It's still about the mortgage and foreclosure frenzy. It's still about people losing their homes, being thrown out in the street, adding to the nation's homeless problem.
It’s all over the news, how the mortgage foreclosure fallout is turning parts of American cities into ghost towns. As you bask in the suns of your respective universes, foreclosures are hitting condos in Miami, apartment complexes in Ohio, and closing in on homes and farms from shore to shore.
The market has tanked so rapidly that many renters no longer know where to send their rent checks. On a foreclosure blog, one man brags that he hasn’t paid rent in four months because his rented condo has been flipped more than a pay day hooker at a military base and nobody knows he’s renting the property.
The consequences of cheap condo conversions, greedy investors, criminal conspiracies and con gams, combined with the action, or non-action of look the other way authorities have come home with a vengeance. Home prices are falling like dead birds from the sky, as many of the nation’s cities and states prepare for massive budget shortfalls and layoffs, due to decreased property revenues.
Straw buyer purchased condos sit empty and abandoned in hundreds of cities across the country. The hand of real estate fraud continues to wreak havoc around the world as discover that their loan portfolios are full of nearly worthless, or grossly devalued mortgage investments.
The fur is flying so fast that many of the investors have no idea what their investments are truly worth, nor are many of them aware of exactly what they own. The untold thousands of foreclosed rental properties stick in their collective craws like indigestible rock.
Many banks have no intention of becoming landlords and kick out tenants when they foreclose on an apartment property. They’d rather see the property remain vacant, rather than bother with becoming landlords or hiring property managers.
Onetime real estate investment hotspots are cooling fast. A recent sub-headline in a Miami newspaper reads, “South Florida’s many condo buildings began to suffer from hundreds of foreclosures – and it may get worse in 2008.” (Miami Herald, 1-09-08)
According to several real estate analysts, the foreclosure crisis is really hitting condo complexes, with those who are left behind and continue to occupy their buildings now having to foot even higher maintenance and home owner association costs. The owner-occupied units have to take up the slack for the now abandoned and foreclosed invester-owned properties.
It’s been said that hot manure doesn’t run uphill and the same is true of bills and fees. When companies get in trouble, they pass their ‘trouble’ on to their customers and clients. The same is true of governments and home owner associations.
Condo associations, which collect fees from residents for maintenance, repairs, management salaries and utilities, have been losing revenue as the numbers of speculator-driven foreclosures rise. It turns out that many condo owners who are struggling to pay their mortgages are also falling behind on association dues. (Business Week, 11-29-07)
Across the country, there are a lot of anxious investors who are waiting for the other shoe to drop. Many hopped into the condo investment business hoping to take the loot and run, but unfortunately, when the bottom dropped out of the market, there were no takers and they were left holding the bag. Thousands of investors were so sure they were going to strike it rich in real estate development that many invested money they could not afford into homes, condos and apartments, only to find that they now are holding the bag on white elephants that nobody wants to buy.