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Plans fall through for former City Club

Two men known for restoring a historic Gastonia home had their eyes set on the defunct City Club, but negotiations failed after the couple couldn’t agree with the bank on a fair price.

Dwayne and Brian Johnpaoli considered buying The City Club, which has been closed for more than a year. The couple made a lower-than-listed bid for the property because they said an inspection revealed the need for extensive work.

That bid was rejected, and New Dominion Bank is back to the drawing board to find a buyer.

“We tried to make the sale happen, and we just couldn’t get it done,” said Greg Burke, the bank’s executive vice president.

 

Heart for renovation

The Johnpaolis appreciate Gastonia history.

They bought and restored the Rankin-Mercer House on South York Road where they now live and host charity events. The couple decided to purchase another property to potentially separate those social gatherings from their living space.

The men put the South New Hope Road property under contract in the spring and called in an inspec-tor to evaluate the condition of The City Club.

Dwayne Johnpaoli said he remembers walking into the basement, where it appeared the walls were covered with toilet paper. It was actually mold, he said.

The mold needs to be removed, inactive termite damage has to be repaired, plumbing needs to be re-placed and a new roof should be put on, Johnpaoli said.

The repairs would top $300,000, according to Johnpaoli.

 

Cost of repairs

Johnpaoli said he and his partner initially offered to pay $400,000 for The City Club. The asking price is $599,900.

The men lowered their offer to $275,000 when they got the estimate for repairs.

According to Johnpaoli, the bank rejected the offer so the men are now looking elsewhere.

Their contract on the building ended June 18, he said.

“It’s very disappointing, but what can you do? You can’t make the bank take less than they want for it,” he said. “Maybe it is worth more, but there are so many repairs needed.”

Burke said that the property obviously needs some work, but he’s not convinced that Johnpaoli’s estimate is accurate.

He said that some of the repairs are optional.

 

Auctioning off contents

The City Club was founded in 1985, but the structure originally served as a home when it was built nearly 100 years ago.

As a private club, the building saw members stop in for meals and social gatherings.

The business fell into foreclosure in 2012 and closed March 2013. The property went on the auction block two months later and that’s when New Dominion Bank took over.

The 12,258-square-foot building was listed with Coldwell Banker Commercial realty about a year ago.

The bank has organized an auction for Sept. 6 to sell off the contents of the building.

Burke said that the auction is a step toward repurposing the former social club.

 

Possible office space

The property’s Realtor, Eric Clay, said he’s had interested parties talk about buying The City Club to reopen for events.

None of those talks have come to fruition.

Burke said that’s a sign that maybe the former club would better serve a different purpose.

Once the contents are auctioned off, Burke said he’ll call in an architect. The idea is that the building would be best suited for office space.

“It’s a great location. We hate that it couldn’t sell and continue as the club, but that’s just the reality of the marketplace right now,” he said.

Ultimately, New Dominion wants to sell the building. But if potential tenants show enough interest the bank could act as a landlord until a purchaser is found, Burke said.

 

‘I hope somebody … saves that building’

The Johnpaolis had hoped to reopen The City Club by October or November.

They’re known for providing a holiday dinner for the less fortunate and thought the event could move into The City Club this year.

Instead, the partners are looking at another old home in Gastonia.

They might buy that place, renovate it and move so that the Rankin-Mercer House can be used solely for event space, Dwayne Johnpaoli said.

He said they hope that The City Club can still serve the community that cherishes it.

“I think it is a beautiful property, and I think it could benefit our city,” he said. “I really hope that in the near future somebody steps up and steps in and saves that building.”

You can reach Diane Turbyfill at 704-869-1817 and Twitter.com/GazetteDiane.

Article source: http://www.gastongazette.com/spotlight/plans-fall-through-for-former-city-club-1.366682

Ferguson isn’t about black rage against cops. It’s white rage against progress.

Carol Anderson is an associate professor of African American studies and history at Emory University and a public voices fellow with the Op-Ed Project. She is the author of “Bourgeois Radicals: The NAACP and the Struggle for Colonial Liberation, 1941-1960.”

