AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Bank of America Plaza to Sell at Foreclosure Auctionhttp://realestate.aol.com/blog/2012/02/06/bank-of-america-plaza-to-sell-at-foreclosure-auction/http://realestate.aol.com/blog/2012/02/06/bank-of-america-plaza-to-sell-at-foreclosure-auction/http://realestate.aol.com/blog/2012/02/06/bank-of-america-plaza-to-sell-at-foreclosure-auction/#commentsFiled under:



In today's post-bubble housing market, it's not uncommon for landmark buildings to fall into foreclosure. But this Atlanta tower is noteworthy for two reasons - it's the tallest skyscraper in the Southeast, and its sale smacks of irony.

The Bank of America Plaza, the 55-story skyscraper where BofA still holds office space, is scheduled to hit the auction block on Tuesday, the Atlanta Business Chronicle reports.

The building's current owner, BentleyForbes, fell behind on mortgage payments after buying the property from BofA and a real estate investment company in 2006.

Just as we've seen in the residential market, commercial buyers over-leveraged loans by betting on still-climbing prices. In 2006 the 1.25 million-square-foot property sold for $436 million. Today, it's worth less than half that, at approximately $202 million, Bloomberg reports.

The news comes as BofA and four other major lenders brace for what could be a record-breaking mortgage settlement, in which the nation's largest banks could face up to a $25 billion judgment for inappropriate underwriting practices known as "robo-signing."

All told, the five major lenders - Bank of America, JP Morgan Chase, Citigroup, Wells Fargo and Ally Financial - control two-thirds of the nation's mortgage servicing industry, Stateline reports. Mortgage wrongdoing has been found by every state attorney general involved in the settlement.

Perhaps spurred by the impending lawsuit, BofA announced that they're considering selling all of their corporate offices, with the exception of the New York and North Carolina headquarters.

Since the purchase by BentleyForbes in 2006, BofA has downsized its presence in the building from 400,000 square feet to under 200,000 square feet.

UPDATE: The Atlanta Journal Constitution reports that the Bank of America Plaza sold at auction to the property's bond holders for a $235 million "credit bid." That's almost half its original sales price of $436 million at the height of the bubble in 2006.



Also see:
Distressed Sales Undercut Home Prices in 2011, Study Says
Foreclosure Discount Capitals: Best Cities to Beat the Bank

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]]>bank of america foreclosurebank of america plazacommercial real estateforeclosure auctionmortgage settlementREITsrobosigningStefanos Chen2012-02-06T15:40:00 00:00Out-of-Towners Covet Florida Real Estate, Locals Scratch Headshttp://realestate.aol.com/blog/2012/02/02/out-of-towners-covet-florida-real-estate-locals-scratch-heads/http://realestate.aol.com/blog/2012/02/02/out-of-towners-covet-florida-real-estate-locals-scratch-heads/http://realestate.aol.com/blog/2012/02/02/out-of-towners-covet-florida-real-estate-locals-scratch-heads/#commentsFiled under:

florida foreclosureThe grass is always greener on the other side - even if said yard is located in one of the states hit hardest by the foreclosure crisis.

A new report by listings company Trulia Inc. reveals that one in three home searches cross state lines, and seven out of 10 of the most popular real estate markets perused by out-of-towners are in Florida.

The study looked at listing search data between Oct. 1 and Dec. 31 that compared incoming property searches from out-of-towners against the number of outgoing searches by locals. The results were narrowed to include only listing views from at least 100 miles away from a property.

Florida Dominates Most-Desired-Properties List

In the most popular market for out-of-towners, the metro area of Palm Bay-Melbourne-Titusville, Fla., there were nearly nine times more inbound searches than outbound. This may be surprising to locals, who are intimately more familiar with the area's housing woes. One in every 205 homes in Palm Bay received a foreclosure filing in Dec. 2011, according to RealtyTrac Inc. -- more than triple the national rate of 1 in 634 foreclosure filings.

But it's not the foreclosures that are attracting house-hunters, but the price declines that they signal, said Jed Kolko, chief economist for Trulia.

Kolko told AOL Real Estate that "Florida has the worst of both worlds -- big price declines, and a slow judicial process for foreclosures" which further delays the local housing recovery.

Foreclosures in the third quarter of 2011 sold for an average 34 percent cheaper than conventional sales, according to RealtyTrac. Couple steep discounts with snowbirds' perennial quest for sunnier, happier places to live, and Florida's dominance in the report makes perfect sense.

Furthermore, because of both the huge backlog of homes in some stage of mortgage default and the slow judicial process used to mediate foreclosures in the state, Florida's home prices aren't likely to rise to anywhere near the pre-boom peak for many years. From start to finish, foreclosures take 806 days to complete in Florida, according to RealtyTrac. The national average is 348.

Popular metros outside the Sunshine State include Tulsa, Okla., the Riverside-San Bernadino-Ontario area of California, and South Carolina's Charleston-North Charleston-Summerville region.

Where Homeowners Want Out

On the flip side, Trulia calculated the top metro areas where locals are looking elsewhere for real estate. By calculating the ratio of outbound listing views to local listings, they arrived at a list of mostly bigger (and comparatively more expensive) cities where residents are searching for a way out.

Topping the list is the area of Newark, N.J, and Union, Pa., where more than three times as many outbound listings were viewed than local ones. San Jose, Calif., Washington, D.C., Philadelphia and Bethesda, Md., rounded out the top five.

But whether prospective homebuyers are looking to buy in or get out, what's driving their search behavior is affordability, Kolko observed. That said, today's looky-loos may not necessary become tomorrow's buyers -- tight credit and larger down-payment requirements may stop many house-hunters in their tracks. When the economy begins to shift, however, expect many of these markets to reap the benefits of pent-up demand.




CORRECTION: A previous version of this article referenced Palm Beach as part of the Melbourne-Titusville, Fla., metro area. It should have identified that city as Palm Bay.

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See also:
Foreclosure Action at Lowest Level Since 2007
Foreclosure Discount Capitals: Where They're Worth It

 

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]]>best housing marketsflorida foreclosuresForeclosure Discountsmost wanted real estatetruliaStefanos Chen2012-02-02T08:05:00 00:00MLK, USA: Many King Streets Stuck on Economic Outskirtshttp://realestate.aol.com/blog/2012/01/17/mlk-usa-many-king-streets-stuck-on-economic-outskirts/http://realestate.aol.com/blog/2012/01/17/mlk-usa-many-king-streets-stuck-on-economic-outskirts/http://realestate.aol.com/blog/2012/01/17/mlk-usa-many-king-streets-stuck-on-economic-outskirts/#commentsFiled under: ,

martin luter king jrTwenty-six years after the Rev. Martin Luther King Jr. was first honored with a holiday, his legacy has flourished -- and not just in the annals of history. Today, there are more than an estimated 900 streets in America that bear the civil rights leader's name.

But even as the memory of King remains at the heart of American discourse, many of his namesake streets are drifting further to the social and economic periphery.

"There tends to be a marginalization of King's name," Derek Alderman, professor of geography at East Carolina University, told AOL Real Estate. Alderman, who has spent the better part of a decade chronicling the number of streets named after the slain civil rights leader, has encountered the paradox many times before -- beloved as the man may be, in real estate, some homebuyers and store owners ascribe a kind of stigma to the name.

Using Realtor.com's database of homes on the market, an analysis of properties on Martin Luther King Jr. streets lends some credence to that view. In 2010, the median list price for homes with "Martin Luther King Jr." in the address was $79,900. By 2011, it had fallen to $69,900, a 12.5 percent decrease. The U.S. median list price was more than twice that last year, at $170,000, and saw only a 4.7 percent drop in the same period, according to the National Association of Realtors. (In the gallery below, see a random sampling of homes on MLK streets.)

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In many ways, Alderman said, it's a case of perception becoming reality. Residents and business owners oppose the renaming of thriving streets because of an unfounded fear that the civil rights leader's name may hurt property value. Instead, the commemorations of King, who was assassinated in 1968, are often quite literally pushed to the margins of town, on streets of communities that are already economically challenged.

