Sunday, April 27, 2008

US Households are bankrupt without help

More U.S. Households
Seek Help With Utilities

By REBECCA SMITH
April 26, 2008; Page A5

More U.S. households are falling behind on their utility bills and seeking public assistance, according to groups that arrange for help. They fear a record number of families will face utility shutoffs in coming months, reflecting fallout from a distressed housing market and rising prices for food and energy.

"The underlying problem is many families are becoming poorer and have to pick which bills to pay," said Mark Wolfe, executive director of the National Energy Assistance Directors' Association, a group that represents state directors of energy-assistance programs. Some states are attempting to buy some time by delaying the date at which utilities are allowed to begin disconnections. That is often prohibited during the winter because it could be life-threatening. Connecticut extended a moratorium on shutoffs to May 1 from April 15 this year.

"There was concern it still would be cold when people had their service shut off," said Carlene Taylor, manager for energy services at the Connecticut Department of Social Services.

Some states have seen double-digit increases in the number of families receiving public assistance to pay their utility and fuel bills. The increases go as high as 80% in Nevada and 44% in Oklahoma. States control how they dole out their share of the $2.5 billion in federal funds distributed under the Low Income Home Energy Assistance Program. Many states are asking Congress to provide more funds for energy assistance.

A preliminary survey by the National Energy Assistance Directors' Association found that the number of families receiving federal energy-assistance funds is the largest in 16 years. For the 2008 federal fiscal year, it topped 5.8 million, a 3.8% increase over fiscal-year 2007.

Preliminary data from the association found that delinquencies are rising. Among the states showing increases were California, with 1.7 million households behind by $300 million.






Chico, Northern California, Real Estate, Property, Auction, sell, sale, NorCal, Redding, Oroville, Tehama, Orovile, Corning, Orland, Butte, Paradise, Magalia, Yuba, Sutter, Yuba City,

More U.S. Households

By REBECCA SMITH
April 26, 2008; Page A5

More U.S. households are falling behind on their utility bills and seeking public assistance, according to groups that arrange for help. They fear a record number of families will face utility shutoffs in coming months, reflecting fallout from a distressed housing market and rising prices for food and energy.

"The underlying problem is many families are becoming poorer and have to pick which bills to pay," said Mark Wolfe, executive director of the National Energy Assistance Directors' Association, a group that represents state directors of energy-assistance programs. Some states are attempting to buy some time by delaying the date at which utilities are allowed to begin disconnections. That is often prohibited during the winter because it could be life-threatening. Connecticut extended a moratorium on shutoffs to May 1 from April 15 this year.

"There was concern it still would be cold when people had their service shut off," said Carlene Taylor, manager for energy services at the Connecticut Department of Social Services.

Some states have seen double-digit increases in the number of families receiving public assistance to pay their utility and fuel bills. The increases go as high as 80% in Nevada and 44% in Oklahoma. States control how they dole out their share of the $2.5 billion in federal funds distributed under the Low Income Home Energy Assistance Program. Many states are asking Congress to provide more funds for energy assistance.

A preliminary survey by the National Energy Assistance Directors' Association found that the number of families receiving federal energy-assistance funds is the largest in 16 years. For the 2008 federal fiscal year, it topped 5.8 million, a 3.8% increase over fiscal-year 2007.

Preliminary data from the association found that delinquencies are rising. Among the states showing increases were California, with 1.7 million households behind by $300 million.






Chico, Northern California, Real Estate, Property, Auction, sell, sale, NorCal, Redding, Oroville, Tehama, Orovile, Corning, Orland, Butte, Paradise, Magalia, Yuba, Sutter, Yuba City,

Wednesday, March 19, 2008

Michael Jackson Keeps Neverland - Against All Auction Odds

But... Singer's absence leaves ranch's future in doubt.

By John Rogers

LOS OLIVOS, Calif. – Michael Jackson still has Neverland, having cut an 11th-hour deal to keep it off the auction block – for now.

But the magic that once made the financially troubled entertainer’s 2,500-acre paradise in the rolling hills of central California’s wine country one of the most talked-about places on Earth seems to have vanished along with its reclusive owner.