When we look back on what happened in Ferguson, Mo., during the summer of 2014, it will be easy to think of it as yet one more episode of black rage ignited by yet another police killing of an unarmed African American male. But that has it precisely backward. What we’ve actually seen is the latest outbreak of white rage. Sure, it is cloaked in the niceties of law and order, but it is rage nonetheless.

Protests and looting naturally capture attention. But the real rage smolders in meetings where officials redraw precincts to dilute African American voting strength or seek to slash the government payrolls that have long served as sources of black employment. It goes virtually unnoticed, however, because white rage doesn’t have to take to the streets and face rubber bullets to be heard. Instead, white rage carries an aura of respectability and has access to the courts, police, legislatures and governors, who cast its efforts as noble, though they are actually driven by the most ignoble motivations.

White rage recurs in American history. It exploded after the Civil War, erupted again to undermine the Supreme Court’s Brown v. Board of Education decision and took on its latest incarnation with Barack Obama’s ascent to the White House. For every action of African American advancement, there’s a reaction, a backlash.

The North’s victory in the Civil War did not bring peace. Instead, emancipation brought white resentment that the good ol’ days of black subjugation were over. Legislatures throughout the South scrambled to reinscribe white supremacy and restore the aura of legitimacy that the anti-slavery campaign had tarnished. Lawmakers in several states created the Black Codes, which effectively criminalized blackness, sanctioned forced labor and undermined every tenet of democracy. Even the federal authorities’ promise of 40 acres — land seized from traitors who had tried to destroy the United States of America — crumbled like dust.

Influential white legislators such as Rep. Thaddeus Stevens (R-Pa.) and Sen. Charles Sumner (R-Mass.) tried to make this nation live its creed, but they were no match for the swelling resentment that neutralized the 13th, 14th and 15th amendments, and welcomed the Supreme Court’s 1876 United States vs. Cruikshank decision, which undercut a law aimed at stopping the terror of the Ku Klux Klan.

Nearly 80 years later, Brown v. Board of Education seemed like another moment of triumph — with the ruling on the unconstitutionality of separate public schools for black and white students affirming African Americans’ rights as citizens. But black children, hungry for quality education, ran headlong into more white rage. Bricks and mobs at school doors were only the most obvious signs. In March 1956, 101 members of Congress issued the Southern Manifesto, declaring war on the Brown decision. Governors in Virginia, Arkansas, Alabama, Georgia and elsewhere then launched “massive resistance.” They created a legal doctrine, interposition, that supposedly nullified any federal law or court decision with which a state disagreed. They passed legislation to withhold public funding from any school that abided by Brown. They shut down public school systems and used tax dollars to ensure that whites could continue their education at racially exclusive private academies. Black children were left to rot with no viable option.

A little more than half a century after Brown, the election of Obama gave hope to the country and the world that a new racial climate had emerged in America, or that it would. But such audacious hopes would be short-lived. A rash of voter-suppression legislation, a series of unfathomable Supreme Court decisions, the rise of stand-your-ground laws and continuing police brutality make clear that Obama’s election and reelection have unleashed yet another wave of fear and anger.

It’s more subtle — less overtly racist — than in 1865 or even 1954. It’s a remake of the Southern Strategy, crafted in the wake of the civil rights movement to exploit white resentment against African Americans, and deployed with precision by Presidents Richard Nixon and Ronald Reagan. As Reagan’s key political strategist, Lee Atwater, explained in a 1981 interview: “You start out in 1954 by saying, ‘N—–, n—–, n—–.’ By 1968 you can’t say ‘n—–’ — that hurts you. Backfires. So you say stuff like ‘forced busing,’ ‘states’ rights’ and all that stuff. You’re getting so abstract now you’re talking about cutting taxes, and all these things you’re talking about are totally economic things, and a byproduct of them is blacks get hurt worse than whites. And subconsciously maybe that is part of it. I’m not saying that.” (The interview was originally published anonymously, and only years later did it emerge that Atwater was the subject.)

