Friday, December 12, 2008

"Rogues in the Real Estate Industry"

From the Sacramento Bee:

You would think people with mortgage problems have enough trouble. But rogues in real estate always find new ways to inflict more. Last year it was foreclosure rescue schemes that robbed desperate people of their homes. Now, it's loan-modification firms taking cash advances from struggling borrowers and disappearing.

Home Front has heard countless stories from struggling borrowers of phone calls offering to mediate with banks for $2,000 to $4,000 or more. Many are so desperate and confused they pay for what they can do themselves or get for free from nonprofit loan-counseling firms. Some say they have paid their advance fees, then can't reach the firm.

The California Department of Real Estate cites an "explosion" of for-profit loan-modification firms as the foreclosure crisis deepens. Former lenders and real estate agents have retooled, and jumped to the newest way to generate income.
It's just one more example of rogues in the real estate industry who are always adapting to the newest problems people are having. Honestly, this is an industry that is going to have years of an uphill fight to rebuild trust.
From the Modesto Bee:
Foreclosure filings fell nationwide in November, but they spiked dramatically in the Northern San Joaquin Valley, statistics released today by RealtyTrac show. Lenders repossessed 1,641 homes last month in Stanislaus, San Joaquin and Merced counties, and they warned 2,727 additional homeowners that foreclosure was imminent if they didn't pay up.
From the SF Chronicle:
The recession that has already devastated the Central Valley has started to hurt the Bay Area, causing job losses that will continue through 2009 when the economy should begin a slow and weak recovery, according to a bleak forecast issued today. "There is no suggestion in the data that we are near that bottom," was the somber message of the UCLA Anderson Forecast, a quarterly look at the state economy conducted by the university's business school.
"The inland areas have been hardest hit by the housing downturn and are being hardest hit by the pullback of the retail and the wholesale sectors," he [economist Jerry Nickelsburg] said. "Here you're talking about areas of the East Bay and the Central Valley."
From USA Today (hat tip Jeff):
[H]ome values have fallen so sharply since hitting a historic peak in the spring of 2006 that many Americans are wondering how much more prices can sink. As painful as the decline has been, history suggests home values still may have a long way to drop and may take decades to return to the heights of 2½ years ago. "We will never see these prices again in our lifetime, when you adjust for inflation," says Peter Schiff, president of investment firm Euro Pacific Capital of Darien, Conn. "These were lifetime peaks."

The boom in home prices — fueled by heavily leveraged loans built on low or even no down payments — made it easy to forget that housing values had been remarkably stable for a half-century after World War II, rising at roughly the same pace as income and inflation. Prices soared in most of the country — especially in Arizona, California, Florida and Nevada and metro areas of Washington, D.C., and New York — during a brief period of easy lending, especially from 2002 to 2006. That era's over.


smf said...

"We will never see these prices again in our lifetime, when you adjust for inflation," says Peter Schiff...

Where have I heard that phrase, months ago...hmm...where?

Can you imagine what will happen when all those people buying those investment homes realize this?


Deflationary Jane said...

**echo snicker**

patient renter said...

Can you imagine what will happen when all those people buying those investment homes realize this?

Bailout #234768342, administered by the Federal Bailout Agency (FBA), of course.

As for me, I'll see your snicker and raise you two snickers!

smf said...

I'll go one better...


norcaljeff said...

I'll trump you one more:

"madoff" :)

Cow_tipping said...

The bay area ... I thought that will never go down ... never I tell you ... Never.

Deflationary Jane said...


I spend a lot of time in in the Bay Area and believe me, they are finally "getting it".

Some friends showed me around their neighborhood where every 11th or so house was empty. These were big 2400 sqft + homes built in the 90s. The homes that still have people living in them had all the BMWs and Escalades in the driveways. A zillow tour of the area was walked showed that many of the now vacant houses were bought in 02 or earlier. I'm guessing a lot of helocs have come home to roost.