader said.”

“Judy Westin filed a complaint about her unfinished Aldea del Rey town home after trying numerous times to contact Pathway. The property is partially built and ‘growing tumbleweeds all around it,’ said Westin, who lives in Tennessee.”

“‘Of course, we would just like to have the money back that we put down,’ Westin said. ‘It’s very sad.’”

“A real estate agent who represented Pathway, Scott Niles, said the developer fell behind in the boom, then hit the brunt of the slowdown. ‘The market was so quick,’ he said. Then ‘everything kind of fell off a cliff.’”

The Arizona Republic. “Metropolitan Phoenix was the home-builder capital of the country a few years ago. But the industry has shrunk with the housing market’s downturn. A few home builders, some Valley-based, have filed for bankruptcy. Some smaller home builders have closed their doors. And other builders, including a few large ones, have walked away from empty lots, model homes and entire subdivisions.”

“Several Valley subdivisions have been foreclosed upon. ‘Rumors abound about this builder and that builder,’ said real-estate analyst RL Brown. ‘Subs aren’t paid by a handful of builders. Contracts are renegotiated, layoffs occur. Divisions are consolidated. Management changed. Mortgage brokers close and a bank or two fail. Investigations into unlawful practices grow by the day.’”

“Mortgages Ltd. has gone in less than two years from being Arizona’s largest private commercial real-estate lender to a company plunged into bankruptcy following the suicide of its CEO, Scott Coles.”

“Along with questions raised by the suicide, Mortgages Ltd.’s dramatic fall raises the business question of why a firm holding $900 million in high-interest commercial loans suddenly had to borrow money to stay afloat.”

“‘I can’t figure out how Mortgages Ltd. decided to fund the condo projects it did when it did,’ said Eric Brown, founder of the Artisan Lofts in Phoenix and an analyst with national real-estate consultants Robert Charles Lesser & Co. ‘The timing was bad for most new housing developments.’”

“‘In the end, Coles was probably trying to stem the bleeding,’ said analyst Eric Brown. ‘It’s a very sad and tough situation for many people. Projects were going to him because it was too tough to get money from banks. Coles was aggressive, and it appears he felt he couldn’t lose.’”

“Developers of Downtown condominium project 44 East Broadway are putting the partially finished building on the market, hoping to find a buyer or investor with deep enough pockets to finish the job.”

“‘It’s not a panicky situation,’ said James LeBeau, managing partner in the project. But ‘we can’t let it limp along anymore.’”

“He said, the business partners simply want to find someone with ‘a lot of cash’ to expedite the process. ‘All the hard work is done,’ said LeBeau. ‘All they have to do is put in a lot of money.’”

“‘There is still money for investment nationally,’ said Tucson Mayor Bob Walkup. ‘Your credit has got to be good and your risk has got to be low. Downtown Tucson is a low-risk investment.’”

“In addition to the penthouses, the building would have 30 condominiums priced from about $350,000 to $650,000, LeBeau said. If no big investor or buyer materializes, LeBeau said he plans to finish the building but will probably rent the units out as apartments. ‘That would be plan B,’ he said.”

The Review Journal from Nevada. “New York-based Related Cos. has been hired by Wall Street investment house Deutsche Bank to finish development of the $3.9 billion Cosmopolitan project on the Strip, an affiliate of the bank announced Wednesday.”

“‘The good news from a market perspective is that the project goes forward as opposed to sitting there idle and leaving a big question mark on the Strip,’ said John Knott, executive VP of the Global Gaming Group for CB Richard Ellis.”

“Knott said he assumes Deutsche Bank will continue to evaluate possible partners and investors. The investment bank did not say if the project’s opening will be pushed back from its current late 2009 date.”

“Deutsche Bank has taken over full ownership of the project under an affiliate. A call to the bank’s New York offices asking if the company still plans to sell the project after the credit markets loosen were not returned by press time.”

“This is Related’s third attempt to move into the Las Vegas resort market. Related was a joint-venture partner with Centra Properties on the canceled Las Ramblas project. Slated for 4,000 hotel-condominium units, the project involved actor George Clooney.”

“Related’s Icon luxury condominium project was canceled in November because of rising construction costs. Related also once held a development agreement for the 61-acre Union Park, but it expired when talks with the city collapsed.”