Jackson hasn’t been seen in this bucolic area of oak-studded hills since he was acquitted in June 2005 of molesting a 13-year-old visitor to his estate, and his absence leaves the future of Neverland, a sort of Hearst Castle for 12-year-olds, in doubt.

“We’re all, of course, wondering what’s going to happen. We’ve heard rumors but we don’t know anything,” said Kim Morrison, one of the administrators of a private school located just across the road from Neverland.

One of those rumors has soccer star David Beckham interested in the property.

“I wouldn’t mind having a new neighbor. It would be nice to have Beckham there,” said Morrison, laughing, although she quickly added that Jackson “was always a good neighbor.”

The pop star’s attorney, L. Londell McMillan, said his client has worked out a confidential agreement with Fortress Investment Group LLC allowing him to retain ownership of the estate.

Whether he’ll keep it for long remains to be seen.

A public auction of Neverland was postponed until May 14 by “mutual agreement” of Jackson and his creditors, said Julie Wagner of Financial Title Co. of San Francisco, the firm that filed the default papers.

“That allows us to refinance or sell the property,” Jackson’s attorney, L. Londell McMillan, said Friday. He added that Jackson is looking at both options.

“We expect to have this matter resolved well before May 14,” said McMillan, according to FoxNews.com .

Meanwhile, Jackson is said to be living in various places, including overseas, and his family has said that when dozens of sheriff’s deputies raided the place in 2003 they destroyed the fond feelings he once had for Neverland.

Jackson, then just 29, was at the height of his career when he bought Neverland, naming it after the mythical land of Peter Pan – where boys never grow up. He had become a pop superstar before his 12th birthday, and he has said he created Neverland – bought from real estate baron William Bone in 1988 – in an effort to obtain the childhood he never had.

Soon he had installed a merry-go-round, bumper cars, a Ferris wheel, roller coaster, a game arcade and a private train to rival that of Disneyland’s. He brought in a zoo that included flamingos, giraffes, elephants, orangutans and reptiles and brought in a veterinarian and snake handler to care for them.

“It’s like stepping into Oz,” he once said. “Once you come in the gates, the outside world does not exist.”

These days all is quiet at Neverland except for the squawking of a few of exotic birds that continue to roost in the trees. The other animals are gone, and the only outward thing to distinguish Jackson’s home from any other is the guard shack with its satellite dish just inside the locked front gate.

“Nobody is living here,” says a friendly but otherwise reticent guard who has been ordered not to talk to anyone.

The shuttered amusement park sits out of sight, but recent aerial photos show it beginning to fall into disrepair.

It’s a far cry from Jackson’s heyday in the 1980s and ’90s, when hundreds of children might be playing there.

“People would line up for a quarter mile or more just to get in the gate,” recalled longtime resident Carol McCarley, out for a morning walk past the ranch.

Although he was rarely seen around town, many say Jackson always gave off the impression of a friendly neighbor.

When a rattlesnake would get into a classroom at The Family School, Morrison said, a call to Neverland would bring the snake handler over to dispose of it. If a child got hurt on the playground, the ranch doctor and Neverland’s own fire department would arrive sooner than the local paramedics.

Jackson, meanwhile, would invite children by the thousands to enjoy the ranch.

Many were disadvantaged or seriously ill. Some were simply local school kids lucky enough to be granted a field trip to Neverland.

“My son knew Michael’s nephews and would hang out at the ranch a lot. It was a wonderland for kids,” said Skip Biolley, taking a break from putting a fresh coat of paint on J. Woeste’s knickknack shop in the heart of downtown Los Olivos, an area that stretches all of two blocks in one direction and two in another.

“He had nothing but good experiences there,” Biolley said of his son, adding the family remains friendly with one of the nephews.

Jackson’s presence in Neverland and his financial empire began to unravel when one of his visitors accused the pop star of molesting him.

His trial, coupled with his often bizarre public behavior, turned him into a pariah in the eyes of many.