Now, under the guise of protecting the sanctity of the ballot box, conservatives have devised measures — such as photo ID requirements — to block African Americans’ access to the polls. A joint report by the NAACP Legal Defense and Educational Fund and the NAACP emphasized that the ID requirements would adversely affect more than 6 million African American voters. (Twenty-five percent of black Americans lack a government-issued photo ID, the report noted, compared with only 8 percent of white Americans.) The Supreme Court sanctioned this discrimination in Shelby County v. Holder , which gutted the Voting Rights Act and opened the door to 21st-century versions of 19th-century literacy tests and poll taxes.

The economic devastation of the Great Recession also shows African Americans under siege. The foreclosure crisis hit black Americans harder than any other group in the United States. A 2013 report by researchers at Brandeis University calculated that “half the collective wealth of African-American families was stripped away during the Great Recession,” in large part because of the impact on home equity. In the process, the wealth gap between blacks and whites grew: Right before the recession, white Americans had four times more wealth than black Americans, on average; by 2010, the gap had increased to six times. This was a targeted hit. Communities of color were far more likely to have riskier, higher-interest-rate loans than white communities, with good credit scores often making no difference.

Add to this the tea party movement’s assault on so-called Big Government, which despite the sanitized language of fiscal responsibility constitutes an attack on African American jobs. Public-sector employment, where there is less discrimination in hiring and pay, has traditionally been an important venue for creating a black middle class.

So when you think of Ferguson, don’t just think of black resentment at a criminal justice system that allows a white police officer to put six bullets into an unarmed black teen. Consider the economic dislocation of black America. Remember a Florida judge instructing a jury to focus only on the moment when George Zimmerman and Trayvon Martin interacted, thus transforming a 17-year-old, unarmed kid into a big, scary black guy, while the grown man who stalked him through the neighborhood with a loaded gun becomes a victim. Remember the assault on the Voting Rights Act. Look at Connick v. Thompson, a partisan 5-4 Supreme Court decision in 2011 that ruled it was legal for a city prosecutor’s staff to hide evidence that exonerated a black man who was rotting on death row for 14 years. And think of a recent study by Stanford University psychology researchers concluding that, when white people were told that black Americans are incarcerated in numbers far beyond their proportion of the population, “they reported being more afraid of crime and more likely to support the kinds of punitive policies that exacerbate the racial disparities,” such as three-strikes or stop-and-frisk laws.

Only then does Ferguson make sense. It’s about white rage.

outlook@washpost.com

Read more from Outlook:

Black America and the burden of the perfect victim

The Talk — a poem inspired by Ferguson, Mo.

Follow our updates on Facebook and Twitter.

Article source: http://www.washingtonpost.com/opinions/ferguson-wasnt-black-rage-against-copsit-was-white-rage-against-progress/2014/08/29/3055e3f4-2d75-11e4-bb9b-997ae96fad33_story.html

San Bernardino blues: Bankrupt city flailing amid financial overhaul

In the meantime, the budget slashing continues.

Some 500 city employees, about a third of the city’s payroll, have been laid off. About 100 police officers lost their jobs, trimming the force to 248. Some public pools didn’t open this summer. Park maintenance, including mowing and watering, is now in the hands of private contractors. Libraries lost four positions.

“The bankruptcy, if anything, has helped maintain city services,” Davis said, by easing debt payments.

What the city will spend money on is a new redevelopment guru to attract business investment to an area that turned the former Norton Air Force Base into the San Bernardino International Airport — an airport with a spanking-new passenger terminal to handle flights but, so far, no scheduled service from any airline.

Davis said there are opportunities, with the city breaking ground recently on an interregional transit hub for bus and rail. But others disagree.

“I don’t see a whole lot of positive,” said Richard Castro, 57, a retired high school science teacher who ran for mayor last year and lost. “It’s tough to get kids to push forward. There’s been more of an exodus.”

Unemployment is at 9 percent in San Bernardino County — much higher than the national rate of 6.2 percent. In the San Bernardino–Riverside metropolitan area, unemployment went as high as 15 percent, and foreclosures peaked at 8.8 percent in 2009, four times the national average.

And the crime rate is high. The website Neighborhood Scout gives San Bernardino a crime index rating of 4, meaning that it’s safer than only 4 percent of other U.S. cities. It says a person’s chance of becoming a victim of violent crime here is 1 in 95 — considerably greater than the 1 in 236 chance statewide. The city was shaken up this month by the shooting of a police officer who was critically injured. Three men were charged with attempted murder.

