Sunday, September 30, 2007




Video: Miami, Florida: Housing Crash 50% Off!

Thank you to a reader for giving us the following video. In this news clips, we see huge priced drops at the Platinum Condomium auction. How could there possibly be 50% price drops in these condo prices? After all, the Florida Association of Realtors® (FAR) recently told us, "Miami-Dade condo prices went up 5 percent [in August] to a median of $262,000."

CLICK HERE TO SEE THE VIDEO

This video perfectly illustrates the complete disconnect between FAR's statistics and the reality of the market.




Today's F@cked Buyer (Palm Beach Gardens)

Thank you to a reader for supplying today's F@cked Buyer. After sitting on the market for 283 days, this home still seems well over-priced despite its projected six-figure loss. To make matters worse, this property has an $1,800 quarterly HOA fee.

105 TRANQUILLA Dr, Palm Beach Gardens, FL 33418

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Saturday, September 29, 2007




Video: The Collapse of the Mortgage Lending Industry

This video illustrated how many lenders have actually been affected by the credit crunch.

CLICK HERE TO WATCH VIDEO




Today's F@cked Buyer (Palm Beach Gardens)

Thank you to "Michael F." for today's F@cked Buyer. As Michael pointed out, the buyer purchased this home using 100% financing with an absolutely brutal 2/28 ARM with 10.4% interest. This means that this buyer's monthly PITI + HOA is around $5,200. Over $5,000 a month for a 2-bedroom townhouse in Palm Beach Gardens? What was this buyer thinking?

2479 San Pietro Cir, Palm Beach Gardens, FL 33410

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Friday, September 28, 2007




Not all F@cked Buyers were irresponsible.

Since starting this site, I have received a few angry emails from homeowners and real-estate-industry workers who think that we take pleasure in the misfortune of others. Specifically, they point to the daily F@cked Buyer posts that seemingly mock those who are facing hardship. However, as I have pointed out in the past, these posts are not intended to deride trouble homeowners.

Instead, I make these daily posts to counter the popular perception that the housing market is only facing a minor correction. Our local newspapers often regurgitate the propaganda by the Florida Association of Realtors® (FAR) -- propaganda designed to make us believe that the “correction” has been minor. These posts show that the market is declining rapidly regardless of FAR’s reports of stagnant Median Sales Price statistics. I also make these daily posts to counter the repetitive and constant drumbeat of Realtors® reminding us that “Now is the time to buy.” These F@cked Buyer posts remind us that there are significant risks involved with buying real estate and people are losing significant amounts on their real estate investments. Ultimately, these posts reflect the reality of the market.

Still, I have to admit there have been times where I have enjoyed watching the housing market slump. In early 2005, when I started to really pay attention to the housing bubble, the real estate cheerleaders were seemingly everywhere trying to convince anyone who would listen that housing market would continue with 20% annual increases into the foreseeable future. The deflated bubble has vindicated all of us who endlessly debated the cheerleaders in those days. More importantly, I am thankful for the housing slump because real estate had simply become unaffordable for most hardworking folks. I look forward to the day when two teachers working in South Florida can once again afford a modest, single-family home or townhouse.

Most of all, I have enjoyed watching the sleazy part of the real estate industry wither away. Watching those who were primarily responsible for the bubble go broke has been my favorite pastime since 2005. I have enjoyed watching flippers and speculator lose their shirts. The demise of subprime lenders, irresponsible mortgage brokers, and highly-levered CDO hedge funds is especially entertaining to watch. Hopefully, we will never see anyone ever lend a 100% financing, teaser-rate, ARM mortgage to someone without verifiable income ever again.

With that being said, let us not forget that many hardworking, honest, responsible people have been severely hurt by the housing slump. To illustrate, I think of some my close friends, a husband and wife, who are now F@cked Buyers.

Both in this couple are well-educated professionals, have good jobs, and make good money. By any measure, they are responsible and live well within their means.

In 2005, these friends decided to sell their small townhouse and buy a nice, single-family home (SFH). After watching the value of SFHs in South Florida nearly triple in just four years, they felt that they had to make this move or "risk being priced out of the market forever" (a common Realtor® mantra at the time).

So, they sold the townhouse and invested the profit into a $500,000 home -- a home that they could easily afford with their salaries. They did not take out a silly teaser-rate ARMs -- they simply took out a conventional 30-year fixed mortgage with a payment that was well within their means.

Unfortunately, now their home is worth about $400,000. They still owe $430,000 on the home. So, if they wanted to move, they would have to come to the closing table with about $54,000 after paying Realtor® commissions (that's after losing the $70,000 they put down). Since they don’t have the much money saved up, they are stuck in their home.

Just recently, they found out that they're having a baby. She wants to quit here job and stay at home to raise her kid rather than putting it in a daycare. But, she cannot quit because they need her salary to service their mortgage. To make matters worse, I fully suspect the home they once purchased for $500,000 will be worth about $250,000 (2001 prices) when we finally hit bottom. Unless something changes, they will be slaves to their mortgage for the next 10 years or more.

I have little doubt that we could find thousands of people across South Florida who are in similar positions. They did not buy beyond their means. They did not fall for subprime teaser-rate loans. They were not flipping or speculating. They simply made the wrong decision to buy a home in South Florida between 2004 and now.




Video: Cramer says, "Do NOT buy now!"

A few months ago, CNBC's Jim Cramer downplayed the housing slump. Now, he's angering Realtors® by providing good advice.

CLICK HERE TO WATCH THE VIDEO








Today's F@cked Buyer (Miami Beach)

Thanks to "ShortingSouthBeach" for providing today's F@cked Buyer. While this property has languished on the MLS for over a year, the owner has been paying an amazing $960 per month in HOA fees.

650 WEST AV Unit: 1002, MIAMI BEACH, FL 33139

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.




Today's Local Real Estate News: "They're on strike, waiting until after prices have fallen."

Local10.com reports that South Florida leads the nation in mortgage fraud:

“A mortgage fraud initiative that includes local, state and federal agencies will crack down on violators in light of the rising number of mortgage fraud cases in South Florida, said the United States attorney for the southern district of Florida Thursday.”
“‘The American dream of home ownership is under attack by mortgage fraudsters. Mortgage fraud puts lenders at risk and confronts homeowners with the possibility of foreclosures and the loss of their homes,’ said Alex Acosta, the U.S. attorney for the southern district of Florida.”

“As reported by Fannie Mae in June 2007 and by the Mortgage Asset Research Institute in May 2007, Florida led the nation in mortgage fraud rates this past year. Within Florida, South Florida has the highest rate of mortgage fraud in the state.”

“Officials involved in the initiative said more arrests are to come.”

“‘The mortgage lending and housing market have a considerable overall effect on the nation's economy and combating mortgage fraud will remain a top priority for the FBI,’ said Jonathan I. Solomon, special agent in charge of the FBI's Miami office.”

The Miami Herald reports on the national new home sales data released yesterday:

“New-homes sales tumbled in August to the lowest level in seven years, a stark sign that the credit crunch is aggravating an already painful housing slump.”

“Sales of new homes dropped 8.3 percent in August from July, the Commerce Department reported Thursday, driving down sales to a seasonally adjusted annual rate of 795,000. That was the lowest level since June 2000.”

“‘This is just hideous,’ said Ian Shepherdson, chief economist at High Frequency Economics.”

“Home prices tanked. The median sales price in August fell by 7.5 percent from a year earlier to $225,700. That was the biggest drop in percentage terms in nearly 37 years. The median price is the middle point at which half sell for more and half for less. The average sales price dropped by 8 percent in August from a year earlier to $292,000. That was the biggest decline in 17 years.”

