A weekend topic starting with the Northwest Florida Daily News. “The Crestview-Fort Walton Beach-Destin metropolitan area saw a massive increase in permits for new single-family homes in the past year. Alan Baggett, VP of The Building Industry Association of Okaloosa and Walton Counties added, ‘If you lived in California and you moved here and you saw something that was inflated from, maybe it was $500,000 last year but now it’s $800,000 this year, you’d go, ‘Shoot that’s a bargain compared to where I come from. I’ll take two.’”
In Maricopa in Arizona. “The housing market is beginning to calm with inventory rising and prices flattening a bit. Residents looking to sell should not worry — a cooling of the market this time of year is normal in Maricopa, and not the sign of a market crash. Several signs point to 2021 being similar to previous years. The first is inventory levels. The number of active listings has nearly tripled in the last 90 days.”
From Har.com in Texas. “While we are still in a sellers market, it has already softened quite a bit here in the Houston area. I have heard the following 4 things from my sellers. These are untruths they have heard from friends, neighbors, their mailman, even other Realtors. 1. You don’t need to do anything—buyers will take whatever. 2. You can just name your price and get it. 3. Sellers don’t need to market their home, it will sell. 4. Its super easy, just take highest offer.”
The Concho Valley Homepage. “Across West Texas, the housing market is robust with demand during a time of year that it would normally be cooling down. ‘Over the past year we’ve been in a bit of a feeding frenzy which has really spiked the list price of homes,’ said Jordan Rose of Keller and Williams Realty. ‘What were seeing now is in the past few weeks or so we’ve really seen a lot of homes have price reductions so what that tells me is because of that feeding frenzy, we’ve kind of priced of some buyers and so now were coming back to an equilibrium.’”
From DS News. “DS News team was on-site, speaking with mortgage servicing’s best and brightest to learn about the state of the industry from their perspective. Bryce Fendall, VP, Default, Foreclosure, Bankruptcy, REO, Claims Statebridge Company: What can the industry do to assist struggling homeowners as they exit forbearance plans?”
“For all mortgage servicers, that has been our focus for the last year-and-a-half: making contact with customers. There’s a kind of phenomenon taking place. When a borrower defaults, they quit reading their mail. They know they owe the bank money, and they know what that letter is, so they quit reading the mail. We are sending them their options. We have learned to become creative to get them to open the mail.”
“We have a lot of tricks that we use, including sending them overnight mail, sending boxes in oblong shapes. We have one mailer where we put dice inside of it, and it says, ‘Don’t roll the dice, because you know we’re here to help.’ We, as servicers, must continue to find interesting ways to connect with the homeowner. It’s not that we’re not there to help them; they are often not receptive to the help we offer. They know they owe the debt, and they think that’s the only thing we want. We only make money when the loans are performing, and when the loans aren’t performing, it gets very costly for everybody involved.”
“Do you anticipate a significant increase in REO activity? We are seeing an increase in foreclosure activity already. However, we also see an increase in resolutions. We send the notice that we’re going to put the home in foreclosure unless a payment is made by a particular date, that date passes, and the loan goes into foreclosure. Sometimes, it comes to just that point where the borrower realizes, ‘Oh, I need to do something!’”
“Right now, borrowers have many options, and many of them have equity. What we are seeing a lot of is getting the home into foreclosure, and then we get a notice or request for a payoff. They want to know how much they owe so that they can pay it off. Then, they pay it off or have worked out some other arrangements. I see our foreclosure volume increasing, but I don’t know how many of those foreclosures will make it to the end. It’s not going to be like what we experienced 10-15 years ago.”
“We are still processing loans that were delinquent before the pandemic started; essentially, all of those were on hold. We can now begin to move those forward, so we’re starting to see those sales. That is what will start happening first. We don’t know what kind of volume we will be looking at. It’s too soon to tell.”
From Reuters. “Close to half a million low-income homeowners in the United States, many of them minorities, are nearing the end of mortgage forbearance plans that allowed them to halt loan payments during the pandemic, presenting a est for the mortgage service firms tasked with helping struggling borrowers move onto payment plans they can afford. Their missed payments could add up to a ‘forbearance overhang’ of more than $15 billion in postponed mortgage payments, or about $14,200 per person.”
“Black Knight estimates that about 850,000 homeowners who participated in forbearance were in plans set to expire by the end of this year, including those who already exhausted their options. Roughly half of those homeowners have loans backed by the Federal Housing Administration or the Department of Veterans Affairs. Those loans, which often require smaller down payments and lower credit scores, are disproportionately used by low-income borrowers, first-time home buyers and minorities.”
“Soon after forbearance ended for Marvin Williams in August, he learned his loan would be transferred to another servicer. For longer than a month, Williams said it was not clear if the new company would defer his missed mortgage payments – adding up to at least $8,000 – to the end of his loan or if he would have to pay it back sooner. Williams, 63, said he often endured two-hour waits on the phone when trying to get in touch with the servicer. On Wednesday, the housing counselor helping him with his case was told the payments would be deferred, but Williams said he is still waiting for written confirmation.”
“‘I’m trying to hope that I’m in the right place with this,’ said Williams, who lives outside Rochester, New York.”