But not in this town of 1,000 residents 150 miles north of Los Angeles. Here, it is hard to find anyone who will say a bad word about Jackson. Some, like Fred Chamberlin, whose ranch abuts Jackson’s, believe he was the victim of an overzealous prosecutor and are quick to note he was never convicted.

Now that he’s gone, people are torn in trying to decide who their new neighbor should be.

Although Jackson’s presence sometimes brought in gawkers who were a nuisance, Biolley noted that having a pop superstar does add a certain cachet.

“Maybe Angelina Jolie and Brad Pitt will buy it for their kids,” he speculates.

Wednesday, March 5, 2008

The bull behind the mortgage crisis.

[Before you read this article... I think it's a bunch of excuses and CRAP!]
It reads like a bunch of excuses from a very small percentage of the population.
Keep in mind ** over 94% of all mortgages are current**
I personally have been involved in contacting mortgage lenders, if you know what they need and do not pretend... you can make big forward progress.

So... Read the article below and decide for yourself...

Sunday, January 13, 2008

And Gretchen Morgenson has real live scientific evidence to prove it:

BUT it is possible to get a feel for what is happening on the ground from a new survey of 2,400 real estate agents sponsored by Inside Mortgage Finance Publications. The survey taps into the outlook of people who see troubled borrowers firsthand, when they try to sell their homes before foreclosure occurs.

For example, agents participating in the survey confirmed what many borrowers say: that loan servicers are downright unresponsive. This is especially true when distressed owners try to sell their homes before being put through the trials of foreclosure. When they sell at a price that is lower than the outstanding mortgage debt, that is known as a short sale.

Asked how servicers could streamline such sales, one said: “Allow you to go directly to the loss mitigation department without having to speak or argue with eight people before they finally give in and transfer you.” Another said: “Respond to offers within five business days — they are killing the market by taking upwards of three months to respond to an offer.”

A third participant said: “Answer their phone, make it easier to talk with the appropriate people, instead of playing Mickey Mouse games. I have never understood why these companies who are owners of a defaulted loan do not make it easier to communicate with agents who are trying to sell these homes.”

Thomas Popick, principal at Geosegment Systems, the designer of the survey and a supplier of data to financial services firms, said its findings show that loan servicers are averse to short sales, even though they may be the best solution for many borrowers, lenders and the overall real estate market.

“In many cases, loan modifications — no matter how generous the terms — only delay foreclosures on properties where the mortgage balance far exceeds the current property value,” he said. Homeowners who try instead to sell “know they cannot afford the property and are trying to do the responsible thing — sell the property to someone else who can afford it.”
Mr. Popick, if they were selling the property to someone else who could "afford it," would we be talkin' short sale here? Do you folks actually listen to yourself talk?

It seems like a good time to discuss short sales in simple, basic terms that everyone can follow without moving their lips. First of all, anybody at any time can sell a home for less than the amount owed on it. There is no law against this. However, the buyer will not get clear title until the lender is either paid in full from other sources that make up for the shortfall, or agrees to "settle for less" and release the lien with less than full payment. So when we talk about "short sales," what we really mean are the ones where the lender is being asked to just take less than a full payoff of the loan while releasing the lien.

Why would any lender accept a short sale? Well, the idea is that a short sale is a form of loss mitigation or workout: the lender (investor) is presented with a choice between a smaller loss in a short sale or a larger loss in foreclosure, so accepting the short sale "mitigates the loss."

The first thing you need, then, is a lender who believes that it would have to foreclose, if it doesn't approve the short sale. Traditionally, you see, short sale offers come up when borrowers are already delinquent, and have probably already been having some contact with the servicer's collection department, and the idea of possible foreclosure isn't coming out of the blue for any party. In cases like this, even a cruddy servicer will probably have already given this borrower a contact in the default servicing department somewhere who, when reached on the phone, will have access to logs of the previous contacts and be able to respond to the idea of a short sale without being unduly startled.