"When a street's name means something [to property value] it's because of the location," said Alice Palmisano, executive director of Brown Harris Stevens Appraisal & Consulting Co. in New York City. "Park Avenue means something because it's in a great neighborhood," not because the name has some intrinsic real estate value.

Compounding the problem for many of these predominantly African-American communities was the rampant predatory lending that plagued poorer neighborhoods during the sub-prime mortgage run-up. In fact, the Justice Department is now seeking to repay more than 200,000 minority borrowers who were steered toward high-interest subprime loans when many qualified for better terms. The search is part of a historic $335 million discriminatory lending settlement levied against Bank of America's Countrywide Financial unit.

But to write off the more than 900 streets that pay homage to King as "struggling" would be wide of the mark, said the Rev. Terence Dicks, project director of the "Claiming a Street Named King" program in Augusta, Ga.

There are several prominent examples of MLK streets with healthy economies and rich cultural legacies, such as the ones in New York City, Austin and, of course, King's hometown of Atlanta. But Dicks' project aims to take an accounting of the problems faced by MLK throughways that continue to face economic hardship.

"I want to see an area meant for bad, used for good," he said, referring to the stigma accompanying many of the streets -- especially when King's legacy is at stake. "Young people do not remember Dr. King as well as they should," and the negativity being attributed to the streets named in his honor is not helping matters.

Alderman, who has collaborated with the grassroots project, echoes his sentiment.

"There's just no way that Martin Luther King's name causes poverty."

Also see:
Landlady's 'White Only' Sign Still Not OK, Commission Says
Messy Yard Brings Jail Time for SC Woman, Then Help

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]]>Martin Luther King AveMartin Luther King Blvdmartin luther king dayMartin Luther King Jr.martin luther king streetsMLKMLK blvdMLK dayStefanos Chen2012-01-17T15:48:00 00:00Foreclosure Actions at Lowest Level Since 2007http://realestate.aol.com/blog/2012/01/12/foreclosure-activity-at-lowest-level-since-2007/http://realestate.aol.com/blog/2012/01/12/foreclosure-activity-at-lowest-level-since-2007/http://realestate.aol.com/blog/2012/01/12/foreclosure-activity-at-lowest-level-since-2007/#commentsFiled under:

foreclosure ratesAfter a year marred by red tape and mortgage lender malfeasance, foreclosure activity in 2011 fell to the lowest annual rate since the housing crisis began more than four years ago, according to data released Thursday.

Foreclosure filings -- which include default notices, scheduled auctions and bank repossessions -- were recorded on 1.9 million homes in 2011, down 34 percent from 2010, the foreclosure database company, RealtyTrac, said.

In real terms, 1.45 percent of homes, or one in 69, were in some stage of foreclosure in 2011. That's down from 2.23 percent in 2010, 2.21 percent in 2009, and 1.8 percent in 2008. Both key metrics in 2011 were at their lowest rate since 2007, when home prices started to tank in several markets.

But the latest figures are less a sign of recovery than a reflection of widespread delays in foreclosure processing.

"It's not that the market is all of a sudden staging a dramatic recovery," said RealtyTrac spokesperson Darren Blomquist in an interview with AOL Real Estate. "It's just that lenders are taking their time for a variety of reasons."

Principal among those reasons is the ongoing (and seemingly never-ending) negotiations for a nationwide mortgage settlement between the country's biggest banks and a coalition of state attorneys general.

A proposed $25 billion lawsuit aims to take lenders to task for a number of fraudulent foreclosure proceedings collectively referred to as "robo-signing" during the height of the housing bubble. As the investigation lurches forward, local courts have been inundated with claims of wrongful foreclosure, especially in states like Florida, where judicial action is necessary to repossess homes with delinquent mortgages.

(See a full list of judicial foreclosure states here.)

Not surprisingly, Florida is "ground zero for dysfunctional foreclosure processes," Blomquist said. While there has been almost a 63 percent decrease in foreclosure activity over the last year in the hard-hit state, he said that the time it takes to complete the process has gone up 48 percent in the same time period. From start to finish, he said, foreclosures take an average of 806 days in the Sunshine State -- the national average is 348.

Closer to 'Reality' in Arizona

But while the widespread legal delays may mask the underlying problems facing the housing market, Blomquist said that foreclosures would have fallen in 2011 regardless -- just not so dramatically.

For a sense of what the road to recovery really looks like, Blomquist offered Arizona, another state suffering from high foreclosure rates, albeit under different circumstances than Florida.

Foreclosures are down there, too, but as a non-judicial state, Arizona has been far more expedient in getting distressed properties on the market and out of the courts. The average foreclosure process in Arizona takes 173 days, far below the national average of 348.

The problem across the board, though, is that once foreclosures hit the market their effect on neighboring properties can be severe. Foreclosures typically sell at a 20 percent discount, according to the National Association of Realtors, and that can drag comparable homes' value down fast.

Facing Facts

December marked a 49-month low for monthly foreclosure activity nationwide. The state with the longest foreclosure processing time by far is New York, with an average of 1,019 days to completion in the fourth quarter. New Jersey and Florida rounded out the top three with 964 days and 806 days, respectively.

But as counterintuitive as it may sound, Blomquist said, the recovery won't truly take off until more foreclosures are processed and the backlog of distressed properties is brought back to normal inventory levels.

'We've been deferring a lot of these foreclosures," he said. "So at some point the market needs to face reality and deal with them."



Also see:
Bank Sues Couple for Title Typo They Didn't Make
Up in Smoke: House Fire Reveals Huge Marijuana Operation
Improving Housing Markets Nearly Double, New Data Says

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]]>foreclosure actionsforeclosure activityforeclosure crisisforeclosure ratesforeclosuresnational mortgage settlementrealtytracReatyTrac foreclosuresrobo signingrobo-signingStefanos Chen2012-01-12T00:10:00 00:00The Minor Threat: Age-Restricted Communities Evicting Childrenhttp://realestate.aol.com/blog/2012/01/06/the-minor-threat-age-restricted-communities-evicting-children/http://realestate.aol.com/blog/2012/01/06/the-minor-threat-age-restricted-communities-evicting-children/http://realestate.aol.com/blog/2012/01/06/the-minor-threat-age-restricted-communities-evicting-children/#commentsFiled under:



At 6 months old, Kimberly Broffman faced eviction.

It wasn't because her grandparents couldn't afford the home where she lived -- they were current on the mortgage. And it had nothing to do with her mother's run-ins with the law; she was welcome to stay, too. The only persona non grata was the infant, and she had to leave soon.

The reason: Kimberly's grandparents -- and primary caregivers -- live in an age-restricted community, where minors are treated more often as vagrants than visitors.

Judie and Jim Stottler (pictured above with Kimberly), who belong to the Lakes Homeowners Association in Clearwater, Fla., have been in and out of court to keep Kimberly in their home since she was 3 years old, though the community board first raised objections when Kimberly was just an infant. She's 8 today.

The couple gained legal custody of Kimberly because her mother had a history of substance abuse. The father remains unknown. Without her grandparents, Kimberly would likely be placed in foster care.

But when the community board discovered that the child was living year-round with her grandparents, they issued an ultimatum: Remove the child or sell the house within 18 months.

"Throwing the child out would be throwing us out," Judie Stottler, 64, told AOL Real Estate. "People end up losing their homes because they won't lose their children."

The Stottlers are hardly alone. As the economic downturn bears down on families, an increasing number of grandparents are stepping in to raise their grandchildren, and it's presenting a host of complicated issues, both legal and ethical, particularly when it comes to senior housing.

A Major Problem With Minors

At the Sun City Community Center near Tampa, Fla., one of the oldest age-restricted communities in the nation, the problem is growing.

Ed Barnes, president of the board, said that he's discovered 10 cases in the past six months in which children were found to be living with relatives -- one of the most basic violations of age-restricted communities' bylaws.

But Barnes doesn't relish the thought of kicking children to the curb.

"Certainly the main reason is the economic downturn, coupled with personal tragedies," he said of the influx of youngsters. "People are getting divorced and have no alternative, no job, and have to find some place for the kids to live."

With a national unemployment rate of nearly 9 percent and millions of Americans still struggling with upside-down mortgages, it's not surprising that there are more multigenerational households these days. Yet bending the rules for even one child could land an age-restricted community in hot water.

