A report from Mortgage Professional America. “‘Bidding wars are still happening, but buyers are starting to get more breathing room,’ said Jill Thompson, a Redfin agent in Indianapolis, where the bidding-war rate dropped to 36.8% in November from 73.6% in October. ‘A few months ago, the typical home was going for $15,000 to $20,000—sometimes even $50,000—over the asking price. Buyers were paying cash, waiving inspection contingencies, and overlooking necessary repairs in order to win,’ Thompson continued. ‘Today, buyers are more cautious about overpaying, aren’t waiving inspections as freely as they were in the spring, and feel less of a rush to commit to a house after the first tour.’”
From ABC 7 Chicago in Illinois. “‘The market has softened a bit; the market has regulated a bit to some extent in the suburbs. Whereas a couple of months ago, with those dozens of offers I mentioned, now it’s maybe three or four who are up against a buyer. So there are some opportunities here to enter the market,’ said Samantha Jones, with the Homes By Jones Team – Coldwell Banker Realty, located in the western suburbs.”
The Augusta Chronicle in Georgia. “An Augusta apartment building owner who fraudulently obtained a near $3 million loan then compounded the crime with bankruptcy fraud and lying under oath was convicted Tuesday night of federal crimes. The U.S. District Court jury convicted Jerome W. Kiggundu, 37, of bank and bankruptcy fraud, and false statements under oath. The crimes are punishable by up to 30 years in prison.”
“The loan was based on Kiggundu’s claims that he had a monthly operating bank balance of about $100,000 when it was actually $500 or less. He also claimed ownership of property in Enid, Oklahoma, in which he had $2.15 million in equity. Kiggundu used the Augusta apartment building as collateral for the Red Oak loan.”
From Hey Socal in California. “Two men involved in a $15 million mortgage fraud scheme in Orange County pleaded guilty and are set to be sentenced Jan. 10, according to court records obtained Friday. Jimmy Phan, 47, and Vinh Phan, 46, both pleaded guilty on Thursday, according to court records. The Phans are not related. Co-defendant Stephen Nguyen, 59, is a fugitive.”
“Jimmy Phan and Vinh Phan pleaded guilty to multiple felony counts of grand theft, mortgage fraud, attempting to file a false or forged instrument and admitted sentencing enhancements for aggravated white collar crime exceeding $500,000. The defendants are accused of acquiring property ‘and using them as collateral to borrow large amounts of money from lenders and private parties for short terms and high interest,’ an Orange County District Attorney’s investigator said in a bail petition.”
“Some of the payments were made, but the lenders did not know the defendants ‘would record forged conveyances (an instrument to indicate that the loan was paid),’ prosecutors alleged. ‘Then they would take the advantage of the title being free from the first loan and obtain a second loan,’ prosecutors alleged. ‘The second lender would fund the loan with the belief the property was free and clear,’ prosecutors alleged.”
“The second loans were sometimes used to finance acquisition of property with an ‘arms length buyer,’ who was ‘in fact in collusion with the seller to inflate the value of the property or to give the appearance of legitimacy,’ prosecutors alleged.”
The North Bay Business Journal in California. “Two San Francisco real estate investors just completed the purchase of the largest portfolio of North Bay commercial real estate in 16 years, moving the unwinding of a Novato-based investment company’s Ponzi scheme into a new chapter. Hamilton Zanze Real Estate Investments and affiliated firm Graham Street Realty together with New York-based Davidson Kempner Capital Management on Wednesday closed escrow on 60 of upward of 70 properties that were the backbone of the late Ken Casey’s companies Professional Financial Investors and Professional Investors Security Fund.”
“The deal price for the more than 1.4 million square feet of commercial and multifamily space in Marin and Sonoma counties was $436.5 million. That includes 935 residential units and about 680,000 square feet of commercial space. The transaction netted roughly $140 million to the bankruptcy estate, after many of the banks that had senior equity positions on the properties had been paid in full, said Ori Katz, one of the attorneys representing the debtors.”
The Seattle Daily Journal of Commerce in Washington. “The fairly new Odessa on Lake Union, at 3120 Harvard Ave. E., has sold for almost $6.2 million, according to King County records. The seller was a court-ordered receiver for 3120 Harvard LLC. That entity, associated with Barcelo Homes, acquired the Eastlake project in 2018 for almost $1.4 million. Odessa began life under different ownership as a congregate apartment building, and Barcelo appears to have bought it while under construction. Several liens were later filed.”
From Now Toronto in Canada. “The Toronto Regional Real Estate Board (TRREB) is opposing councillor Mike Colle’s motion to implement a speculation tax on investment buyers who are driving up property prices and making the city impossible for first-time home buyers trying to gain a footing.”
“‘A speculation tax could primarily impact small-scale ‘mom and pop’ investors who also happen to be a key source of supply for an already tight rental market,’ said TRREB president Kevin Crigger, painting a quaint picture of the investors bidding up prices in the Toronto real estate market. The average price for a home was $1,163,323 in November, with detached 416 homes averaging $1,807,983. ‘Experts, including TRREB, agree that policies aimed at the demand side of the market will not have any sustainable long-term benefits.’”
“TRREB also cites a since-abandoned provincial Speculation Tax in 1974 that affected equity on homes. A similar outcome would be substantial today since homeowners are heavily in debt, maxing out the equity on their over-priced homes.”
The Business Post. “Wealthy Asian investors, who have snapped up more than a thousand Irish homes in recent years, have started to divest from the Irish housing market amid fears of a property crash in China. The new trend comes as part of a wider move by Chinese investors worldwide to divest from property after debt concerns were identified at Evergrande, the embattled real estate giant.”
From Bloomberg. “Chinese property stocks tumbled close to a new five-year low after a series of asset sales underscored concern that equity investors will bear the brunt of losses as developers offload projects to repay debt. Shimao Group Holdings Ltd. agreed to sell stakes in a Hong Kong development at a loss while Sunac China Holdings Ltd. unloaded assets in Shanghai as developers seek to raise cash.”
“The rout in developer shares means the richest bosses behind China’s real estate firms have lost more than $46 billion combined this year, according to the Bloomberg Billionaires Index. Evergrande founder Hui Ka Yan’s wealth alone has plunged by $17.2 billion.”
“December is poised to be a record month for Chinese offshore corporate defaults after missed payments by indebted companies including China Evergrande and Kaisa Group Holdings Ltd. Chinese firms have defaulted on a record $3.8 billion in offshore bonds so far this month, data compiled by Bloomberg show. The previous monthly high was in January when Chinese borrowers failed to repay $2.7 billion of such notes.”