Showing posts with label housing foreclosures in Michigan. Show all posts
Showing posts with label housing foreclosures in Michigan. Show all posts

Tuesday, June 1, 2010

Lenders Versus Homeowners: The Moral Quandary of Foreclosure

David Streitfeld has a story in The New York Times about homeowners who simply stop paying their mortgages and continue living in their homes. (Or are they squatters in the lender's "home" at that point?)
A growing number of the people whose homes are in foreclosure are refusing to slink away in shame. They are fashioning a sort of homemade mortgage modification, one that brings their payments all the way down to zero. They use the money they save to get back on their feet or just get by.

This type of modification does not beg for a lender’s permission but is delivered as an ultimatum: Force me out if you can. Any moral qualms are overshadowed by a conviction that the banks created the crisis by snookering homeowners with loans that got them in over their heads.

It raises some interesting questions about personal responsibility versus the responsibility of banks and lenders during the housing crisis.

From the lenders’ standpoint, people who stay in their homes without paying the mortgage or actively trying to work out some other solution, like selling it, are “milking the process,” said Kyle Lundstedt, managing director of Lender Processing Service’s analytics group. LPS provides technology, services and data to the mortgage industry.

These “free riders” are “the unintended and unfortunate consequence” of lenders struggling to work out a solution, Mr. Lundstedt said. “These people are playing a dangerous game. There are processes in many states to go after folks who have substantial assets postforeclosure.”

But for borrowers like Jim Tsiogas, the benefits of not paying now outweigh any worries about the future.

“I stopped paying in August 2008,” said Mr. Tsiogas, who is in foreclosure on his house and two rental properties. “I told the lady at the bank, ‘I can’t afford $2,500. I can only afford $1,300.’ "

As this map in the Times story shows, the time it takes for a Michigan resident who defaults on a loan to lose the property is, on average, quite short compared to the rest of the country.



Sunday, May 30, 2010

Memories of Home in the Midst of Foreclosure


The newly built home on Rolling Green Drive in 1962.


Expatriate Graydon Forrer of Washington D.C. chronicles the fate of the house he grew up in, reminding us that suburbia has been hit by the foreclosure crisis as hard as urban areas:


Like so many Flint-area expatriates, I recently had the disconcerting experience of seeing the house I grew up in listed at a bank auction site.


The house is located on Rolling Green Drive in the Warwick Hills subdivision of Grand Blanc Township. My father, a physician, had the house build in 1962 when we moved to Grand Blanc from Davison. My father and mother selected what was then a respectable mid-century modern design, brick with clean lines.


I remember as a kid going out to visit the construction progress on the weekends as my parents wandered through the shell of the construction, blue-prints in hand, checking their specifications and the quality of the construction.


When it was being built, it was only the third, possibly fourth house on a block that had only recently been carved out of the woods adjacent to the Warwick Hills golf course. Our few neighbors included Vern Parsell who owned Parsell’s Buick dealership and the owner of Spring’s Drugs located at the corner of Saginaw St. and Burton Road.


I think that my parents paid around $40,000 for the house which was built by local Flint builder Dick Page. The lot, I think, cost about $3,000 and came with a membership to Warwick Hills Country Club. Over the years, they added a screened in back porch, finished the basement and re-modeled the kitchen at least twice.


Eventually, all the lots on the nearly empty street were sold and developed into comfortable upper-middle class homes. But before the transformation was complete, my brothers, our neighbors, and I spent a lot of time playing in the swamp that was in the undeveloped property behind the house, carving bike trails through the woods and taking advantage of the construction of more than one of our neighbor’s houses to obtain building supplies for our various forts, tree houses, bicycle and skate-board ramps and Buick Open lemonade stands.


My parents stayed in the house until 1987 or 1988, when they sold in what was then a down market for a price that is only about $25,000 less than the list price at the bank auction site. They moved on first to Alaska and finally retired to Tucson, Arizona where they reside today. This was the only house they built, however, and for nearly 30 years, it reflected my parents taste and even today, in some small way, it remains home.


Over the years, I have watched Flint and the Flint area’s decline with great sorrow. Stores, restaurants even old familiar gas stations and businesses have all disappeared. Neighbors have retired and moved-on. Indeed, I haven’t been back to the area in more than 10 years. On my last trip, a trip to Ann Arbor to accompany my father to his 50th medical school reunion at the University of Michigan, I took an afternoon to drive with my wife — a California native — north to Flint to visit the old neighborhood and to see what had happened to a once thriving industrial community.


We drove to Warwick and onto Rolling Green Drive and our house (for that it will always be for me) looked pretty much the same even though it hadn’t been our house for more than 12 years. The yard was updated and the front door had been changed. The new owners had a hot-tub in the back yard off the basement door. In spite of all that had changed in Flint, the house was still there, taken care of and the rest of the neighborhood was equally well kempt.(Although all the houses in Warwick seemed smaller, especially in comparison to all the new McMansions that seemed to be sprouting-up in new subdivisions all over the South Saginaw St. end of Grand Blanc Township.)


But it wasn’t home. The neighbors were different. Flint and Grand Blanc were different.


Of course, I’ve no idea how it ended up as part of a bank sale, or why the auction price was so much lower than other sale properties on the block? That a house in Warwick Hills could be at sale as part of a bank auction just underscored how times had changed in Flint and Genesee County .


So there was our house on a bank auction site. In the accompanying picture, the lawn looks as if it hasn’t been mowed for a while. The roof has been redone and altered by removing a vent/skylight that let sunlight into the front family room. Otherwise, the house is a ghost image of what I knew as a child and seemingly as solid as when my father had it built and when we live there. On a Flint area realty site, I saw some interior pictures taken for the sale. Some of the rooms had been altered, hard wood floors had replaced the wall-to-wall carpeting that was a must have for all upwardly mobile homeowners in the 1960s and '70s. There were crown moldings where before the rooms were once decidedly mid-century modern. They were also empty and devoid of my mother’s taste and decorating influence.


The auction site’s encouraged potential bidders to bring some “sparkle” back to the property. All the sparkle, however, seems long gone.





Saturday, May 15, 2010

Vegas Keeps Building Despite Empty Homes

While Flint searches for cash to tear down vacant houses, Las Vegas is gambling on what appears to be a long-shot bet to combat the foreclosure crisis.

David Streitfeld of The New York Times reports:
Home prices in Las Vegas are down by 60 percent from 2006 in one of the steepest descents in modern times. There are 9,517 spanking new houses sitting empty. An additional 5,600 homes were repossessed by lenders in the first three months of this year and could soon be for sale.

Yet builders here are putting up 1,100 homes, and they are frantically buying lots for even more.

Las Vegas is trying to recover by building what it does not need. It is an unlikely pattern being repeated in many of the areas where the housing crash was most severe.



Thursday, April 22, 2010

North Dakota Meet Flint

If only Flint, a shrinking city with too much housing and not enough jobs, could somehow combine forces with North Dakota.

Monica Davey of The New York Times reports:
North Dakota has a novel problem: plenty of jobs, but nowhere to put the people who hold them.

The same forces that have resulted in more homelessness elsewhere — unemployment, foreclosure, economic misery — have pushed laid off workers from California, Florida, Minnesota, Michigan and Wyoming to abundant jobs here, especially in the booming oil fields.

But in this city rising from the long empty stretches of North Dakota, hundreds are sleeping in their cars or living in motel rooms, pup tents and tiny campers meant for weekend getaways in warmer climes. They are staying on cots in offices and in sleeping bags in the concrete basements of people they barely know.