L.A. may test loan program for troubled Pacoima homeowners [Southern California]

L.A. may test loan program for troubled Pacoima homeowners [Southern California]

The Los Angeles City Council is poised to vote today on a plan to help distressed homeowners in the northeast San Fernando Valley by putting up city money for “silent second mortgages” that could encourage financial institutions to modify home loans.

The pilot program would make available $1 million from the Community Redevelopment Agency to help 20 to 30 homeowners in Pacoima and neighboring communities who are in foreclosure.

Under the plan, the city would loan as much as $75,000 to distressed borrowers, who would not have to make payments on that loan until they sold their home. The city money would go directly to lenders, which in turn would have to agree to reduce the mortgage balance to current market value — in some cases a write-down of more than $100,000. The banks and the city would get a share of any appreciation in the home’s value at the time of its sale.

Corus Has Buyers for Its Condos: Vultures

Corus Has Buyers for Its Condos: Vultures

Corus Bankshares Inc.’s recent warning that it could be placed into receivership by federal regulators has set off a scramble among real-estate investors who hope to pick up the lender’s nonperforming loans.

The Chicago-based firm, which became one of the leading lenders to high-end condominium towers from Miami to Los Angeles, faces a mid-June deadline to sell itself or raise at least $390 million in capital. If Corus, which had $7.7 billion in assets as of March 31, can’t survive, it would rank as the largest bank failure this year by assets and the fourth largest of the current downturn.

While it is possible that Corus will find the capital it needs or a buyer, many analysts believe the deck is stacked against the bank because its problems are so complex. “Just given the environment that we’re in and given the condition of their balance sheets, those tasks would prove to be rather difficult,” said Daniel Cardenas, senior vice president at Chicago brokerage Howe Barnes Hoefer & Arnett Inc.

Corus didn’t respond to requests for comment.

Home Prices Continued Their Decline in February

Home Prices Continued Their Decline in February

Phoenix has achieved the unwelcome distinction of becoming the first major American city where home prices have fallen in half since the market peaked in the middle of the decade, according to data released Tuesday.

Though historical statistics are scant, experts said the precipitous decline probably had few if any equals in modern times.

“Even during the Depression, I’m not sure prices fell this quickly,” said Karl Guntermann, a professor of real estate at Arizona State University.

Greg Swann, a Phoenix real estate agent, took a moment to marvel at the news. “What happened here will some day be a new chapter in ‘Extraordinary Popular Delusions and the Madness of Crowds,’ ” the classic survey of investing mania, he said. “We were living during the boom like there was no tomorrow. And guess what? Now it’s tomorrow.”

Bidders find bargains at foreclosed homes auction

Bidders find bargains at foreclosed homes auction

Diana Alebord knew what she wanted – a three-bedroom, two-bath house – and she had three properties in mind.

The 45-year-old Sarasota woman drove to Tampa, hoping to find a bargain at an auction of foreclosed homes held Tuesday night at the Tampa Convention Center.

The auction, hosted by Real Estate Disposition Corp., a California-based company, drew 1,150 people. Many of them walked away with a steal, snapping up homes and condominiums, some valued at more than $300,000, for nearly half that price.

“I own a condo and I want to find a nice house,” Alebord said, before the auction began. “With this market, I’ll probably rent out my condo. Hopefully, I’ll be able to get a goo

d deal.”

Miami condo corridor’s woes create boon for renters

Miami condo corridor’s woes create boon for renters

It’s not hard to get Regan Marock to gush about his rental unit in a twin-tower luxury building in the heart of Miami’s high-rise corridor. The two-bedroom condo has stainless steel appliances, a jetted tub and dazzling views of the city — not to mention the two pools, gym, spas, movie theater and game room in the building.

Renting straight from the developer, The Related Group, Marock pays $1,450 for the plush, spanking new digs at 500 Brickell. Monthy mortgage payments for the roughly $350,000 unit, bought with 20 percent down, at today’s interest rate would run about $1,482 — not including taxes, insurance and association fees, which could add a thousand dollars or more to the bill.

”It’s the most incredible thing,” said Marock, 24, a sales director at a Coral Gables property management company.

The costs and benefits of home ownership | Shelter, or burden?

The costs and benefits of home ownership | Shelter, or burden?

In a scene from the film “It’s a Wonderful Life”, a happy couple is about to enter their new home. Jimmy Stewart, whose firm has sold them the mortgage, reflects that there is “a fundamental urge…for a man to have his own roof, walls and fireplace.” He offers them bread, salt and wine so “joy and prosperity may reign for ever”.

That embodies the Anglo-Saxon world’s attitude to home ownership. Owning your own roof, walls and fireplace, it is thought, is good for householders because it helps them accumulate wealth. It is good for the economy because it encourages people to save. And it is good for society because homeowners invest more in their neighbourhoods, engage more in civic activities and encourage their children to do better at school than do renters. Home ownership, in short, benefits everyone—not just the homeowner—and the more there is of it, the better. Which is why it is usually encouraged by the government. In America, Ireland and Spain, homeowners can deduct mortgage-interest payments from taxable income.

Yet the worldwide crash was bound up in this supposed miracle of social policy. The disaster began with defaults on American subprime mortgages, a financial instrument designed to spread home ownership among the poor. It gathered pace after the failures of Fannie Mae and Freddie Mac, two government-sponsored enterprises that provide cheap home loans. As a result, the home-ownership rate in America has fallen for four years, the first time that has happened in a quarter of a century. In 2008, 2.3m families lost their homes or faced foreclosure—double the average before the crisis—reducing the home-ownership rate from 69% in 2004 to 67.5% at the end of 2008. The number of owner-occupied dwellings also slipped in Britain in 2007-08 for the first time since the 1950s.