What we seem to have going on, at least in some cases here, are borrowers who are not delinquent, who have attempted to sell the property, who have ended up with no offers except short ones, and whose Relitters therefore dial up the 800 number for the servicer, wanting someone who can make a deal, right now, soup-to-nuts in five days. Strangely enough, they're talking to your basic customer service rep who doesn't make short sale deals. And the CSR doesn't just transfer them to the Loss Mit Squad because, well, the loan isn't delinquent, which the CSR can see just by typing in a loan number and looking at the monitor. Are you likely to get someone saying, "Um, are you sure we're talking about the same customer?" Yes. You are likely to get that. Can you see why?

You can call this "Mickey Mouse" all you want, and we all know there's plenty of bureaucratic nonsense all over the corporate world, including but not limited to mortgage servicers. But the first necessary condition for "loss mitigation" is "evidence that loss will occur." Nobody takes the lesser of two evils unless both evils are on the table. If you have never been delinquent on your mortgage, and your financial situation has not changed since the loan was made (you still make what you made then, your non-discretionary expenses are still what they were), and you don't have some other circumstance like a forced job relocation, your servicer isn't exactly being dense by wondering why we're already supposed to be negotiating a short sale.

Every servicer, even the cruddy ones, has a process in place for dealing with this situation. If you "cannot afford the property," as Mr. Popick says, you are going to have to call your servicer and explain that you will very soon default, if you have not missed a payment already. The servicer will request financial information from you--possibly more of it than it asked for when the loan was made, but that's where we are. The servicer will also order an appraisal with an interior and exterior inspection. If you do not allow an appraiser (or broker for a BPO) access to the interior of your home, your case will go directly to the foreclosure department without passing "Go." If you have already listed the property, the servicer will need all the information from you about the listing date and the list price to determine whether your property has been "exposed to the market" adequately.

No servicer will ever, as far as I know, approve a short sale without asking you to pay something--even if it's just a token amount--in cash to offset the lender's loss. That might take the form of signing away your rights to your current escrow balance. It might mean you write an actual check. A large part of the reason that the lender makes you go through the part about sending copies of your bank statements to the Loss Mit people before a short sale is approved involves the lender making sure that you are either really a hardship case, or if not, that it removes some money from your pocket. Short sales are not actually "free puts."

You will absolutely be required to show evidence that the proposed short sale is an arm's length transaction. If the buyer of the property is getting "creative financing" from somebody in order to make the deal work, count on extra time while the servicer of your mortgage exercises its rights to examine the terms of the buyer's financing, even if the servicer of your mortgage isn't providing that financing. If the deal being contemplated involves this nice guy in a suit who came to your door and had you sign over title to your home with a promise that he could arrange a short sale for you for just a modest fee, your servicer is going to object.

If you, the borrower, are a real estate agent and plan on making a commission on the short sale of your own property, the servicer is going to double-object. If the buyer making the short offer is an LLC formed by a principal in another LLC who happens to be, um, you, the servicer will extra-triple-super object. This kind of thing happens--or tries to happen--often enough that investors do in fact demand a lot of details about the proposed transaction to prevent being scammed. Yes, we are aware that they should have been this vigilant when they made your loan to you, but they weren't and here we are. No deals are going to get made, start to finish, in five business days, just to make an RE broker happy.

If you have a second lien on the property with another servicer, you'll be dealing with two sets of negotiations. This will not speed things up any. If you have only one loan, but you originally had mortgage insurance, the MI will be a party to the negotiations as well. The MI takes most or all of the loss here. The MI gets to have an opinion.

Any sales contract you sign will have to have special contingencies in it reserving rights to the mortgage servicer. When the transaction actually closes, you will not be allowed to receive any funds directly. This will mean that the Settlement Statement will have to be sent to your mortgage servicer for review before your buyer gets the keys. It may all strike you as "Mickey Mouse." I can pretty much promise you that if you let that attitude show in your conversations with the servicer, the process will get even longer.

Is it the job of the Loss Mitigation Department to care about clearing your local RE market? No. Is it their job to care about keeping your buyer wiggling on the hook long enough to get papers signed? No. Is a short sale supposed to be a painless alternative to foreclosure for anyone involved? No. There are no painless alternatives. There shouldn't be. There cannot be.