The Las Vegas Business Press from Nevada. “The Meridian, a luxury condo property just east of the Strip, is in turmoil as multiple investors try to evict the company that was renting out their units — in many cases, for illegal overnight stays.”

“Unit owners, many of them absentee landlords, are trying to regain control of their units in order to generate their own tenants. Their rental incomes stopped in July when the county shut down an informal hotel operation at the Meridian. Many owners counted on an onsite rental company to generate funds to cover the cost of their condo mortgages.”

“‘They don’t have use of their property. And they’re not getting rent,’ said lawyer Edward Kania, who is representing 12 Meridian owners.”

“About 400 of the Meridian’s estimated 450 owners are in some degree of financial distress ‘now or soon,’ according to Scott Oelke, a real-estate agent who owns two units at the Meridian.”

In Business Las Vegas. “Some elected officials and business leaders met over two days last week to give their insights on how local governments and community leaders can create a sustainable environment in Southern Nevada.”

“Mike Dwyer, a UNLV professor of environmental studies who participated in one of the sessions as a moderator, says sustainability is a complex concept to implement. ‘It is not rocket science, but it is hard,’ Dwyer says. ‘We have rocket science figured out.’”

“In other news: The number of listings by Realtors continues to be primarily composed of nonowner-occupied units. Vacant units represent 54 percent of the 22,095 homes for sale, according to Applied Analysis. There are 7,279 homes under contract, with 4,259 contingent and 3,020 pending. Forty-eight percent of the contingent units are short sales.”

The Las Vegas Sun. “A Green Valley home with a front courtyard and a bubbling fountain is advertised in the newspaper with 100 percent financing. The ‘Nehemiah’ program is popular because ‘there’s little to no money out of pocket and it’s easier to qualify (than under other programs) in terms of credit,’ said local loan processor Shani Fazzi of First United Mortgage.”

“Despite its attraction to buyers, this seller-funded down payment assistance program will expire Oct. 1. ‘We noticed as time went on that these loans were failing at two or three times the (overall) frequency,’ HUD spokesman Brian Sullivan said. ‘It’s not enough to put people into homes. You’ve got to keep them there.’”

“Local real estate agents say the program has enabled families to buy homes they may not have been able to afford otherwise.”

“‘When we get rid of this program, a lot of people will have to rent,’ said agent Teresa McCormick, who with husband Paul posted the advertisement for that home in Green Valley.”

“That screeching sound heard throughout Las Vegas Valley is the brakes being applied not only to large-scale Strip projects, but to many of the residential and mixed-use projects planned for the outskirts of town and outlying rural areas.”

“Expansive master-planned communities such as Coyote Springs 50 miles northeast of Las Vegas and White Hills in northern Arizona advertised the lifestyle and amenities associated with Summerlin and Anthem — poster neighborhoods in Las Vegas — at a significant discount in home prices.”

“Focus Property Group, which snapped up thousands of acres at public land auctions, sunk more than $1 billion into the development of the Mountain’s Edge, Providence and Inspirada communities. The company also made a play in Pahrump with about 1,000 acres.”

“Whether Las Vegas is on the verge of a boom or bust is a matter of opinion.”

“‘The projects that were marketed to come on line and haven’t … am I going to suggest that those projects won’t get built? No way,’ housing analyst Dennis Smith said. ‘Do you think Las Vegas will stop growing? Does anybody really think Las Vegas will stop growing?’”

“Builders at Inspirada are in trouble. Utah-based Woodside Homes may be near involuntary Chapter 11 bankruptcy, and Kimball Hill Homes filed for bankruptcy earlier this year. Toll Brothers, Meritage Homes and Beazer Homes are also partners in Inspirada.”

“Home building at Coyote Springs has been delayed 18 months and prices have yet to be determined, said Klif Andrews, Nevada division president of Pardee Homes.”

“The golf course is finished and open for play and some of the basic infrastructure is in place, including 21,000 feet of sewer lines and 11,000 feet of water lines, A water treatment plant is finished and a separate wastewater and sewer plant is near completion.”

“‘You’ve got to spend $30 million on wastewater treatment before you can hook up one toilet,’ Andrews said. ‘That’s why houses will always appreciate because it’s difficult and expensive to build in outlying areas.’”

Please visit the HBB Forum. Post off-topic ideas, links and Craigslist finds here.

