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The Foreclosure Crisis Means a Bonanza for Some Enterprising Entrepreneurs

Susan Pedersen — Fri, 06 Nov 2009 13:31:16 +0000

The first region to crumble under the onslaught of the sub-prime fiasco was South Florida. It came to be identified as the earthquake’s epicentre. It left behind a trail of woes – rubble and dust. The housing bust resulted in downward spiralling of property value and joblessness. Continuing foreclosures further mired the situation. But amidst this devastation the vultures are partying.

Vultures have a very vital part to play in the scheme of Nature. That is why Jeff Water of Giving Tree Development in Fort Lauderdale calls himself a ‘White Angel.’ At deeply discounted prices he started purchasing notes and then lowering the monthly mortgage amounts of the borrowers to help them stay in their homes.

But Peter Zalweski running Condo Vultures in Bal Harbor of Florida has no conscience pricks for making gains on the bad luck of others. He is snapping up bargains and making fast bucks. He admits that although the work is not noble there is no doubt that it is profitable.

The opportunities that have surfaced since the biggest meltdown in the housing sector in Florida will continue for about another two years. New foreclosures are continuing to choke the courts of Florida. Jack McCabe is a real estate expert. He said, “Those who never came to grips with the historic bust are improving their golf games or catching a lot of fish. Those who had the foresight to shift gears for the tumultuous marketplace have found opportunities to start and grow businesses. Some are going to make fortunes.”

Zalewski was formerly a business journalist. He founded his real estate firm in 2006 – a couple of months prior to the crash that he had foreseen would come. Over the last three years he has employed 36 operators to keep pace with the rising demand from investors ready with cash who are hunting for bargains. The name of his firm, Condo Vultures, caught the attention of film producer Michael Moore. Zalewski is shown in the documentary film ‘Capitalism: A Love Story’. Zalewski is seen in the film surrounded by houses with foreclosure signs. He sits in a swank office in a well tailored suit.

Waters founded Giving Tree Development in 2008 out of sheer necessity. He was one of the casualties of Bear Stearns. He soon discovered the possibilities in buying troubled properties one at a time. An investor then buys a note and the home owner gets a knock on the door bearing good news about change of servicer and offer of modification.

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Foreclosures are One of the Prime Reasons for Increasing Homelessness

Susan Pedersen — Thu, 05 Nov 2009 13:23:38 +0000

A casual look around will show that foreclosures are one of the prime reasons for increasing homelessness in USA today. The other reasons are loss of jobs, mental ailment, addiction to drugs or alcohol, divorce, violence at home, medical emergencies and natural calamities.

According to New York Times, 10% of all new entrants to homeless shelters across the country have come hounded out by foreclosures. In the Midwest the number is worse – 15%. Each person has a sad tale to tell that will fill up the pages of a novel.

Sheri West of Cleveland had once been the owner of a shelter but now she is running from shelter to shelter herself when her husband deserted her with a pile of credit card debts. The state then stopped financing her stay in the shelter. Without a roof she started roughing it out in her car. The irony is that the once proud West full of self-respect has to ask for help to keep surviving. It is the American style of independence that is now edging her on. It can give the push but it can also drag one down. Obsessed with the icon that is America, the poor are being blamed for everything negative that is happening. It is West and many like her who have made a mess of their lives.

But somewhere there is a silver lining in the sky. There are an increasing number of people like West requiring social services. The general tendency has been to think of them as being indolent and lazy. But now that attitude is changing to empathy. It is our individual choices that land us up on the bed we are in. It is the same with larger societal issues. Like the ants in the famed fable of Aesop, America has been storing up for harsh winter and not being lazy like the grasshopper. But there are other ways of dying apart from starving.

A staggering number of former house owners are now homeless thanks to foreclosure. It means more people are beginning to know the agony of hitting the rock bottom. With so many prostrate the others too are learning a lesson about why this has happened and what can be done to prevent it. The nation as a whole will have to learn to stand up again instead of placing a handkerchief on the nose at the many down there and blaming them at what has overtaken the whole country with rippling effects across the globe.