Legal and Financial Consequences

"Age restriction is a fundamental part of what makes up that community," said Michael Gelfand, a West Palm Beach-area attorney with experience in community association disputes. Putting aside residents' attitudes about young children, sheltering minors could put the community under serious financial duress.

The Fair Housing Act, which forms the basis for anti-discrimination law in housing, was amended to include a "familial restriction" that essentially validates senior communities' right to prohibit minors from living there, Gelfand said.

Up to 20 percent of residents in age-restricted communities can be under the set residency age, but these arrangements are largely used to accommodate adult children who inherit property. The rule is never used to accommodate minors, however, and if a community is found to exceed the 20 percent limit, or selectively enforces the rules, it could lose its exemption status. And that could cause a cascade of adverse effects.

The perception is that "property values are going to plummet," said Rob Freedman, a Tampa-based attorney who's written covenants for several age-restricted communities in Florida. "Because now you have more people coming in ... and because senior citizens are not going to want to live in a community that has kids around."

Moreover, senior communities aren't equipped for children, Freedman said. Swimming pools and other adult facilities will have to be reinsured; lightly used roadways will take a pounding as younger residents move in, creating safety hazards for golf cart-reliant seniors and increased taxes for residents; and mortgage lenders will likely be forced to revise their valuation of the community, making it harder for borrowers to change terms.

For seniors on a fixed income, any number of these changes could lead to hardship. The median listing price in Sun City is $104,950 as of November, which is down 4.5 percent from last year, according to Realtor.com data. In comparison, the national median list price was $189,900.

U.S. Census data shows that 5.8 million children under the age of 18 live in grandparent-headed households as of the last decennial survey, up from 4.5 million a decade ago. And while residents in age-restricted communities make up just under a million owner-occupied households in America, according to the National Association of Home Builders, economic hardships are bringing more of these eviction cases to the surface.

A Slippery Slope

The problem isn't entirely new. Take for instance the cautionary tale of Youngtown, Ariz., credited as the first age-restricted community in the nation. In 1996, 16-year-old Chaz Cope moved in with his grandparents in the senior community to escape his abusive stepfather.

Cope's grandparents petitioned the association to allow the teenager to stay with them until he finished high school, but the board bristled.

Chaz Cope"It was scary. I didn't have nowhere else to go and I definitely wasn't going back to that abusive household," Cope, now 31, told AOL Real Estate. (He's pictured left with his 4-year-old daughter.)

But when the story garnered mainstream attention, the Arizona attorney general's office ordered a stay on Cope's eviction and initiated a 10-month investigation of the community. It turned out that the town had improperly sought its age-restricted status and the town lost its exemption altogether, allowing Cope -- and anyone else inclined to live among a majority of seniors -- to move into the community.

"I made it so anybody could live in that community," Cope said, with a measure of pride.

Kids in the Shadows

Cope's story is a sobering example of what's at stake for 55-and-up communities that discover children in their midst. In Sun City Community Center, president Barnes said that he's seen more stowaways lately, but that the problem still only affects a small portion of the 10,000-plus population. But AOL Real Estate spoke to residents who claim that there are many children who remain hidden.

"Oh my goodness -- shock-o, shock-o," one resident quipped when informed of the recent discoveries. The homeowner, who asked not to be identified, said that she's seen several children peeking out from behind screen doors in the seven years she's lived at Sun City.

The reasons they live in the shadows are clear to Judie Stottler, whose 8-year-old grandchild has been at the center of controversy since she was an infant.

Kimberly BroffmanThe family has been battling to keep Kimberly since before she could crawl, but has had the services of attorney Rob Eckard for the past 5 years. Eckard, who first read about the Stottlers' case in the local press, came on to defend the family pro bono.

"People who can't afford attorneys end up losing their home because they won't lose their children," Stottler said. Before they had legal representation, the family signed an agreement stating that they would move out of the home within 18 months. "We thought we'd have to sign or we'd be thrown out right then."

But when the housing market went belly up, they were left with little hope of selling. The home was first listed in 2006 for $250,000, Stottler said -- now it's priced at $89,000.

Stottler works at a local assisted living home and supports the family entirely on her income. Her husband, Jim, is disabled. She expects to retire this February.

To make matters worse, the community board president, whom the family had dealt with, recently died, leaving their lawyer with the arduous task of restarting negotiations.

But there's hope for them yet. Because the family was granted custody of Kimberly during a separate hearing, Eckard said, there may be grounds for setting up a temporary zoning variance that would allow the Stottlers to keep their home, as well as their granddaughter.

A Case for Revision

The problem with these cases, even when the children are granted admission to the community, is that they're won on technicalities, said Shelley Cutts, a Tempe, Ariz., attorney who studied the Cope case.

State attorneys general sometimes intervene in these cases, "but never have to answer the tough questions," she said -- namely, revising the laws to include a hardship exemption for families with no other options.

For the time being, however, families like the Stottlers face uphill battles in court, where their best defense is to find flaws in their community's bylaws.

As of Wednesday, Eckard, the family's attorney, said the association was very close to reaching a deal with the Stottlers to allow Kimberly to stay on a temporary zoning exemption. The proposal was very careful to maintain the community's age restricted status, he says -- the offer would only be extended to Kimberly, and no other children found in the community. As of this writing, the community association's attorney has yet to respond to calls regarding the case.

Eckard says he's already been approached by another resident in the Lakes subdivision who is sheltering a minor and fears community reprisal.

"There's people in that community just one event away from being in their shoes," he said.

Until a policy is reached that both maintains age-restricted enforcement and considers extreme family hardship, residents within these communities will continue to have to choose between keeping their homes and housing their kin.

But Stottler said she already knows where she stands.

"Your child is going to come first. That's just the way it is."

Special thanks to Professor Judith Trolander, whose insights helped inform this article.

Also see:
Housing Market Unprepared for Aging Gay Community
Survey: Most Boomers Would Cover Kids' Down Payment

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]]>age+restricted+communitiesage-qualified communitiesage-restrictedagerestrictedcommunitieschaz copeclearwater floridajudie stottlerkimberly broffmanlakes homeowners associationsenior communitiessun city community centeryoungtown arizonaStefanos Chen2012-01-06T06:00:00 00:00Bernanke: Fed Should Help Turn Foreclosures Into Rentalshttp://realestate.aol.com/blog/2012/01/05/fed-seeking-nationwide-foreclosure-rental-program/http://realestate.aol.com/blog/2012/01/05/fed-seeking-nationwide-foreclosure-rental-program/http://realestate.aol.com/blog/2012/01/05/fed-seeking-nationwide-foreclosure-rental-program/#commentsFiled under: ,

reo propertyMost of Washington's initiatives to staunch the flow of foreclosures glutting the housing market have been woefully inadequate. (We're looking at you, HAMP, HAFA and HARP). But a new idea put forth by Federal Reserve Chairman Ben Bernanke might actually make a dent in the bank-owned backlog: Allow renters to move into foreclosures.

HousingWire reports that the chairman endorsed the idea in a letter sent Wednesday to ranking members of the House Committee of Financial Services.

If prolonged foreclosures and dicey mortgage origination is holding back the recovery, he wrote, then filling up the nation's vacant (and otherwise deteriorating) homes with renters might be the best way to cut losses and protect investments.

In a preliminary study of Fannie Mae's REO inventory -- foreclosures in which the lender owns the property because they couldn't unload it -- two-fifths of the homes showed more potential as rentals than as resales. For foreclosures purchased with Federal Housing Administration (FHA) loans, the rent potential is even higher, since homes secured through FHA loans (a favorite of first-time buyers) tend to sell for less.

Part of the problem, as owners in some of the hardest-hit states will attest, is that vacant homes invite all sorts of calamities for prospective buyers. In humid climes like Florida, mold can ravage even the best built homes, and vandals and squatters can cause damage that far exceeds the value of some foreclosed properties.

Keeping foreclosed homes occupied could also have the added benefit of protecting neighborhood property value, which is a major concern for sellers and the countless others not yet willing to attempt a sale. The National Association of Realtors estimates that foreclosures typically sell at a 20 to 25 percent discount, which drags neighboring properties value down. Zillow estimates that homes lost $700 billion in value in 2011 alone.

