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Dallas Real Estate Foreclosure Offering Forgiveable Second

Here’s a very interesting Dallas property. List price $423,000 in The Meadows, on Meadow Road just east of Hillcrest. Your nice 1970 ranch with a few skylights, bay windows, maybe even a popcorn ceiling, you know the drill. The house is a foreclosure, owned by a bank, who’s offering to forgive the $123,000 second lien on the property if the buyer lives in the home for three years. (Or, they may consider forgiving one-third of the second per year.) I want to know if this can be done; I think it can IF the bank doing the forgiving owns the note. The Realtor, Joe Peterson of The Property Shop, told me the buyer would receive a general warranty deed. So you take the asking price, subtract the second, you would essentially get the house for $300,000. Or less, depending on what offered. Why would the bank do this? Slow down the hit they are taking. The home is 2842 square feet, three bedrooms, 2.5 baths, security system, 90 by 139 lot. Carport, no garage. The house most definitely needs work in the master (see photos) and the kitchen, which has pink tile counters. But this is very intriguing and a clever little trick by the financial institution holding the note. 7334 Blairview, at 2941 square feet, is listed for $550,000. My fave bankruptcy attorney tells me the lenders are pulling more creative tricks out to work with foreclosures, now one of every four homes in D/FW. Hey, it could be worse: Vegas is one of every two.

Dallas Real Estate/Bankruptcy Update: Creditors Getting More Negotiable

Dallas foreclosures are up again, according to Roddy’s Foreclosure Listing Service, Inc: more than 6,000 posted for October, more than 5,000 posted for November, with the estimated total for 2009 a whopping 60,000 — about the size of a town. But local creditors must be taking Happy Pills or getting smarter, says one bright young Dallas attorney. They are frantically working out deals with homeowners on debt to avoid all-out bankruptcy.

Say your home gets foreclosed on. What then? Your options are to file for bankruptcy or pay off the deficiency balance, which is the amount you are liable for on the note after the foreclosure sale. But what many people don’t know — in fact, I learned this just at dinner last night — that figure can usually be reduced to pennies on the dollar outside of filing bankruptcy IF you hire an attorney to negotiate with the mortgage company. And the mortgage companies are getting so bankruptcy weary, they are in a more negotiating mood, says Jacob A. Decker, an attorney with Allmand & Lee.

“The large five mortgage companies are really talking turkey now, ” says Decker. “Last week, I settled one deficiency balance of $65,000 for less than $5,000.”

The trick, he says,  is to work with a bankruptcy law firm that deals with the creditors on a daily basis in a bankruptcy context. That way, the lenders know that if they do not settle for a  pennies on the dollar, the next step will be a bankruptcy filing where they will likely get zilch. A couple thousand versus zero? Decker says the lenders will almost always take the money.

Toss in cash-strapped tenants who are filing to wriggle free of long-term leases, bankruptcy attorneys are busier than they have ever been, says Decker. He’s also seen a significant increase in creditors’ willingness to settle other debt — renegotiate auto, student loan and even credit card debt. Bankruptcy attorneys are raking it in. Full disclosure: I have first-hand knowledge of how hard they’re working and am not complaining one bit: Decker is my new son-in-law!

Dallas Deal Estate: This House Just Keeps Getting Cheaper…

OK, I know it’s a little quirky — the architect was trying to be all New Orleans style — but surely some Tulane grad wants 4214 Manning. It’s now down to $2,050,000 from $2.5 and something tells me note holders just might entertain an offer. In fact, I’d go in at $1.5 — what do you think?

Foreclosures Down, Postings for September Up 35% Over 2008

Steve Brown reports that government programs may be the reason why we saw fewer foreclosures in the first half of 2009, but still no consensus on whether those programs are working. The foreclosure moratoriums do seem to be keeping homeowners in their homes: during the first 6 months of 2009, only 30% of the homes posted for foreclosure were auctioned off. Usually, that percentage is higher, like 40%.  Often homes are put on the foreclosure list but homeowners often work deals to keep their homestead right up ’till the last possible minute. And despite Dr. Mark Dotzour calling bottom yesterday, his colleague, Dr. James Gaines, is still worried that the worst is not yet over.

New Jersey Woman Bakes Her Way Out Of Foreclosure

One of the most heartwarming stories I have read in real estate, this story shows true American, can-do grit. I’m hoping her Mortgage Apple Cakes become as famous as Miss Grace Cakes.

Scene From The Dallas County Foreclosure Auction, Ctd.