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The Restoration of the Jacksonville is Aided by the Prices of the Foreclosure Listings

Susan Pedersen — Wed, 04 Nov 2009 13:05:18 +0000

An interesting effect of the reduced prices of the foreclosure listings has been noticed recently. The restoration work going on at Springfield, the historic place in Jacksonville has to a great extent benefited from this, according to the report from the Council of Revitalization and Preservation in Springfield.

It has been explained by the officials of the Council that the steady increase in the number of the lowered rate of foreclosed properties has made it affordable for the people to buy the properties. This has increased the sales and the proceeds are being used for the renovation of the historical buildings of this area.

The Springfield has a rather old history. Founded in the year 1869 the place is known for its eighteen hundred old buildings of great historic importance. All of these are being restored to their former glory.

Due to its historical significance this place has been pretty expensive. Buying property here is not easy. The dropped prices of the houses from four million to nearly just two millions have given the people the power to purchase properties here.

The total number of foreclosed properties in Jacksonville in the first half of this year crossed 13500, which means that every forty three houses one property was foreclosed. When compared to the latter half of last year, a rise, in the number of foreclosures by twenty five percent, is noticed. Since the beginning of last year the rise has been by fifty nine percent.

It is estimated that counting the different areas including Paxon, the southern Trout River area and the lower Jacksonville the foreclosed houses were nearly sixty eight percent of the total number of houses sold.

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Foreclosure Climate has Caused Sharp Rise in Homeless Persons

Susan Pedersen — Tue, 03 Nov 2009 11:27:55 +0000

The foreclosure climate has caused a sharp rise in homeless persons but the number of public houses providing shelter has decreased. The state government is being compelled to fall back on housing plans due to acute dearth of funds.

The recession is triggering unemployment while foreclosures continue to run apace. Meanwhile the number of families and individuals in need of shelter is increasing alarmingly. The state governments grappling with budge deficits remain helpless while private donations are also decreasing.

Chuck Bean of Nonprofit Roundtable of Greater Washington speaking to MSNBC said, “A downturn in (overall) funding in this case is accompanied by a surge in demand, so a homeless shelter, food pantry, or job-training program is going to feel it first. Even if they have 100 percent of their budget compared to last year, they now see a 50 percent surge in demand.”

In Massachusetts the situation is so critical that the state government has been compelled to make arrangement for over 630 families to put up in motels. The average cost is $85 per night. Trying to grapple with the problem the administration of Governor Deval Patrick said that new regulations are going to be imposed that aims to bring down the numbers of those eligible to put up in public shelter homes.

Those putting up at shelter will be expected to work a minimum of 30 hours each week and be able to put aside as savings 30% of their earnings. Once the earnings of the family becomes more than the maximum scheduled limit, the family will be given three months time to find out a place to stay independently. Previously the limit was six months.

This new rule will save the sate about $520,000 in this year and more than $11 million in the fiscal year 2010 said Julia E. Kehoe the commissioner of the state Department of Transitional Assistance.

The housing advocates have raised a hue and cry over these new rules. Robyn Frost of Massachusetts Coalition for the Homeless speaking to the Boston Globe said, “This is not the time to change the safety net. The number of people in need of shelter is like nothing we’ve ever seen. There’s never been such a desperate need for housing, and these changes could be devastating. They couldn’t come at a worse time.”

This reversal is ironical since for the last 5 years the cities and states of USA with the help of Interagency Council of Homelessness have been trying to enforce 10 year programmes to erase altogether the problem of homelessness.

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Foreclosure Winds are Changing the Economic Climate of Florida

Susan Pedersen — Fri, 30 Oct 2009 12:47:15 +0000

Gusty foreclosure winds are changing the economic climate of Florida. It is well known that the economy of the state had been centred on tourism, agriculture and also construction. But now it is being driven largely by global competition, science and engineering. There is a stronger identity with the place. This was the general opinion of a meeting of the heads of the Chamber of Commerce of Florida.

