Foreclosure Madness Just Won't Stop
More pain is forecast in the housing market.
All you need to do is look at Broward County Property Appraiser records to see why. There are thousands of properties left over from the housing boom that have neither been foreclosed or short sold.
"I think foreclosures have set a record every year the last four years now, and I think 2011 will break last year's record," said our resident expert, Jack McCabe, who foresaw the bust and doesn't see it bottoming until next year minimum. "The problem right now is that half or more of the sales are foreclosure or short sales. Because of that, we're going to continue to see prices go down because half of the sales are distressed sales."
If you haven't been profoundly affected by this mess, you know someone who has. This is something that we need to go through as a nation. Where is Obama? Playing footsie with the banks, letting them stall and hem and haw before they lower the hammer on the upside-down homeowners who are left and truly want to save their house? I believe the president's greatest failure so far has been his inability to get ahead of this crisis.
You want to see something scary? Go do a Broward Property Appraiser's website search on Sailboat Pointe.
Sailboat Pointe was a massive apartment complex in Oakland Park that converted to condos in 2005, at the height of the boom. It did a great sales job, apparently, as two/twos went for the high hundreds well into the two hundreds. These are units that rent for around a grand. It was insane.
Those same condos today are selling for about $50,000. Just to get an idea of where we're at right now, click here on the appraiser's site and punch "Sailboat Pointe" in where it asks for the subdivision name. Then look at the first unit on the list. It's owned by a man named Terry who is maintaining his homestead exemption on the house. He's apparently making a go of it. He paid $190,900 for the property in June 2005. It's now assessed at $50,000. That's the first one. Now just start going down the line of properties and you'll see that
many are in Terry's position. While some of the units have been foreclosed or short-sold, more appear to be just sitting there, waiting for the pain.
And there are dozens of complexes and neighborhoods across South Florida and the nation in a similar position. Remember, the country hasn't seen anything like this since the Great Depression, and Broward County was ground zero for the madness.
Loan remodifications are the answer, you say? Well, not until the banks really start to play ball. The derelict banks are offering lower interest rates to some homeowners, but, as McCabe will tell you, only very rarely do they offer reductions in the principle owed. Until the banks actually start reducing the principle, most modifications are nothing more than staving off the inevitable. "In a lot of cases, the homeowners are going to die before the house will be worth what they paid for them. We're turning people into glorified renters who will never have equity in their house."
What's worse, the banks are often going after the hapless homeowners after the distressed sales for the unpaid principle of the doomed loan that was the product of a collective madness and greed that overtook the housing industry and the nation.
That's not just unethical -- it's immoral.
Somebody's got to get real, and it starts with the banks, which so far have been miserable during this interminably long crisis. I guess that would be predictable since they were the driving force behind it in the first place.
-- I got a quick congratulations to extend to Al Lamberti's public corruption unit. With the Cindi Hutchinson arrest, it finally has an arrest under its belt -- and it looks like a strong case.
The sheriff hired former FBI agent Al La Manna last year to head the unit, which has three deputies working full-time in it. We wondered if it would be a serious effort or just a political extension of the sheriff. At times, it has stumbled (see Gunzburger, Sue), but this case puts it back on the right track. Here's to a few more.
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