When the trustee speaks, everyone listens.

Scene From The Dallas County Foreclosure Auction

Huddled around a trustee, must have some juicy props.

Real Estate Bargains On The Courthouse Steps: The Biggest Foreclosure Auction In Dallas Ever

It was my first venture to a Dallas County foreclosure auction, which takes place the first Tuesday of every month “on the courthouse steps”, as ordered by Texas law. And yesterday’s was billed as the biggest ever, some 6000 commercial and residential properties auctioned off for lack of payment. Honestly, way more fun than the fair. I met fascinating people, saw some familiar faces — Allie Beth Allman, Baxter Brinkmann — and learned a lot. Will definitely go back for more. This is where savvy agents know they can not only pick up great deals for clients but find out what the bottom line really is. If you’ve never been, and you love real estate, this is a must-see show. A few quick observations, then hit the jump.

One, I cannot believe how archaic the process is. A bunch of hot people standing outside the George Allen Courthouse, lawyers in suits  (low wool content, I hope). We could have used chair massages and Slurpee’s, and where’s the potty? At first we went to Lew Sterrett Frank Crowley, I pulled out the Handi-Wipes, but was re-directed to 600 Commerce after passing my handbag through the metal detector. Veterans tell me that folks didn’t like being at Lew Crowley for obvious reasons. So we get to 600 Commerce and like a sidewalk fair, everyone is  standing outside under the overhang, where I stayed remarkably comfortable for a July day in Texas. (Note to Dallas County: exterior ceiling fans.)  A few people did stop and ask if this was a fair or something. It was hot, but could have been worse.  Pity the poor trustee  who was off next to Tarrant County’s auction — it is held on the west-facing courthouse steps, outside, no overhang.

Foreclosure attendees consist of four basic food groups: newbies, like me;  investors (serious), also known as vultures; bank reps — I learned many of the banks buy back their own properties so they can re-sell them; people desperately trying to save their homes. The atmosphere is almost camp-like, since the savvy bring coolers and those fold-able camp chairs — one trustee even had a camp battery pack and fan. Paperwork is kept in rolling file cartons a la the Container Store. The American Dream is in full force — one person’s loss is another’s bargain.  Most folks are dressed casually save for the few dedicated attorneys in suits who stand out like hot, sore thumbs, but at least you can see them as they read off their prepped legal docs — same verbiage, different debtor: “Whereas on August 12, 1999, Michael Jackson, a single man, executed a deed for the sum of $500,000 in Dallas County…”  You cannot hear  very well as the buses, planes and sirens are out-screeching  words, so everyone leans in close, creating a huddle around each trustee. I saw one bid start at $80,000, the home sold for $214,000. (Interesting, the guy waiting to about $150K to jump in.) The bidding on some properties  started at a dollar. One Lakeridge property owned by Bank of America started at $24,650, and I wrote about a four million dollar property out there. Someone cleaned house on a $5 million dollar downtown commercial property they snagged for $3 million. The blood thirst for bargains was thick: I was back at the silent auction table at a charity fund raiser where an aggressive broad planted herself in front of the sign-up for lunch with Nolan Ryan at The Ballpark, or at Filene’s Basement with La Perla fifty cents a pair.

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Tuesday Morning Tussle: One Week To The Foreclosure Auction

Next Tuesday morning foreclosed homes in Dallas will be sold on the courthouse steps. Foreclosures are a sad time and I cannot think of a worse, more horribly stressful scenario than being forced out of your home. I know — it happened to me.

Real Estate Round-Up: Foreclosures Spreading, Dallas RE Values Revisit the 90’s?

USA Today quotes Realty Trac saying that foreclosures are spreading from the Big Four Bad Boys — California, Florida, Nevada and Arizona to other locales like North Carolina, Wisconsin (!) and even the land of potatoes, Idaho. Culprits: lost jobs, lay-offs. Steve Brown tells us that Dallas real estate values have re-visited the 1990’s when adjusted for inflation. The median price of a Dallas home in 2007 was $158,000  — today that same house can be picked up for $129,000. Just please don’t tell me that we are going to re-live the 90’s in decor: if the southwestern look returns, I’m outa here.