The CEO and president of the chamber Mark Wilson speaking to 400 participants who were attending this annual meeting said that unemployment had touched 10.7% and since 2007 October 600,000 jobs had vanished. Out of every five homes one was in foreclosure. He said, “The Florida that we’ve known is in fact over.

Don’t get caught up in that being a bad thing. (The question is) how quickly can we get to the next economy?” He further added, “Today the state no longer can bank on a growing population lured by sunshine and a low cost of living. The state now is the 19th most expensive nationwide. Its population still will to grow but more slowly — 7 million new Floridians are expected by 2030 — and while tourism, construction and agriculture will remain the economy’s foundation it will need to diversify. Education must be up to the challenge. Companies and jobs are going to go wherever in the world the talent is. So Florida needs to make talent our No. 1 priority.”

It has been two years since the chamber stalwarts have been grappling with this change. Thanks to their efforts has been developed the Florida Scorecard that is a combination of six new factors that are driving the economy. The point is to measure how well Florida is dealing with each of these factors – education, innovation, growth, business, governing and above all quality of life.

The participants at the conference came to know that the numbers of bachelor degrees and PH D’s in the science and engineering stream have been less than the national figures. In indications that point to the quality of life Florida is 48th in foreclosure numbers, 41st in number of families facing poverty and 47th in the number of residents lacking health facilities.

The scorecard was developed by the chamber’s foundation with the assistance of other business groups across the state. The target was to use it for creating a blue print for the long time recovery of Florida. In contrast the government is not looking beyond a maximum of four years.

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The Foreclosure Fueled Recession Seems to be Over According to Pundits

Susan Pedersen — Thu, 29 Oct 2009 11:59:01 +0000

A survey shows that most of the pundits feel that the foreclosure fueled recession is over. Over 80% of the economists hold this view. They say that expansion has already started. But all agree that the pace of recovery will e slow as unemployment and huge federal debts continue to drag it down.

This unanimous view was released by a survey undertaken by National Association for Business Economic. Lynne Reaser of NABE who is also the chief economist of Point Loma Nazarene University said, “The survey found that the vast majority of business economists believe that the recession has ended but that the economic recovery is likely to be more moderate than those typically experienced following steep declines.”

The index pointed to a strong recovery during the 4th quarter but it will become moderate during the first months of 2010. The economic forecast for forthcoming quarters seemed to be upbeat. But there were warnings about the continuation of unemployment problems. The federal deficits will continue to remain troublesome all through 2010. The economists are hopeful that the economy calculated on GDP will go forward by 2.9% during the second part of the year after falling behind in four running quarters. It will be a record since figures have been maintained from 1947. A gain of 3% is anticipated in 2010.

Despite this good news it cannot be denied that the deficit in the federal budget has swelled disproportionately. Unemployment will continue to plague the nation as the employers have not regained their confidence and continue to be cautious.

In September this year the rate of unemployment rate spiked to 9.8% from 9.7% according to the Labor Departments. It is the highest since the last 26 years. The forecast is that unemployment numbers too will continue to increase to 10% during the first three months of 2010. By the end of the next year it is expected to push down to 9.5%.

This persisting recession the country is enduring is the worst after the 1930s. It has erased nearly 7.2 million jobs and more cuts have recently been announced. Thermo Fisher Scientific that is engaged in the production of scientific equipments announced that it will shut down its plant in Dubuque in Iowa in 2010. By doing so 350 jobs will vanish.

Unemployment worries will continue to hold back consumer spending. It will increase during the last six months of this year but will fall back in 2010.

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Experts are now Reviewing their Apprehensions about a Flood of Foreclosures

Susan Pedersen — Wed, 28 Oct 2009 12:56:47 +0000

Since the time of the crash the industry watchers and experts have been giving out warnings about a second flood of foreclosures. But now they are reviewing their predictions.