“It’s beyond fed up,” Castro said of the feelings that many city residents have. “It’s hopeless. We see no sign of a different future.”

Article source: http://america.aljazeera.com/articles/2014/8/31/bankrupt-downtownsanbernardino.html

HUD says $15.8 billion of loan sales cut losses, foreclosures

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WASHINGTON — The sale of $15.8 billion in nonperforming loans by the U.S. Housing and Urban Development Department cut losses to its troubled insurance fund and helped stop foreclosure for about 6,400 homeowners, the agency said.


HUD has sold more than 91,000 loans, including almost 53,000 this year. Half of the about 38,000 loans sold through last year were resolved as of May — meaning they went through foreclosure or another outcome and are no longer considered nonperforming — and 34 percent of those resolutions resulted in property seizures being averted, the department said in a report released yesterday.

“Without the note sale program, all of these loans would be foreclosed upon,” HUD said. The “program is achieving its anticipated goal of minimizing losses” and providing alternative resolutions to thousands of borrowers at risk of losing their homes, the department said in the report.

HUD began auctioning pools of delinquent mortgages in 2010 as losses to the Federal Housing Administration’s mortgage insurance fund caused by foreclosures mounted. Yesterday’s report is the first to assess the results of the sales, which are aimed at reducing taxpayer losses at a time when Wall Street firms are trying to profit from the housing recovery by acquiring distressed real estate assets.

The loans, sold in groups of local and national pools, averaged 31 months of delinquency, “meaning these borrowers are destined for foreclosure,” according to the report. All loans sold since late 2012 included six-month restrictions against foreclosure actions for owner-occupied properties unless there were extenuating circumstances.

The largest buyers of the national pools have been Lone Star Funds, founded by billionaire John Grayken; Bayview Asset Management, a Coral Gables-based company backed by Blackstone Group; and Selene Finance, founded by mortgage-bond pioneer Lew Ranieri. The biggest local-pool buyers have been Los Angeles-based investment company Oaktree Capital Management, Bayview and Charlotte, N.C.-based 25 Capital Partners, headed by Shaun Ahmad.

The Federal Housing Administration insurance fund’s loss rates on failed mortgages fell to 52.9 percent in the second quarter of this year from 63.5 percent in the first quarter of 2010, before the agency began auctioning pools of loans, according to the report.

Climbing home values also have lessened the loss rates and spurred bidders for nonperforming-loan pools to raise their offers. Bids rose to about 60 percent of unpaid principal balances this year from about 40 percent in 2012.

The Federal Housing Administration had more than 437,000 seriously delinquent loans as of June 30, according to the Mortgage Bankers Association. The administration is a mortgage insurer run by HUD that helps lower-income borrowers buy houses.

Losses of more than $50 billion on mortgages it insured as the housing bubble burst led to a $1.7 billion cash infusion last year, the first taxpayer subsidy in its 80-year history.

Borrowers were more likely to have received an alternative to a foreclosure if their mortgages were part of geographically concentrated pools that required investors to ensure that the loans were resolved in a way that stabilized the neighborhood, according to yesterday’s report.

Among the allowable options were selling the loans to owner-occupants or transferring the properties to a community land bank.

In the neighborhood-stabilization pools, 23.5 percent of resolved loans reperformed, meaning the owners resumed paying their debt after a modification, while just 8.7 percent of loans in pools without the restrictions reperformed.

© 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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FACT CHECK See inaccurate information in this story? Tell us here.

Article source: http://www.columbiatribune.com/business/saturday_business/hud-says-billion-of-loan-sales-cut-losses-foreclosures/article_9e488010-2ecc-54c1-bf19-4cbc44132937.html

Broward industrial building hit with foreclosure



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Brian Bandell
Senior Reporter- South Florida Business Journal

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An industrial building in Pompano Beach could be seized in foreclosure.

Fort Lauderdale-based CT Capital filed a foreclosure lawsuit against A QC Group Corp. over a mortgage last modified at $4.85 million in 2010. That loan was set to mature in June 2012.

