Flippers in Florida cause loss of millions

“At least 37 groups of property flippers operated in Sarasota and Manatee counties. The groups bought hundreds of properties worth more than $350 million and sold them to associates for inflated prices. The flippers identified by the Herald-Tribune — and the people who ultimately bought their properties — have so far defaulted on more than $450 million in mortgage loans. Their defaults account for $1 in every $13 lost to foreclosure in Sarasota and Manatee counties from 2005 through 2008.”

Article:

Foreclosure jump in first half of 2009

“Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday.

The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15 percent from the first half of last year.”

Article:

Wells Fargo & Deutsche Bank sued in foreclosure mess

Ohio has been hit hard by foreclosures.  Not just Cleveland but also Cincinnati.  This lawsuit is aimed at Wells,  Deutsche Bank and the City of Cincinnati for allowing the Price Hill areas to become dangerously blighted.  The complaint states that in East and West Price Hill neighborhoods there were nearly 300 foreclosures in 2007.   

The banks are blamed for allowing the properties they foreclosed on to become littered with trash and broken glass.  Houses have become safety hazards and magnets for looters.  They re-sell these properties, according to the complaint, to out-of-town speculators who have no intention of making improvements to the properties.

What do the plaintiffs want?  They want to force the banks to make the properties presentable and if that doesn’t happen to have a receiver appointed who will make the necessary improvements if the banks don’t. 

Ohio is in the forefront of efforts to legally address the terrible conditions caused by mass foreclosures.   Surely, other states are being hit as hard.  Why aren’t we hearing about these kinds of suits in places like Florida, California and Nevada?

Complaint courtesy Courthousenews

Update: Foreclosure rescue scams

I just came across a useful blog entry that address the legal issues involved in type of suit I mentioned earlier here.

It appears from “The Lead Counsel Corner” that these scams are being monitor carefully by the FTC.  I hope the Illinois AG is working with them and other AGs to prevent the worst abuse of this sort from happening.

Cool, Depressing Bankruptcy Graph!

I need to parse this carefully.  The data (thanks creditcards.com) being displayed is sad and appears to track closely with foreclosures.  Now that would interesting layer on top of this graph, seeing the correlation between declaring bankruptcy and foreclosures.

One of the stories that has been under reported in my view, is the foreclosure story.  I’ve heard one report that in some neighborhoods, there have been so many foreclosures that foreclosed houses are being destroyed because an empty house is more toxic to housing prices that an empty lot.  This story is at the heart of the downturn and yet mostly we see stories about bailouts and stock market declines and the like.