Jim Summers of Re/MAX Golden Empire said, “Like everyone else, I’ve been waiting, but we’re not seeing the big influx that was expected. At this point, I wouldn’t bank on anything.” His views are echoed by many other pundits who are now saying that it is unclear when the second wave will hit the shores.

It is to nobody’s interest to see thousands of foreclosures entering the real estate market and further push down prices. Both the public and private entities have joined hands firmly to avoid this. This was the view of the director of Casden Real Estate Economics Forecast of Lusk Center for Real Estate (University of Southern California). Conway said, “As long as interest rates stay low, I think banking and government interests will be able to maintain some degree of market stability.”

The federal government definitely does not want another downward pressure on the economy. The banks do not care to see their assets go for a tumble again. The cities are dead against another round of blight – line after line of derelict foreclosed houses left to crumble and decay while inviting criminals and vagabonds.

Looking at the status of the market it is clear that foreclosures never took a rest. But a massive attack seems not to have materialized. It happened in Kern County when foreclosures doubled from last January to August. Foreclosure postings during the first 9 months of this year have decreased by 14% from what it was in 2008. The numbers fell from 6,827 to 5,858 as per the findings of Kern County Assessor. In Kern County the staggering unemployment rate is 14.3%.

This optimism holds despite the knowledge that landmines buried deep below the real estate coverings could explode any moment. The option ARM, the most exotic of the mortgages are about to reset to higher rates. These were freely distributed during the time of the housing boom.

Option ARM initially allowed borrowers low payments but with the passage of time these increase dramatically by two or three times of the original loan. California has been one of the largest recipients of these loans. 2007 was the last year when many of these loans were contracted. As per schedule these should start resetting from 2010 and continue well into 2012.

Foreclosure1.com provides new foreclosure listings everyday. Try to search foreclosures by state today!

Lack of Education has Been to a Large Extent Behind the Foreclosure Crisis

Susan Pedersen — Tue, 27 Oct 2009 12:45:18 +0000

With the passage of time since the bursting forth of the foreclosure crisis it seems evident that one of the prime reasons behind it has been lack of education among ordinary Americans. It made it easy for predatory lenders to prey on the gullible.

The story of the economic success of America has always been linked with education. The 19th century had witnessed America take the lead in universal primary education.

The other countries then began to emulate her. In the early part of the 20th century took place the “high school revolution” that took America to another high level. The post World War II saw America holding an unchallenged position in higher education.

All that has now become history. The rise of education in USA has been mainly the blooming of public education. But the last three decades has seen a change in attitudes. Politics has come to be ruled by the idea that any sort of spending by the government is a waste of taxpayer’s money. With education being one of the biggest sections of public expenditure it has invariably suffered because of this outlook.

Slowly, albeit surely, its effects began to be felt on the educational field – it was a steady erosion of America’s unchallenged position. The crisis is showing that now the worsening is picking up speed following the penny-wise-pound-foolish policies being adopted by Washington in the name of “fiscal responsibility.”

Recently suddenly there is flurry of focusing on the decline of American position in the top universities of the country. But the reporting has failed to note the related decline in ordinary mundane matters. America has been slowly relinquishing its lead as educators of the young to other progressing countries.

It is not easy to wipe out the image most people have of American being the haven for college learning – it being unique in so far as higher education is made available to the population in general. The image was at one time true and real. But compared to other countries fewer number of Americans will cross the graduation threshold. Statistics shows that the rate of college graduation has fallen slightly behind the rate of other advanced countries.

Sans the crisis the rate was falling. The crisis has further expedited the speed of fall. With slim pockets it is difficult for more and more Americans to send their children to college.

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Chicago Neighborhoods are Replete with Foreclosed Properties

Susan Pedersen — Mon, 26 Oct 2009 11:30:41 +0000

The US real estate sector is in the grip of a crisis. With unemployment reigning high people are faltering on mortgage payments. Hence foreclosures are at an all-time high.