The Chicago Sun Times in Illinois. “Wanda Carter is among thousands of Chicagoans haunted by what have come to be known as ‘zombie properties.’ It started when Carter bought a house in Englewood in 2004. She fell behind on the mortgage and by 2006 found herself facing foreclosure. With no prospect of bringing the mortgage current, Carter and her husband moved out in 2008, agreeing to deed the house back to the bank. Her husband died the next month.”
“Thirteen years later, the property at 6548 S. Morgan St. where Carter’s two-story frame house stood is a vacant lot, the abandoned building demolished in 2018 by the city after it fell into disrepair. But the city is still trying to hold the 70-year-old widow responsible for the upkeep of the lot, hitting her with thousands of dollars in fines and penalties over the years for code violations like not cutting the weeds — at a property she hasn’t owned for years.”
“‘I’m trapped on a property that is not even there anymore,’ she told me. ‘It’s like this is never ending.’”
“In ‘zombie foreclosures,’ lenders begin foreclosure proceedings against homeowners but don’t follow through because they want to avoid the financial responsibility that comes with holding title to the property — costs that often exceed the value. Former owners like Carter later discover their former lender never recorded a new deed, leaving them as the owner of record even though they have no benefits of ownership. So they’re victimized twice.”
From The Record in New Jersey. “The increase in housing prices during the pandemic is forcing many first-time buyers to stretch financially. There’s no sign that prices will return to pre-pandemic levels, even as the market returns to a more normal selling cycle. There’s still a scarcity of homes for sale, said Jordan Kaufman, a partner at Green Ridge Wealth Planning in Montville. That’s especially true in Bergen County, where price appreciation is above the national average.”
“‘The perception that it’s a good investment makes it a good investment,’ said Kaufman, who lives in Ridgewood.”
From NewJersey.com. “The billboards offer an irresistible come-on, the promise of a pristine life on Easy Street. ‘Realty Investment Done Right’ one says, alongside an image of a silver-haired couple riding bicycles on the beach. The radio ads feature none other than former Fox News personality Bill O’Reilly, promising a ’10-per-cent monthly payout.’”
“Yes, there is fine print — for one thing, National Realty Investment Advisors will only accept minimum investments of $1 million. (Hey, it takes money to make money.) But the Secaucus-based private equity firm portrays its ‘cash recycling’ investment strategy as foolproof. NRIA claims to have amassed $1.25 billion in assets in 15 years in business, focusing on high-end real estate in gentrifying city neighborhoods and tony suburbs from Palm Beach to Brooklyn, with stops in Bergen and Hudson counties. The firm also runs lucrative businesses in India, Dubai and Thailand, selling chances at American green cards to rich foreigners and their families.”
“The alluring pitch, however, may mask a more sordid reality. On the morning of March 4, FBI agents surrounded the Secaucus home of the firm’s then-portfolio manager, Nick Salzano. A tense, hours-long standoff ensued, locking down the suburban neighborhood. When Salzano eventually surrendered, authorities charged him with attempting to con an investor as part of a North Bergen housing development project. Prosecutors say he also forged a multimillion-dollar loan guarantee in 2019 to squeeze another $150,000 out of a Silicon Valley woman.”
“The investigation has widened to include other NRIA leaders, including founder Rey Grabato, and his lieutenant, Coley O’Brien, sources with direct knowledge of the proceedings said. Grabato’s signature appeared on the doctored loan agreement, according to federal charging documents. The U.S. Securities and Exchange Commission and the New Jersey Bureau of Securities are also investigating, the source said.”
“‘The reality is, for many of these cases, nobody is going to know until the horse is long out of the barn that the issuer is doing business in the states, and that’s a problem,’ says Rick Barry, the former enforcement chief for the New Jersey Bureau of Securities. ‘When there is a problem with exempt offerings, by the time it all gets uncovered, the money is usually gone. And it’s expensive (and) difficult — if not impossible — to recover any money.’”
From Tokeneo. “Comparing Bitcoin to a bubble on a Dutch tulip bulb maintains the deception. Technology is evolving faster than nature, and a decentralized network has more financial benefits than a bundle of flowers. Bitcoin is a technology, tulips are plants, and no intelligent person is going to make any further comparisons. Tulipmania, a 17th century market bubble in which the price of a bulb rose due to speculation by Dutch investors, caused a major slump. Prices exceeded six times the average annual income at the time. The rarest light bulb is one of the most expensive items in the world.”
“British economist Gabriel Mahluff reminded us superficially of Bitcoin: ‘300 years ago people invested money in tulips because they thought they were investments.’ Bitcoin opponents repeatedly use Tulipmania to live up to their petty expectations. Tales of the tulip mania were popularized by Scottish journalist Charles Mackay in his 1841 book Memoirs of Extremely Popular Misconceptions and Crowd Madness, as Mackay wrote: Sailors, henchmen, servants, even chimney sweeps, dug in the tulips. When the tulip bubble burst in 1637, McKay claimed the Dutch economy was in chaos.”
“Anne Goldgar, Professor of Early Modern History at King’s College London and author of Tulipmania: Money, Honor and Knowledge in the Dutch Golden Age, explains why Mackay’s version is not suitable. ‘It’s a great story, and the reason it’s great is because it makes people look stupid,’ said Goldgar, who complained that even a serious economist like John Kenneth Galbraith Mackays in A Brief History of Financial mimicked euphoria. He continued: ‘But the idea that tulip mania causes a lot of depression is completely wrong. I don’t think that this has any real impact on the economy.’”