Cleveland Real Estate News » foreclosures

Would You Be Surprised to Know How Many Out of Town Investors Now Own Property in NE Ohio?

Carole Cohen — Mon, 19 Jul 2010 02:32:38 +0000

I’m not surprised, but then again, I’m in the business. I know a pesky Utah investor, for example, who owns a lot of property here, keeps trying to buy my listings at outrageously low prices. I know of others, and you probably know of the foreclosed properties owned by large banks like Deutsche and Wells Fargo. There is more to the story. I just recently started blogging again, which means I recently started reading blogs again. Bill Callahan and his Callahan’s Diary is still diligent about foreclosures and housing issues. I’m bringing your attention to two. One is basically a google map that shows how many properties are owned by an investment company on the left coast. The next one includes a letter to Bill from that investment company.

There are lots of reasons why some of our neighborhoods face immense challenges in rejuvenation: low population, poverty, etc. I’ve heard the stereotypical phrase ‘absentee landlord’ all my life, but did you know just how ‘absentee’ a landlord can be? Read Bill’s posts and find out. Even though I knew about this, seeing that Google map of properties is still startling. These types of investors may have the best of intentions, but if you own a zillion homes somewhere, who is overseeing the properties? Ask Cleveland’s Housing Court (or go sit in on a day’s worth of cases there) and you could get an answer.

I don’t always agree with Bill’s solutions, and am admittedly anti political party this year, but I tip my hat to him for remaining vigilant on this issue. In some ways, I wish he had taken the CEO’s plane ticket and gone to California and talked and maybe taken Ray Pianka of the Housing Court with him. Or better yet, EZ homes execs need to come here for an extended period of time. They can always stay in one of their homes! Are these people doing this because they are part of a REIT investment program? Not sure how they can be making money on properties with no increase in investment possibilities unless they are fixed up. Any ideas? Peace Out – 3C

Here is a blog post from Slumlord Watch in Baltimore about EZ Access here and a lawsuit filed against them. Peace Out – 3C

453 Houses in Foreclosure Because of Mortgage Fraud

Carole Cohen — Thu, 27 Aug 2009 00:41:33 +0000

The numbers are numbing. Allegedly, one investment company and 41 people who worked for it, were responsible for 453 fraudulent mortgages in Cuyahoga County . Apparently, most of these homes are again in foreclosure. You can read about it here from the News Net 5 website and here from a website called Daily Mortgage Fraud News. How sad is it that there has to be an entire website devoted to this. Not surprising, but sad.

When I talk to people who live in other states they still don’t really believe that NE Ohio does not have foreclosure issues because of the infamous housing bubble that hit so many states. Just this week I was being interviewed by a reporter for REO Housing Wire magazine. I got the impression he was surprised when I said this. Our issues are due to predatory lending and continued job losses. But we know that because we live here!

When you think of how many foreclosures have come and gone over the last few years, it’s sobering to think that one scam alone could affect 453 home sales. Peace Out – 3C

Foreclosure vs Short Sale: What Would Work Best?

Carole Cohen — Fri, 21 Aug 2009 04:21:43 +0000

Home owners are still finding themselves in trouble with their mortgages. Some are anticipating being in trouble because they can see what is coming, financially, in the future. The problem can seem complex but at some point you have to decide, do you want to go through a short sale or do you want to foreclose on your home?

A lot of people think a short sale is better because the term foreclosure has such a negative connotation in our society. Like filing bankruptcy. But the truth is, a short sale can open you up to complications you might not expect.

Each lender is different, so I suggest you do the best first step, which is, call your lender. They will give you someone to talk to about your mortgage. Talk to them if you are current but worried. Best to know your options, yes? Talk to them if you’ve missed a payment or two. Or if you have lost your job, got laid off, had a medical emergency, a divorce. Your home investment can take up a substantial portion of your monthly income. It’s worth exploring all your options before you decide on a plan.

Did you know - if you want to short sale your home, many lenders will want you to have tried to sell it first, at market value, for at least 90 days. Otherwise they think you are making a potentially rash decision to short sale.

