Real estate roundup: Californians in foreclosure limbo

A rising number of Californians are finding themselves in financial limbo, having defaulted on their mortgages but still living in their homes, a new report has found.

The report by Foreclosureradar.com (registration required) found that while the number of properties scheduled for foreclosure sale increased last month, lenders continue to postpone the sales rather than foreclose.

After three months of declines, the number of houses taken back by banks in October rose by 22.2% from September and 20.95% from October 2008. Despite that jump, the number of foreclosures remains 42.6% below a peak reached in July 2008, from which time the inventory of scheduled foreclosures has grown 131.36%, according to the report.

“While we continue to see a steady stream of properties entering foreclosure, relatively few are completing the process and being sold at auction,” Sean O’Toole, chief executive of ForeclosureRadar.com, said in a statement. “The bigger picture is that more and more homeowners are finding themselves upside down in foreclosure limbo, some hoping for a loan modification or short sale, while others are just waiting for a knock on the door.”

Of all postponements, 87% of them were made at the request or with the agreement of lenders, compared with 10% postponed due to bankruptcy. The majority of loans foreclosed upon in October 2009 were originally made between January 2005 and December 2007, according to the report.

In other news, the death of prominent attorney and developer Doug Ring may have resulted from an overdose of pills. Ring was found dead Thursday in his Brentwood home. Read more about it in our sister blog,  L.A. Now.

-- Alejandro Lazo

Redfin announces sale prices in real time, uh, maybe

The online brokerage Redfin announced a cool new tool for those interested in SoCal real estate prices. The Seattle-based online brokerage is now posting closed-sale prices and photographs for houses in a variety of big real estate markets as soon as the listing broker marks the property as sold.

The new version of the company’s website integrates data from the local databases that brokers use to take properties on and off the market, according to a release by the company this morning. The upgrade added 9.6 million photos for 1.4 million recent property sales with an average of more than 100 data fields on the property’s features.

Michael Smedberg, chief of of Redfin’s query and statistics team, says the upgrade will allow consumers to do their own comparative analyses of homes that were previously the purview of real estate agents.

“Comparative Market Analyses are one of the real estate industry’s ‘killer applications,’ ” Smedberg said in today's release, “but they're often shrouded in mystery; agents have direct access to data such as prices and photos for just-sold homes, but buyers rarely do. Without that direct access, consumers have had to rely on the expertise and availability of their agent, and this in turn made it hard to figure out on their own what to offer or ask for a listing.”

The company also announced that it has added trackbacks to its site, which will allow bloggers to automatically link to Web pages featuring properties.

Test run: It appears that Redfin’s site is groaning under the load of its new features. All morning the home page has had this message: “We're working hard to bring you a better Redfin. The site is unavailable for a brief time while we update our service. Please check back in a few minutes.”

Redfin Chief Executive Glenn Kelman just confirmed in an e-mail that the site keeps crashing for “the first time in a year or maybe two” and that we should hold off on our posting. Whoops. Too late.

-- Alejandro Lazo

Fannie Mae to allow troubled homeowners to rent back homes

Mortgage titan Fannie Mae said it will begin allowing homeowners facing foreclosure to rent back their homes for up to one year in a move aimed at keeping a stack of foreclosures on its books from hitting the market, which is just beginning to show signs of recovery.

The new program is meant for troubled borrowers who don't qualify for or haven't been able to get a loan work-out, such as a modification, according to Fannie's news release.

Under the Deed for Lease program, the borrower would transfer title to the property to the lender by completing a deed in lieu of foreclosure and then rent back the house at market rates -- which in many markets have fallen over the last year and probably would be cheaper than a mortgage payment on a loan made during the boom years.

-- Alejandro Lazo

Photo: Rows of homes in Las Vegas. Credit: Bloomberg

Following up on L.A. foreclosure properties

Back in March L.A. Land looked at some Los Angeles foreclosures for sale. Thought we might follow up to see what they went for:

5605 Shenandoah Ave., Los Angeles 90056
Size: This 3,565-square-foot home in the Ladera Heights area has four bedrooms and 3½ bathrooms. The 1959 two-story house sits on a roughly 9,600-square-foot lot.
Agent description: The home has granite kitchen countertops, ceramic and wood floors, a wet bar and an aluminum steel roof.
Listed for: $789,000

Sold June 9 for $705,000.

Another foreclosure listed then was:

4138 Bledsoe Ave., Los Angeles 90066
Size: The 1,297-square-foot home has three bedrooms and two bathrooms. The 1953 single-story home is on a lot of about 4,240 square feet.
Agent description: The traditional home on a tree-lined street in the Mar Vista area features hardwood floors, a private patio and a large, gated front yard with a pond.
Listed for: $489,900

Still for sale. The price was reduced to $440,000 July 20.

