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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.

Dallas Dealestate: Ridgewood Park Foreclosure Under $200K

This won’t last. At $152,000 this foreclosure in coveted Ridgewood is on Lovers lane, which may be somewhat of a drawback — busy street and all — but at the price you could almost charge this on a couple credit cards and be done with it until the first bill came in. We don’t play that game anymore. Ridgewood Park is a highly sought after area for first-time home buyers with a superior home owners association and crime watch. Most of the homes were built in the 1950’s and sport hardwoods, solid bones, leafy yards. Granite in the kitchen folks, slate back splash and yes, I saw the colors: Sherwin Williams is having a sale…

Do I Pay A Mortgage Holder Who Has Defaulted?

Yes, and I would keep copies of the payments in a file in case things get “sticky”.

Even if your mortgage has been sold, sold again and re-packaged as a mortgage-backed security, your name is on the note and you are responsible for the monthly payments no matter who it was assigned to. Know those stacks of papers you sign at closing? One of those docs gives your lender the right to assign the loan — or sell it — to whoever wants to pay the big bucks buy it. Miss one payment, you’ll find yourself embroiled in a lot of explanation and eterna-holds. (Wachovia calls me if one of our mortgage payments is two days late!) Miss several and your home could end up being sold on the court-house steps. Texas is a non-judicial foreclosure state, which means nothing has to be shown to a judge prior to launching the foreclosure process. This is one reason why Texas bankruptcy attorneys are busier than sin these days, working Saturdays and going to court to help homeowners save their homes.

But I need reader’s help with this one: is the mortgage holder, in this case none other than our esteemed Wick Allison, required to mail the payment (or send electronically) to the last known servicing address? Isn’t the bank required to notify all mortgage holders when a new loan assignment has taken place and specify where payments are to be mailed? What, if any, are the penalties against the mortgage holder for not doing so?

I recall an article in either the New York Times or Wall Street Journal a few months’ back describing the confusion all these loan re-assignments have caused in the foreclosure process. Folks were getting to court and no one could locate the actual mortgage documents. I’m trying to find the article.

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...

More Texas Home Foreclosures on The Horizon?

The DMN is reporting that 8 percent of Texans are behind on their mortgage payments, which means another wave of foreclosures may be on the horizon. Mortgage Bankers Association chief economist Jay Brinkmann told the DMN that mortgage defaults won’t likely slow down until the “employment situation begins to improve.” The MBA is predicting that won’t happen until late 2010.

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.

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.

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.

Calling 1-800-PRO-TEST

People Newspapers staff photographer Chris McGathey sent along the following photos and accompanying caption:

Acorn Members Sebastian Dominguez, holding a sign, and Tersesa Rojo protesting outside the Wells Fargo at Lemmon Avenue and Wycliff on Wednesday. The Acorn members were on hand to support and help two families that were meeting with bank officials to re-negotiate the foreclosure of their homes. Texas Acron is currently supporting and have put together a five-point legislative package to help families stay in their homes.

(with tongue placed firmly in cheek) I wonder if I can get some protesters to stand outside the cubicles of certain unnamed PR reps who spam my inbox with 6 versions of the same e-mail?

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?

So Whatever Happened To P.M.I???

Did PMI have PMS? I actually had a dream last night about P.M.I. — that is, private mortgage insurance. (The trillion dollar bail-out is so mind-boggling I am dreaming about it.) I recall when we bought our first house we had to buy P.M.I. which was a sort of default insurance that would pay off the mortgage loan in case we didn’t. The bigger our equity has become over the years, the less we have had to pay.

But what about people who bought with zero down? Didn’t they have to pay P.M.I? Or were they, instead, encouraged to get second mortgages so that instead of having an insurance policy on default, they would screw over two banks instead of one?

May I make a modest suggestion: whoever initiated the dumping of P.M.I. helped make a significant contribution to the mortgage crisis and current financial meltdown. Agree?

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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