The Santa Cruz Sentinel reports from California. “Tuesday was a record-breaking day for foreclosures in Santa Cruz County. Compared to this time last year, foreclosure sales are up more than 300 percent, topping 600. Tuesday’s large number of foreclosure auctions was due in part to Labor Day, and partly because there is no slowdown in the number of people with adjustable-rate mortgages falling behind on payments.”

“A small crowd gathered as Liese Varenkamp, who handles auction sales for lenders, read off addresses and asking prices for the properties, many purchased in the 2005 and 2006 boom years. Ten were sold back to the lenders after no one bid. Last year, four to five foreclosure sales took place in a typical week.”

“Another 21 sales were postponed, six because the borrowers filed for bankruptcy. In the rest, the borrowers and lenders are talking to see if there are options other than foreclosure.”

“Usually foreclosure auctions wrap up in a half hour, but Tuesday’s took nearly 90 minutes as Varenkamp waited for instructions from lenders as to asking prices for 16 properties.”

“‘I’ve never been here this long,’ she said, as the clock approached 3 p.m.”

“In Santa Cruz County, default notices to delinquent borrowers have grown steadily, topping 50 a week, according to the Santa Cruz Record. The foreclosure pipeline is even bigger in Monterey County. Varenkamp said the number of default notices filed last week reached 191, the second highest number in that county’s history.”

The Sun Post. “The abundance of dry grass and weed-filled yards of foreclosed houses are keeping code compliance officers busy, but a new state law could help them force lenders to maintain their properties.”

“‘It’s obviously a big problem,’ Lathrop Code Compliance Supervisor Lane Avilla said. ‘Last month (the number of foreclosures) was pretty high, and April was pretty high. It hasn’t slowed down. We average 15 a week.’”

“‘It doesn’t make the community look very good,’ said Shawna Snodgrass, who moved to Lathrop recently after she bought a foreclosed home. ‘Our grass was dead, but it was green before we moved in. I think the realtor did it.’”

“‘It’s terrible,’ said Phyllis Maxwell. ‘The real estate agents have too many to monitor. Fifteen houses (on Daffodil Hill) are foreclosed and we’re getting ready to go too. It makes you feel terrible.’ Maxwell added that she feels her entire neighborhood is disappearing.”

“City officials criticized TCN Properties last week for failing to uphold its promise to build parks in Mossdale Landing, despite protests from the developer that the project is unrealistic given the state of the housing market.”

“But it appears that residents will get the parks anyway, as they will soon be built by the bonding company that insured the project.”

“Assistant City Manager Cary Keaten told the council that Mossdale Landing residents have already been paying for the parks’ maintenance through the various fees associated with purchasing a home.”

“‘TCN Properties already sold all the land for the houses to KB Homes and they are in the process of building all the houses right now,’ Keaten said. ‘They’re almost done.’”

“The issue came to the council on Tuesday, Aug. 19 when building industry lobbyist John Beckman, who formerly worked as a business developer for the City of Lathrop, delivered a letter to the council on behalf of TCN.”

“‘Considering the severe downturn in the housing market and the exceptionally large number of foreclosures which have occurred in Lathrop, it would be a wise decision for the City of Lathrop to reconsider the timing of new parkland development,’ Beckman read.”

“Public Works Director Steve Salvatore said there are 10 parks slated for the Mossdale Landing area. Five parks have been accepted by the city, two have been only partially accepted because their public bathrooms remain unfinished, and the three promised by TCN remain unbuilt, he said.”

The Merced Sun Star. “The Merced County Board of Supervisors voted Tuesday to accept plans for the largest housing development ever proposed in Merced County. If it’s built as envisioned, Laguna San Luis would add 16,000 homes and 45,000 people during the next three decades to the area just west of Los Banos and south of Santa Nella.”

“Three other massive housing developments are also in the works on the county’s Westside. If all goes as developers plan, the four projects would add about 80,000 people over the next 30 years to the region just west of Los Banos, now home to a few thousand.”

“During a public hearing before the board’s vote, a handful of people spoke against the project. They questioned why the county would consider building more houses when countless homes already stand empty here and dozens of subdivisions sit half-built and basically abandoned in the wake of an unprecedented market meltdown.”

“‘For the last 20 years, and especially the last 10, our collective elected officials have brought a colossal housing bust that has made national and international headlines,’ said Bill Thompson, secretary-treasurer of the Merced County Farm Bureau. ‘Why are we planning for more people when there is no clear and present need?’”