4214 Manning Goes Into Foreclosure

I almost feel like this is my house going into foreclosure, because I have watched this child grow…  from completion to the proud-as-a-mama Louisiana-style party to unveil her, to shooting a video on her, touring every square inch, very sad to see that no one will buy this home. It is loaded with quality, but it is a bit quirky — not for everyone. And that may be why 4214 Manning is now like an orphaned child. (Or it just may be that we have too many new homes for sale in Dallas.) Agent Philip Walker tells me the price is still $2,500,000, which is what the bank has in this property. It will also lease for $9000 a month.  Anyone out there want a Louisiana-style home  cher, loaded with high end appliances, marble, granite, etc. etc? Call Philip, make an offer...

Fabulous House Deal: Going, Going, Gone…

Chancellor Creek in McKinney. 4300 square feet. Granite counters, high-end appliances, four bedrooms, three and a half baths, three living areas, study, huge corner lot, secret passageway from game room leads to a media room with half bath. Foreclosure in better than perfect condition. Only one problem — it’s under contract. The pricing started in the $600′’s and now reduced to … are you sitting? $339,300. Not a misprint. Stay tuned, I’ll find more and post before the agents snap them up.

Outrageous Real Estate Moves: Could This Happen In Dallas?

Banks in southern California allegedly scraped foreclosed homes in need of work rather than complete or repair them, according to Mish.

Friday Report: Foreclosures Up, But Good Prognosis For Dallas Real Estate

Steve Brown reports that while foreclosures are up — 15% in Dallas County from May 2008, up a whopping 45% in Collin County — the numbers may be so large because lenders have taken off their self-imposed moratoriums and are no longer being the nice guys. While that may make for an even gloomier Friday, this report by real estate expert John Burns in Builder ought to bring out the real estate sunshine: Burns asked national real estate experts to select five cities (and states) that will be the first to recover and Dallas, “an affordable market that continues to churn out good jobs”, was right on that list! (He even says we will do better than Houston.) As for Texas, Burns says we added 155,000 new jobs last year, most in the oil and gas industry. Great news, after hearing Fareed Zakaria speak this noon at the World Affairs Council luncheon: the energy industry, he said,  is most certainly not going bye-bye.

I’m almost bullish.

Feed The Beast, Then Go Find A Foreclosure

 Or a home whose price has been slashed and dashed. Since you won’t have any money left after paying your taxes today, you might want to know about a super duper warehouse auction of (mostly) new homes later in the month. I perused the list of 85 homes and while most of the deals are new homes in places like Midlothian, Anna, Little Elm, Forney and Irving, I found this little number in the 75229 zip code — not bad. And stay tuned – I’m off  to check out the company that runs these warehouse close-out sales on new homes, (not foreclosures), touted as a first of its kind in Texas.

Dallas Has Its Share of Mortgage Ripoff

The government announced yesterday a multi-department effort to crack down on mortgage scams - pulling desperate people into phony modification programs, promising them ways to keep their home from foreclosure, then ripping them off. I asked Dallas bankruptcy attorney Rustin Polk if he has seen any evidence of this hanky-panky in Dallas — and he said unfortunately, yes. Too many: One client was working on a loan modification with a “loan counselor”, paid several fees and appraisals during a six month period of time. The lender went ahead and posted the home for foreclosure today.  Yesterday at noon, the loan counselor said to his client, “Oh by the way, we just found out that your mortgage lender doesn’t do modifications.”

Another client paid a local “law firm” that advertises on a local Dallas radio station $3,000 to get his mortgage modified; the firms first piece of advice was to intentionally get behind on his mortgage. The mortgage company posted him for foreclosure, the modification people told him that they couldn’t help him. Now he now faces the prospect of losing his home if he does not pay three months of payments all at once, plus all of the bank’s legal fees related to the foreclosure, and he’s out the $3,000. What a scam.

Then there’s the “foreclosure rescue specialist” called North American Foreclosure, LLP.  Folks need to be careful, says Polk, a bankruptcy attorney and home foreclosure expert for 15 years.

“Sadly, a person will try whatever they have to in order to keep their home and a roof over their kid’s head.  And who can blame them?,” says Polk. “But a con artist can sense that kind of desperation.   The number of so-called “loan modification counselors” has quadrupled in the last 18 months as the hucksters have opened up shop.  These fly-by-night operators target desperate homeowners– the easiest mark, but also the least able to afford such a scam.”

Nagin’s Frisco Townhome Up For Auction Today in Collin County

I called Lone Star Management, the company that collects home association fees for Casa Bella Owner’s Association, to see if the Nagins have made a last-ditch effort to save their cute little Frisco abode, but no one would comment. Here is the list of properties on today’s auction block in McKinney.

