Homeowners, lawmakers gain from GOP tax reform. Is it fair? [Florida]

Homeowners, lawmakers gain from GOP tax reform. Is it fair? [Florida]

The Republican House leadership says its proposal to eliminate taxes on homesteaded properties while increasing the sales tax from 6 percent to 8.5 percent is a bold attempt to address inequities dogging the current system.

Critics say the proposal would hurt the poor, renters and others, but an Associated Press check of property records shows one of the groups that would do well: the Republican House leadership. Most would save thousands unless they are exorbitant spenders.

House Speaker Marco Rubio wouldn’t have to pay the roughly $13,100 he paid in property taxes on his half-million-dollar West Miami home last year, for example. To make up for that hit to local government coffers, Rubio would have to spend about $525,000 a year on taxable goods under the higher sales tax, which would continue the exemption for food and medicine. His government salary is about $30,000 and he has a $300,000 a year job with the law firm Broad and Cassel.

Real estate fund’s manager fleeing REITs tied to apartments

Real estate fund’s manager fleeing REITs tied to apartments

Kenneth Heebner, the manager of the top-performing real estate mutual fund over the last 10 years, said the economic damage from high-risk mortgage defaults is going to get worse.

“We have a trillion dollars of subprime mortgages, and we’re going to have huge defaults,” Heebner, 66, said in a telephone interview from his office in Boston. “If you’re looking at the housing market, it’s not the darkest before dawn, it’s the darkest before pitch black.”

Heebner, cofounder of Capital Growth Management, has been selling shares of real estate investment trusts that buy apartments because they are no longer cheap. At year-end, his CGM Realty Fund had 35 percent of its assets in REITs. He said he had made a “significant reduction,” though he would not be more specific.

Overdue mortgages linked to risky loans

Overdue mortgages linked to risky loans

An explosion in overdue mortgages tailored to home buyers with less-than-sterling credit has driven foreclosure filings to record highs in Massachusetts.

These mortgages, known as subprime loans, charge higher interest rates to compensate the lender for the risks associated with customers who have low credit scores or large credit card or other debts.

Subprime mortgages were lauded for helping more Americans than ever buy homes during the housing boom earlier in the decade. But four years after their popularity took off, the loans are backfiring. More homeowners are no longer able to afford their payments, which typically rise sharply two years into the loan. In 2006, lenders filed 19,487 foreclosure notices against Massachusetts homeowners, surpassing the record high of 17,000 filings in 1991, during the state’s severe recession.

Ballooning foreclosures tax court clerks, judges [South Florida]

Ballooning foreclosures tax court clerks, judges [South Florida]

For months, a ceaseless routine has gripped the St. Lucie clerk of court’s civil office: New mortgage foreclosure lawsuits arrive in unprecedented numbers – huge stacks, some a foot or 2 tall. But as soon as one stack is processed and emptied from the in-box, another dozen or more foreclosures show up the next day.

On really busy mornings, process servers drop off banks’ boxes filled with these documents, which set into motion a process that often means homeowners who haven’t paid their mortgages will lose their homes.

The clerks who process the cases shake their heads when they think back to the days when maybe two or three mortgage foreclosure lawsuits arrived each day. They don’t have to stretch their memories much: That was only about a year and a half ago.

A cooling trend in real estate flipping

A cooling trend in real estate flipping

If buyers have felt lonely making the sole bids on houses these days, it might be because home flippers, those who buy property with the intention of renovating and reselling quickly, haven’t been as active in the last year.

“Flipped” houses, considered by analysts to be those owned for six months or less, accounted for 3.2% of all home resales statewide in 2006, down from 4.2% in 2005, according to http://www.homesmartreports.com , a market-tracking website.

Flipping also proved less profitable last year as 24.9% of such sales resulted in a loss for the seller, compared with 7.5% in 2005. In 2006, flippers sold for a median $45,000 more than they paid (not factoring in improvement costs), down from $52,000 in 2005.

“The market where you could just go in, tidy something up and make a lot of money is gone,” said Jad Najjar, a longtime flipper and real estate broker in Beverly Hills. The number of his clients looking for houses to flip has declined 75% in the last year, he said, in part because it’s become a more rigorous and less profitable business right now and less experienced buyers fear a potential drop in the market. Najjar himself has had a 50% drop in profits from flipping since 2005.

Real Estate Funds Continue to Show Gains

Real Estate Funds Continue to Show Gains

If location is the golden rule of real estate, then many who invest in real estate mutual funds might at times feel as if they’ve stumbled upon a great deal in the fanciest building in town.

A big acquisition in the commercial real estate market has led some observers to speculate that demand will continue for companies that invest in real estate.

Known as real-estate investment trusts, or REITs, these companies have shown at times returns greater than 25 percent per year in recent years. REITs, which frequently invest in commercial real estate or larger residential projects such as apartment buildings, have dodged the financial wrecking ball that has left cracks in some parts of the housing market.

In early February, the Blackstone Group, a power hitter in the private equity world, acquired Equity Office Properties in a $23 billion buyout. The bidding war that erupted over the company, whose properties included choice commercial skyscrapers, spurred talk that other REITs might be snapped up by private equity companies looking for places to spend their vast sums of cash.