The Tribune. “Real estate developer and broker Patrick Aurignac has bought another building in downtown San Luis Obispo for $1.125 million. And he’s developing a 16-unit condo project called Campus Point Townhomes, although that project is outside the San Luis Obispo downtown core.”

“The latest purchase is 745 Higuera St. ‘When you consider how dynamic and attractive San Luis Obispo is - its low congestion and crime, its great schools and its location - it’s a lot like ocean-front property; there’s only so much of it, and I believe the value will only continue to go up,’ Aurignac said.”

From CNN Money. “A rock-bottom price just isn’t enough for buyers these days - it’s a starting point. If the furnace is out of date, they’ll demand a new one. Cracked driveways have to be repaved, and dirty carpeting torn out and replaced. All at the seller’s expense.”

“Buyers are in the driver’s seat and they know it. They’re using that leverage to pry more concessions out of desperate sellers than they ever dreamed of during the bubble.”

“‘Now it’s my turn,’ is the attitude,’” said Mike Byrd, a real estate agent in San Luis Obispo, Calif. ‘Some buyers are really putting the screws on.’”

“‘[During the boom] buyers usually accepted the property as-is, and we even occasionally offered to pay the seller’s state and county transfer taxes,’ said agent John Sullivan, who is president elect of the National Association of Exclusive Buyer’s Agents. ‘No more.’”

The Ventura County Star. “After nearly three decades in business, Ventura Volvo shut down Friday. ‘We’re closing today because the economy is so bad and we can’t sell enough cars to make a profit,’ said owner Chris Norstedt.”

“Ventura Volvo is the third local dealership to go out of business over the past few years. Ford of Santa Paula closed in March, 18 months after Ojai Ford shut down. Ventura County car and truck sales have tumbled according to Western Automotive Consultants, a Ventura firm that tracks new vehicle registrations.”

“‘It’s just the way it is,’ Norstedt said. ‘There’s a lot of people who’ve lost their homes and lost their jobs. The country’s a mess and we’re just part of it.’”

The Daily Breeze. “The continued high cost of housing hurts young workers, the middle class and businesses by forcing employees to live far from their jobs, according to a report released Tuesday by the Los Angeles Business Council.”

“Despite a building boom that created more supply, and the current foreclosure crisis that has pushed down prices, too few residents can afford to live near their places of work.”

“‘A lack of housing near job sites consistently serves as one of the major obstacles to doing business in this region, and the situation is getting worse,’ said Antonio Manning, a VP for Washington Mutual and one of the report’s authors.”

“The Westside, Santa Monica, Santa Clarita, Pasadena and San Fernando Valley all boosted home construction to keep pace with new jobs. But the report doesn’t say whether the new homes in those communities were affordable for the people working in those new jobs.”

“Fewer than 11 percent of the homes for sale during the first quarter of 2008 were affordable to families earning the median income of $53,000.”

“‘Where it gets tricky is when you talk affordable housing,’ said Mary Leslie, the council’s president.”

The Warwick Beacon reports from Rhode Island. “With statewide home sales down by 5 percent from last year and the median single-family home price down 12.5 percent from $280,000 in July of last year to $245,000 this year, many realtors miss the days of the housing bubble. Over 26 percent of all houses sold from April until July were either foreclosed properties or short sales-both of which sell at far below the market price.”

“Robert Scaralia, president of the Rhode Island Realtors Association said it’s an exciting time to be a first-time homebuyer. But realtors have a reputation for being eternal optimists. When the housing prices are down, they say it’s a great time to be buying homes. When prices skyrocket, as they did beginning in 2003, they incessantly point out that it’s a great time to be selling houses.”

“‘The affordability is back for the first time home buyer. I’ve been doing this for over 20 years, and I have never seen a better opportunity for people to get into home ownership for the first time,’ said Scaralia.”

“Richard Torres, a loan officer for Countrywide Financial who works in Warwick, said he’s seen a recent pickup in business. More people are seeking loans than a year ago, but the amount of money they’re looking for has decreased.”

“The old ways of no credit check loans have given way to solid background checks, said Torres, and he thinks that’s a good thing.’

“‘There are a lot of people who come in here and say, ‘oh my credit is good, but when I check it, it’s far from good.’ And these people would have gotten the loans in the old days,’ said Torres.”