Mitchell J. Howard, the managing member of A QC Group, was not named in the lawsuit.

RELATED CONTENT: Broward office park, two Miami properties targeted by lawsuits

The complaint targets the 59,415-square-foot industrial building at 200 Park Central Blvd. It’s just north of Copans Road and west of North Andrews Avenue. It was built in 1984.

Fort Lauderdale attorney Robert L. Sader, who represents CT Capital in the lawsuit, couldn’t be reached for comment.

Miami Gardens shopping center changes hands in foreclosure

A local investor with ties to a supermarket chain took title to the Lakes on the Green Shopping Center in Miami Gardens after buying a foreclosure judgment.

Branch Bank and Trust Co. filed a foreclosure lawsuit in 2009 against CC Development, Power One Group and managing members Reginald Beane, Luis M. Espinosa, Rene M. Cambert, Michael Camilleri and Oscar Delgado. They were the heads of the shuttered First Commercial Insurance Co.

BBT later sold the $23.6 million loan to Miami Gardens Drive LLC, which is managed by Agustin Herran, the president and CEO of Sedan’s supermarket and a former director of U.S Century Bank.

RELATED CONTENT: FDIC objects to U.S. Century Bank settlement

Miami Gardens Drive LLC won a $54.1 million foreclosure judgment against CC Development and won the auction on July 31 with a credit bid of $900,100. It recently took title to the 105,895-square-foot shopping center at 18600 N.W. 87 th Avenue.

Brian Bandell covers banking, finance, health care and education. Get the latest banking news with our free daily newsletter. Click here to subscribe.




Article source: http://www.bizjournals.com/southflorida/news/2014/08/29/broward-industrial-building-hit-with-foreclosure.html

Foreclosure rates down in Routt County

— Standing on the steps just inside the Routt County Courthouse, county Treasurer and Public Trustee Brita Horn looks over the paperwork for two homes undergoing foreclosure.

Horn said she views herself as a conduit between banks and the people of Routt County facing the prospect of losing their homes.

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“I’m here for Routt County,” said Horn, who’s facilitated 100 foreclosure sales since taking her post in December 2012.

She said she missed the worst of the Great Recession’s effect on homeowners by the time she took the job, but she has witnessed the falling foreclosure rate firsthand.

In 2014, she anticipates just 100 homes will begin the foreclosure process, down from 134 in 2013, 233 in 2012 and 306 in 2011.

“The numbers are going down,” Horn said.

Of those 100 homes, some owners will pull themselves out of the process by borrowing money from family and friends or somehow finding a way to catch up on payments. For others, the process will continue, and ultimately may lead to a quick sale of their home by Horn on the front steps of the Routt County Courthouse.

During Wednesday’s sale, Horn tried to auction off two homes — a four-bedroom, four-bath home on East Maple Street near Steamboat Springs High School and a three-bedroom, 2 1/2-bath on nearly 19 acres off Routt County Road 14.

Horn said the sales usually are attended by a few curious home flippers and sometimes by the family facing the foreclosure themselves.

The homes Wednesday were bid on by banks at $346,503 for the East Maple Street home and $709,073 for the Routt County Road home, and Horn facilitated an auction that would sell off the houses for as little as a dollar more than the initial bank bid.

One home flipper took interest in the East Maple Street house, bidding a dollar more, but he took back his offer just 10 minutes after the auction.

Horn said that she often hears from upset homeowners seeking information just before auctions, and she has learned to communicate well with them.

By the time a foreclosure reaches Horn, homeowners have anticipated it for a long time.

“They’ve had years of letters and phone calls and trying to work with the bank,” Horn said. “But they’ll be fine after all this.”

So far in 2014, 18 homes entered the foreclosure process during the first quarter, and another 17 in the second. Horn said that number will reach nearly 50 by the beginning of September, and 100 by the year’s end.

Horn said she expects more foreclosures in the second half of 2014, but she still thinks the annual number is going down.

The foreclosure rate has dropped dramatically throughout the past few years.

“In the last two years, if you look at those numbers, they’re starting to go down,” Horn said.