Did you know – when you sell a home ‘short,’ if you have a phrase on your lenders’ release of the mortgage that says ‘note satisfied’ you are clear of your financial responsibilities. If not? Legally, that same lender can try to recoup the rest of what you owe for a period of five years following the sale of your home.

You can also ask your mortgage holder/lender to buy back the home from you, which is called a Deed In Lieu Of. This is usually a step taken when your mortgage lender is close to beginning foreclosure on your home. It’s worth looking into what this process can do for you.

Did you know – if you sell your home for $100,000 in a short sale when you actually still owed $150,000 that you could wind up being responsible for paying taxes on the difference (in this case, $50,000).

Foreclosures and short sales both affect your credit and your ability to buy another home in the future. The length of time may be different in each case, but it’s worth talking to a financial advisor to talk about your credit and the difference in how long it will be before the short sale or foreclosure is cleared off your credit report.

The easiest thing to do, if you live in NE Ohio, is to call a free, non profit organization like Neighborhood Housing Services of Greater Cleveland. They have an unbelievably expert staff, great communicators. I had that reiterated to me just today when a client called me to say he was so relieved to have spoken to someone at NHSGC because now he felt informed and more able to make a decision about what to do. Working with a non-profit is the way to go. They can answer any question you have, or direct you to someone who has the answer. And do not, I repeat, do not use a commercial third party organization to help you through this process. They will charge you money for what you can get free at a place like Neighborhood Housing Services of Greater Cleveland. So call them instead! Peace Out – 3C

Update on NPI Lawsuit to Help Stop Housing Depreciation

Carole Cohen — Fri, 03 Apr 2009 05:22:57 +0000

I found this article in The Washington Independent, which I admit I have never read before. But was impressed enough that the article (written by Mary Kane) gives the back story in a clear and fairly accurate way, along with the update on the lawsuit’s progress.

I wrote about the lawsuit efforts in this December ’08 post, but here is the issue in a nutshell. Housing has been depreciating, we all know that. The average depreciation here in the Cleveland area has been about 25% lower than 2005 sale prices. Banks take over homes and in many cases do fix them up a bit before selling them. Several lenders have taken a different road. They take over the properties and then sell them for pennies of the last sale price. If you have six foreclosure sales (REO’s) on your block in the last six months, those bank sales affect the value of your home. This caused NPI and the Cleveland Housing Network to go after a few of these REO offenders. And if the Washington Independent article is to be believed, the lawsuit is actually making progress; this was not expected; the lawsuit was like David against Goliath.

So check out the above link, because if this case sets a precedence with a ‘win,’ it could change how bank owned properties are allowed to be sold and at what price. Peace Out – 3C

There is a Lot of Truth and Even Hope In This Story

Carole Cohen — Thu, 05 Mar 2009 16:42:57 +0000

This is a fabulous article from the NY Times and Alex Kotlowitz with a tremendous insight into the not always black and white issues surrounding foreclosure. A big shout out to my friend Mike who pointed it out to me this morning. I suggest you bookmark the article because it’s long…..but truly one of the best insights into what is transpiring in our Wards today.

It’s not just a gloom and doom article either. It features people who are digging in and trying to make a difference in our communities. For example, a woman who is disabled but takes pride in her home and goes to great, almost unimaginable length to take care of her yard. And a guy who is trying to buy up a whole block in his neighborhood so he can bring it back.

It also talks about the dilemmas Housing Court faces every day; while a lot of the out of town cheap home purchasers are either duped or disreputable….this doesn’t apply to all of them (and I know because I am working with one of them). And it features the strong effort being made by private citizens to shore up their neighborhoods…even one family paying for the electricity in a home they do not own because they don’t want this historic home to wind up with frozen pipes.

So wait until you have a big mug of coffee and the time, but please read it. Peace Out -3C

When We Need The Truth, The Stats From Callahan’s Cleveland Diary Never Disappoint Us

Carole Cohen — Fri, 23 Jan 2009 19:02:15 +0000

Well, we might not be as happy with Bill’s information regarding foreclosure filings at the end of 2008, but we would rather have the truth than not, right? Bill mentions that an Akron Beacon Journal article that was overly optimistic. Henry Gomez wrote in this week’s PD that sheriff sales were down 32% – may be true and that is great, but foreclosure filings were not.