The Republican from Massachusetts. “Springfield had 61 mortgage foreclosures in July, the second highest number of any city in the state behind Worcester’s 68. The Warren Group released mortgage data from across the state today. Springfield had 56 foreclosure deeds filed in June and 47 filed in July 2007 for an increase of nearly 30 percent year over year.”

“‘The numbers about foreclosures are no surprise,’ said Kevin M. Sears, a Realtor in Springfield. He said he’s seeing a number of owners attempt a short sale only to fail.”

“Sometimes, large lenders can’t approve the short sale and the house goes up for auction. It happened this summer to a Sears client with a home in the East Forest Park neighborhood. ‘I just drove by there the other day and the grass is up to my knees, and that’s just the beginning,’ Sears said.”

“Sears said squatters and thieves often target vacant homes. Foreclosed properties are also driving down the real-estate prices, especially the prices paid for multifamily homes because many multifamily homes are getting foreclosed upon.”

“‘It’s noticeable when there is a glut of bank-owned properties that are listed for 60 percent of what market properties are listed for,’ Sears said.”

The Boston Herald from Massachusetts. “Lenders took legal ownership of nearly 8,000 Massachusetts homes during 2008’s first seven months - more property titles than banks seized for mortgage nonpayment in all of 2007, new figures show.”

“‘Foreclosures (continue to be) a serious problem,’ Warren Group CEO Tim Warren said. ‘I think there are still a lot more foreclosures to come. Median (house-sale) prices are down 10 percent so far this year, and that can’t be good news for foreclosures.’”

The Boston Globe. “The Carruth, a mix of affordable apartments and market-rate condominiums in Dorchester, opened earlier this year, as the market for condos had turned sharply downward. Sales of the 42 condos in the building languished, with only three sold to date.”

“So, developer Trinity Financial Inc. of Boston decided to offer the units as a variation of rent-to-own - leases with an option to purchase at a potential discount.”

“Rent-to-own arrangements typically are offered in newly built condo developments in which units are not selling or are selling slowly.”

“‘It is getting more difficult to sell at the speed developers need to recover their investment,’ said Jon Gollinger, East Coast CEO of Accelerated Marketing Partners. ‘There is cash flow that is needed when they are sitting there empty.’”

“‘You see it in Florida and other areas where there are more distressed properties,’ said Jesse Holland, president of Sunrise Management & Consulting in Latham, N.Y. ‘Often a developer has sold some of the units and can’t sell any more. You can’t go forward and you can’t go back.’”

The Westminster Advocate from Maryland. “Jill and Jim Gallagher placed their Westminster home on the market nearly 10 months ago, and it’s still sitting there today.”

“In today’s real estate market, however, this is nothing out of the ordinary, as houses are staying on the market much longer than in previous years before the real estate bubble burst and the credit crisis began, said Russ Blackburn, president of the Carroll County Association of Realtors.”

“‘At the current time there’s about 1,300 homes on the market in Carroll County,’ Blackburn said. ‘That’s higher than usual.’”

“Blackburn said more houses are continuing to add to the inventory than are being disposed of. In July, 281 new county listings went on the market, while just 90 properties went under contract to be sold during that same month, he said.”

“Home values are also down from recent years in today’s market, and Blackburn blamed numerous variables for that. Factors contributing to the lower property values include the higher housing inventory, inflation, the uncertain economy, sellers competing with foreclosures and sellers taking any ‘reasonable offer’ after an extended amount of time on the market, he said.”

“Jill Gallagher said she thought her home was listed at a fair price, with the $310,000 asking price below it’s tax assessment. ‘We think that we’re asking a fair price, however if it sits another six months we may consider lowering it,’ Jill Gallagher said.”

“Prior to listing the house online, Jill Gallagher said they placed a sign in the front yard and used a broker in Virginia to get multiple listings for the house. ‘It seemed as though houses weren’t moving one way or the other whether you listed it with a real estate agent or not,’ Jill Gallagher said. ‘Financially we can save a few thousands [of dollars] and it just made sense.’”

“Two offers have been made on Jill Gallagher’s house so far, she said, but in both incidences the buyers couldn’t get the financing they needed so the offers weren’t able to materialize into a deal.”

“According to Blackburn, banks are being more selective about giving out loans these days. ‘You can throw their previous requirements out the window,’ he said.”

The Frederick News Post from Maryland. “Amid the housing crisis, the president of the local real estate association said the media are making the problem worse and should spread more uplifting messages.”