With fears running high that the FHA might need a bailout in 2012 if the market doesn't improve, renting foreclosures might be a welcome cost-saving measure to preserve the administration's coffers.

Of course, it also couldn't hurt if those homeowners evicted through foreclosure are allowed to stay in their homes through the rental program.

Also see:
Foreclosures Could Be on the Rise Again, Report Says
Study: Foreclosure Process Time Has Doubled Since 2007

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]]>bank owned propertyBen BernankeFederal Housing Administrationfederal reservefha loanshafahampharpreo propertiesreo rental programStefanos Chen2012-01-05T13:30:00 00:00Tennessee Home Burns as Firefighters Watchhttp://realestate.aol.com/blog/2011/12/07/tennessee-home-burns-as-firefighters-watch/http://realestate.aol.com/blog/2011/12/07/tennessee-home-burns-as-firefighters-watch/http://realestate.aol.com/blog/2011/12/07/tennessee-home-burns-as-firefighters-watch/#commentsFiled under:

For one Tennessee family, perhaps the only thing worse than watching their home burn down was watching the firetrucks hang back as it was engulfed in flames.

Near the rural town of South Fulton, Tenn., outlying homeowners are required to pay a subscription fee to subsidize the fire department, local TV station WPSD reports. But when that $75 annual fee goes unpaid, homeowners like Vicky Bell find out the hard way what noncompliance entails.

After Bell reported that her mobile home was on fire, the fire department arrived, she told WPSD -- but they wouldn't intervene.

And yet, this is not the first time when the town's controversial "pay for spray" policy has rankled residents and drawn national attention. Last year, local resident Gene Cranick called in the fire department to save his double-wide mobile home on the outskirts of town, but he too had failed to pay the annual fee.

Instead, firefighters arrived to protect the property of Cranick's neighbor, who had paid the $75. The decision sparked public outrage, and the International Association of Fire Fighters issued a press release condemning the South Fulton policy, stating that the department's decision was "incredibly irresponsible."

Admittedly, homeowners in both cases were aware of the annual subscription fee, but still failed to pay. The fact that firefighters arrived on the scene in both cases, however, but refused to aid the victims, has drawn major criticism.

Still, the practice has its supporters. Mayor David Crocker stands behind the policy, he told WPSD, because the department depends on the subscription fee to cover the outskirts of town. Crocker said that firefighters will help when people are actually placed in danger, whether or not they've paid the fees, The Associated Press reports.

But considering a recent statistic showing that house fires in modern homes can become uncontrollable in less than 3 minutes, that claim may be suspect.



Tennessee Firefighters Watch as Home Burns

Also see:
Home Allegedly Set Afire in Neighbors' Facebook Feud
Apartment Fire Safety Tips

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]]>firefightersgene cranickhome firesobion countypay for spraysouth fultontenessee housingvicky bellStefanos Chen2011-12-07T09:35:00 00:00Man Sells Sister's Home as She Was Cloistered in Nunneryhttp://realestate.aol.com/blog/2011/12/05/man-sells-sisters-home-while-she-was-cloistered-in-nunnery/http://realestate.aol.com/blog/2011/12/05/man-sells-sisters-home-while-she-was-cloistered-in-nunnery/http://realestate.aol.com/blog/2011/12/05/man-sells-sisters-home-while-she-was-cloistered-in-nunnery/#commentsFiled under: ,

Teresa Nadia PedullaSibling rivalry is one thing, but swindling this sort of sister crosses the line.

Teresa Nadia Pedulla, an Australian homeowner who had been living abroad with an order of Italian nuns, is being awarded $3.8 million by the New South Wales government after her brother illegally sold her estate, according to The Sydney Morning Herald.

Pedulla, who had left her Sydney home for more than five years to live in cloisters with the nuns, discovered that her brother and two accomplices had taken out several mortgages against the home in her absence, and finally sold it for $3.8 million in March of this year.

The brother, Fernando Rene Panetta, and his wife Anna Lam each made off with $684,890.92, the Sydney Morning Herald reported. They left the country on separate flights and their whereabouts remain unknown.

A third accomplice, Lewis Fineman Yee, is charged with fraudulently claiming to be Pedulla's attorney and helping to illegally transfer the property to her brother for the nominal fee of $1.

As if the circumstances of the theft were not sensational enough, it was revealed in court that Yee has had a long-term intimate relationship with Anna Lam, who has presumably absconded with her current husband and co-conspirator, Fernando Panetta.

And while the details of the Pedulla case may seem outlandish, title deed fraud is becoming increasingly common, especially in the hardest-hit states of America. In Florida, homeowners are especially prone to a scheme known as "quitclaim fraud."

The combination of a vast inventory of vacant homes, coupled with Florida's very public property records, allows scammers to forge signatures, steal personal information, and ultimately claim ownership before the bona fide owner is even notified of the transfer. Learn how to protect yourself from quitclaim fraud in this post from AOL Real Estate.

While Sydney's legal system may have intervened on this victim's behalf, justice is not always so swift back stateside.

See also:
'Quitclaim' Foreclosure Scam Could Cost You Your Home
Victims of 'Robo-Signing': Fight the Machine!

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]]>Anna Lambrother cheats nunbrother sells nuns homebrother steals nuns homeFernando Rene PanettaLewis Fineman Yeenew south walesnun fraudnunsquitclaim fraudsydneyTeresa Nadia Pedullaweird newsStefanos Chen2011-12-05T15:15:00 00:00Survey: Most Boomers Would Cover Kids' Down Paymenthttp://realestate.aol.com/blog/2011/11/30/survey-most-boomers-would-cover-kids-down-payment/http://realestate.aol.com/blog/2011/11/30/survey-most-boomers-would-cover-kids-down-payment/http://realestate.aol.com/blog/2011/11/30/survey-most-boomers-would-cover-kids-down-payment/#commentsFiled under:

baby boomers Baby boomers may be in a better position than most to buy homes, but not before helping Junior out of a bind. A national survey found that at least two-thirds of boomers age 45 and up want to help their children or grandchildren with a home down payment.

The study, conducted by Meredith Research Solutions for Better Homes and Gardens Real Estate, polled a random sampling of 1,100 adults over 45 who had at least one child or grandchild over 18.

The results overwhelmingly show a generation that still appreciates the value of homeownership, despite their children's difficulties in the market. One in five boomers stated that they've already loaned money, co-signed a mortgage, or given a cash gift to children for a down payment. When asked why they're willing to help, 75 percent said that it was still a good investment for their children, while 58 percent still think that homeownership is part of the American Dream.

And it's not just wealthier boomers who hold these beliefs. While the study found that boomers who make more than $75,000 are the most likely to offer financial help, roughly 46 percent of those who said that they will definitely contribute to their children's home purchase made less than that. Within that group, 30 percent made less than $50,000 in household income.

For recent college graduates, the results should come as a relief. At least 41 percent of students are returning to their parents' home after graduation, saddled with huge college debt and grim job prospects. Many others opt instead to never leave the family home, either by delaying college or commuting to a local school.

But helping the kids move out sooner may come at a high cost for boomers on a fixed income. Homeowners of middle age and older typically have more equity in their home and are better candidates for reverse mortgaging. But as more of boomers' savings go toward securing their children's futures, less financing may be available for their own move. And fewer boomers moving means a smaller pool of qualified buyers.

First-time homeowners may be the future, but it's the repeat buyers who have the means to put down a substantial cash sum at closing.

And while respondents cited "love" as a top consideration in shelling out for their kin, another frequent reason is lighter on sentiment, heavy on foreboding. One in five boomers -- who said that they have helped or likely will help with a loan to their children -- said that their kids couldn't afford the home without them.



See also:
Forget Empty Nesters, We Now Have 'Full Nest Syndrome'
Will Baby Boomers Rock the Housing Market?