The Chicago Tribune quoted University of Florida professor, Jay Ritter, on the slow sales:

“‘Mismatched expectations,’ explains Jay Ritter, a professor of finance at the University of Florida who says that consumer behavior is the wild card in the marketplace impasse.”

“Many home sellers, he says, are in love with the old days, when home prices seemingly rose by the hour.”

“And sellers, he said, are stuck in neutral, waiting for a better deal.”

“‘When prices are going down and there are articles in the news about prices dropping, it leads more people to wait and see, and it becomes a self-fulfilling prophecy,’ Ritter said. ‘Rather than closing the deal now, they're on strike, waiting until after prices have fallen.’”

CNNMoney.com reports on vulture investors in South Florida

“Real estate investor Matthew Martinez is the point man for a private equity group that plans to invest $200 million in Florida condo developments.”

“But recent forecasts show many housing markets in the Sunshine State are looking at double-digit drops in home prices. What is he thinking?”

“‘We believe in the long-term viability of the Florida real estate market, but we're buying on rental economics,’ Martinez says. ‘People had been purchasing on condo economics and those numbers no longer apply.’”

“He's looking for 15 percent or higher discounts off previous condo prices to make his purchases viable. He then plans to convert the apartments back into rental units.”

The Palm Beach Post reports that falling property values does not necessarily mean falling property taxes:

“For the first time in more than a decade, Palm Beach County's taxable value is expected to drop next year by 5.4 percent, according to preliminary estimates released this week by the property appraiser's office.”

“The dip comes after years of double-digit property value increases that poured millions of dollars of tax revenue into local government coffers.”

“But even though values are declining, many property owners may not see their tax bills drop. In fact, many could be paying more in 2008, Property Appraiser Gary Nikolits said Thursday.”

“Local governments could be forced to raise their tax rates to make up the property tax revenue they will lose because of dropping values, Nikolits said.”

“Residential property values are expected to drop by about 15 percent next year, according to preliminary estimates. But officials in the property appraiser's office warn that number could be higher by the end of the year because values have been slipping at a much faster rate in recent months.”

“‘Toward the beginning of the year, especially in the first three or four months, prices were flat,’ said John Thomas, assistant director of residential appraisal services for the property appraiser's office. ‘In the last few months, we are starting to see the values slip, and it appears to me that the rate of decrease is accelerating.’”

Target Corp. blamed some of its poor earnings projections on the Florida housing slump:

“Target Corp.'s (NYSE: TGT) is now warning the market of a slower September sales month after coming off several months of better-than-expected same-store sales. The nation's second-largest discount retailer seemed to set a scary precedent for other retailers as well, with the market thinking that a slow holiday season could set in as October approaches and the holiday shopping season begins in November.”

“This week, Target, cut its forecast for September same-store sales (sales from stores open at least a year) to 1.5% to 2.5% -- quite a drop from the previous 4% to 6%. In a sign that maybe the housing market was playing a factor, the retailer stated that sales in Florida was particularly sluggish. The state is sharing the top spot with California in terms of housing foreclosures and mortgage flops.”

Thursday, September 27, 2007




Today's F@cked Buyer (Boca Raton)

Thank you to "140 dollars per sq foot" for this new record loss on the daily "F@cked Buyer" post. This currently shows a $1.078 million dollar loss. It has been foreclosed on and is now bank-owned. It has languished on the market since January.

7649 WOOD DUCK Dr, Boca Raton, FL 33434

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.




Today's Local Real Estate News: "That's an all-time high. That's horrible."

The Miami Herald reports on the continued deterioration of home sales:

“Home sales fell sharply in August, the Florida Association of Realtors reported. The number of homes for sale still greatly outstrips demand. Banks that doled out too many risky mortgages have made it harder for buyers to borrow. Foreclosures are likely to worsen as adjustable rate mortgages reset to higher interest rates. And jittery buyers are sticking to the sidelines.”

“‘'We have not only not seen evidence of any of these items resolving, but instead we have seen further deterioration,’ Lennar CEO Stuart Miller said. Lennar, one of the nation's largest builders of new homes, has shaved 35 percent of its workforce since the downturn started last year and may let more people go.”

“In Miami-Dade County, existing single-family home sales in August dropped 45 percent from the same month a year ago and 24 percent from July. Broward single-family home sales in August were off 23 percent from August 2006 and 4 percent from July.”

“It was a similar story for condominiums. Miami-Dade condo sales fell 44 percent in August over last year and 16 percent from July. Broward condo sales were off 22 percent from last year and 2 percent compared to July.”

“This means the number of homes waiting for buyers continued growing -- from 60,900 in Miami-Dade and Broward in August 2006 to more than 80,000 this year. At the current rate, it would take 25 months to sell all of the single-family homes on the market in Miami-Dade, and 36 months for condos. It would take 21 months to sell all the homes in Broward, and 29 months for condos.”

The Sun-Sentinel reports on Palm Beach County’s housing slump:

“Sales of existing homes in Palm Beach County declined 13 percent to 568 from 655 a year ago. The median price of $366,200 was off 5 percent from $386,000 last August. And the number of homes on the market hit a record as the inventory topped 40 months.”

“The county's condominium market also was sluggish last month. Sales fell 16 percent, and the median price of $209,000 dropped 5 percent from $220,300 a year ago.”

“‘The housing market is trying to find a bottom, but it's just not there yet,’ said Mike Larson, an analyst with Weiss Research in Jupiter.”

“The number of properties on the market in Palm Beach County has leveled off in recent months but still is up over last year. There were 33,708 homes and condos for sale at the end of August, a 10 percent increase from 30,774 a year ago, according to Illustrated Properties in Palm Beach Gardens.”

“At the current pace, it would take 40.3 months to sell that inventory, assuming no new properties were listed. ‘That's an all-time high,’ said Chappy Adams, president of Illustrated. ‘That's horrible.’”

“Horrible” can also be used to described the earnings report by Miami-based Lennar. The Sun-Sentinel reports:

“Tough times in the national housing market led to a company record loss of $513.9 million for Lennar Corp. in the third quarter, with drops in sales prices and home deliveries compounded by heavy charges to write down land values. Its shares fell almost 4 percent.”

“One of the nation's largest home builders said Tuesday it had cut its work force by 35 percent this year and that it expects to pare more employees soon.”

“‘These continue to be very difficult times for the homebuilding industry,’ Lennar Chief Executive Stuart Miller said in a conference call.”

“It was the biggest quarterly loss in the 53-year history of Lennar. Miller said consumer confidence in the housing market is low.”

The Palm Beach Post reports on a protest by ACORN:

“Dozens of people poured out of a big yellow school bus in Wednesday's rain to protest what they said was Ocwen Financial's predatory lending practices.”

“The group, members of ACORN, crowded into the lobby of Ocwen's headquarters, chanting loudly and demanding to talk to the chief executive of one of the country's largest subprime loan servicers.”

“ACORN - Association of Community Organizations for Reform Now - wants Ocwen to stop foreclosures and evictions immediately, restructure loans based on borrowers' incomes and ability to pay, and offer to lock in the initial interest rate for the remaining terms of the loan for borrowers who cannot afford monthly payments that are about to reset at much higher interest rates.”

“ACORN estimates 1.8 million adjustable rate mortgages worth $900 billion will reset by the end of this year and in 2008.”

“In June alone, $25 billion in loans reset.”

“Of all homeowners who received a subprime mortgage in recent years, one in three will lose their homes within the next six years, according to the activist group.”

In the face of this news, the NAHB is going on a “Buy Now” campaign. The Palm Beach Post reports:
“Weary of what they say is a ‘relentless tide of bad news’ (Hmmm. Where have we heard that before?), builders are fighting back - in the media, no less.”