“Larry Riggs, president of the Frederick County Association of Realtors, argued in a recent newsletter to his organization that the media should work with agents for the good of the country to increase consumer confidence.”

“The media is no longer reporting news but is practicing ’social engineering’ when it comes to reporting the housing market, Riggs said. ‘If they don’t like those in power, they will put a certain spin on their reporting, and sure enough society will produce the fruit of the bad news they are listening to,’ Riggs said.”

“Journalism and business experts said media coverage stems from the troubled housing market. ‘What’s going on as far as declining housing prices is a reflection of economic fundamentals,’ said Steve Pilloff, a Hood College management professor. ‘If the media is being accused of painting a doom-and-gloom picture, that’s a reflection of what’s going on.’”

“Riggs partly blames the media for some consumers not buying homes. ‘The reason they aren’t is because they are afraid of the present market because of the press,’ Riggs said. ‘That’s why the number of foreclosures in relation to all sold (homes) is high.’”

“The real estate industry has an interest in portraying an environment that will sell houses, said Bernie Kohn, president of the Society of American Business Editors and Writers, a nationwide organization that represents business journalists.”

“‘That’s not our duty,’ Kohn said. ‘Our duty is to inform consumers about the reality of what’s going on, not to put spin on it for the benefit of the real estate industry.’”

“Reporters are focusing more attention on the economy, said Al Weinberg, a Hood College journalism professor. Journalists should remain objective, he said.”

“‘What’s the alternative? The news media should not be the chamber or commerce or the boosters of the economic forces of the country,’ Weinberg said. ‘They’re supposed to simply report what they perceive as reality.’”

“That isn’t stopping the real estate industry from trying to convey the benefits of the current market. NAR started its Surround Sound Campaign in March to encourage real estate agents to speak at public events and talk to media outlets, said NAR spokeswoman Liz Giovaniello. About 1,500 agents took classes related to the campaign, but no classes were held in Frederick.”

“‘We’re not turning folks into cheerleaders and denying there is some pain out there,’ Giovaniello said. ‘We really want buyers, especially those on the fence, to understand there are opportunities out there.’”

“Consumers aren’t always getting the full picture of the market, Giovaniello said. ‘We tell Realtors to not sit around and complain about the news coverage,’ Giovaniello said. ‘We say, ‘Let’s get out there and make sure your story is told.’”

“National headlines don’t always reflect local markets, Giovaniello said. ‘What troubles us is when local papers don’t have reporters tell local stories, and just run an AP story,’ Giovaniello said. ‘We feel like the AP story might give an OK overview of the national picture, but it doesn’t paint the picture of the local market.’”

“The association’s campaign focuses on low interest rates, decreasing home prices in most areas and a greater selection of homes on the market, Giovaniello said.”

“NAR is simply doing its job to represent real estate agents, Kohn said. ‘It’s what you do on behalf of an industry that faces tough times,’ Kohn said. ‘You have to find that little bit of silver lining.’”

The Virginia Pilot. “Nearly a year after work halted on Granby Tower, the city is finally moving to clean up the construction site, which some officials describe as an eyesore. Surrounded by chain-link fence, the corner of Granby Street and Brambleton Avenue is stark. There are deep holes filled with water, piles of discarded wood and steel and weeds growing 6 feet high amid rubble.”

“Cement pilings meant as the foundation for the 34-story, $180 million condominium project lay discarded.”

“The man behind the project, developer Buddy Gadams, lost his financing last September amid the meltdown of the credit markets, and has been pursuing new investors ever since. City officials have been steadfastly supportive.”

“However, Mayor Paul Fraim took the first step toward cleaning up the site earlier this summer. Gadams complied. By the middle of the summer, city officials began telling Gadams to do more.”

“‘The time is growing closer where the city will have to take some affirmative steps to reclaim the street, if Buddy hasn’t made real progress,’ Fraim said.”

“City officials say that cleaning up the site is necessary for the survival of businesses operating in the area. Keith Large and Richard Grether, owners of the Oasis restaurant at York and Boush streets, say their business has dropped 40 percent since construction for Granby Tower blocked York Street.”

“Responding by e-mail, Gadams said Tuesday he continues to pursue financing. If it hasn’t happened by the end of this month, the City Council may take stronger action.”

“‘At some point we’ve got to say, you’ve got 30 days to get your financing, or we’re going to take all of the barricades down,’ Councilman Don Williams said.”