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]]>baby boomersboomerang kidsfirst time home buyersfirst time homebuyer down paymenthome down paymenthousing crisisretireesreverse mortgagessenior livingStefanos Chen2011-11-30T08:30:00 00:00Rent This Way: Lady Gaga's Pre-Stardom Pad Hits Markethttp://realestate.aol.com/blog/2011/11/21/rent-this-way-lady-gagas-pre-stardom-pad-hits-market/http://realestate.aol.com/blog/2011/11/21/rent-this-way-lady-gagas-pre-stardom-pad-hits-market/http://realestate.aol.com/blog/2011/11/21/rent-this-way-lady-gagas-pre-stardom-pad-hits-market/#commentsFiled under:

lady gaga apartmentGet your paws up and your checkbooks out, little monsters. The one-bedroom Lower East Side apartment where starving artist Stefani Germanotta became Lady Gaga is back on the market.

For $1,850 a month, you too can experience the pre-stardom glow of living well beyond your means in the hope of making it big.

A tour of the property today, though, doesn't exactly bear Gaga's shock-pop stamp. Conspicuously absent are the sequins, flaming pianos and meat fabric we've come to expect from the mercurial pop star.

lady gagaIn true New York fashion, the three room apartment includes a kitchen-cum-living room, a tight-fitting bedroom, and a closet-size bathroom perfect for recording YouTube's next viral sensation. But it's a small price to pay to live in walking distance from the much revered Bowery Ballroom, where today's struggling acts become tomorrow's chart-topping stars.

The listing agent, John English for CitiHabitats, did not immediately return our calls.

Watch the video clip below for a glimpse inside the apartment (not to mention Gaga getting unceremoniously locked out of the apartment by its next tenant).



See also:
Rent Oprah's Chicago Co-op for $15,000 a Month
Divorcing? Don't Do What Demi May Have Done
Longtime Resident k.d. lang Lists Laurel Canyon Home

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]]>celebrity real estatedowntown new yorkJohn English CitiHabitatslady gagaLady Gaga apartmentLady Gaga Bowery BallroomLower East Side apartmentnew york real estateStefani GermanottaStefanos Chen2011-11-21T14:43:00 00:00FHA Loan Limit Raised, Despite Oppositionhttp://realestate.aol.com/blog/2011/11/18/fha-loan-limit-raised-despite-opposition/http://realestate.aol.com/blog/2011/11/18/fha-loan-limit-raised-despite-opposition/http://realestate.aol.com/blog/2011/11/18/fha-loan-limit-raised-despite-opposition/#commentsFiled under:

FHA loanCongress moved to raise the loan limit for mortgages backed by the Federal Housing Administration on Thursday, despite some lawmakers' fears of artificially propping up the market.

The bill increased the ceiling on the loans to $729,750, up from $625,500 in October, says The Wall Street Journal. The loan limit had been raised to this level before in an attempt to promote homeownership during the height of the recession, but it was allowed to expire, The Associated Press reported.

With as little as 3.5 percent down payment required to close on an FHA loan, the program has long been promoted as an option for first-time homebuyers. But critics have claimed that the higher loan limit exceeds the needs of most first-time buyers and places too much pressure on the federal government to subsidize housing.

On the other hand, proponents of raising the limit argue that historically expensive markets, like New York and San Francisco, require the FHA to raise their ceiling to be useful to buyers. Around 600 counties were affected by the FHA loan limit drop in October.

The bill was not without compromise, however. Proponents in the House and Senate had to shed a similar limit raise on loans held by government-sponsored mortgage giants Fannie Mae and Freddie Mac. The limit placed on the two major mortgage finance companies remains at $625,500.

The news comes after an audit of the FHA revealed that there is nearly a 50 percent chance that the administration will require a federal bailout next year if the market worsens, according to The New York Times. The FHA, which was founded in 1934 in the wake of the Great Depression, has seen much of its cash reserves dwindle in the past few years, as mounting foreclosures cost the agency billions in insurance claims. The administration is down to $2.6 billion in cash reserves, down from $4.7 billion last year, the Times reports.

To learn more about first-time buyer mortgage options, watch the video below.




Also see:
Open Houses of the Week: Golden Opportunities for Retirees
When It Comes to Mortgages, Women Don't Shop Enough
Feds Target Loan Mod Scams, With Google's Cooperation

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]]>Stefanos Chen2011-11-18T13:42:00 00:00Budding Trend: Foreclosed Homes Converted to Pot Gardenshttp://realestate.aol.com/blog/2011/11/15/budding-trend-foreclosed-homes-converted-into-pot-gardens/http://realestate.aol.com/blog/2011/11/15/budding-trend-foreclosed-homes-converted-into-pot-gardens/http://realestate.aol.com/blog/2011/11/15/budding-trend-foreclosed-homes-converted-into-pot-gardens/#commentsFiled under:



The housing market isn't the only thing that's gone to pot in Las Vegas.

With the foreclosure crisis in high gear, some enterprising residents are converting vacant homes into marijuana grow sites, the Los Angeles Times reports.

In one raid, Vegas police discovered 61 plants in a recently foreclosed four-bedroom home. In another, they confiscated 878 plants worth approximately $2.6 million.

The budding trend's growth coincides with the city's wildly speculative housing boom and subsequent bust. In 2005, when home prices were still rising, there were 18 recorded pot sites and 1,000 confiscated plants in the state. In 2010, police raided 153 indoor operations and nabbed 13,000 plants, according to the Times.

In October, one in every 180 homes in Nevada received a foreclosure filing -- more than three times the national average of one in 563, says RealtyTrac, a foreclosure analytics company. In large part due to the foreclosure backlog, property value in Las Vegas dropped from $317 per square foot in 2006 to $138 per square foot in 2010, according to the National Association of Realtors.

Vacant homes, as we previously reported, fall prey to grifters of all stripes. In Bay Shore, N.Y., a couple found themselves the victims of a criminal trifecta -- squatters, scammers and thieves. While Richard and Lisa Scott waited for their bank to approve short sale offers on their foreclosed home, the property was vandalized by squatters, fraudulently rented out on Craigslist and finally stripped of its copper plumbing by robbers.

And even when no criminal activity is involved, vacant homes are vulnerable to another threat: mold. In humid states like Florida -- which, incidentally, also teems with foreclosures -- vacant homes can succumb to the effects of mold and mildew in a matter of weeks, and the damage can quickly add up.

There are, however, at least a few rare instances in which vacant homes yield pleasant surprises. While making repairs to a home in Florida, a plumber discovered $20,000 hidden in an air duct. It turns out that the previous owner, a widow with an apparent aversion to banking, took to hiding cash in the home for her next of kin. The altruistic plumber turned the money over to the police.

See also:
Vacant House Yields Late Owner's Stash of Cash
Vacant Home Targeted By Squatters, Scammers and Thieves

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]]>cannibisforeclosure crisisLas Vegas abandoned homeslas vegas foreclosuresLas Vegas pot growing homesmarijuanapotsquattersvacant homesStefanos Chen2011-11-15T14:40:00 00:00Hot Stat: Today's Homes Burn Faster Than Everhttp://realestate.aol.com/blog/2011/11/07/hot-stat-todays-homes-burn-faster-than-ever/http://realestate.aol.com/blog/2011/11/07/hot-stat-todays-homes-burn-faster-than-ever/http://realestate.aol.com/blog/2011/11/07/hot-stat-todays-homes-burn-faster-than-ever/#commentsIt may sound like a cliche to trot out fire safety tips before the holiday season, but if there's one statistic that bears repeating, it's this: Even with adequate smoke alarms, a house fire today can become uncontrollable in less than three minutes.

That's down from an average 17 minutes in 1975 -- a whopping 82 percent difference.

And the reason for the drastic change, according to a report by the National Institute of Standards and Technology, isn't just the type of house you live in, but what you put inside.

"It's not how old the home is, it's the furnishings," Jack Watts, Director of the Fire Safety Institute, told AOL Real Estate.



A spokesperson for the National Association of State Fire Marshals told AOL Real Estate that the worst culprit in home fires is upholstered furniture, because it often contains highly flammable polyurethane foam. These all-too-common materials provide the fuel for what fire experts call the flashover -- the point at which everything in the room simultaneously bursts into flames. It doesn't help that many of today's homes are built with more open floor plans and modern building materials like wallboard that can lead to faster fires, according to the Wichita Eagle.