“The National Association of Home Builders leveraged its $3 million national ad campaign into a broader $8.3 million campaign with funds from local home-building associations. The NAHB provided grants to 168 HBAs in 42 states.”

“Many of the grants for the "Buy Now" builders' ad blitz went to states hardest hit by the housing downturn, including Florida.”

Wednesday, September 26, 2007




Today's F@cked Buyer (Tamarac)

Here's another non-homesteaded unit that was purchased in 2005 and is now being offered as a short sale.

8370 SANDS POINT BL Unit: H-109, TAMARAC, FL 33321

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.




Update: September Median Listing Prices and Inventory

The Florida Association of Realtors (FAR) released its August sales data for South Florida today. Again, FAR continues to provide data that doesn’t tell the full truth. The Sun-Sentinel reports:

“Sales of existing homes in Palm Beach County fell 13 percent from a year ago, while the median price of $366,200 dropped 5 percent from $386,000.”

“Broward sales plummeted 23 percent from a year ago. The median price inched up 2 percent to $368,800 from $362,800 last August but was down from $373,700 in July.”

“Meanwhile, the condominium markets in Palm Beach and Broward counties also took a hit last month.”

“Condo sales in Palm Beach County fell 16 percent, and the median price of $209,000 was off 5 percent from $220,300 a year ago.”

“Broward's condo sales dropped 22 percent, while the median price of $178,800 dropped 12 percent from $204,300 last August.”

While these numbers certainly do not seem rosy, FAR continues to use median sales price as an indicator rather than using median listing price. A previous post on the “Myth of the Median Price” shows how the median sales price is used to distort reality. A much better gauge of market performance is the median listing price, which continues to fall rapidly in South Florida. The year-to-year median listing price drop across South Florida is 11.11%. The month-to-month drop in median listing price is 1.54%.

Here is an updated graph on the median listing price in South Florida (source: Housingtracker.net):




Again, this month’s update graph shows sustained and constant drops. Clearly this chart shows a much different picture than painted by FAR. The inventory of unsold homes also continues to grow. The year-to-year increase in inventory was 25.89% and the month-to-month increase was 1.55%. Here’s the updated graph:

Tuesday, September 25, 2007




Today's F@cked Buyer (Boca Raton)

I found this foreclosure being discussed on the Palm Beach Post message boards. It has seen a 57% decrease in price from its 2004 purchase price and shows the biggest loss of all "F@cked Buyer" listed on this site to date. For some reason, it shows up on the Ziprealty and the linked Expert Realty sites, but is not showing up in Realtor.com.

3720 S OCEAN BLVD # 207, Boca Raton, FL 33431

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Monday, September 24, 2007




Today's F@cked Buyer (West Palm Beach)

How's this investment working out for this flipper? It was purchased only seven months ago and appears that has never been lived in based on the photos. Now, it's being offered as a short sale.

4199 N Haverhill Rd # 113, West Palm Beach, FL 33417

3 Bed, 2 Bath Townhouse
Bought in February 2007 for $280,000
On the MLS for $239,900
Days on the Market: 13
Loss before the Realtor® commission: $40,100
Loss after the Realtor® commission: $54,494

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Sunday, September 23, 2007




Today's F@cked Buyer (Fort Lauderdale -- Las Olas)

I am including this unit because even though it should not be a "F@cked Buyer" situation. However, this shows how some people profited handsomely off the irresponsibility of some lenders (lenders that Congress and Bush plan to bail out). This unit should have been "profitable" if it sells at its current price

333 LAS OLAS WY # 505, Fort Lauderdale, FL 33301

This is what could have happened, but will not. Instead, soon after closing on this unit, the "owner" took out $515,000 in mortgages on this unit through a 80/20 piggyback ARM -- in other words, he put $216,000 of cash in his pockets (before transactions costs) by "buying" this unit.

Now, this "owner" is trying to sell this through a short sale. If it sells at this price, the loan holder will lose $139,940 after paying the Realtor commission.

So, if this transaction completes at this price, the "owner" walks away with $216,000 minus transaction cost (might be worth the 7 years of ruined credit). In turn, the loan holder is out at least $139,940.

Ultimately, I doubt that this unit will ever sell, especially at this price. Instead, it will probably go into foreclosure and the loan holders lose even more.

On a side note, the $515,000 mortgage was granted to the "owner" despite an outstanding $20,000 judgement against him from AMEX.

You can see the documents related to this transaction by clicking here.

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Saturday, September 22, 2007




Today's F@cked Buyer (Miami -- Brickell)

The bank that is holding this foreclosure is currently paying $11,962.46 a year in taxes plus another $5,544 a year in HOA fees. You'd think they'd be more eager to sell this, but it's still overpriced by more than $100,000.

701 BRICKELL KEY BL Unit: 506, MIAMI, FL 33036

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Friday, September 21, 2007




Today's F@cked Buyer (Miami Beach)

This short sale listing was only bought 12 months ago. The listing agent says, "This foreclosure unit will not last." Yet, it has been on the market for almost 150 days. At its current price will probably languish indefinitely. On a side note, you've got to love this lazy listing Realtor -- after nearly a 150 days on the market, he still can get a photo to show up on Realtor.com.

110 WASHINGTON AV Unit: 2608, MIAMI BEACH, FL 33139

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Thursday, September 20, 2007




Today's F@cked Buyer (Wilton Manors)

Thank you to a reader for this foreclosure in Wilton Manors. This has to make you question if it was a case of mortgage fraud. Even it the hottest market, in my opinion, this house was never a $500,000 home. The home was bought in October 2006 with 100% financing using a 80/20 piggyback ARM. It was foreclosed on only 10 months later. Since it typically takes nine months to complete a foreclosure, I wonder if this "buyer" ever paid a cent on her two mortgages.

It is transactions like this that seemed to drive the market in 2005 and 2006 when most legitimate buyers had been priced out of the market. Also note that this property is being sold far below its previous, 2004 selling price of $310,000.

2808 NE 10TH TE, WILTON MANORS, FL 33334

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Today's Cover in Sweden's Most Popular Newspaper

In a previous post (click here to see the previous post), I mentioned that Scandinavians seem more aware of our impending housing crisis than most Americans. Today’s cover of the business section of Sweden’s most popular newspaper helps prove this point:



The approximate translation of the headline is: “Stock Market Rises after USA Fed Drops Interest Rates -- At the same time, Americans are threatened by homelessness as a result of the financial crisis.” Incidentally, the headline is referring to the Swedish stock market, which went up 3.24% in response to the Fed rate change.

Wednesday, September 19, 2007




Today's F@cked Buyer (Tamarac)

Thank you a reader, "140 Dollar per Sq Foot" for this property. This unit shows how trying to catch a falling knife can get one in trouble. It was purchased only six months ago and is already on the market for some reason. Because the property is homestead and the photo make it appear to be lived in, this unit does not look like a flip. Yet, after living in the home for only six months, the owners are selling it for some reason. They've listed it as a short sale, so if it sells, they will lose their downpayment (only $800 on this 80/20 piggyback ARM), some of their furniture, which they're throwing in according to the listing agent notes, and their credit rating. They will also get hit by a hefty tax bill when they receive their 1099 at the end of this tax year (assuming it sells). They would have been MUCH better off renting.

5908 NW 70TH AV, TAMARAC, FL 33321

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Tuesday, September 18, 2007




Video: Flipper Nation (Episode 3): The Flippin' Fight

This is the third episode of a great series mocks flipping shows that have become popular on A&E, TLC, and HGTV:

CLICK HERE TO SEE THE VIDEO




Today's F@cked Buyer (Fort Lauderdale)

The projected $670,000 loss on this foreclosure is stunning. It is priced 53% below its 2004 purchase price and has been on the market for over 100 days.