In the second quarter of 2014, the 17 homes that have entered foreclosure is down from 27 in 2013, 63 in 2012 and 62 in 2011.

Only 13 sales were held in the second quarter of 2014, down from 20 in the second quarter of 2013, 25 in 2012 and 60 in 2011.

Horn thinks that fewer foreclosures means fewer empty homes in the area, prompting new building and boosting the construction sector.

“It’s a sign that we’re getting a steady economy,” Horn said.

To reach Teresa Ristow, call 970-871-4206, email tristow@SteamboatToday.com or follow her on Twitter @TeresaRistow

Article source: http://www.steamboattoday.com/news/2014/aug/30/foreclosure-rates-down-routt-county/

Client with wage garnishment files chapter 13 to save house from foreclosure

Client with wage garnishment files chapter 13 to save house from foreclosure


CLIENT is 60 years old and married. She has gross income of $3,000 as a caregiver.  Husband is not employed and waiting for social security benefits, which is still two years from now. Due to a car that was repossessed last year, client owes $18,000 on a car loan deficiency. Her salary is subject to wage garnishment of $600 monthly because of the repossessed car. Because of this client has not paid her mortgage on their residence for the last 8 months. Their mortgage is $1,500 a month, so their mortgage default is $12,000. They owe $40,000 of credit card debt, which they have not paid for the last 12 months. They have a car loan on a new Camry with a balance of $20,000 on which they pay $500 monthly at 10% interest. They are one month behind on the car payment. The mortgage holder has sent them a “Notice of Default” with a recording date last week advising them that their house will be foreclosed upon after 90 days pursuant to foreclosure law in the state of California unless the amount of default of $12,000 plus costs and attorney’s fees is paid in full at least 5 days before the foreclosure auction sale date, to be set, after the lapse of 90 days. A few days later, the LA county recorder’s office sends them the same information telling them that they will lose their house to foreclosure unless they pay the default in full by the deadline, and that they should contact a lawyer for assistance if they want to save their house.

Any homeowner who is in this situation and wants to save the house from foreclosure, and is serious about saving the house, should file a Chapter 13 forthwith. There are other options that can be taken but none of those are as effective in stopping a foreclosure on its track as a Chapter 13. The reason is that Chapter 13 is specifically designed by law to help homeowners save their houses from foreclosure. How will client benefit from her Chapter 13 petition?

She will benefit as follows:

• The wage garnishment will stop immediately, thus providing her $625 more of net income monthly.

• The foreclosure process will stop immediately. Mortgage holder cannot proceed with selling her house in a foreclosure sale.

• The mortgage arrears of $12,000 will be paid over a period of 5 years, no interest, at $200 a month.

• If client wants, the car payment can be paid at the rate of $333 monthly for 60 months, instead of $500 a month.

• In the Chapter 13 plan, she will only pay the default of the house at $200 a month for 60 months and paying zero to her $40,000 of credit cards. She does not have to pay any part of the $40,000 credit card debt at all.

• In addition to the stopping of the wage garnishment for the repossessed car, client will pay zero on the unpaid balance of the $18,000 car repo deficiency.

• If she completes the plan payment of $200 for 60 months, the court will discharge the $40,000 of credit card debt and the $18,000 car repo deficiency.

• During the next 5 years, as long as client is making the plan payments in a timely manner to the trustee, the house foreclosure is stopped, and none of her creditors can sue her for collection or garnish her wages or levy her bank accounts. She gets peace of mind and order from chaos.

Client has to resume her current mortgage payment of $1,500 on the month after the date of filing. Thus, on year 5, she will be back on current status again with her house mortgage. Client does not have a 2nd trust deed or a home equity loan, but if she did, assuming the legal requirements are satisfied, she could have also gotten rid of the 2nd trust deed, converting it to an unsecured debt just like a credit card debt with client paying the 2nd trust deed holder, again nothing, zero. If she owed $100,000 on a HELOC, that entire amount will get discharged upon plan completion, on zero payment.

So, as long as she completes all plan payments, she can retire in peace at the age of 65. At that time, her husband will be receiving social security benefits boosting their household income when their unsecured debt has been reduced from $58,000 to nothing. They will be debt free at 65 and their house will become current on mortgage payments again. It’s something to look forward to!