The numbers show an alarming trend. In 1977, the first year when data was available, there were 750,000 residential fires, according to the National Fire Protection Association. In 2010, there were roughly half that many, thanks in large part to widespread use of smoke detectors. But the incredible speed with which home fires can spread in today's homes represents a major step backward in fire safety.

The Hot Topic of Sprinklers

The next step in home fire safety, a spokesperson for the NASFM said, is to require fire sprinklers in new residential properties. Homebuilders bristle at the idea due to the high cost of installation. The national average cost to install sprinklers is $1.60 per square foot, according to the Wichita Eagle. In a 2,000-square-foot home, that comes out to about $3,200.

Another barrier is public opinion. As we reported last year, when given the choice between granite countertops and fire sprinklers, respondents overwhelmingly chose the countertops, according to the National Association of Home Builders.

(To find out if your state requires fire sprinklers in new construction, check out the Fire Sprinkler Initiative website.)

Worse still, there are only voluntary flammability regulations for upholstered furniture. Implementing a nationwide standard would go a long way in protecting consumers from purchasing dangerously flammable furnishings, the NASFM spokesperson said.

Regardless of what state legislators decide, though, it all comes down to vigilance, says Fire Safety Institute Director Watts.

If you'll be using a live Christmas tree this holiday season, make sure to water it regularly and keep an eye on any decorative lighting and candles. And, as always, make sure your house is equipped with working smoke and carbon monoxide detectors. For a terrifying glimpse at a Christmas tree "flashover," watch the video above.

Also see:
Home Allegedly Set Afire in Neighbors' Facebook Feud
Mortgage Rates Stay Low, But Homebuyers Aren't Budging

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]]>Fire Safety Institutefire sprinklers in the homeflammable furniturehome fire safetyNational Association of State Fire MarshalsNational Fire Protection AssociationNational Institute of Standards and TechnologyStefanos Chen2011-11-07T17:55:00 00:00BofA Threatens Family With Foreclosure Over $1 'Coding Error'http://realestate.aol.com/blog/2011/11/04/bofa-threatens-family-with-foreclosure-over-1-coding-error/http://realestate.aol.com/blog/2011/11/04/bofa-threatens-family-with-foreclosure-over-1-coding-error/http://realestate.aol.com/blog/2011/11/04/bofa-threatens-family-with-foreclosure-over-1-coding-error/#commentsFiled under: ,

$1 foreclosure utahWhen Shantell Curtis sold her Vernal, Utah, home last year, she expected, as a reasonable person might, that she'd paid her last mortgage payment on the house.

But her lender, Bank of America, thought differently, according to KUTV 2News in Utah. Because of a $1 "coding error" on the bank's part, the title to Curtis' home was never transferred to the new owners, making it appear as if she still owned the home. As a result, BofA initiated a foreclosure process on the home and reported Curtis to the credit bureaus, effectively obliterating her credit score.

Now Curtis is left to pick up the pieces for a mistake that was not her own, on a house that no longer belongs to her.


While BofA was prompt in identifying the problem after Curtis reported the issue, it's been more than five months and she still hasn't received a letter to confirm that the title issues have been resolved. A bank spokesperson also told her that they'd clear up her credit issues, but that could take up to three months. In the meantime, Curtis' credit score remains in the dumps.

"They said that they had to keep reprocessing it and this has been a game we've been playing ever since," Curtis told KUTV. "They just say they need to reprocess papers."

AOL Real Estate contacted the new owners of the home in question, who said they were unaware of the Curtises' problem, adding that they are current on their own mortgage. They've never received any mail from Bank of America addressed to the Curtises either, they said during a phone interview.

The new owners' mortgage is with a different lender.

When reached for comment, a spokesperson for the Bank of America told us that they will look into the matter. As of this writing, they have yet to respond.

UPDATE: Bank of America spokesperson Jumana Bauwens sent the following --
This was an issue that we handled with the tv station in August. It was a result of a coding error. We have verified that all the codes on the loan were corrected. The loan now has a zero balance and reflects as paid off in the system. We apologize to the Curtis' for this error and have made (in August) the necessary corrections to the credit agencies.

See also:
Woman Faces Foreclosure On Home She Bought for $1
Soldier Buys Back Parents' Foreclosed Home
Houston Family Foreclosed On Through No Fault of Their Own

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]]>1 dollar foreclosurebank error foreclosurebank of americaBank of America error foreclosurebofafamily threatened with foreclosurehome titleshantell curtisuntransfered titleuntransferred titleutahvernalwrongful foreclosureStefanos Chen2011-11-04T14:00:00 00:00Victims of Robo-Signing: Fight the Machine!http://realestate.aol.com/blog/2011/11/02/victims-of-robo-signing-fight-the-machine/http://realestate.aol.com/blog/2011/11/02/victims-of-robo-signing-fight-the-machine/http://realestate.aol.com/blog/2011/11/02/victims-of-robo-signing-fight-the-machine/#comments

With the national foreclosure settlement ramping up, victims of the housing crisis may finally be getting some satisfaction. Starting this week, more than 4 million homeowners who faced foreclosure between 2009 and 2010 may be able to get their cases reviewed to determine whether their lenders engaged in robo-signing and other questionable practices.

The Office of the Comptroller of the Currency has ordered the 14 largest mortgage servicers to send out mailers informing borrowers how to request a review if they suffered "financial injury as a result of errors, misrepresentations, or other deficiencies in foreclosure proceedings" on the purchase of their primary home.

In addition to being spanked for robo-signed signatures (pictured above) and other faulty documentation, banks may also be on the hook for other "financially harmful" practices, such as foreclosing on a home at the same time that the homeowner was in the process of a loan modification.

To qualify, the homeowner's mortgage must have been active in the foreclosure process between Jan. 1, 2009 and Dec. 31, 2010. Requests for reviews must be submitted by April 30, 2012. The loan must have been serviced by one of the lenders listed here. A neutral third party will review the complaints, according to the OCC release.

There is no word yet as to how much individual homeowners may recoup, nor is there any indication that foreclosed homeowners who fall outside the 2009-2010 window will receive a similar deal. And while this may be a step in the right direction for homeowners wronged by their lenders during the housing bubble, it falls far short of getting to the root of the problem. Robo-signing may have been a widespread phenomenon as far back as the mid-1990s, according to The Associated Press.

To learn more about the program and to see if your loan is eligible, visit IndependentForeclosureReview.com.

Also see:
Foreclosure Law Firm Mocks the Homeless for Halloween
Viewpoint: Kamala Harris for President
Houston Family Foreclosed On Through No Fault of Their Own

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]]>foreclosure crisisforeclosure settlementhousing bubblerobosignerrobosigningunderwater mortgagesStefanos Chen2011-11-02T15:11:00 00:00When Renters Get Snared in Foreclosure's Webhttp://realestate.aol.com/blog/2011/10/27/when-renters-get-snared-in-foreclosures-web/http://realestate.aol.com/blog/2011/10/27/when-renters-get-snared-in-foreclosures-web/http://realestate.aol.com/blog/2011/10/27/when-renters-get-snared-in-foreclosures-web/#commentsFiled under:


When homeowners fall into foreclosure, the consequences are dire. But when landlords run afoul of their lenders, it can be the tenants who suffer most.

For New Yorker Ingrid Soto, her apartment building in the Bronx (pictured above) has been in and out of foreclosure since 2007, and it's pushed this mother to the brink.

When the landlord, Ocelot Capital Group, walked away from its mortgage obligations -- and subsequently stopped paying for utilities -- Soto (shown below) and dozens of other tenants were literally left in the cold.

Ingrid Soto"We had to boil water to take showers," she says matter of factly, relating a story she's told many times before. "We've got children and we're freezing.... A lot of tenants got sick, and a lot of children [came down with] pneumonia."

Having to choose between the risks of freezing and carbon monoxide poisoning, many tenants in Soto's 42-unit building used ovens to warm their apartments during the winter, despite repeated warnings from the fire department about the dangers.

Basic services were nonexistent. Drug vials littered the halls, walls succumbed to mold and rot, and the on-premises super couldn't afford even the most essential cleaning supplies, she says. "We had to deal with rats, roach infestations, building violations, bedbugs -- you name it."