2100 N OCEAN BL # 7-B, Fort Lauderdale, FL 33305

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Monday, September 17, 2007




Video: Flipper Nation (Episode 2): The Blame Game

This is the second episode of a great series mocks flipping shows that have become popular on A&E, TLC, and HGTV:

CLICK HERE TO SEE THE VIDEO




Today's F@cked Buyer (Tamarac)

Many think that 50% price drops from our 2005/2006 peaks is absolutely ridiculous. This property shows that it's not only plausible; it's happening. This 55-and-over property is priced 53% off of its 2006 purchase price. Ouch.

6401 N UNIVERSITY DR Unit: 202, TAMARAC, FL 33321

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Sunday, September 16, 2007




Today's F@cked Buyer (Hollywood)

Eventhough the projected loss on this one is not huge, this foreclosure is interesting because it has languished on the market for 189 days despite being priced below 2004 prices. The bank has held this since December 2006 and still hasn't been able to sell it.

4400 HILLCREST DR Unit: 720C, HOLLYWOOD, FL 33021


I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Saturday, September 15, 2007

A Casual Observation on our Collective Cluelessness

I apologize for my dearth of posts lately. I am on two-week vacation visiting family in various Scandinavian countries. I thought I would have more time to post while on vacation, but my schedule has been filled and my availability to wireless connections limited. Frankly, I have too much fun with my family to keep up with this site.

During this vacation, I made a casual, but surprising, observation on the relative cluelessness of Americans on the economic tsunami that is rapidly approaching.

I work in a professional office that has nothing to do with real estate. Since many of my coworkers know that I am an avid (my wife would say obsessed) follower of the real estate market, many come to me and ask me for my opinion on the current market. When they do, I am constantly amazed how little my coworkers know about our current economic situation.

For instance, just prior to leaving on vacation, a coworker asked me if it was a good time to sell her Coral Springs townhouse. I explained that it was a good time to liquidate real estate holdings and remain on the sidelines. However, I explained that it would be extremely difficult to sell her home and she would have to be aggressive with her pricing strategy. When she explained that she purchased her home in 2005, I cautioned her that she would probably have to sell for significantly less than her purchase price. At this point, she instantly doubted my knowledge – she explained that in her neighborhood, prices had not dropped and people were making sizable profits on their sales.

I hate to admit it, but after our conversation, I looked up her property and her debt. Currently there are identical townhouses to hers that had languished on the market for months at prices about 20% below her original purchase price. I also found out that she financed 100% of her purchase with an 80/20 piggyback loan with an option ARM. Simply put, she is a “F@cked Buyer.”

During our conversation, I also noted that she had no idea about the economic pressures on housing. She knew nothing about the subprime mess, the proposed bailout, the securitization of mortgages, the credit crunch, or the global implications of Greenspan’s loose monetary policies over the past decade. Keep in mind, this particular coworker is very well-educated with an MBA from a top school. She is also someone that I consider otherwise intelligent and professionally competent.

But this conversation with my coworker is far from isolated. On a daily basis, I encounter people that know nothing about our economic situation. They know nothing about CDOs, REOs, or ARM resets. Often they make critical financial decisions on real estate, but are completely blind to local ballooning inventories, rapidly falling prices, or the massive overbuilding in South Florida. They buy into Realtor-driven mantras like, “Now is a great time to buy!” Many still think option ARMs are still a great alternative form of financing because of the flexibility they offer.

But, cluelessness on simple economics never surprises me. I realize that I am a geek who follows economic trends as a pastime and do not expect others to do the same. However, on this vacation I have been absolutely shocked by our cluelessness relative to those that I have spoken with here in Scandinavia.

I have repeatedly talked to people here that understand what is happening in the United States. They understand our credit crunch, how we securitized our mortgages, and how our impending ARM resets are only now starting to affect our market. I have seen finance magazines in Sweden, newspapers in Denmark, and local television news programs that have the woes of the American real estate market as their lead stories. They seem far more concerned with our economic situation that we are.

I am not really sure if my casual observation is fair mainly because it is purely anecdotal. Perhaps, my daily encounters with people in U.S. are with people who are excessively ignorant. Or, maybe my talks with family and friends in Scandinavia are with most apt to follow global economic trends. Nonetheless, my personal observation stands – we are collectively more clueless about our own economic situation than our Scandinavian counterparts.

Why is this happening? First, having lived in Europe, I have never bought into the ridiculous notion that Europeans are simply more aware and better educated than Americans. First, Americans are more apt to have university educations and are far more likely to have advanced degrees. Furthermore, there are other issues where I find Europeans are far more clueless than Americans (i.e., entrepreneurship, terrorism, taxation, issues in the Americas, et al). However, this issue is different.

Personally, I think European national media has done a much better job of covering this situation. Their media are much less likely to be influenced by the real estate industry – U.S. Realtors do not threaten their newspapers for reporting the truth. Their media also tends to blame the United States for their own woes – if Swedish banks are getting clobbered because they moronically invested in American securitized mortgages, the Swedish press will make sure to report on our lack of government oversight in the mortgage industry and Greenspan’s reckless monetary policies.

More importantly, I think all populations tend to bury their heads in the sand when facing peril. While my coworker asked me for my opinion on real estate, she really did not want to know her true plight. People who own homes (over 75% of Americans) do not want to hear that their single biggest investment is rapidly losing value. So, we’ll keep our heads buried until the bitter end.




Today's F@cked Buyer (Miami)

This unit has been on the market for nearly a year. It was originally listed for $231,980.


13015 SW 88 TE Unit: 201-B, MIAMI, FL 33186



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Flipper Nation (Episode 1): The First Flip

This great series mocks flipping shows that have become popular on A&E, TLC, and HGTV:

CLICK HERE TO SEE THE VIDEO

Friday, September 14, 2007




Today's F@cked Buyer (West Palm Beach)

1145 GOLDEN LAKES BL Unit: 712, WEST PALM BEACH, FL 33411



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Thursday, September 13, 2007




Today's F@cked Buyer (Boca Raton)

5080 HEATHERHILL Ln # 3201, Boca Raton, FL 33486



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Wednesday, September 12, 2007




Today's F@cked Buyer (Miami)

Thank you to a reader for this property. This property has been listed for more than 300 days.


10000 NW 80 CT # 2313, Miami, FL 33016



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Tuesday, September 11, 2007




Today's F@cked Buyer (West Palm Beach)

6410 EMERALD DUNES DRIVE Unit: 304, WEST PALM BEACH, FL 33411



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Monday, September 10, 2007




Today's F@cked Buyer (Miami)

This property has lost 24% of its value in a little over a year.


3406 FRANKLIN AV, MIAMI, FL 33133



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Sunday, September 9, 2007




Today's F@cked Buyer (Lake Worth)

This foreclosure has seen a 25% price reduction in just 18 months.


7565 EDISTO, Lake Worth, FL 33467



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Saturday, September 8, 2007




Today's F@cked Buyer (West Palm Beach)

This one was purchased as a condo conversion back in 2005 and was never homesteaded. This has been listed for sale for nearly 300 days. At only 760 square feet, this one will be a tough sale at that price.


4131 SAN MARINO BLVD # 305, WEST PALM BEACH, FL 33409



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.




Today's Local Real Estate News: "‘5.2 percent of all mortgages in Florida were delinquent."

