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Monday, November 05, 2007

Cause for City and bank to sit tight, hunker down, and wait. Plus - what's fair, when "fair notice" should arguably be given?

Sitting Tight.

Precipitous action is usually ill-advised action; such as Ramsey getting sucked into the entire Town Center fiasco in the first place.

Now, let's consider a sit-tight response.

Strib reports that the housing market appears to not have bottomed out yet. Fall-winter is not the peak real estate dealing season. Those projecting the current housing market doldrums continuing at least to next summer are looking to have guessed right. Strib, at the start of the month reported:

Number of U.S. homes facing foreclosure doubles in third quarter
Associated Press
Last update: November 01, 2007 – 7:54 AM


LOS ANGELES— A soaring number of U.S. homeowners struggled to make mortgage payments in the third quarter, with properties in some stage of foreclosure more than doubling from the same time last year, a mortgage data company said today.

A total of 446,726 homes nationwide were targeted by some sort of foreclosure activity from July to September, up 100.1 percent from 223,233 properties in the year-ago period, according to Irvine-based RealtyTrac Inc.

Doubling of foreclosure rates nationwide is big news. And if the trend is your friend, your friend is saying sit tight and don't push real estate promotions since the market's gotten more sour, quarter-by-quarter:

The current figure was 33.9 percent higher than the 333,731 properties in foreclosure in the second quarter of this year.

There was one foreclosure filing for every 196 households in the nation during the most recent quarter, RealtyTrac said.

All but five states reported a year-over-year increase in foreclosure filings, which include notices of default, auction sale notices or bank repossessions, the company said.

A single property can sometimes receive more than one notice in a three-month period.

In all, 635,159 filings were reported in the third quarter, up 99.5 percent from the year-ago quarter and up 30 percent from the second quarter of this year.

RealtyTrac CEO James J. Saccacio said in a statement that August and September accounted for the highest monthly totals since the company began issuing foreclosure filing reports in January 2005.

"Given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets,'' he said.

Mortgage lenders are bracing for a flood of defaults as many adjustable-rate mortgages originated in 2005 and 2006 during the height of the housing market frenzy reset to higher interest rates.

The loans were initially attractive options for buyers because of their cheaper "teaser'' interest rates that kept monthly payments low, but even a small percentage increase can translate into a far higher payment.

With home sales in decline and prices down or flat in many regions, more homeowners are landing in foreclosure because they can't afford to sell their homes after falling behind on payments.

The three states with the highest foreclosure rates during the third quarter were Nevada, California and Florida, RealtyTrac said.

Nevada reported one foreclosure filing for every 61 households, with 16,817 filings on 12,982 properties.

That marked a 22.8 percent increase in filings from the previous quarter and a tripling from the year-ago quarter.

California led the nation in total foreclosure filings and reported one filing for every 88 households.

The state had 148,147 filings on 94,772 properties, an increase in filings of 36 percent from the previous quarter and nearly four times more than the year-ago period.

In Florida, there were 86,465 foreclosure filings on 60,992 properties during the third quarter, RealtyTrac said. Foreclosure filings rose 51.5 percent from the previous quarter and more than doubled from the same quarter last year.

Florida's foreclosure rate amounted to one filing for every 95 households, RealtyTrac said.

Rounding out the top 10 states in foreclosure rates were Michigan, Ohio, Colorado, Arizona, Georgia, Indiana and Texas.

So, Minnesota is not in the "ten worse" category, but leave statewide worry aside - where is Ramsey Town Center in comparison to those ten worse states? Worse percentage-wise than Nevada? Than Florida?


Fair Notice.

And is John Peterson's market niche doing better or worse than shared-wall high-density? Probably, if you look at the cornfield on Nowthen by Trott Brook, that has sprung up a new cash crop - lumber, not raw, but nailed together, etc.

But the gun club. I drove through there - one home being built on a cul-de-sac with swamp on three sides - but the rest as roadways and a couple of big pits. So, where was the lead-polluted part, and what's its status now? Should people buying there be given notice that the homes are built over a former hobby shooting range so that residents know to have blood lead levels monitored more closely than would be applicable for the general population? There's sense to having a City ordinance requiring such notice, as a matter of public health protection. Give notice, someone buys, they make a rational choice. Withhold notice, somebody buys, they have a right to feel hoodwinked by developer and city each turning a blind eye to the particularized risks of living atop a former hobby shooting range.

Is that, silence when there's good cause for notice, what our City, Ramsey, is all about? If so, whose interest is served by any such silence? Mine, yours, or Ben the Taxpayer's? Crabgrass probably propsers regardless of residual lead levels and risk, but then crabgrass is very adaptive and opportunistic. Given any chance it can grow as wild and unrestrained as allowed. The question is what to allow.