It will be a while before we know the January stats.

I will say that in certain neighborhoods, there have been less new bank owned listings coming available for my clients. But that could mean they just haven’t come on the market yet.

Time will tell how things play out. As I always say, one or two months of stats don’t make a viable trend. One thing we know, we can count on Bill Callahan to keep us updated on stats, no matter how they fall. Peace Out – 3C

If You Are Renting and Your Landlord Goes Into Foreclosure, You May Soon Be Getting A Break

Carole Cohen — Tue, 16 Dec 2008 03:46:48 +0000

Kelly Evans covers this in the Wall Street Journal here. If someone forecloses on a Fannie Mae loan, their renters may soon be happier. Fannie Mae is finalizing a National policy that will cease displacement of tenants in foreclosed homes. This is due to a case brought in Connecticut. Fannie Mae was required, when it got it’s Federal rescue, to ensure that evictions would not happen during the Holidays, for one thing. Fannie Mae was not following this policy. So Connecticut legal aid got involved. Now, Fannie Mae will not only stop evictions during the rest of the holidays but they will keep this policy in place until a new one is written.

I’m sure you have to stay current on your rents to make this happen (regardless of your landlord’s foreclosure). I’ll do a more thorough update when the new policy is finalized. Peace Out – 3C

If You Are Writing An Offer on a Short Sale or Bank Owned Listing, You May Want To Make Your Best and Highest Offer

Carole Cohen — Fri, 07 Nov 2008 23:49:22 +0000

Today was one of those gratifying days in real estate. I was able to hand over the keys to my clients because they are the proud owners of a new home. There would be more days like this except for one pesky little thing in real estate: short sales and bank owned homes.

To recap from earlier posts: A short sale is a home listed for sale at a price that is less than what the mortgage holder (owner) owes on the house. We call these owners upside down in their mortgage. We’ve all heard a lot about upside down owners in the last year as it relates to foreclosures. People who enter into a short sale of their homes are trying to avoid foreclosure.

In our area, when a home is listed at a price that puts the home owners upside down, there are remarks listed for the brokers (on our computer MLS listing service) that alerts us so we can inform our buyers when we show it. It will say something like ‘this home is subject to a short sale.’ To the point and helpful.

A bank owned home means someone waited too long to be able to negotiate a short sale (or didn’t try to do it) and now the bank owns it. It could have also already gone through a sheriff sale and been bought back by original mortgage lender or a different bank.

Yes I sell bank owned and short sale homes and yes they can be negotiated. But there are certain things buyers have much less control over on these homes, compared to sales negotiated with private sellers, regular home owners like you and me. The main thing is the price. There are so many variables, that when you make an offer that is less than the listed price you have to be prepared to lose the house to someone else. That is just a fact of life.

So I tell my clients, when they really want a home, to make their best and highest offer. This means a price that, if you lose the house to someone else anyway, you know you did the best you could or the best you felt comfortable offering. Best and highest doesn’t have to mean full price. Plus, if a home is drastically lower in listing price than non-bank owned or short sale homes in the neighborhood, someone could actually still outbid you by offering more. If you want to make an offer on one of these under market value homes, it’s good to think about it differently. Meaning, not thinking how low can I go and still get this home. Instead, what is the best and highest offer I feel comfortable making, knowing what I know about my finances and my belief, after seeing the home, what might need to be done to the house to get it up to my comfort level when I move in. In my experience, people feel this way about a home because it already meets certain criteria that could include floor plans (that first floor bedroom they need), number of bathrooms, it only needs cosmetic work like painting, it has enough bedrooms for everyone in the family; things like that. I don’t think it’s necessary to make a best and highest offer on a home unless you really want it.

Nothing is etched in stone, believe me. It’s possible you could be successful in owning a home after offering much less than the listed price. And sometimes people are making offers on homes they can take or leave. By that I mean, it meets their needs, but they won’t be upset if they lose it. They might not have a time crunch, or care if they are in a new home before the end of the year. I think you get my drift here.