The Sun-Sentinel Editorial Board wants the Bush administration to bailout irresponsible lenders:

“Last week, the administration announced a series of well-timed steps to avoid a sharp increase in foreclosures across the country. Among the actions is one permitting the Federal Housing Administration to guarantee loans for delinquent borrowers, buying them time to refinance their mortgages.”

“The housing mess is no small chasm in the U.S. economy. The growing numbers of foreclosures hint at a much deeper train wreck ahead. The worry has roiled the stock markets, as has the bankruptcy filing of a major mortgage provider.”

“There are well-founded fears of a credit crunch, and the last time this happened, in the early 1990s, it led to a recession.”

“So, the Bush administration is smart to take measures to keep the foreclosure mess from worsening. Creating space for mortgage borrowers to refinance loans at manageable, fixed rates could keep lots of people from losing homes, and also keep them making monthly payments.”

“BOTTOM LINE: Bush administration right to act now, perhaps head off more foreclosures.”

This comes as the Palm Beach Post is reporting that ballooning foreclosure rates are largely cause by “investors:”

“Foreclosure filings in the Treasure Coast more than tripled in August as the worst housing slump in 16 years continued to send shock waves through local households amid more evidence that severe economic problems could be on the horizon.”

“The grim numbers released Friday came in the wake of a report Thursday by the Mortgage Bankers Association that documented record delinquencies and foreclosures across the country.”

“The trade group reported 5.2 percent of all mortgages in Florida were delinquent by the end of the second quarter, up from 4.4 percent at the end of the first quarter.”

“Investors are a major cause of the surge in foreclosures, analysts say.”

“‘Owners of condos who speculated pre-construction are trying to dump them at their sales price,’ said real estate lawyer John Pankauski from his office in West Palm Beach. ‘Investors will have to realize that to get rid of their condos — and to stop paying real estate taxes and maintenance fees - they will have to take a hit.’”

“Buyers have dried up, however, because of tougher credit practices and ‘the fact that the housing boom has run its course,’ he said.”


Yesterday’s jobs report revealed that unemployment is increasing in South Florida. The Sun-Sentinel reports:

“Employers sliced payrolls in August by 4,000 jobs, the first such decline in four years and a stark sign that a painful credit crunch that has unnerved Wall Street is putting a strain on the national economy.”

“The latest employment snapshot, released by the Labor Department on Friday, showed the unemployment rate held steady at 4.6 percent, mainly because hundreds of thousands of people left the work force for any number of reasons. The report spooked investors and the Dow Jones industrials fell almost 250 points.”

“Florida's job market has weathered the housing downturn somewhat better than the nation. The state lost 17,900 construction jobs in the last year, but its July employment report also showed strong gains in other sectors such as education and health services. On average, Florida employers have created 10,967 jobs a month this year.”

“As a result, Florida's unemployment rate was a relatively low 3.9 percent in July, even while the number of people without jobs increased in Palm Beach, Broward and Miami-Dade counties by 12,615 compared with June.”

The Sun-Sentinel reports on huge job cuts that were announced after stock trading closed on Friday:

“Struggling Countrywide Financial Corp., the nation's largest lender, said Friday it will cut as many as 12,000 jobs as it struggles to deal with challenging conditions in the mortgage industry.”

“The company said the cuts, amounting to as much as 20 percent of its work force, are needed because it expects new mortgages to fall about 25 percent in 2008 from this year's levels.”

“The job cuts are expected to center primarily on the company's production divisions and its general and administrative support areas, Countrywide Chief Executive Angelo Mozilo said in a letter distributed to employees Friday.”

“The company employs about 60,000 people, with about 34,000 working in loan production. The lender has loan offices nationwide, including in South Florida.”

In addition to lawsuits from defrauded mortgage holders, Jack Moussa is now facing a lawsuit from one of his investors. The Sun-Sentinel reports:

“A Delray Beach investor, who claims he was lured into investing thousands to salvage properties facing foreclosure, has filed suit against a Broward County foreclosure rescue company to recover his money.”

“Matthew W. Anderson sued Equity Investment Capital Management, the firm that owns foreclosure rescue firm Florida Housing Council, in Broward County Circuit Court on Aug. 23. The suit also names FHC and Jack Moussa, the registered agent for EICM; Star Enterprises and its owner Rose Moussa, Jerome Weinstein, and homeowners Connie and Roy Hull, who had sought help from FHC.”

“FHC and Moussa have been sued by homeowners in Broward, Palm Beach and Miami-Dade counties in recent years, alleging fraud and deceptive practices. Some homeowners said FHC officials created the impression the company is a federally funded agency that helps homeowners in financial distress.”

“The lawsuit comes at a time when foreclosure fillings have soared in South Florida and across the nation. The real estate market is no longer seen as a place where investors can make a quick profit.”

“Consumer advocates say the suit also highlights the risks of homeowners hiring a foreclosure rescue firm when facing financial difficulties. A better strategy, experts advise: Homeowners should work with their lender to create a plan that will move them out of financial difficulty.”

Friday, September 7, 2007




Today's F@cked Buyer (Miami Beach)

This property has been listed for over 200 days.


16851 NE 23 AV Unit: A508, MIAMI BEACH, FL 33160



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.

Thursday, September 6, 2007




Today's F@cked Buyer (Boca Raton)

The Realtor® listing this property has the interesting tactic of advertising the F@cked Buyer status. In his comments he says, "BEAT THE BANK!!!! PREFORECLOSURE PURCHASED FOR $295000 IN SEPTEMBER OF 2005!!!! ALL OFFERS SUBECT TO BANK ACCEPTANCE OF SHORT PAYOFF. NO CREATIVE FINANCING!!!"


9202 VINELAND CT Unit: D, BOCA RATON, FL 33496



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.




Today's Local Real Estate News: "There's still a lot of pain that's ahead of us."

The Palm Beach Post reports on pending home sales:

“A near-record low for an index that forecasts near-term home sales suggests borrowers in expensive areas are struggling to finalize home purchases amid mortgage market troubles.”

“The National Association of Realtors said Wednesday its seasonally adjusted index of pending sales for existing homes fell 16.1 percent in July from a year ago and 12.2 percent from the prior month. July's reading of 89.9 was the second-lowest ever for the index and its lowest since September 2001, when the economy was jolted by the terrorist attacks.”

“The pending home sales index is designed to predict sales levels over the following two months. A reading of 100 is equal to the average level of pending sales activity in 2001, when the index began.”

“‘Numbers like this should put to rest the belief that we've reached the bottom’ in the housing market, said Joel Naroff, chief economist for Commerce Bancorp Inc. ‘There's still a lot of pain that's ahead of us.’”

Officials testified in front of Congress yesterday on this issue:

“The worst housing slump in 16 years and upheaval in financial markets have cast a shadow on the economy, leading lawmakers to question federal regulators about the path ahead for anxious consumers.”

“A House panel was expected to examine the potential impact on consumers during a hearing Wednesday, five days after President Bush put forward a plan to help struggling borrowers keep their homes amid rising foreclosures. Regulators who oversee the markets, from the Treasury Department, the Securities and Exchange Commission, and the Federal Deposit Insurance Corp., were scheduled to appear.”

“An estimated 2 million adjustable-rate mortgages are scheduled to ‘reset’ this year and next, jumping from low ‘teaser’ rates for the first two or three years to much steeper rates that could cost borrowers their homes. The wave of resets could crest during the presidential and congressional election campaigns next year, and the issue already has brought politically tinged debate over possible responses by the government.”

“Defaults have spiked in recent months on high-risk subprime mortgages, loans that were extended to borrowers with weak credit histories. The rising tide of soured loans forced a number of lenders into bankruptcy, while hedge fund and other big investors in securities backed by subprime mortgages took deep financial hits.”