Like anyone else with a functioning brain, I accept the principle of loss mitigation: a smaller loss on a short sale beats a larger loss on a foreclosure. However, I have a little bit of a problem with being told by an RE broker that I'd better hurry up and complete this short sale "before it gets worse." Are you telling me that the current transaction isn't, actually, short enough? In that case, are we transferring this property to "someone who can afford it," or are we just throwing in a "pinch borrower" who will be calling me up in six months with the same story I just heard from the former owner? Just exactly how often does an arm's length market produce a short sale price that is so much better than a foreclosure auction price? Why does it do that? You might want to think about it for a minute.

Real estate agents: you might want to be careful what you wish for. I don't know what all the various servicers will do--or will be forced by circumstances to do--but I know what I do every time someone tells me to hurry up and take a pig in a poke.

Wednesday, February 20, 2008

Subprime loans defaulting even before resets

It turns out that massive interest rate spikes aren't the problem -- many borrowers couldn't afford these mortgages even at the low, introductory interest rates.


By Les Christie, CNNMoney.com staff writer

Tuesday, February 19, 2008

Homeless find shelter in vacant and foreclosed houses

Do not let your properties sit vacant, the homeless are moving in and it's not always easy to get them out.

Vacant dwellings prove inviting to street people

CLEVELAND - The nation's foreclosure crisis has led to a painful irony for homeless people: On any given night they are outnumbered in some cities by vacant houses. Some street people are taking advantage of the opportunity by becoming squatters.

Foreclosed homes often have an advantage over boarded-up and dilapidated houses abandoned because of rundown conditions: Sometimes the heat, lights and water are still working.

"That's what you call convenient," said James Bertan, 41, an ex-convict and self-described "bando," or someone who lives in abandoned houses.

While no one keeps numbers of below-the-radar homeless finding shelter in properties left vacant by foreclosure, homeless advocates agree the locations — even with utilities cut off — would be inviting to some. There are risks for squatters, including fires from using candles and confrontations with drug dealers, prostitutes, copper thieves or police.

"Many homeless people see the foreclosure crisis as an opportunity to find low-cost housing (FREE!) with some privacy," Brian Davis, director of the Northeast Ohio Coalition for the Homeless, said in the summary of the latest census of homeless sleeping outside in downtown Cleveland.

The census had dropped from 40 to 17 people. Davis, a board member of the National Coalition for the Homeless, cited factors including the availability of shelter in foreclosed homes, aggressive sidewalk and street cleaning and the relocation of a homeless feeding site. He said there are an average 4,000 homeless in Cleveland on any given night. There are an estimated 15,000 single-family homes vacant due to foreclosure in Cleveland and suburban Cuyahoga County.

In Texas, Larry James, president and chief executive officer of Central Dallas Ministries, said he wasn't surprised that homeless might be taking advantage of vacant homes in residential neighborhoods beyond the reach of his downtown agency.

"There are some campgrounds and creek beds and such where people would be tempted to walk across the street or climb out of the creek bed and sneak into a vacant house," he said.

Bertan, who doesn't like shelters because of the rules, said he has been homeless or in prison for drugs and other charges for the past nine years. He has noticed the increased availability of boarded-up homes amid the foreclosure crisis.

In search of a ‘fresh building’
He said a "fresh building" — recently foreclosed — offered the best prospects to squatters.

"You can be pretty comfortable for a little bit until it gets burned out," he said as he made the rounds of the annual "stand down" where homeless in Cleveland were offered medical checkups, haircuts, a hot meal and self-help information.

Shelia Wilson, 50, who was homeless for years because of drug abuse problems, also has lived in abandoned homes, and for the same reason as Bertan: She kept getting thrown out of shelters for violating rules. "Every place, I've been kicked out of because of drugs," she said.

Michael Stoops, acting executive director of the National Coalition for the Homeless, hasn't seen evidence of increased homeless moving into foreclosed homes but isn't surprised. He said anecdotal evidence — candles burning in boarded-up homes, a squatter killed by a fire set to keep warm — shows the determination of the homeless to find shelter.