In 2008, Ocelot Capital Group, which made headlines for over-leveraging a number of rent-stabilized investment properties and falling behind on mortgage payments, owned multiple buildings on a list of the worst-maintained apartments in New York City.

"With tenants, it's not like when you have a home that's foreclosed and then you're not there anymore," she says. "We were still living in those conditions, under all those building violations."

A Flimsy Safety Net

In any given year, there are an estimated 34 million households that rent, according to the Joint Center for Housing Studies of Harvard University -- a number that's positioned to grow as more homeowners get priced out -- or forced out -- of single-family homes.

The numbers paint a stark picture. In a 2010 study by the National Low Income Housing Coalition, 40 percent of families facing eviction due to foreclosure were renters, including those who were current on their rent.

But much to the dismay of tenants who suddenly find themselves in foreclosure limbo, there are precious few protections when the landlord defaults, says Eloisa Rodriguez-Dod, a professor of law at Nova Southeastern University in Fort Lauderdale, Fla.

The only federal law that addresses even some of the problems faced by renters in these circumstances is the Protecting Tenants at Foreclosure Act of 2009. Essentially, the law provides, in the case of foreclosure, a minimum 90 days notice to tenants prior to eviction. The law also states that tenants have the right to live in the property until the end of their lease.

But there are several loopholes and shortcomings, Rodriguez-Dod says. For one, while the law states that tenants can stay until the end of their lease, a qualifier in the act permits a new purchaser to evict a tenant with 90 days notice if they claim that they'll personally occupy the unit. Since there are no explicit penalties for abusing this provision, an unethical purchaser could invoke it as a strategy to evict an unwanted tenant.

Ocelot BronxMore important, the law does little to protect tenants in Soto's scenario, in which a landlord's negligence can effectively force most renters to move.

"The tenants are entitled to clean buildings and all the services, but there just isn't any enforcement," says Ian Davie, an attorney in the Bronx office of Legal Services NYC, which brought the Ocelot Capital Group case to court.

When a large multifamily property like Soto's falls into foreclosure, a court-appointed "receiver" is chosen to steward the property until a new buyer is found. But in reality, he says, it's the mortgage-holder's responsibility to fund any necessary repairs. That's typically when the finger-pointing begins.

"The argument we face is that 'there's no money,' " says Sateesh Nori, director of housing litigation at BedStuy Legal Services in Brooklyn. "And it's hard to force someone to do something when they claim they're broke."

A National Problem

The shortcomings of tenant protections against foreclosure affect people from all walks of life and every corner of the nation -- even the savviest renters. Gracee Arthur, a Malibu real estate agent with 20 years of experience, found herself in the same position as Soto: Unbeknownst to her, the landlord had stopped paying his mortgage.

He did not, however, stop collecting rent, she says.

Gracee ArthurArthur (pictured at right) moved into the ocean-view architectural home, which rents for around $3,800 a month for a two-bedroom apartment, at the end of April. By the middle of June, a Notice of Default was placed on the home -- a fact that she'd come to learn only after reading about a "trustee's sale" on the building in the local paper some months later.

She now suspects that her landlord -- who is also a real estate agent -- stopped paying the mortgage before she moved in.

"It didn't show up in any documentation yet," she says, referring to the impending foreclosure. But Arthur believes that she's a victim of "basically, fraud and rent-skimming." (Hear Arthur tell the tale in her own words here.)

Fortunately, in Arthur's case, utilities were covered by individual tenants. But the indignity of waking to a foreclosure notice was more than enough to spur her to action.

She immediately confronted the landlord about the notice. He told her not to tell the other tenants, Arthur says. But not only did she share the news with the others, she also contacted a real estate attorney about possibly filing suit for landlord fraud. And because federal law does not guarantee a refund on renters' security deposits, she recommended to tenants that they work out a deal in which their deposits be used toward their last two months of rent.

As for her landlord, Arthur says that she's been advised to file a complaint against him with the California Department of Real Estate.

"You at least have compassion for someone who's leasing their own home," Arthur says. "But for this guy, it's just a bad investment. Don't feel bad for him."

No Solution in Sight?

In Soto's case, the battle to stay in her home has been a long and tortuous tale. After months of uncertainty, years of neglect, and even having the apartment complex listed on an online auction site, renters in the erstwhile Ocelot building finally have a stable landlord.

After a lengthy court battle, the tenants convinced Fannie Mae, which held the mortgage, to take a significant loss on the outstanding debt -- from $29 million down to $5 million, says New York attorney Davie -- which demonstrates just how rampant property speculation was at the height of the bubble. Since then, a new buyer has taken the reins and has been making significant repairs to the building, Soto says.

Unfortunately, says New York attorney Nori, there wasn't much the tenants of Ocelot could have done to prevent their protracted legal battle.

"There's nothing a tenant can do to protect themselves," he said. "Even if your landlord is good now, five years from now, if they get into trouble, there isn't anything you can do other than hope things work out."

Also see:
Houston Family Foreclosed On Through No Fault of Their Own
Buy This House -- With the Seller Still In It

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]]>BedStuy Legal Servicesevictionforeclosure crisisGracee Arthurlegal services nycocelot capital grouprenters in foreclosurerenters rightstenant evictiontenants in foreclosureStefanos Chen2011-10-27T15:10:00 00:00Muammar Gaddafi: Homes the Dictator Left Behindhttp://realestate.aol.com/blog/2011/10/21/muammar-gaddafi-homes-the-dictator-left-behind/http://realestate.aol.com/blog/2011/10/21/muammar-gaddafi-homes-the-dictator-left-behind/http://realestate.aol.com/blog/2011/10/21/muammar-gaddafi-homes-the-dictator-left-behind/#commentsFiled under:



With the death of Muammar Gaddafi, a 42-year reign of terror and violence in Libya draws to a close. But for the small army of auditors and bankers tasked with tracking down the colonel's ill-gotten fortune (at least $30 billion in the U.S. alone), the work has only just begun. Perhaps the most concrete reminder of Gaddafi's legacy is his family's impressive real estate holdings.

In the affluent community of Englewood, N.J., Gaddafi purchased a sprawling 25-room mansion in 1982. For years, neighbors have bristled at the thought of living in such close proximity to a man charged with crimes against humanity.

Gaddafi Englewood home

It also didn't help that neighbors essentially paid for his taxes. Because the home was established as sovereign Libyan territory, whoever lived there did so tax-free. High-profile neighbors to the Libyan strongman included Eddie Murphy, John Travolta, and Lil' Kim.

In 2009, during a visit to the United Nations in New York, he planned to erect a Bedouin-style tent at the Palisades Avenue home just days after giving the recently-released Lockerbie bomber, Adel Basset al-Megrahi, a hero's welcome. After a very vocal backlash, Gaddafi was not be allowed to pitch his elaborate tent.

Across the Atlantic, the Georgian-style London mansion of the colonel's 38-year-old son, Saif al-Islam Gaddafi, has been at the center of an international protest since March. As the civil war raged on in Libya, a group of Libyan expats and sympathizers determined that the £11million ($17.5 million) townhouse belonged to the dictator's absentee son -- and decided to squat in it. (That's the home pictured at the top of the post, being occupied by protesters in March.)

The protesters, who adopted the name "Topple the Tyrant," laid banners over the roof of the building saying "Out of London, Out of Libya," with an X over Gaddafi's portrait. Inside, the protesters found an indoor swimming pool, state-of-the-art home theater, and widescreen TVs throughout the premises. The home, which was purchased mortgage-free in 2009, drew headlines when Gaddafi's known assets were frozen earlier this year. The tony home represents just a fraction of the Gaddafi family's exorbitant fortune, which is already said to exceed $168 billion.



While it remains unlikely that the Gaddafi fortune will ever be fully accounted for, the dictator and his eight children's real estate holdings reveal just the tip of the iceberg when it comes to restoring Libya's lost billions.

