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Newsvine button Introduces REO and Foreclosure AVM

New York, NY, September 29, 2014 –(– Prime foreclosures and charge-offs are expected to stay elevated due to the continued squeeze in the Jumbo mortgage market, high incidence of short sales and the highly probable tsunami of HELOC defaults hitting the market in early 2015. If the HELOC hypothesis comes to pass, a new generation of REO and foreclosure (“Foreclosure”) AVMs geared exclusively towards that segment would be mandatory.

In fact, everyone from the traditional AVM houses to the listing services to the national brokerage houses has realized that the foreclosure markets are not short-lived or temporary. Actually, the overall housing market has become semi-permanently bimodal (primary and foreclosure), requiring significant back-to-the-drawing-board valuation re-engineering.

Under the traditional AVM development process only the recent arms-length sales (often aided by the discounted seasoned listings to simulate the most recent market) are used to create representative sales samples to develop Multiple Regression Analysis (MRA) models, which are then applied on to the populations the samples are derived from. In other words, the traditional modeling samples ignore all foreclosure and short sales.

However, to develop Foreclosure AVMs, the experts at Homequant derive modeling samples from the foreclosure-related universe only, to avoid having to distort the final values by applying some heuristic discounting factors. When the AVMs are developed as such, the final values are more in line with that segment of the market, addressing especially the sub-markets which inherently deviate from the median market.

Of course, to bolster the sample size, they often group and model multiple contiguous markets together; for example, if the local MLS covers three counties, they tend to model them together drawing all of their foreclosure and short sales into the mix. Obviously, it’s easier for them to generate sales samples in those Metropolitan Statistical Areas (MSA’s) where foreclosures are common or are elevated.

The lenders holding large inventories of REO and foreclosures (late stage) would also be better served with the proposed Foreclosure AVMs, not only to price their portfolios more accurately, but to prevent appraisal frauds as well. Those AVM values should be used as control values to trigger the Supervisory QC.

If you’d like more information about their Custom AVM solutions, or to schedule an interview with them, please email them at:

About Homequant
Homequant is the inventor of the comparables-based valuation of simulated subjects. The President of Homequant recently explained their invention: “There are roughly 90 million single family homes in the US and, on average, 3% of that universe annually sells. By inventing the concept of the simulated subject, we are able to value those 97% unsold properties by storing only the 3% sold data. The home valuation industry will soon recognize the significance of our invention.”

Homequant’s President published two books on econometric AVM.

Article source:

Boca man pleads guilty in foreclosure rescue scheme, brought guns to work …

Real Time

Posted: 9:30 pm Sunday, September 28th, 2014

By Kim Miller

house moneyA 39-year-old Boca Raton man pleaded guilty Friday in federal court to charges of conspiracy to commit mail fraud and wire fraud in connection with a scheme to bilk thousands of struggling homeowners nationwide.

Jason Vitulano was the subject of an indictment that alleged between 2008 and 2009  he was the organizer and operator of the Boca Raton-based companies FHA All Day .com, Housing Assistance Law Center and Safety Financial Corp.

The indictment says the companies were boiler room call centers where salesman called homeowners telling them they were approved for loan modifications that would reduce their mortgage payments and that the companies could stop a foreclosure.

More than 2,000 homeowners paid upfront fees totaling seven million dollars to the companies, Vitulano, and eight other defendants involved in the operation.

Homeowners were charged up-front fees of between $1,500 and $7,000 for FHA All Day’s services. Salesmen, who read from prepared scripts, received a 10 percent commission on each sale.

A Rolls Royce Phantom

A Rolls Royce Phantom

In one script, the salesperson would claim to have a team of expert attorneys that would contact the homeowner’s lender and work on getting a new, more affordable mortgage.

“There was never a ‘team of expert attorneys,’” prosecutors wrote. “At any given time, there was only one attorney, and often none, working on files.”

Vitulano’s business partner, 38-year-old Greg Lazarus of Boca Raton, committed suicide in 2009 shortly after the Florida attorney general’s office shut down FHA All Day, according to court records released earlier this year.

Vitulano is familiar to federal authorities. In 2010, he was sentenced to more than five years in prison in relation to mortgage fraud that occurred when he was a Boca Raton branch manager for Top Dot Mortgage in 2006 and 2007.

A year earlier, and already investigating FHA All Day, the government seized hefty assets from Vitulano, including a Rolls Royce Phantom, a 42-foot Fountain racing boat and two Mercedes Benzes.

Vitulano is described as erratic and reckless in Top Dot court documents, saying in a 2010 psychological evaluation that he suffered bouts of mania and depression and used illegal drugs, even during the work day.