Also:

3952 Walgrove Ave., Los Angeles 90066
Size: The single-story home in the Palms/Mar Vista neighborhood is about 900 square feet. The home, built in 1941, is on a roughly 5,980-square-foot lot and has two bedrooms and one bathroom.
Agent description: The redone house has bamboo floors and travertine countertops.
Listed for: $679,900

Sold July 23 for $639,000.

So did the buyers get some deals buying foreclosures, or are those prices still too high?

--Lauren Beale

Thoughts? Comments?

Photo:  The 90056 ZIP Code for 5605 Shenandoah Ave., top, has seen 26 sales since the first of the year at a median price of $650,000, according to MDA DataQuick. That's a price drop of 22.6% from the median for the first half of 2008. Credit: Nelson Shelton & Associates

Photo:  The 90066 ZIP Code for 4138 Bledsoe Ave., middle, and 3952 Walgrove Ave., bottom, has seen 114 sales since the first of the year at a median price of $675,000, according to MDA DataQuick. That's a price drop of 14.4% from the median for the first half of 2008. Credit: Maria Hsin

Bad haircut in Pasadena

 

This house on a lovely tree-canopied lane in Pasadena is back on the market after foreclosure. It's an especially sad example of the housing bubble's pointless waste of resources. 

It was listed for sale in the summer of 2007, as the market was showing signs of softening. I noticed it then because I was looking for a house about that time and thought the two-bedroom, 1,400 square-foot house on a 6,200 square-foot lot might actually be sold for a reasonable price. Maybe in the high-600s, I thought, because it had sold in 2004 for $637,500, and I figured prices would correct to about '04 levels plus inflation.

I don't recall what the house was listed for in 2007, but I think it was in the high 700s. I doubted it would sell at such a high price and would be reduced. I was wrong. In July, 2007, it went for $855,000.

"Well, the buyer paid a lot," I thought to myself then, "but if she's going to stay in the house and enjoy it for many years, so be it. It's a nice house on a beautiful street. It's not all about money."

Then the perfectly livable house was gutted. The new owner wanted to expand the living space into the already small backyard. Maybe to boost the square-footage for a flip?

By May of 2008, the owner threw in the towel and put the house on the market. I don't recall the price, but think it was in the low 700s. The house was uninhabitable. Demolition had begun on the kitchen and bathroom, then was halted, leaving exposed pipes and studs throughout.

It just didn't make sense then for anyone to purchase the house anywhere near its list price, because tens of thousands of dollars would have to be spent just to get it approved for occupancy.

The house was foreclosed in December 2008, taken back at auction for $687,048.

The lender didn't bother with the expansion and completed the kitchen and bathrooms, so the house is livable again. But rather than list it at a low price for a rapid sale, as many banks are doing with foreclosed houses, the house came on the market in April for $728,000.

With no takers, the price was cut recently to $710,000.

Adjusted for inflation, the house's 2004 sale price would be about $720,000 today. 

Meanwhile, in the last two years, hundreds of thousands of dollars were lost by the investor and banks. A lot of construction work was done, but in the end, the house is basically the same size and condition it was in before its 2007 sale, plus an extra 3/4 bath.

As all this running in place was going on, a fine, usable house has been vacant for two years ... and counting.

-- Peter Y. Hong

Photo credit: Peter Y. Hong

    

Hot Property: 'American Idol' contestant buys bank-owned Valley starter home

 

"American Idol" Season 6 contestant Rudy Cardenas has become a first-time homeowner with the purchase of a three-bedroom, 1 1/2-bathroom bank-owned home in Van Nuys for $328,000.

The property had sold for $515,000 in May 2006, according to public records.

The traditional 1,460-square-foot home has a fireplace in the living room, an eat-in kitchen and a grass yard. The one-story home, built in 1954, is on a tree-lined street in the Valley Glen area.

In the first quarter this year, 53 single-family homes have sold in the 91405 ZIP Code for a median price of $330,000, according to MDA DataQuick. That's a price drop of 24.5% from the first quarter of 2008.

-- Lauren Beale

Thoughts? Comments?

Photo: Prudential California Realty

Broad says mortgage rates need to drop further

Eli Broad, founder of KB Home, said the areas hardest hit by the housing crisis won't rebound until mortgage rates there drop to 3%, Bloomberg News reported.

Broad, speaking in an interview at the Milken Institute Global Conference in Beverly Hills, also said the housing industry will see more mergers and acquisitions as the national housing slump continues.

-- Nathan Olivarez-Giles

Southern California Home Buyer's Fair this weekend

Need help figuring out how to buy a home? The Southern California Home Buyer's Fair -- sponsored by the real estate industry and the L.A. Times -- might offer some tips.