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]]>gaddafi+fortunegaddafi+homesgaddafifortunegaddafihomesinfamous real estatelibyaMoammar GadhafiMuammar GaddafiStefanos Chen2011-10-21T17:30:00 00:00Hey, Foreign Investors: Buy a House, Get a Visa!http://realestate.aol.com/blog/2011/10/20/hey-foreign-investors-buy-a-house-get-a-visa/http://realestate.aol.com/blog/2011/10/20/hey-foreign-investors-buy-a-house-get-a-visa/http://realestate.aol.com/blog/2011/10/20/hey-foreign-investors-buy-a-house-get-a-visa/#commentsFiled under: ,,,

home soldIt's no secret that one of the few bright spots in the housing market today comes from all-cash buyers, many of whom are foreign investors. But a new bipartisan bill in the Senate aims to take this trend to its most logical (and controversial) end -- buy a house and you'll qualify for a resident visa in the U.S.

The bill, proposed by Sens. Chuck Schumer (D-N.Y.) and Mike Lee (R-Utah), seeks to lure foreign buyers by offering a resident visa in exchange for a cash purchase of at least $500,000 on a single-family home, condo or townhouse, according to The Wall Street Journal.

The proposal takes its cue from the "EB-5" program (formally known as the Immigrant Investor Program), in which foreigners who invest in job-creating projects that are worth at least $500,000 in high-unemployment areas are granted green cards.

The bill is not, however, without its detractors. Richard Smith, CEO of Realogy, the parent company of realty heavies like ERA, Century 21 and Coldwell Banker, told The Wall Street Journal that it's an unnecessary measure -- even without the incentive, foreigners are already snapping up American property.

And he may be right. Of the $1.07 trillion spent on existing home sales between March 2010 and March 2011, about $41 billion changed hands thanks to foreign investors, according to the National Association of Realtors. Additionally, all-cash sales accounted for 30 percent of all purchases -- much of which is generated by foreign investors facing favorable exchange rates.

On the other hand, Sen. Schumer told the Journal, the proposal is a quick way to shore up demand for the country's housing overstock without costing the federal government anything. Until first-time homebuyers overcome the hurdles at the banks, and repeat buyers find ways to unload their current homes, increased sales to foreign investors may be the best way to absorb some of the nation's enormous inventory of homes.

The investor visas would not leapfrog current waiting lists, which should prevent wealthier foreigners from jumping ahead of other immigrants. The bill also requires investors to apply for a separate visa to work in the U.S, says the Journal.

Readers, what do you think? Would such a bill help or hurt the U.S. economy?

Also see:
Viva Las Vegas! Sin City Now Bargain City
When It Comes to Square Footage, the U.S. Is Cheap
Require 20% Down on a House? Hong Kong Tried That
Pity the Homeowner Who Tries to Sell in These 10 Cities


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]]>buy house get visabuyers marketChuck SchumerEB-5foreign investment in US real estateforeign investorsimmigrant housingImmigrant Investor Programimmigrant real estateSen Mike LeeStefanos Chen2011-10-20T16:00:00 00:00Zombie-Proof Your Home Before Friday's Rapturehttp://realestate.aol.com/blog/2011/10/19/zombie-proof-your-home-before-fridays-rapture/http://realestate.aol.com/blog/2011/10/19/zombie-proof-your-home-before-fridays-rapture/http://realestate.aol.com/blog/2011/10/19/zombie-proof-your-home-before-fridays-rapture/#commentsHarold Camping, the evangelical Henny Penny of the Apocalypse, has got that feeling again. This time, the 90-year-old prophet is claiming that the world will "probably" end Oct. 21, 2011. What are the odds he goes 0-2? (Let's not revisit his predictions throughout the '90s for the moment.)

To hedge your bets on the eve of oblivion, browse this gallery from This Old House in preparation for one of the most frequently cited end-of-days scenarios: zombie home invasion. (Click the thumbnails to start the gallery.)

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Even if this whole Rapture thing blows over, you'll be ahead of the game for Halloween. And zombie preparedness is never a bad thing. Just ask The Centers for Disease Control.

Also see:
Gimme Shelter: Homes for the Apocalypse
Newest Squatters in Empty Homes: Rats and Coyotes

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]]>apocalypseend of the worldharold campingmay 21 2011oct 21 2011rapturezombie apocalypsezombiesStefanos Chen2011-10-19T20:00:00 00:00Bank of America Offering Up to $20,000 to Florida Short Sellershttp://realestate.aol.com/blog/2011/10/11/bank-of-america-offering-up-to-20-000-to-florida-short-sellers/http://realestate.aol.com/blog/2011/10/11/bank-of-america-offering-up-to-20-000-to-florida-short-sellers/http://realestate.aol.com/blog/2011/10/11/bank-of-america-offering-up-to-20-000-to-florida-short-sellers/#commentsFiled under:

bank of america short sellersIt's not mortgage principal reduction, but it's a start.

Bank of America is quietly rolling out an incentive program in parts of Florida in which they'll pay distressed homeowners up to $20,000 if they successfully short-sell their home, according to The Palm Beach Post.

A short sale is an arrangement in which the lender agrees to accept less than what's owed on the mortgage to avoid a lengthy (and expensive) foreclosure process. Foreclosures in Florida take an average of 23 months to be processed -- nearly twice the national average, according to analytics firm RealtyTrac.

The pilot program, identified by BoA spokesman Rick Simon as the "short sale/relo incentive program," is only being tested in Florida at the moment, due to the state's high volume of foreclosures. If the program is successful, the program may be launched elsewhere, he said in an email to AOL Real Estate.

Sometimes referred to as "cash for keys," the money may be used to provide distressed homeowners "with the tools and resources necessary to transition out of their home with dignity," the press statement says. In other words, there will be less chance that the homeowner will be tempted to vandalize the property on the way out.

Trouble Thrives in Vacant Homes

In the humid climes of Florida, short sales are far more desirable to lenders than letting the house sit vacant in a foreclosure. Mold can ravage even the best built homes, and empty houses are prone to squatters and vandals. The $20,000 payout could be a drop in the bucket in comparison to the cost of maintaining a rapidly deteriorating home.

But there may be a major downside to the program for severely underwater homeowners. In recourse-loan states like Florida, the lender can seek what's known as a deficiency judgment -- the unpaid balance left on the mortgage -- even after a short sale is completed.

In such cases, much of the money could end up back into the bank's pocket. BoA's Simon said that the bank's guidelines "allow for the deficiency judgment to be waived," but the bank reserves the right "to pursue collection" after the sale. That may not be a strong enough commitment, according to Broward County-based consumer defense attorney Margery Golant.

"The fact that they 'may consider' waiving the deficiency judgment means nothing to me," Golant told AOL Real Estate in a phone interview. "It just fosters false hope."

For Golant, who regularly sees homeowners with close to six figures of outstanding debt, even the full $20,000 would do little to get an owner out of the hole if they're still on the hook for the difference, she said.

"If they really were waiving the deficiency judgment, then I would think it could mean a meaningful approach," Golant says. "But to say we'll give you $20,000, yet reserve the right to sue for the difference is not only not meaningful but deceptive."

Could It Work?

There is already a national precedent for what BoA is attempting - the Home Affordable Foreclosures Alternative (HAFA) program, which offers a $3,000 short sale "relocation" incentive. But so far the results have been less than encouraging. Since April 2010, HAFA has only completed 15,531 short sales nationwide, The Palm Beach Post reports, and the program is scheduled to sunset at the end of 2012.

Still, if BoA can put up some impressive numbers in its trial run, there may yet be hope of more aggressive financing options for America's thousands of underwater homeowners - like the often-trumpeted, mostly dismissed notion of mortgage principal reduction.

For Florida homeowners interested in participating in the program, here are some key points:
  • The program offers $5,000 to $20,000 to qualifying homeowners who complete a bank-approved short sale. The amount is based on the unpaid balance on the loan as of Aug. 2011.
  • Short sale must be initiated between Sept. 26 and Nov. 30, 2011, and closed by Aug. 31, 2012.
To learn more about the program, call 1-877-459-2852.

CORRECTION: A previous version of this article stated that foreclosures in Florida take an average 23 months to sell. It takes an average 23 months to complete the foreclosure process in Florida, not to sell the property.

See also:
HAMP Helping Fewer and Fewer Homeowners
Viewpoint: The Mortgage Fix That Could Save the Economy

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]]>bank of americacash for keysflorida short salesforeclosure crisisHAFAHAMPhome affordable foreclosure alternativesshort salesStefanos Chen2011-10-11T17:00:00 00:00