“The turmoil spilled over into global credit markets in recent weeks as investors faced the prospect of not being repaid. Credit tightened, even for more creditworthy borrowers. Stock markets around the globe gyrated wildly and key market indexes were knocked down. The Federal Reserve and other central banks swooped into the markets, pumping tens of billions of dollars into the financial system to help banks and other institutions get through the credit crunch and continue to make loans.”

The Sun-Sentinel reports on the high rate of subprime mortgages in South Florida:

“Up to half of home loans and refinancings in Broward and Palm Beach counties last year were made at above-market interest rates, and minority borrowers were far more likely to have such high-cost loans, a study issued Wednesday said.”

“The study, by the ACORN group of housing advocates, covered 172 communities and said Palm Beach County ranked 17th and Broward County 35th among areas with the most high-cost loans.”

“‘In 2006, adjustable-rate loans made up 80 percent of all subprime loans, a huge increase from 1999,’ said the study, titled ‘Foreclosure Exposure.’ ‘These loans fall disproportionately on minority borrowers,’ it said.”

A story in The Miami Herald refuted the Realtor®-created myth of population growth in South Florida (see my previous post on this issue):

Tenet Healthcare, the area's dominant hospital operator, is cutting 346 jobs at its hospitals in Miami-Dade, Broward and Palm Beach counties because of a continuing decline in patients, the company said Wednesday.

That translates to 174 jobs at its five hospitals in Palm Beach County and North Ridge Medical Center in Fort Lauderdale. It is cutting an additional 172 jobs at its other Broward and Miami-Dade county hospitals.

''This is a response to the protracted period of time that our volume and patient activity has been in somewhat of a downward spiral,'' said Mitch Feldman, vice president of Tenet's Palm Beach Network.

Feldman said hospital admissions were down last winter because fewer snowbirds came to South Florida. He said the slowing population growth and the downturn in the housing market is contributing to the reduction in patient demand.

Wednesday, September 5, 2007




Today's F@cked Buyer (Tamarac)

Thank you to a reader for this newly-listed home in Tamarac.

7800 NW 67TH AV, TAMARAC, FL 33321

I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.




Today's Local Real Estate News: "The ultimate beneficiary will be the lenders who get a bad loan paid off."

The Sun-Sentinel reports that Congress is looking to expand the proposed Federal bailout of irresponsible and reckless lenders:

“A House panel was expected to examine the potential impact on consumers during a hearing Wednesday, five days after President Bush put forward a plan to help struggling borrowers keep their homes amid rising foreclosures. Regulators who oversee the markets, from the Treasury Department, the Securities and Exchange Commission, and the Federal Deposit Insurance Corp., were scheduled to appear.”

“An estimated 2 million adjustable-rate mortgages are scheduled to "reset" this year and next, jumping from low ‘teaser’ rates for the first two or three years to much steeper rates that could cost borrowers their homes. The wave of resets could crest during the presidential and congressional election campaigns next year, and the issue already has brought politically tinged debate over possible responses by the government.”

“Observers say it is likely that the modest proposals Bush outlined last Friday will be expanded in coming weeks by a Democratic-controlled Congress seeking to respond to growing voter anxiety.”

“‘I welcome the administration's recognition that a greater public response is required and I look forward to working with them because I agree with a number of specific things that they propose,’ said Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee. Changes being proposed by Frank and other Democrats in Congress go further, however.”

Meanwhile, the Sun-Sentinel reports that the Fed is pleading with the reckless lenders to go easy on the troubled borrowers:

“The Federal Reserve and other banking regulators issued special guidance today urging loan service companies to work with borrowers in danger of defaulting on their home mortgages.”

“The new guidelines are not mandatory, but the regulators expressed hope companies that collect payments on mortgages would heed the advice.”

“Sheila Bair, chairman of the Federal Deposit Insurance Corp., said that mortgage collectors have the authority under existing accounting and tax rules to help deserving borrowers.”

“‘More and more consumers with subprime and hybrid mortgage products are facing the very real prospect of losing their homes through foreclosure as their payments reset and become unaffordable,’ she said in a statement. ‘It is vital that mortgage servicers work proactively with borrowers facing much higher payments as their interest rates reset.’”

The Palm Beach Post printed a column that encourages the Federal government to use billions of taxpayers’ dollars for the bailout:

“From the way President Bush's comments on the mortgage meltdown were pitched in advance, you would have thought his compassion had finally caught up with his conservatism. But it wasn't to be, not any more than the other times during the last seven years when the White House pulled the same feint.”

“Bush did not after all come to the rescue of the literally millions who may be within months of seeing their homes snatched away by jacked-up payments.”

“Instead, the administration would make maybe 80,000 additional people eligible for FHA-backed loans and will ask Congress for legislation to make it easier for some shaky homeowners to renegotiate with their mortgage holders.”

“Overnight the Fed can flood billions into the system to keep credit from seizing up altogether. It is difficult for this dolt to see why we can't devise relatively speedy administrative means to protect reasonably able families from foreclosures that would further depress housing by dumping thousands upon thousands of homes on what is already a buyer's market.”

“Sometimes a little humanity can be good business.”

While this columnist does not seem to understand the real purpose behind the bailout, at least Leon Mandell gets it. The Palm Beach Post recently published his letter to the editor:

“Any way you look at it, here goes the government again bailing out the lending industry, this time for its greed in making bad sub-prime loans ("Locals give Bush plan qualified thumbs-up," Sept. 1) - just like when the government bailed out the savings and loans.”

“While President Bush is suggesting that the Federal Housing Administration refinance loans for people with good credit who are not in a position to repay, the ultimate beneficiary will be the lenders who get a bad loan paid off. Their investors and other investors who invested in packages of sub-prime loans will come out whole. Again, big business is saved without any change in its lending habits or any change in the borrowing habits of the poor person who took out the loan.”

“I am a retired person on a fixed income. Can the government fix it so that my property taxes and homeowners insurance do not take a large share of my meager income? Who will bail me out when I no longer can afford to live in my home? Maybe someone like the tooth fairy will increase my Social Security payment in an amount sufficient to cover my needs.”

The Palm Beach Post reports on plunging construction spending:

“Construction activity plunged in July by the biggest amount in six months as spending on homes fell for a record 17th straight month.”

“The Commerce Department reported Tuesday that construction spending dropped 0.4 percent in July, compared with June, the weakest showing since a 0.6 percent fall in January.”

“It was a bigger drop than economists had been expecting and underscored the continued drag the severe slump in housing is having on building activity.”

“Housing activity fell by 1.4 percent, more than double the 0.6 percent decline in June, and has now declined for a record 17 straight months as home building suffers through its worst slump in 16 years.”

“Economists believe the downturn will get even more severe in coming months, reflecting the spreading problems in the mortgage markets. Rising delinquencies, especially by borrowers of subprime mortgages, are dumping more homes on an already glutted market. That is forcing builders to slash construction plans even further and offer a variety of incentives to move the homes they have already built.”

The Palm Beach Post reports that the subprime mess disproportionately affects minority borrowers:

“Minority borrowers in Palm Beach County were more than twice as likely to get high-cost subprime loans last year than whites were, a study scheduled to be released today shows.”

“Besides the racial disparity the study reveals, the findings suggest that minority borrowers have a higher risk of foreclosure because of their subprime mortgage rates.”

“Borrowers with subprime loans are already paying higher interest rates and don't have the resources to handle rising loan payments, the study says. More than $1 trillion in adjustable rate mortgages, or ARMs, are scheduled to reset to higher interest rates in the next few years.”