His co-manager at Top Dot, who was also charged in relation to the mortgage fraud, said in a 2010 sentencing memorandum that Vitulano brought a gun to the Top Dot office and pointed its laser beam at the heads of emplo

Vitulano’s sentencing is scheduled for Dec. 5 in West Palm Beach. He faces up to 20 years in prison on each of two counts.

About the Author

Kim Miller

Kimberly Miller covers real estate for The Palm Beach Post. Her previous beats have included K-12 education, universities and colleges, and general assignment.


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DOE makes plans to offer new type of Hanford tour

Local News

Make-A-Wish reunites dog with boy owner in Pasco

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Copper pipe stolen from greenhouse

Copper pipe stolen from greenhouse

Thieves stole 40 feet of half-inch copper piping from the former Sensinger Greenhouse on Route 902 in Mahoning Township on Friday, township police said. Anyone with information is asked to call police at 570-452-1813.

Pipe, furnace taken from home

Thieves stole copper pipe and a gas furnace from a home in foreclosure in the 1,000 block of East Broad Street on Friday morning, Hazleton police said.

Thieves entered the home at 10:35 a.m. and removed the furnace and pipe from the basement. Anyone with information is asked to call police at 570-459-4940 or by dialing 911. Calls will be kept confidential.

Woman reports tire, rim stolen

Linda Wagner, 54, Gilberton, reported that a spare tire and rim was stolen from the bed of a 1995 Ford Ranger that was parked in the back yard at 96 Main St., Gilberton, between Tuesday and Saturday, state police at Frackville said.

Police investigate theft in Hazleton

George Shipps, Jr., Beaver Meadows, reported that a 1993 Yamaha Virago motorcycle and a black leather bag on the bike were stolen near Sixth and Boundary streets in Hazleton between 11:30 p.m. Friday and 2:25 a.m. Saturday, Hazleton police said.

The bike has a Pennsylvania registration 6190R and is maroon with gold wheels. Anyone with information can call police by dialing 911.

Police apprehend Ohio fugitive

West Hazleton police apprehended a man who is wanted in Lorain County, Ohio, following a traffic stop in the 200 block of Winters Avenue early Saturday.

Police apprehended Oscar Bernado Robles-Matos, 36, of Hazle Township, following the 1:10 a.m. traffic stop. Robles-Matos was charged as a fugitive from justice and jailed at Luzerne County Correctional Facility. He awaits extradition to Lorain County, Ohio.

$500 in equipment taken from trailer

Thieves stole tools, a case of penetrating fluid, two sledge hammers and other equipment worth $500 from a storage trailer at Maurer and Scott Explosives, Route 443 and Wildcat Road, Schuylkill County, state police at Frackville said.

A long-handled cable cutter, two adaptors for a torque multiplier, a bottle of “Go Jo” hand cleaner and a case of earplugs were also taken from the storage trailer between Sept. 20 and Sept. 22, police said.

Injuries sustained in two-vehicle crash

Three people suffered minor injuries following a two-vehicle crash on South Church Street near Four Seasons Drive in Hazle Township on Friday afternoon, state police at Hazleton said.

Police said a 1999 Honda driven by Jose Toro Velez and occupied by Juan Toro Velez and Jose Irizarry slowed to a stop to turn into an auto repair business when a 2009 Mazda driven by Michaeleen M. Farley, 30, and occupied by Dillon Farley, 11, struck the stopped vehicle at 1:40 p.m..

Both Farleys and Toro Velezes suffered minor injuries police said. Irizarry was not injured.

Both vehicles were towed and sustained heavy damage, police said.

Firefighters from Hazle Township, McAdoo Ambulance and American Patient Transport Systems responded.

Two men rob Hazleton business

Two men wearing bandanas over their faces held up a business in the 500 block of Alter Street in Hazleton on Friday night.

Hazleton police said the two men walked into Ron’s Notary, 533 Alter St., a little after 6 p.m. and demanded money from the female employee.

The men were described as being Hispanic, each with a thin build, between 5 feet, 7 inches and 5 feet, 10 inches tall. One was wearing a black hooded sweatshirt with a blue bandana over his face, and the other was wearing a blue hooded sweatshirt with a blue bandana over his face.

Government van damaged in garage

A U.S. government-owned van was damaged while it was parked in the Hazleton City Parking Garage on South Wyoming Street sometime between 11 a.m. and 4 p.m. Friday.

Man accused of stealing DVDs

Patrick Duksta, 20, of Hazleton was arrested for allegedly removing two DVDs from Giant Supermarket, South Vine Street, without paying for them at around 7 p.m. Friday.