But if you really want a particular house, and it happens to be a bank owned home or a short sale, there are enough variables to make it a crap shoot. In reality, making your best and highest offer can take away some of the stress or disappointment you might feel afterwards if someone else has their purchase offer accepted and you don’t. Peace out – 3C

Cook County Sheriff Takes A Stand: No More Evictions On My Watch

Carole Cohen — Thu, 09 Oct 2008 06:47:30 +0000

Read this article from CNN’s website and tell me what you think; is Sheriff Dart a hero or should he be held in contempt of court? It’s hard not to read this article and admire him on some level. He’s frustrated and he sees the human loss in evictions. I love when an article can give me a V8 moment; I never thought about how tough it must be on sheriff’s around the Country. Evictions are hard under normal circumstances, but add in all the extra foreclosures in many places and it must be heart wrenching and stressful, to say the least.

The article talks about renters who pay their rents on time but can still wind up finding themselves victims facing eviction if their landlord’s wind up in foreclosure. Renters could have done their homework, their due dilgence, and checked out their landlords as fully as possible….and six months later things could be terribly different.

Last year I averaged one call a month from renters seeking advice, tenants who found themselves needing to start searching for a new home even though they had leases. Tenants who knew their landlords and never expected something like this to happen. I even had a few tenants who felt bad about leaving and not giving their landlords any more rent because they felt sorry for their financial circumstances.

I really liked Sheriff Dart’s analysis regarding us (taxpayers) doing the mortgage lender’s jobs for them. When a bank or mortgage company winds up owning the property, they are responsible for finding out the status of anyone living on the premises. Dart says this became an issue, banks/lenders stopped doing their jobs:

“These mortgage companies only see pieces of paper, not people, and don’t care who’s in the building,” Dart said. “They simply want their money and don’t care who gets hurt along the way.

“On top of it all, they want taxpayers to fund their investigative work for them. We’re not going to do their jobs for them anymore. We’re just not going to evict innocent tenants. It stops today.”

The above details refer to Chicago. How about Cleveland? This PD article from Januaryof this year featured Cuyahoga County Deputy Sheriff Robert Kole. Here, if the Sheriff shows up at your door once, you get a warning. Second time? It’s an official eviction with locks changing as soon as you are out of the house. The difference is, the Sheriff’s office doesn’t evict renters. They will advise tenants about some options (who to call) and then they warn them that the City of Cleveland will be notified and is responsible for their eviction, should they still be in the house.

It’s been almost a year since this article was written. Wonder if Deputy Sheriff Kole is sympathetic to Sheriff Dart’s line in the sand. Peace Out – 3C

Ed Rybka and Cleveland’ Vacant Home Demo Program, Per TV20

Carole Cohen — Mon, 22 Sep 2008 17:16:28 +0000

I’ve written about the grant monies recently received by The City of Cleveland to help them in their vacant housing demolition program. Two nights ago I was surfing the Tube and came across a TV20 (local access channel) video with Ed Rybka, our Director of Building and Housing for Cleveland.

What I gleaned was that in 2006 there were 500 homes with violations issued by C of Cleve. By 2008 that list was up to over 1,000.

There is a staff of 50 people working on all demolition and infraction issues. Currently, according to Ed Rybka, there are about 8,000 vacant homes in Cleveland proper.

Recently they took down, at the neighborhood’s request, four vacant homes on E. 73rd Street. He pointed out that it made more sense to do all of them because otherwise how does it help the neighborhood to only do one.

I tried to find a link to the TV20 video but they may not be made public. Here is a re-link to the PD story about the grant money received for the vacant housing issue. The issue btw is not just a recent phenomenon due to the current foreclosure crisis. Here is a story about a Valley View home that was set for demolition in August.

There is also a Vacant Property Initiatives Fund detailed on the City website.

Ed Rybka pointed out that the 50 staff people are working on the most serious issues (vacant homes) so he was imploring residents to contact his office if they know of something else that needs to be addressed. Here is a link to the Housing Dept. web page so you can contact them. Or call 216-664-2282.