Realtors, economists and other professionals will be on hand to break down the process of home buying, finding and buying foreclosures, monitoring and fixing credit, finding and qualifying for home loans and other topics in more than 50 how-to seminars and 75 exhibit booths.

Admission is free; the first 200 people who show up each day get free movie tickets. 

The second annual conference is sponsored by the California Assn. of Realtors and the Los Angeles Times and will be held at the Los Angeles Convention Center on Saturday from 10 a.m. to 5 p.m. and Sunday from 11 a.m. to 4 p.m.

Representatives from the Realtors association will also be on hand to discuss their Mortgage Protection Program, which offers qualifying first-time home buyers who are laid off as much as $1,500 a month to help make their mortgage payments.

For more information on the fair, check out http://www.homebuyersfair.com/.

-- Nathan Olivarez-Giles

Tracking San Bernardino's Dollar Homes

 

The program to provide affordable housing and clear Department of Housing and Urban Development books of foreclosures has benefited builders and investors too since it was launched in 1998, according to a Times investigation. From latimes.com:

More than 2,300 homes have been sold by HUD for $1 each nationwide, with 326 in California. Nearly half of the homes in California were bought by companies or individuals who typically resold them at a much higher price. Only 15% were sold to nonprofit housing groups such as Habitat for Humanity, records show.

The city of San Bernardino bought more Dollar Homes -- 62 -- than any other city or county in the state. But San Bernardino officials could not provide The Times with any account of what happened to the homes after they were sold.

So The Times took on the project:

Using county property tax and assessor records, federal bankruptcy files and real estate listings, The Times tracked every property sale to San Bernardino under the program since 2000. Among the findings:

* At least 43 of the 62 homes were sold to housing contractors and investors. Within months after purchase, nearly all were resold, and for an average of three times the original sales price.

* The homes continued to change hands frequently. Some homes have been bought and sold eight times in as many years, defeating the intent of the program to encourage buyers to put down roots and revive downtrodden neighborhoods.

* Instead of continuing to provide opportunities for low-income buyers, these homes have become priced beyond their reach, shooting up more than 450% in value from 2000 to 2008, based on sale prices. Moreover, there are no rules to ensure the homes remain affordable when they are resold.

* Nearly half of homes ended up with buyers who struggled with homeownership, missing property tax payments, defaulting on their loans, and in at least nine cases falling into foreclosure.

* The program goes unmonitored. Cities are by law required to give HUD detailed accounts of who bought the homes and for how much. But in at least 31 cases, San Bernardino provided inaccurate information, incorrectly listing either the buyer or the sale price, the review found.

Your tax dollars work.

-- Lauren Beale

Thoughts? Comments?

Photo: This home on North D Street in San Bernardino has had three owners since HUD took it over in 1998. The city sold it in 2000 for $6,000 to California Capital Properties, which sold it to a buyer for $97,000. The buyer refinanced it twice, ending in 2005 with a $280,500 loan.

 

L.A. as landlord

 

Los Angeles is joining the movement by other cities around the country to buy up foreclosures and turn them back into viable residences. Fed Housing Secretary Shaun Donovan and others toured some of the homes Wednesday that L.A. plans to buy with its share of the funds under the Neighborhood Stabilization Program. From latimes.com: 

The city intends to use its $33-million piece of that money to turn some of the homes into low-income rental housing. Others it will refurbish and sell to low-income and moderate-income families.

"We want to bring real families into these neighborhoods, not more investors," said Mercedes Marquez, the head of the city's housing agency....

The aim of the federal effort is to reduce blight and add affordable housing. There has been some grumbling among housing programs about the formula that was used for the funding allocation, with some agencies saying that big cities like Los Angeles and Cleveland gobbled up more than their fair share. Some real estate brokers and private investors also have been critical of the program, saying it could force prices down even further.

The funding itself is a small dose of medicine for a massive problem. Los Angeles saw more than 21,000 foreclosures in 2007 and 2008, and many of them are still on the market. Even if it spent every cent of its funding on buying homes and bought them at an average price of $100,000, the city would be able to buy only 330 homes.

It's hard to imagine 300 or so homes would have much impact on housing prices in a city as big as L.A. If there's a vacant house on the block that's becoming a public nuisance, having the Feds buy and fix it might make the neighbors happy. But this certainly sounds like a drop in the bucket.

-- Lauren Beale

Thoughts? Comments?

Photo: U.S. Housing Secretary Shaun Donovan, left, greets Assemblyman Mike Davis (D-Los Angeles) outside a foreclosed house on East 90th Street that Los Angeles is taking over. Credit: Gary Friedman / Los Angeles Times