“Be of good courage, and He shall strengthen your heart, all you who hope in the LORD.” Psalm 31:24.

* * *

Lawrence Bautista Yang specializes in bankruptcy, business, real estate and civil litigation and has successfully represented more than five thousand clients in California.  Please call Angie, Barbara or Jess at (626) 284-1142 for an appointment at 1000 S Fremont Ave Mailstop 58 Bldg A-1 Suite 1125 Alhambra, CA 91803.

 

Article source: http://asianjournal.com/consumer/client-with-wage-garnishment-files-chapter-13-to-save-house-from-foreclosure-2/

ACDC building forced to foreclose

A foreclosure has forced the Argenta Community Development Corporation out of the same district it’s been working to improve.

Article source: http://www.thv11.com/story/news/local/north-little-rock/2014/08/29/acdc-building-forced-to-foreclose/14828823/

HUD Says $15.8 Billion of Loan Sales Cut Losses, Foreclosures

The sale of $15.8 billion in nonperforming loans by the U.S. Housing and Urban Development Department cut losses to its troubled insurance fund and helped stop foreclosure for about 6,400 homeowners, the agency said.

HUD has sold more than 91,000 loans, including almost 53,000 this year. Half of the about 38,000 loans sold through last year were resolved as of May — meaning they went through foreclosure or another outcome and are no longer considered nonperforming — and 34 percent of those resolutions resulted in property seizures being averted, the department said in a report released today.

“Without the note sale program, all of these loans would be foreclosed upon,” HUD said. The “program is achieving its anticipated goal of minimizing losses” and providing alternative resolutions to thousands of borrowers at risk of losing their homes, the department said in the report.

HUD began auctioning pools of delinquent mortgages in 2010 as losses to the Federal Housing Administration’s mortgage insurance fund caused by foreclosures mounted. Today’s report is the first to assess the results of the sales, which are aimed at reducing taxpayer losses at a time when Wall Street firms are trying to profit from the housing recovery by acquiring distressed real estate assets.

The loans, sold in groups of local and national pools, averaged 31 months of delinquency, “meaning these borrowers are destined for foreclosure,” according to the report. All loans sold since late 2012 included six-month restrictions against foreclosure actions for owner-occupied properties unless there were extenuating circumstances.

Grayken’s Company

The largest buyers of the national pools have been Lone Star Funds, founded by billionaire John Grayken; Bayview Asset Management LLC, a Coral Gables, Florida-based company backed by Blackstone Group LP; and Selene Finance LP, founded by mortgage- bond pioneer Lew Ranieri. The biggest local-pool buyers have been Los Angeles-based investment company Oaktree Capital Management LP, Bayview and Charlotte, North Carolina-based 25 Capital Partners, headed by Shaun Ahmad.

The Federal Housing Administration insurance fund’s loss rates on failed mortgages fell to 52.9 percent in the second quarter of this year from 63.5 percent in the first quarter of 2010, before the agency began auctioning pools of loans, according to the report. Climbing home values have also lessened the loss rates and spurred bidders for nonperforming-loan pools to raise their offers. Bids rose to about 60 percent of unpaid principal balances this year from about 40 percent in 2012.

Taxpayer Subsidy

The Federal Housing Administration had more than 437,000 seriously delinquent loans as of June 30, according to the Mortgage Bankers Association. The administration is a mortgage insurer run by HUD that helps lower-income borrowers buy houses. Losses of more than $50 billion on mortgages it insured as the housing bubble burst led to a $1.7 billion cash infusion last year, the first taxpayer subsidy in its 80-year history.

Borrowers were more likely to have received an alternative to a foreclosure if their mortgages were part of geographically concentrated pools that required investors to ensure that the loans were resolved in a way that stabilized the neighborhood, according to today’s report.

Among the allowable options were selling the loans to owner-occupants or transferring the properties to a community land bank. In the neighborhood-stabilization pools, 23.5 percent of resolved loans reperformed, meaning the owners resumed paying their debt after a modification, while just 8.7 percent of loans in pools without the restrictions reperformed.