Zillow Explains Obama’s New Home Loan Modification Plan

Many of you probably read the news last week regarding the Obama administration’s plan to come up with a rather aggressive effort to stem the tide of foreclosures. In short it’s a way for homeowners to reduce their monthly payments (not including PMI) to 31% of their pre-tax monthly income. For the full monty visit Zillow’s blog post here that explains the process in detail and even points you to the right documents.

Here are the dirty details on qualifying:

• Must have originated mortgage before Jan. 1, 2009.
• Be an owner-occupant.
• Have an unpaid balance that is equal to or less than $729,750 (for a single-family home).
• Have trouble paying your mortgage due to financial hardship.
• Your monthly mortgage payment must also be more than 31% of your gross (pre-tax) monthly income. Duh.There’s a three-month trial period before you lock in the lower rate for five years and if your home is in danger of foreclosure the process will be halted while you apply for the program.

Dee Numbers Don’t Lie: D F’s Are up

What Steve Brown’s report doesn’t mention is that home foreclosures in Dalllas’ two most affluent areas are already on the rise. According to People Newspapers’ Krista Nightengale, who detailed the Park Cities/Preston Hollow foreclosure market in this article, the number of foreclosures in the first quarter of 2009 were up for all PC/PH zip codes except 75225.

Here’s a closer look at the data from Addison-based Foreclosing Listing Service:

Inman News: Lenders Not Exactly Gaga Over HASP

The Mortgage Bankers Association sees weaknesses in Obama’s real estate stimulus plan in the lending realm, like the upper limit of a 105% loan-to-value ratio required for refinancing, and the role of Freddie Mac/Fannie Mae as guarantors.

$275 Billion Home Stimulus Plan At First Blush

I know the reports are preliminary, but I am already getting ulcers over President Obama’s cure for our housing woes. Here’s my first report card:

A -$8000 tax credit for first-time buyers, l like very much. Assuming this will work like a section 179 deduction and come right off the taxes, not add 5 more pages or 6 hours of CPA billable hours to the tax return, essentially using tax dollars to help fund the home purchase. 

F- Revamping U.S. bankruptcy rules, giving judges the power to reduce mortgage payments and set lower interest rates. Excuse me, but I think part of our problem was that banks got too big, unregulated and complex. So now we are going to let judges play banker? This will slow down lending and banks will have to recoup their losses from somewhere —charge more to the customers who pay their bills, or higher PMI or PMI for everyone or higher interest rates.

Not fair, folks.

C – The government will match reductions lenders make to keep borrowers home payments at 31% of their income. What income — stated income? Does that include alimony?

Incomplete – Flushing Fannie Mae and Freddie Mac with $900 billion.

Octu-Mom’s Mom’s House May Be In Foreclosure

Since Octu-mom does not have a house of her own to shelter her litter brood, she lives with her mom who is behind on her house payments by more than $23,000… this is just sick. Please, someone, psych examination for these people and the physician. Then, I guess, bail out?

And Now, For Some Positive Real Estate News

I am hearing of a sale in Lakewood of a $500,000 ish home that was, yes, reduced but when reduced had three contracts. Roddy’s Foreclosure Listing Service, Inc. reports a nine year trend reversal in Dallas-Fort Worth: fewer homes were posted for February foreclosure than were posted one year ago.

The LA Times reports that default notices against homeowners have dropped significantly, probably because of a new California law that gives delinquent mortgage holders more time. And I’m not the only one who sees the silver lining in the fact that national housing supplies cratered in 2008. As they told us at Inman: look for an uptick in the sale of starter homes.

Debbie Downer Is Alive And Depressed In New York City

You haven’t heard from me because I spent half the day with travel delays –it’s cold and rainy in NYC, which matches the mood perfectly at this year’s Inman News Real Estate Connect. I tootled in just in time to hear Bob Shiller, the famed Yale economist who creates the benchmark SP/Case Shiller Housing Report. The heads — Bob Shiller wants to see us trade real estate securities like stocks, thinks the government should subsidize financial advisers for every family, and made liberal use of the D word — depression:

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Must-Read: The Folks Who Can Say “I Told You So”

Love this article by Bruce Bartlett, a new Forbes columnist —- significant quote:

“While conceding that economic fundamentals were favorable to rising home prices, they also noted that there were elements of bubble psychology in the housing market. Case and Shiller pointed to an increase in the buying of real estate for investment purposes and high expectations of housing price increases.

They also observed an increasing sense of urgency and opportunity among home buyers, who were plunging into real estate for fear of being left behind as they perceived their friends and neighbors growing richer–classic signs of a bubble.”