Now the foreclosed homes are being put back on to the market for resale. They are being grabbed by first-time investors and genuine home buyers are finding themselves being edged out of the game. The Chicago neighborhoods are replete with foreclosed properties.

Owners are shocked to see that more and more homes are falling prey to foreclosures than ever before. By the end of ’08, 33 per cent of the foreclosures were not sold. That meant unsafe houses lining the streets.

The problem is really very acute in the Afro-American neighborhoods. In the beginning of this year, 2,099 properties in Chicago were taken over by the bank. Eighty per cent of those properties belonged to Afro-Americans. Many of the houses in the neighborhood have seen their values plunge as they lie vacant for more than one-and-a-half years.

The vice president of the Chicago think tank, Woodstock Institute Geoff Smith, says that the picture is really grim. There are a lot of people who are set to leave their homes. What are the chances of these foreclosed properties being put back into the housing market? Smith feels the chances are very bleak.

Chicago Lawn is one such area that is a symbol of the adverse trends. In this area, many properties, both belonging to single families as well as a group, are lying vacant. One house on 61st Street, for instance, is partially hidden. Its doors are open and garbage is scattered along the pathway. There is a fence and a couch is lying in the front yard.

Twenty year old Roddis Scott says that the house is not safe at night. He has been trying to keep his brothers away from the house before dusk. There are other vacant homes on the block too that the neighbors are trying to keep clean.

The institute observes that it takes about 274 days for a foreclosed property to sell in Chicago as compared to 180 four years ago. When properties are indeed sold, they are snapped up by investors and not home owners. The owners who take over the properties do not stay in these houses. They merely want to sell them off when prices escalate. Investor buyers are therefore, keeping ordinary people away from the housing market.

Foreclosure1.com provides new foreclosure listings everyday. Try to search foreclosures by state today!

Panel Pulls up the Government for Failing Foreclosure Prevention Programme

Susan Pedersen — Fri, 23 Oct 2009 13:20:00 +0000

An oversight panel pulled up the government sharply on Friday 9th October for failing foreclosure prevention programme. It was pointed out that this failure would make millions open to foreclosure risk. The Congress Oversight Panel acting as a watchdog made its debut in 2008 to keep a watch on the flow of bailout funds. In a polite but firm language it pointed out that the programme would benefit only half of the targeted numbers.

The report chided the administration for crafting a programme that would address the main causes for the escalating foreclosure crisis – increasing unemployment and exotic loans with teaser low rates that were replaced by sharp high payments. Many of the mortgages are too big to qualify for the modification plan chalked out in the programme. Borrowers without income are often disqualified for getting relief.

According to the panel the programme seemed to be “targeted at the housing crisis as it existed six months ago, rather than as it exists now.” It went on to add, “The panel urges Treasury to reconsider the scope, scalability and permanence of the programs designed to minimize the economic impact of foreclosures and consider whether new programs or program enhancements could be adopted.”

Talking to reporters over the telephone the chairperson of the oversight panel, Elizabeth Warren said that the housing programme was so constricted that it was not possible for it to keep pace with the rising surge of foreclosures. She said, “Even when Treasury’s programs are running at full speed, foreclosures are estimated to outpace modifications by about two to one. It simply isn’t clear that the programs in place will do enough to tame the crisis and have a significant impact on the broader economy.”

The Treasury admitted to the limitations of its anti-foreclosure measures. But it said that other measures are being simultaneously taken to stretch unemployment benefits and extend health benefits to those without jobs so as to give some relief to the housing sector whose health is linked with these other factors. Meg Reilla a spokesperson of the Treasury said, “In developing this program, it was critical that we address challenges that could be solved quickly with the tools available to us to ensure the most effective use of taxpayer money.”

The administration is planning to cut down on the expenses of one of its measures. This will led to more contentious arguments as the foreclosure crisis rumbles on relentlessly.

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Foreclosure News - Foreclosure1.com

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