Quote of the Day
"All right, time to scare the neighbors." - Damon Borozny joked to the passengers about to view a house from a foreclosure bus tour he was leading around Atlanta, Georgia.
"There are people who move in and know exactly who to contact and say 'If you want this house, why don't you come out here and offer me cash.'" - Detective Erin Camphouse of the Los Angeles Police Department's Real Estate Fraud Unit, on the rising rate of squatters who take over foreclosed homes to squeeze money out of lenders who want the keys.
Fairfax May Offer Deal On Foreclosed Homes. Virginia: Fairfax County is developing a program to allow 100 first-time home buyers to purchase foreclosed houses at cut rates to bolster the county's affordable-housing efforts and help prevent the region's mortgage crisis from causing neighborhood decline… County housing officials have proposed spending as much as $6.4 million over two years to help such middle-income professionals as teachers, police officers and firefighters afford the region's housing. With county loans, qualified buyers would be able to purchase the properties directly from participating banks at below-market prices and be eligible for low-interest mortgages.”
Foreclosure Bill Seen Passing Congress. “U.S. Rep. Barney Frank, chairman of the House Financial Services Committee, thinks congressional Democrats and Republicans will soon agree on a forclosure-prevention package that President Bush will sign despite a previous veto threat… Senate Democrats and Republicans yesterday hammered out a compromise plan that omits housing aid that the House package included.”
An Equity Kicker. “Trading future appreciation for lower payments can work. In Australia, a company called Rismark provides homeowners with an amount equal to 20% of the value of their home. In return Rismark gets 20% of the eventual sale price plus another 20% of the appreciation… Many homes are underwater, and so a 20% claim on sale proceeds that stands second in line behind a bank's mortgage claim isn't worth much. But in this case the appreciation sharer is the bank itself, and the bank stands to lose money if it [repossesses] the property.”
Foreclosures 4 In 10 Socal Home Sales. “DataQuick: Nearly four out of every 10 homes sold in Southern California last month was formerly a home foreclosed upon by a lender… Bargain hunting boosted sales to their highest level since the credit crunch hit in August and cut the median price of a Southern California home by nearly 24% from the peak… The percentage of home sales financed with “jumbo” loans fell to 15.1% in April. Before the credit crunch… nearly 40% of SoCal home sales were financed with jumbos. The typical monthly mortgage payment in the region fell 33.1% from the June peak, down to $1,716 last month.”
Soaring Foreclosure Numbers Mean More Prey for Vulture Funds. “As more homes fall into foreclosure, banks are packaging pools of foreclosed homes and wholesaling them to private equity “vulture funds” for pennies on the dollar. While the phrase vulture fund conjures up cold-blooded opportunists, the funds are buying assets that banks are desperately trying to move off their books to free up capital. Basically, anyone in the market with $3M-$100 million or more to buy a block of REO, or real estate owned, properties could be called a vulture fund. National investors such as The Blackstone Group (NYSE:BX) and Lehman Bros. Inc. (LEH) have reportedly purchased billions of dollars of foreclosed properties through private equity funds.”
Foreclosure Becomes $2.8M Showcase In Spring Parade Of Homes. Plainfield Twp., Michigan: “In 2002, James Eerdmans picked up a house out of foreclosure for $146,000. On a hill off Grand River Drive NE, the turreted home sat on 2 1/2 acres and featured an expansive view of Versluis Lake. As a mortgage broker and real-estate agent, buying homes and fixing them up to rent or sell is something he did often… His investment now includes 16 acres, a 9,000-square-foot main house, a 1,200-square-foot guest house and a price tag of about $2.8 million.”
When Lenders Need Menders. San Diego, Calif.: “When the housing slump cost him his job as a home-building executive, Jay Kerr turned to the burgeoning foreclosure market to jump-start his stalled career: Repairing damaged foreclosure homes for the lenders who have reclaimed them… Kerr, who now serves as president of MHS Inc., a San Diego residential contracting firm that began maintaining bank-owned properties in October… Although the number of foreclosures in March dropped about 21% below February's mark, the rate of mortgage failures during Q1 more than tripled over Q1’07, increasing from 1,182 to 3,666.
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