Davis said Cleveland's high foreclosure rate and the proximity of downtown shelters to residential neighborhoods has given the city a lead role in the homeless/foreclosure phenomenon.

Many cities roust homeless from vacant homes, which more typically will be used by drug dealers or prostitutes than a homeless person looking for a place to sleep, Stoops said.

Police across the country must deal with squatters and vandalism involving vacant homes:

  • In suburban Shaker Heights, which has $1 million homes on wide boulevards, poorer neighborhoods with foreclosed homes get extra police attention.
  • East of San Francisco, a man was arrested in November on a code violation while living without water service in a vacant home in Manteca, Calif., which has been hit hard by the foreclosure crisis.
  • In Cape Coral, Fla., a man arrested in September in a foreclosed home said he had been living there since helping a friend move out weeks earlier.

Bertan and Wilson agreed that squatting in a foreclosed home can be dangerous because the locations can attract drug dealers, prostitutes and, eventually, police.

William Reed, 64, a homeless man who walks with a cane, thumbed through a shoulder bag holding a blue-bound Bible, notebooks with his pencil drawings and a plastic-wrapped piece of bread as he sat on a retainer wall in the cold outside St. John Cathedral in downtown Cleveland. He's gone inside empty homes but thinks it's too risky to spend the night.

Even the inviting idea of countless vacant and foreclosed empty homes didn't overcome the possible risk of entering a crack house.

"Their brains could be burned up," said Reed, who didn't want to detail where he sleeps at night.

Difficult to track
Sometimes it's hard to track where the homeless go.

In Philadelphia, the risk is too great to send case workers into vacant homes to check for homeless needing help, said Ed Speedling, community liaison with Project H.O.M.E. "We're very, very wary of going inside. There's danger. I mean, if the floor caves in. There's potential danger: Sometimes they are still owned by someone," Speedling said.

William Walker, 57, who was homeless for seven years and now counsels drifters at a sprawling warehouse-turned-shelter overlooking Lake Erie, has seen people living in foreclosed homes in his blue-collar neighborhood in Cleveland. He estimated that three or four boarded-up homes in his neighborhood have homeless living there from time to time.

Sometimes homeless men living in tents in a nearby woods disappear from their makeshift homes, Walker said. "The guys who were there last year are not there now. Are they in the vacant (foreclosed) homes? I don't know. They are just not in their places," Walker said.




Saturday, February 16, 2008

Northern California Home Auctions Triple

By Pamela Tom

Much of the downturn in the economy is blamed on the housing crisis. As foreclosures rise, so do home auctions.

The bank foreclosed on a six-bedroom, two-bath home in West Oakland. It wouldn't sell at $400,000 dollars, so the bank turned down offers at $370,000. Now it's on the auction block.

"Everybody's bargain hunting right now," said Real Estate Broker Kenny Sessions.

Real estate broker Kenny Sessions has more than a dozen listings going to auction in the next two weeks. He says the banks usually sell at 80 to 90 cents on the dollar.

"Some of it is properties I've had on the market for 90 to 120 days and other properties I've had for 30 to 60 days so there really is on set pattern of what they choose to take to auction," said Sessions.

He says the home's condition can be good or bad but all are in foreclosure.

"A Web site called Foreclosure Radar tracks California's foreclosure rates. The site's latest numbers show out of 51 counties, Alameda County ranks 25th in foreclosures while Contra Costa Co. comes in tenth.

Similarly, more and more homes are being auctioned but U.C. Berkeley economics professor John Quigley points out that the bidding wars of a couple years back were essentially an auction -- just implicit rather than explicit.

Quigley encourages buyers to do their homework, check the current prices of comparable properties but warns against trying to time exactly when to buy.

"It's probably a mistake for individuals to think they can do a great deal about timing the market for the purchase of their single house. If you want to time the real estate market, you can do that in real estate investment trust or other more liquid ways of investing in housing," said U.C. Berkeley professor John Quigley.

The California Budget Project of Sacramento says Bay Area home prices remain unaffordable, and the number of qualified buyers is decreasing due to stricter lending practices. But Kenny Sessions says there is hope for the working class. In one month, he sold 17 homes.