[Source: Alan Zibel, Associated Press] — The nation’s foreclosure crisis is centered in four states. But taxpayers across the country will feel the pain of bailing them out. California, Florida, Nevada and Arizona generated about half of all foreclosure filings nationwide last year, according to RealtyTrac Inc., even though residents in those states hold just a quarter of U.S. mortgages. Since mid-2007, skyrocketing foreclosures in those states have been magnifying the national rate.
As lawmakers prepare to spend up to $100 billion in financial bailout money on a sweeping foreclosure prevention plan pushed by President-elect Barack Obama, the discrepancy is adding another layer to a problem already confounding economists, politicians, and homeowners.
Just this week, RealtyTrac, an Irvine, Calif.-based foreclosure listing service, reported that more than 2.3 million American homeowners faced the loss of their homes last year, an 81 percent increase from 2007. And Goldman Sachs chief economist Jan Hatzius said in a report that the number of unsold homes on the market is so large that prices are likely to keep falling by an additional 20 percent to 25 percent by mid-2010. But there’s more to it than that. The Sun Belt states now in trouble are the same ones that for decades have taken jobs and residents from states in colder climates…
The risky loans that were prevalent in Las Vegas and Phoenix are “just completely foreign” to North Dakotans, said David Flynn, an economics professor at the University of North Dakota. [Note: To read the full article, click here.]
[Source: Jan Buchholz, Phoenix Business Journal] — Hundreds of mechanic’s liens are being filed each month in the Valley by contractors and subcontractors that haven’t been paid for their work. Industry experts say the liens, some in the millions of dollars, are a strong indicator of stress in the real estate community. “Liens are a great way of seeing what’s coming ahead. A glut of liens is a bad sign,” said Zach Bowers, a researcher for Ion Data Express, a Valley real estate data firm.
In fact, the numbers are startling compared with previous years. In 2005, 1,752 mechanic’s liens were filed with the Maricopa County Recorder’s office. Through Aug. 6 of this year, 5,303 liens were filed. If that rate continues, the number of mechanic’s liens filed will more than double the 4,152 liens filed in 2007. “We have filed a ton of liens,” said Janet Summers, owner of Van Rylin Associates Inc. in Tucson, which researches and files mechanic’s liens on behalf of clients all over Arizona.
Summers believes the mortgage and banking industries are to blame. In many cases, she said, developers did not receive the full amount of money promised them. In other cases, banks and other lenders suddenly have called loans or refused to extend credit lines to worthy parties because of market fears, she said. [Note: To read the full article, click here.]
Top 10 Mechanic’s Liens Filed in 2008 (Downtown/Midtown Phoenix Only)
#1. Summit Builders Construction Co. ($5.68 million)
Lien filed against: Hotel Monroe, Central & Monroe LLC, Grace Communities
Type of project: Luxury boutique hotel, historic preservation
#4. The Weitz Co. ($3.21 million)
Lien filed against: The Summit at Copper Square LLC
Type of project: High rise condominiums
#5. Gold Creek Inc. ($3.05 million)
Lien filed against: Mortgages Ltd. in connection with Chateaux on Central
Type of project: Luxury condominiums