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NY Rising OKs deals on 155 LI storm-hit homes for $59.5 million

New York State has accelerated the pace of buying properties severely damaged in superstorm Sandy and tropical storms Irene and Lee, closing deals on 155 Long Island homes that it valued at $59.5 million, new figures show.

New York Rising, the state agency administering $4.4 billion in federal funds for storm-related recovery, had purchased 97 properties in Suffolk and 58 in Nassau by Wednesday and now is averaging about 30 closings each month across Long Island, officials said.

The state program had made “conditional offers” on a total of 713 homes across both counties, with a cumulative worth the agency put at $300.9 million, from 958 applications, the figures show. The deadline to apply was April 11.

The latest tally represents a dramatic increase in acquisitions and buyouts ahead of the two-year anniversary of Sandy — the horrific Oct. 29, 2012, storm that flooded homes, ripped up boardwalks and battered shorelines along the Eastern Seaboard from Florida to Maine, causing billions of dollars in damage.

The homes fall into two broad categories: acquisitions, or properties that will be redeveloped to be storm-resistant; and buyouts, homes that will be demolished, with the land repurposed as environmental buffers against future storms, according to NY Rising spokeswoman Barbara Brancaccio.

NY Rising, the agency created to administer billions in Community Development Block Grant funds from the U.S. Department of Housing and Urban Development for storm recovery, has come under sharp criticism from stricken homeowners and some local officials for hefty delays in handling cases and providing money for repair, reconstruction or demolition.


Buyouts and assistance

The agency is responsible for delivering relief through four programs: housing recovery, which consists of buying distressed properties; small-business assistance to help get firms back on their feet; community reconstruction, a program that allows neighborhoods to plan their future; and infrastructure assistance, financial help for much-needed capital projects.

NY Rising, in the first raft of deals on storm-damaged properties, had closed on 34 of these 155 homes on the Island by May. Sixteen of those were acquisitions, and 18 were buyouts. At that time, the agency had made conditional offers on a total of 470 homes.

To be considered for acquisition or buyout, the homes had to be declared “substantially damaged,” a key designation meaning the property sustained damage of 50 percent or more of its pre-storm market value.

The state’s latest figures provide the first broad look into the scope of Sandy’s potential effect on Long Island’s landscape. Some highlights:

Acquisitions. The state so far paid nearly $23 million to acquire 58 homes in Nassau and $20.5 million to acquire 51 homes in Suffolk.

Buyouts. NY Rising paid $16 million to purchase 46 homes in Suffolk under the buyout program. Buyouts were not offered in Nassau because storm-affected residents did not express interest in the program.

Remaining offers. In Nassau, 224 conditional offers from NY Rising for acquisitions remained outstanding, while that number in Suffolk was 213. The number of pending conditional offers for buyouts in Suffolk was 121.

Number of applicants. In all, 384 property owners in Nassau applied to NY Rising for acquisition of their homes at pre-storm values, while 381 homeowners in Suffolk applied for acquisition. There were 193 applications for buyouts in Suffolk.

Communities with most offers. Lindenhurst, Mastic Beach and Babylon were the Suffolk communities with the greatest number of NY Rising offers for acquisitions and buyouts. In Nassau, Island Park and Long Beach had the highest number of offers for acquisitions.


Abandoned homes

Several state-purchased properties along Lindenhurst’s canals, shown to Newsday in a recent tour with NY Rising officials, are sandwiched between others whose owners have decided to stay put despite any storm damage to their homes. The homes are built of brick or wood, some shingled and some with siding, but all are abandoned shells, awaiting demolition or elevation and reconstruction.

Whatever the parcels become — new housing or natural terrain — these transformed spaces, and others like them in the hardest-hit communities, will perhaps be the most enduring signs of Sandy’s wrath.

Officials pledged that properties purchased as acquisitions will be redeveloped to help rebuild communities through replacement with fortified structures.

“Within a year, we will auction off these properties with new construction,” said Rebecca Sinclair, director of buyouts and acquisitions for NY Rising.


Memories of a lifetime

Longtime Lindenhurst resident Susan Gorman, 59, is among those whose homes were purchased as acquisitions, meaning that the parcel can be redeveloped. She called the sale “bittersweet” because the two-story house on South Wellwood Avenue holds 35 years’ worth of life’s milestones with her late husband and the births, graduations and marriages of their daughters.

She got an offer in April, closed this month, and has begun moving on. She now lives with her mother in North Bellmore.

“They were giving me a very fair offer, so I thought it’s probably my best bet,” Gorman said. “The streets here are still flooding, and next time I may not be able to get out.”

Gorman said that at first, like many storm victims, she had hoped to rebuild her home. But she became worried when months of waiting turned into a year.