© Copyright 2014 Bloomberg News. All rights reserved.

Article source: http://www.moneynews.com/Economy/HUD-loan-sales-losses/2014/08/29/id/591714/

Investor has renewed vision for charred Flamingo resort

The Flamingo Hotel Resort and Spa still offers one of the best views of the Coachella Valley, which is saying something for an aging Desert Hot Springs hotel that’s sustained massive fire damage and counts pigeons as its latest guests.

But it’s that view — combined with the city’s signature hot springs — that has the owner of Victory Tile and Marble firmly believing he can turn the scorched building remains into one of the world’s best spas.

“This is the Flamingo, rising from the ashes,” Victor Butte said, standing atop the hotel overlook. “I really like taking something torn down and turning it into something beautiful.”

Butte is the latest in a long line of investors who had hopes of transforming the 57-year-old hotel once owned by comedic actor Dom DeLuise.

Having owned the hotel at 67-221 Pierson Boulevard for about a year, Butte only recently received the city’s go-ahead to frame the project.

“The challenge to having a world-class spa is, first, it must be environmentally friendly so people feel a sense of renewal, lifestyle change and that it’s the one special place that exists for the greatest waters,” Mayor Adam Sanchez said.

“Secondly, wellness programming must be provided promoting good eating habits, things like yoga classes and healthy living.”

Butte says he’s up for the challenge.

A desert resident for 30-plus years, Butte has been traveling from mud baths in Calistoga to eucalyptus-lined steam rooms in Guadalajara, Mexico in order to research his plans.

He plans to tap into the two fountains behind the hotel and pump their sulfur-free waters bowl-to-bowl to avoid siphoning pool chemicals back into the ground.

The healthy palm trees amid the hotel’s vestiges suggest bountiful mineral wells are below.

Butte also is in talks with a doctor to turn his venture into a medical spa that would feature stem cell skin treatments.

Shooting for a February 2015 opening, Butte expects it will cost patrons more than $200-plus a night to book one of the 28 hotel rooms.

“I saw this place for a long time, but I never thought it was attainable,” Butte told The Desert Sun.

“I love mid-century modern. I like the simple lines, and there’s not a lot of frou-frou on it.”

Butte declined to say how much he paid for the hotel or how much he’s putting into its restoration.

Although Butte’s done a number of mid-century modern renovations, the charred, graffiti-littered hotel will be his largest undertaking.

The hotel will feature a 16-foot-tall flamingo, as well as two bars and a restaurant.

And Butte can already picture the sunbathers lounging near the seven pools.

“I want to take the best elements of the best places around and incorporate them into this one,” Butte said.

Previous plans for the hotel never quiet materialized.

In 2008, Desert Hot Springs gave $250,000 for renovations to the Malibu-based owner, Brian Bescoby, and promised an additional $250,000 in transient occupancy tax rebates.

But shortly after the economic incentive deal was reached, city officials said Bescoby ran out of money — resulting in a claim against the property to recoup some of the money when it went into foreclosure.

Bescoby’s BCB Resorts had purchased the property for $2.9 million.

Los Angeles-based Pacific Allied Investments was the next to try its luck in 2010, but contractor Steve Shin never got anything off the ground.

LWL Investment Group was slowly updating the then-pink hotel when the south side went up in flames in June 2012, with a firefighter sustaining minor injuries in the process.

Butte isn’t deterred by the hotel’s history.

“What hotel has a view like this?” Butte asked. “I bought it burned.”

The 1950s were a boon for spas in Desert Hot Springs, but some dried up unlike the hot springs that fueled them.

More than 20 resort hotels operate in the city, and most of the 14 that are members of the Desert Hot Springs Chamber of Commerce access the mineral waters, said President Heather Coladonato.

“You’ve got a lot of diversity in the tourists coming to this city, with international guests coming specifically for the hot, mineral waters and others for an experience a little off the beaten path,” Coladonato said.

“Celebrities wanting the opportunity to relax and rejuvenate unnoticed come to Desert Hot Springs.”

Article source: http://www.desertsun.com/story/news/2014/08/29/investor-renewed-vision-charred-flamingo-resort/14820761/