Jersey Foreclosure Info
"Rising foreclosure rates in New Jersey are likely to remain on the upswing in 2007, but experts say the odds are slim that the increases will signal a crisis for the state’s housing market or its economy.
For the first 11 months of 2006, home mortgage foreclosures in the state were 25,472, up 78 percent from 14,311 for all of 2005, according to Foreclosures.com, a real estate advisory firm in Sacramento, Calif.
Big increases occurred throughout the state. In affluent Bergen County, foreclosures jumped more than tenfold, from 104 in 2005 to 1,367 last year. In Monmouth County, home to many shore communities, foreclosures rose from 883 in 2005 to 1,533 last year."
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posted by Little_Silvered at 7:16 PM
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fyi This is a long article !!!
Falling prices trap new homebuyers
Neighbors in a new Garden Grove tract say a developer’s plan to slash prices by about $140,000 has left them owing more for their homes than they’re now worth.
By JEFF COLLINS
The Orange County Register
http://www.ocregister.com/ocregister/money/abox/article_1381194.php
GARDEN GROVE – David Dunn felt as if Christmas were stolen from him when prices for neighboring homes in his new subdivision fell by about $140,000.
Now, he says, his home is worth less than he owes, making it next to impossible to refinance before his $3,000-a-month payment doubles. Eleven neighbors who bought before the price cuts are in the same boat.
“They put us in a bad financial situation by lowering the price,” said Dunn, 33. “Some of (the buyers) did 100 percent financing, so they’re completely over their head right now.”
Brandywine Homes, developer of the 42-home Heritage subdivision in Garden Grove, is one of many homebuilders that’s had to cut prices lately.
Dave Barisic, Brandywine’s vice president of sales and marketing, said in an e-mail that his firm recently held what he thought was a successful meeting with homeowners.
“As such, I don’t think you’ll be contacted again and there probably isn’t much of a story there,” he wrote.
But homeowners say the matter remains unresolved, and an attorney says he’s still waiting for a response to a letter he sent the developer on behalf of buyers who hired him.
Meanwhile, ads offering big discounts and concessions on new homes have been rolling off the press for weeks as builders race to clear inventory before the end of the year:
•”It’s a homebuyer’s market, and now is the time to take advantage of it,” said a Richmond American Homes ad several weeks ago that offered buyers free stainless-steel appliances, free washers and dryers, plus 3 percent toward paying closing costs.
•”Ask about our Serious Incentives for Serious Buyers,” Taylor Woodrow Homes said in another ad.
•The only thing that’s not negotiable, added a Standard Pacific Homes ad, is the quality of the houses – implying that the price is negotiable. Year-end incentives include below-market loan rates, no-loan payments for six months and free upgrades.
At Tustin’s Columbus Grove, sales reps for William Lyon Homes, Lennar and KB Home touted plans that included help paying off closing costs and loans, flooring upgrades worth up to $20,000 or – in the case of one KB Home development – up to $70,000 off the purchase price.
Wally Welter, an Irvine home shopper, said salesmen for several builders at Ladera Ranch offered concessions worth $100,000 or more.
“I’ve had salespeople say, ‘Make an offer,’ which you never hear the builder say,” said Welter, 60. “Now, they’re willing to listen.”
The reason builders now are listening is a housing slump that’s caused new home orders to tumble and homebuilder profits to fall.
Standard Pacific Corp., for example, reported that its net income fell by $66 million in the third quarter, a 68 percent drop; Toll Brothers reported a 44 percent decline in quarterly profits; William Lyon Homes reported that its net income fell 72 percent from the third quarter of 2005.
Most homebuilders are reporting that 40 percent or more of their buyers are canceling this year. Often, cancellations result in the builder getting stuck with an empty home that’s already under construction.
The closer the home gets to being finished, said KB Home’s Irvine-based regional manager, Jay Moss, “the more anxious the homebuilder gets to make the deal.”
Concessions, said housing consultant John Burns, are “the talk of the industry.”
“On a completed home, it can be substantial.”
But residents of Garden Grove’s Heritage subdivision maintain that there’s more to their story than mere concessions. They maintain that their builder, Brandywine Homes of Irvine, has cut prices well below market values, regardless of how that affects the earlier buyers.
At the very least, their story shows that the pain caused by falling prices isn’t borne by the developers alone.
The homeowners said that the price cuts began in November, just months after the first dozen buyers closed escrow, paying from $770,000 to $888,500 for their homes. The average price was $825,000, property records show.
After the builder dropped prices by more than $100,000, all but five of the homes sold in a matter of weeks.
“Usually builders keep their prices up. They try to keep their buyers happy,” said Christie Vu, 27, who paid almost $870,000 for the home she and her husband, Philip Luu, share with their two young sons. “In this case, it’s just the opposite.”
The builder’s representatives said during a recent meeting that they are being forced to price the homes to sell and maintain they are getting “zero profit” from the project, homeowners said.
Keyvan Samini, an attorney for some of the buyers, said the purchasers relied on the lender and its appraiser to confirm the homes’ $800,000-plus price tags.
But appraisers ended up using homes about three miles away as a guide for the first appraisal, and subsequent loan appraisals were based on the first one, Samini said.
The appraisals “were way too high,” Samini said. “I believe that the builder knew they were too high, or should have known. And it’s not the fault of the buyers. They rely on the expertise of those appraisers.”
Barisic, Brandywine’s sales VP, said he doesn’t know anything about the comparable homes used in the appraisals.
“The appraisers are not hired by Brandywine Homes,” Barisic said. “They’re hired by the lenders, which the homebuyers chose themselves.”
One of Samini’s clients said he’s facing the possibility of foreclosure because of the price cuts.
Dunn said he’s in a financial bind because he’s using an exotic mortgage called an Option ARM, an adjustable-rate loan in which the homeowner can pick his monthly payment from a variety of options.
Eventually, he’ll be responsible for making full payments of $6,000 a month, he said, adding, “I don’t know how we’ll be able to pay that.”
“It’s not just the financial aspect. It’s the emotional,” Dunn said. “We can’t eat, can’t sleep. I can’t concentrate on work. This is all I think about.”
" Garden Grove tract " is this a new tract develpoment in south jersey ?
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