Just like many of us have to pay increased HOA dues for upkeep on homes that have been abandoned, condos have it even worse because upkeep fees tend to be much more closely tied to condo ownership than single family home owners.

Barbara Sanz has never missed a mortgage payment, but the plunge in real estate is punishing condominium owners like her anyway.

Four years ago, she bought her first condo in a glassy new Miami tower when the building was filling up. Now nearly one in six residents in the 43-story building is battling foreclosure and their contributions to the building association are shrinking. Each of the remaining owners has had to chip in an extra $1,000 assessment and $50 more a month for cable and Internet. That is on top of Ms. Sanz’s $450 monthly maintenance fee.

Even though she pays more, her building has broken washers and dryers and unusable exercise equipment, and her hallway is spotted with mold.

“It’s not fair,” said Ms. Sanz, a 32-year-old event planner. “The first two years, I enjoyed all of the benefits of living in a condo. I’m disappointed now. I hate the way the building looks.”

When people buy condos, they expect their monthly fees will cover many of the responsibilities that they would otherwise have as owners of single-family homes, like cutting the grass and paying the water bills. Now many find themselves nagging each other in the hallways to pay their assessments and adding special fees while haggling over chores. In Miami, Chicago and San Diego, condo owners are adjusting to the economic woes, sometimes by mowing themselves and working shifts for building security — all while lamenting their lost community.

…

The pain in the condo market, mostly in urban areas, may not only be deeper than in the rest of the housing market during this downturn but more prolonged. Bargain hunters say they are reluctant to buy into a building even when the upfront cost seems low because they might have to pay unexpected fees as distressed neighbors default on their mortgages or just stop paying the association fees that cover everything from taxes to pool maintenance to air-conditioning repair.

“We have not even approached the bottom and will not approach the bottom until 2009,” said Hessam Nadji, managing director of research services at Marcus & Millichap.

“Nobody knows if the worst is yet to come,” he said. “Nobody knows how much prices will continue to drop.”

Continue Reading »

You have to be very careful how you read titles like this because many have a knee-jerk reaction to thinking, “stopping foreclosure – that’s great!”. But there are many foreclosures that are simply going to have to happen if we want the economy to get itself back on track.

You can’t put a fire out by dumping gasoline on it.

This is probably a bill that needs to fail.

New York’s proposed foreclosure freeze is getting a cold reception in the state Senate, to the chagrin of some Democrats.

The bill — a response to rising foreclosure rates statewide — sailed through the Assembly last week, but seems to have shallow support among Republican leaders in the Senate, where it may not go to a vote.

Frustrated Senate Democrats on Wednesday held a news conference to demand that Senate Majority Leader Joseph L. Bruno allow a vote on the measure. They called the freeze a step that could keep thousands of New Yorkers in their homes by allowing them time to talk to housing experts and negotiate with lenders.

“A moratorium gives the chance for the counseling process to take place,” said Sen. Neil Breslin, D-Bethlehem.

Why does it need to fail?

Continue Reading »

We’re seeing this more and more – the benefits of owning a house are no longer outweighing the benefits of renting instead. With high profile folks like Jose Canseco electing to be foreclosed on rather than make uncomfortable payments or the folks who are losing their homes in The Hamptons due to the North Eastern financial crisis, more folks are finding a hard time convincing themselves it’s better to stay in bad loan.

Now, you have to ask “bad for whom?” and then it becomes a personal issue. Some folks will toss ethics in there and say that walking away is unethical and to a point I agree. But the “just business” nature of contracts also means that if you don’t make payments, the bank never feels unethical by taking your house back either.

So there’s definitely two sides to the coin.

Nassau’s foreclosure-related filings last month jumped 113 percent from a year ago, higher than the national average increase of 65 percent, according to RealtyTrac, a California-based online market for foreclosures.

The county’s 14 percent increase in filings from March to April this year also exceeded the national, month-to-month average increase of 4 percent, the report said. Nassau last month had 502 filings, which include default and auction notices — 442 in March and 236 in April 2007, according to RealtyTrac.

Broker David Farrell, who on Saturday took house hunters on his first Long Island Foreclosure Tours in Nassau, said the higher figures reflect the bigger price increases in Nassau home sales during the boom years. Suffolk’s rise in prices had been tempered by new-home construction, but Nassau has less buildable land left, he said.

People who bought high during the hot market of three and four years ago now see their property values falling and are walking away from houses with mortgages worth more than their homes, Farrell said.

“We don’t have massive job losses, nothing along the lines that would trigger this,” he said. “We have a fact where people now say ‘I have a house. I paid $600,000 for it, and my next-door neighbor is paying $429,000. What am I doing here?’

Continue Reading »

Everytime you hear the optimists speak about a turn in the economy being just around the corner, you hear of things like the tax rebate checks, or some statistic trying to show that housing isn’t as bad as it really is, or the fact that unemployment and GDP growth aren’t as bad as they could be.

But the truth is that you still have to ask a few basic questions.

There are several strands to the market’s optimism about an early V-shaped economic recovery. Among these is the fact that, while certainly not good, the various US macroeconomic indicators, like GDP growth and employment, for the first quarter of the year were not nearly as bad as the Cassandras had led us to fear.

…

Valid as these arguments might be, they totally overlook the fact that the US economy is still being adversely impacted by the very same three negative shocks that caused the US economy to go into a funk in the first place. Worse still, it would appear that at least some of these adverse shocks are now intensifying.

What are those three negative shocks?

Are US house prices at the national level now not declining at an accelerating pace in a manner that has no precedent in the past seventy years?

Have not international oil prices dramatically risen to around US $125 a barrel, or approximately double the level that they were a year ago, thereby more than offsetting the US government’s tax rebate program?

And is the US financial system not still in the throes of what Paul Volcker has referred to as the “mother of all credit crises”, as vividly illustrated by the Federal Reserve’s recent still very gloomy survey of bank lending intentions?

Continue Reading »

This kind of had me doing a double take at the title. I’ve always heard of “vacationing in The Hamptons”, but this really brings that point home. Looks like soon, that’s all some folks will be able to do!

Homeowners in the some of the toniest ZIP codes in the Hamptons are facing a frightening reality – they can’t afford to foot the bill for their high-priced homes, The Post has learned.

In the first three months of this year, banks have launched preliminary foreclosure actions – known as lis pendens proceedings – against a record 120 borrowers in East Hampton and Southampton towns.

Twenty percent of those borrowers live in homes that are worth more than $1 million, according to figures from the Suffolk County clerk.

And the list gets longer every week.

“This problem didn’t even exist before,” said John Brady, a broker with Coldwell Banker in East Hampton. “They used to pop up once in a while, and you wouldn’t even pay attention. Now you expect to see new ones every week.”

A total of 10 East End homes, including a massive Westhampton mansion, were foreclosed outright since the beginning of the year.

In addition, more than 800 East End homeowners – a mix of rich and middle-class people from Riverhead to Montauk – have been flagged by credit-monitoring companies this year for late payments.

Brady said the high-end, delinquent borrowers are finance types, lawyers and speculators who overextended themselves on second homes and investment properties.

Continue Reading »