“Palm Beach County's African-American buyers were 2.4 times more likely than whites to be steered to subprime loans in 2006, according to the ACORN study. Nationwide, African-Americans were 2.7 times more likely than whites to get subprime loans.”

“Of 110 purchase loans made to African-Americans in Palm Beach County last year, 82 mortgages - nearly 75 percent - were subprime loans, according to the ACORN study.”

“‘We have seen a sharp increase in foreclosures in some of the urban and minority communities that most need to build wealth through home ownership,’ said ACORN National President Maude Hurd. ‘Too many of our neighbors were steered into unaffordable, exploding ARMs without being given an option for a fixed rate,’ she said. They face foreclosure, ‘which harms their families and our communities.’”

The Broward School Board announced that they support using taxpayers’ dollars to add to the massive inventory of homes in the County. The Sun-Sentinel reports:

“The Broward School Board on Tuesday overwhelmingly backed the unique concept of building affordable apartments reserved exclusively for district workers.”

“Public school employees just starting out in Broward County would be able to rent one-, two- or three-bedroom apartments at a price within financial reach, school district officials said.”

“By providing School Board-owned land to private developers, officials say they would be in a position to set affordable rents. No one would pay more than 30 percent of their salary for rent. A teacher with a starting pay of $38,500, for example, would pay no more than $962 a month.”

“‘They're making determination on where people should be living,’ Pat Santeramo, president of the Broward Teachers Union, told the South Florida Sun-Sentinel last week. ‘[Teachers] should be able to live wherever they want to live and afford it.’”

The Wall Street Journal reports on Fort-Lauderdale-based homebuilder, Levitt Corp.:

“Could Levitt Corp. be one of the first casualties among builders from the housing bust? The answer will partly depend on the success of the company's rights offering, which is under way.”

“Levitt, of Fort Lauderdale, Fla., played an important role in the history of the nation's home-building industry and was among the first companies to produce suburban tract developments. The company has been ailing for years because of management missteps.”

“Now Levitt's future seems uncertain as it rushes to raise cash. Last month, the company reported a loss of $58.1 million, or $2.93 a share, in the second quarter, and analysts don't expect a profit anytime soon. While stock prices of all home builders have fallen sharply in the past year, Levitt's stock has been hit harder than others and has plummeted more than 80%, the weakest performance among the 37 companies in the Dow Jones U.S. home-construction stocks index. Levitt's shares were down 11 cents to $2.23 yesterday in 4 p.m. composite trading on the New York Stock Exchange.”

But, don’t worry; the University of Florida has declared that the State’s real estate market is good shape. According to a survey released yesterday:

“Despite the bleak real estate outlook nationwide, Florida’s new home market appears for now to be stabilizing as a result of persistent demand for homes and lack of overbuilding, according to a University of Florida study released today.”

“‘There’s a growing feeling of apprehension or caution, but the results from our survey remind us that the underlying markets for real estate in Florida are still in good shape,’ said Wayne Archer, director of UF’s Bergstrom Center for Real Estate Studies. “Owner residential is the only area of real estate markets where there are problems at this time. Apartments, retail, office, industrial and hospitality all remain stable and healthy.’”

“The latest UF housing survey was conducted in July before the crisis had escalated. ‘If we could poll our respondents now, they might be quite a bit more apprehensive than they were two or three weeks ago,’ he said.”

“Whatever happens to the single-family housing market in the future, the chances of homeowners defaulting on their mortgages are small, he said.”

“Archer, who has spent most of his professional career studying mortgages, said people underestimate the tenacity of homeowners to remain in their homes. ‘Even if a homeowner gets in trouble, it takes a severe disruption in their household or their life before they will abandon their mortgage and their home,’ he said. ‘They will fight to keep that house. They’ll give up their car. They’ll take on four jobs. They’ll do whatever it takes.’”

Tuesday, September 4, 2007




Video: Subprime Primer by PBS's NewsHour

This video by PBS's NewsHour is one of the best explanation of the securitization that I have ever seen. It's a must watch -- prestented in two parts.


CLICK HERE TO WATCH PART 1 of 2



CLICK HERE TO WATCH PART 2 of 2




Today's F@cked Buyer (Miami)

This unit was originally listed for $225,000 over 250 days ago. They have dropped their price 11 times since then.


11111 BISCAYNE BL Unit: 5H, MIAMI, FL 33181





I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.




Today's Local Real Estate News: "Rates are higher because credit is more difficult to get."

The Sun-Sentinel reports on the continued push for a taxpayer-funded bailout out of irresponsible lenders:

“Want government help to get out of a bad subprime mortgage? Don't look for Congress to come to your rescue anytime soon.”

“Lawmakers have lots of ideas and plans -- as well as hearings to share their concerns and assess blame -- but there's no consensus on how to stop the foreclosures. The only thing everyone has agreed on is that something must be done.”

“‘We may have as many as 1 million to 3 million people who could lose their homes, not because they lost their jobs, not because the economy collapsed, but because they got bad deals on mortgages,’ said Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking, Housing and Urban Affairs Committee.”

“House and Senate lawmakers are working on different plans to help Americans out of the mortgage crisis, none of which seems ready for a prime-time signing by President Bush. Dodd acknowledged as much last week as he urged the White House to take action, despite all the mortgage-related legislation his committee has planned for the fall.”

St. Lucie lawyers are offering free legal assistance to troubled borrowers:

“As unprecedented numbers of St. Lucie County residents face the prospect of losing their homes through mortgage foreclosures, some local lawyers are stepping up to help these people, many of whom have never before dealt with the legal system, understand the law and navigate what can be a daunting process.”

“The St. Lucie County Bar Association, along with Florida Rural Legal Services Inc. and the 19th Judicial Circuit Pro-Bono Committee, have organized two foreclosure law clinics to give folks free help.”

“‘The idea is to give people one-on-one time with an attorney to answer specific questions to the extent that we can about the foreclosure process in general and steps they can take to preserve their rights,’ said Jason Halliburton, St. Lucie County Bar president.”

The Palm Beach Daily News reports on how the mortgage crisis is affecting the very wealthy:

“Volatile. Confusing. Troubling.”

“The careening, and career-denting, subprime mortgage sector is all that and more. It also is less catastrophic than some have indicated, say local and national experts who watch the markets closely.”

“Many financial institutions seared by the fallout have locations in Palm Beach, and some investment titans own homes here.”

“Yet borrowing money to buy a house on the island has not been jeopardized to any great extent by the larger crisis, said Ellen Bitton, of Palm Beach, CEO of Park Avenue Mortgage Group. She deals with many lenders, but the pack is dwindling.”

“Having the subprime sector in a supine stance affects all markets, Bitton said.”

“‘Rates are higher because credit is more difficult to get,’ she said.”

The Sun-Sentinel reports how the housing downturn is affecting employment for both legal and illegal immigrants:

“A combination of slowing construction because of dismal real estate sales and stepped-up scrutiny over employment documents has meant less work for many immigrants, particularly those who install drywall and roofing at South Florida construction sites.”

“Supporters of reduced immigration say this increased discomfort is precisely what's needed to persuade undocumented workers to leave the United States. Advocates for such workers say they will simply be pushed deeper underground as they struggle to survive.”

“‘Things have gotten much tougher, and if you do get a job, it's much easier for employers not to pay minimum wage, much easier not to give benefits, not to pay overtime,’ Bendixen said.”

“The poll of 900 immigrants, both legal and undocumented, concluded that more than 80 percent of immigrants from Mexico and Central America are finding it harder to obtain good-paying jobs than a year ago in the United States. The study was conducted in June, as the immigration debate consumed Congress, and released Aug. 14.”

“With bleak housing sales, fewer construction projects are in the pipeline, and analysts say the market isn't likely to pick up soon. Real estate analyst Mike Larson noted Palm Beach County has a three-year inventory of homes for sale.”

“‘Construction activity is weak and obviously the immigrant community fill a lot of construction jobs, and they're going to bear the brunt of it,’ he said.”

Yet, despite all this, the British population is being told that “Now, is the time to buy” in South Florida. The Telegraph reports from the UK:

“American estate agents claim it is ‘softening’, economists say it is ‘crashing’, and the truth is probably somewhere in-between for the US property market.”

“Prices had been climbing in Florida since 2003, with speculators pushing them up by 25 per cent a year. But the bubble has burst with an oversupply of housing and higher interest rates leading to price plunges over the past 18 months.”

“So why buy in Miami now?”

“‘It's a matter of taking a chance and playing the market,’ says Peter Esders of The International Law Partnership.”

“James Hickman, a currency exchange expert from Caxton FX, says the US market is still a good bet. He advises buyers to go for high-end property, particularly waterfront homes: ‘South Beach is popular, and with nowhere to build there any more, it is a good, long-term investment.’”

Monday, September 3, 2007




Today's F@cked Buyer (Deerfield Beach)

That you to the reader, "140 dollars per sq foot " for this listing. This foreclosure has been on the market for 83 days. The price has been dropped three times from its original price of $219,900.


1320 SW 6TH WY, DEERFIELD BEACH, FL 33441



I need your help with this daily feature. Do you know of a F@cked Buyer? Just add the MLS number or the FSBO link in the comments section and I will add it to an this daily update in the future.




Video: NewsHour on Bush's Bailout of Irresponsible Lenders

Of the major television news outlets, PBS has been by far the best at covering the housing bubble. In this segment:

"The NewsHour's extensive coverage of the Bush and Bernanke bailout of the U.S. housing market, along with a discussion with economists Mark Zandi and Diane Swonk and their expectations for an upcoming Fed rate cut."

This segment is delivered in two parts:

CLICK HERE TO WATCH PART 1

CLICK HERE TO WATCH PART 2




Today's Local Real Estate News: "Florida is at epicenter of U.S. housing bust."

Broward County may provide affordable housing for their teachers. The Sun-Sentinel reports:

“Broward County school officials are considering the unique idea of providing affordable housing to employees, which some hope could offset high housing costs they say deter teachers from working in the county.”

“‘Retention of existing school teachers is economically critical,’ states a report to be presented to the School Board for discussion on Tuesday. ‘To protect the educational system and to sustain Broward County Public Schools into the future, a districtwide housing plan for its teachers and other employees is necessary.’”

“Some educators, however, say affordable housing exclusively for school employees would do little to retain the county's teacher corps.”

“‘They're making determination on where people should be living,’ said Pat Santeramo, president of the Broward Teachers Union. ‘[Teachers] should be able to live wherever they want to live and afford it.’”

Meanwhile, the City of Miami Beach are making plans to provide affordable housing to artists. The Miami Herald reports:

“In an effort to bring new artists to the city, Miami Beach commissioners are expected to give preliminary approval on Wednesday to measures that would create affordable housing in the new Cultural Arts Neighborhood Overlay or CANDO.”

“Mayor David Dermer came up with the CANDO idea as a way to not only lure new artists to the city, but to also encourage new arts-related businesses to open up there.”

“To qualify for affordable housing in the CANDO district, the artist would have to be an employee of a cultural arts organization, like New World Symphony or the Miami Ballet, or is an artist ‘who creates art as an occupation or work in an art-related nonprofit field, which sponsors, creates of exhibits art.’ Also, they would have earn between 80 and 120-percent of Miami-Dade's median income of about $39-thousand for an individual, $4,700 for a couple.”

The Contra Costa Times reports on how some lenders encouraged borrowers to take out toxic loans:

“Patricia Clemons had a serious heart condition and she was living on a $1,094-a-month disability check when she answered a letter from a Florida mortgage broker in 2004. It promised what sounded like easy money and cash-back refinancing of her small home in St. Petersburg.”

“Financial planners warn against taking home loans whose monthly payments exceed 40 percent of income. Yet Clemons, 62, later learned that she'd signed up for a new loan whose costs exceeded 62 percent of her fixed income. To her horror, the loan from Advanced Funding didn't even have an escrow account to include taxes and insurance in her monthly payment.”

“‘When it came in the mail, it was telling me how much my mortgage was ... and they were saying we can refinance you for this much, and it was only up a few more dollars,’ Clemons said.”

“Weeks later, pressured by a loan officer, she signed the paperwork that began her nightmare. The ad that seemed too good to be true was.”

“‘How did I qualify to pay $688 a month when I could barely pay $500? How could they take me up that far?’ she asked in an interview, still angry. Add in insurance and taxes and her new monthly total was $813 -- 74 percent of her monthly disability check.”
The Palm Beach Post reports on insignificant property tax savings:

“When Palm City resident Sally Curtis heard that state legislators changed property tax laws this year to lower homeowners' tax bills, she envisioned savings hundreds of dollars.”

“Her tax notice arrived in the mail last week with word she would save $83, barely enough to cover a weekly trip to the grocery store.”

“‘This doesn't amount to a row of beans,’ Curtis said. ‘Eighty-three dollars? For a whole year? I was expecting a couple hundred dollars at least, at a minimum.’”

“Anthony DeMatteo, who lives in the Savanna Club on U.S. 1 near Port St. Lucie, found out he would save $41 on this year's tax bill. He blames a high taxable value on his manufactured house for the miserly amount and thinks his $83,089 assessed value is too high.”

“‘Places are selling for $69,000 now and were going for $90,000 four years ago,’ DeMatteo said. ‘You can't increase the taxable value and lower taxes. If I tried to borrow money on this place, I couldn't get the $127,500 market value they say it's worth.’”

Finally, a recent L.A. Time editorial echoed an earlier post (click here to see that post) that I made that pointed out that the housing mess is NOT a local phenomena:

The aftershocks of the sub-prime mortgage crisis are being felt across the country. But how many epicenters can one meltdown have?

* ". . . Stockton may be the epicenter of the earthquake, with the highest foreclosure
rate in the United States. . ."

--International Herald Tribune,
Aug. 14

* "In California, Perris is at the epicenter of mortgage problems. From November to January, 177 homes in Perris' central ZIP Code have received notices of default, the first step toward foreclosure."

--Los Angeles Times, March 16

* "Las Vegas . . . is the new epicenter of the sub-prime loan crisis, with more than
40% of all homes and condos on the market for sale vacant."

--Webwire, Aug. 27

* "Florida is at epicenter of U.S. housing bust."

--FT.com, Aug. 9

* "While tonight's congressional hearing on predatory lending unfolds in downtown Minneapolis, the epicenter of foreclosures and loan scams is just a few miles away, on the North Side."

--Minneapolis Star Tribune, Aug. 9

* " 'You are in the epicenter of the sub-prime-induced bubble.' "

--Wharton professor Susan Wachter in the Sarasota (Fla.)Herald-Tribune, Aug.
26

* "The witnesses we have here today are at the epicenter of the
sub-prime storm."

--Sen. Charles E. Schumer (D-N.Y.), referring to Cleveland at a Senate hearing, July 25

* ". . . Southeast Queens is the epicenter of the sub-prime mortgage foreclosure crisis. . . . "

--New York Beacon, July 12

* " 'Welcome to the epicenter of the mortgage meltdown in America.' "

--Cuyahoga County Treasurer Jim Rokakis in the Cleveland Plain Dealer, July 4

* "Florida has been an epicenter of speculation-driven real estate purchases in the past few years."

--St. Petersburg Times, May 18