Besides, she said, NY Rising had offered her too little money — only $12,000, after an insurance payout was deducted — to pay for repair and the required elevation of homes that lie within the 100-year floodplain, areas most prone to massive flooding. So she opted to sell.

State records show properties in Lindenhurst were most frequently on NY Rising’s list of properties for potential acquisition or buyout — 167 people applied for acquisitions, 121 of them received offers from the state and 20 of those deals have closed. In addition, 83 homeowners there — including those in the areas of Strong’s Creek and Venetian Shores, which NY Rising listed separately in data supplied to Newsday — applied for buyouts, with 73 receiving conditional offers and 19 closings so far.

Charles Farris, 62, an information technology contractor, took a buyout, selling his Lindenhurst home of 20 years. He said he got an offer from NY Rising in March and closed the deal in July.

Sandy had pumped 27 inches of water into the house, elbowed it off its foundation and caused enough damage to make it buyout-eligible. Farris said he at first planned to opt for reconstruction and be inside a newly minted abode in three months.

But the costs of elevating the house and repairing it were too great. NY Rising offered what he called a “fair” price — $440,000, the cost the agency was willing to pay, plus a 10 percent incentive that is part of the buyout initiative.

Farris, single since his wife died shortly before the storm, and burdened with paying for the mortgage and an equity loan on one salary, said it gradually dawned on him that it was best to get out.

NY Rising’s offer, while nowhere near the house’s 2007 appraised value of $525,000, was just enough to cement his decision, he said.

“I have very mixed feelings about no longer living there,” said Farris, who now lives upstate in Webster, near Rochester. “From the financial aspects I am relieved, but from the emotional aspect I would love nothing more than to have stayed in my home.”

He said his experience with NY Rising “couldn’t be better,” adding that he had a caseworker who always responded to requests within a day, but usually within hours. He never was beset with the delays and lost paperwork that have marred the experiences of other families dealing with the agency, he said.

Suffolk Legis. Kate M. Browning (WF-Shirley), who represents hard-hit South Shore communities, said her office received a flurry of complaints from upset constituents in the immediate aftermath of Sandy.


Delays criticized

Many homeowners have complained about NY Rising’s cumbersome, drawn-out application process and have bemoaned delays in receiving money for all kinds of assistance — repairs, elevation and purchase.

Browning, noting that the home-buying process can be lengthy and take many months even without a storm of Sandy’s magnitude, said she is pleased that sales have become brisker in recent months.

“If you’re buying a home yourself, it’s going to take you six months to even get a sale, and that’s without complications,” Browning said, adding that she has spoken with constituents on both sides of the fence — those happy with their experiences rebuilding or selling their homes through NY Rising, and those who were unhappy.

“I’m sure if I was one of the residents in that situation, I would probably want it to have happened sooner,” she said.

Other lawmakers agreed that the delays are perhaps the program’s Achilles’ heel.

“I am hopeful that things are moving along,” said Kevin McCaffrey (R-Lindenhurst). “It has done anything but move along so far, and the frustration for people has been terrible. The horror stories I hear from NY Rising just boggle my mind.”

Sinclair, director of buyouts and acquisitions for NY Rising, said the agency is working as quickly as it can with hundreds of homeowners at once, each requiring verification of financial information such as title clearing and the other paperwork that comes with all home purchases.


Aims to be one-stop shop

In addition, she said, the agency functions as an advocate for people who might have a hard time selling their homes on the open market. Some homeowners are in foreclosure, are conducting complex estate sales, have divorces pending, or don’t have enough cash on hand for a new home, all wrinkles that can complicate and delay sales.

“I don’t doubt that it’s never going to be fast enough for some people,” Sinclair said, adding that NY Rising aims to serve as a one-stop-shopping case manager that handles all aspects of the sale, including guaranteeing the payment of the debt and, in some cases, consolidating people’s debts. “We’re acting as your debt consolidator, and we’re playing all of these other roles to make your life better.”

In Nassau, Island Park was at the top of NY Rising’s list, with 66 homeowners completing applications for acquisitions and NY Rising issuing 54 offers of purchase. So far, there have been 14 closings.

Freeport, Long Beach and Massapequa followed in the number of state acquisitions so far in Nassau — with 12, seven and seven homes, respectively.

In Suffolk, Lindenhurst — including the areas of Strong’s Creek and Venetian Shores — led the way in the number of applications, conditional offers and closings for both acquisitions and buyouts.

Other communities in Suffolk where state deals have closed, according to the most recent figures, included Mastic Beach, with six acquisitions and six buyouts; Patchogue, with three acquisitions and five buyouts; Babylon, with eight acquisitions; and Flanders, where homeowners had flooding from Tropical Storm Irene in 2011 as well as Sandy, with 10 buyouts.

Mastic Beach Mayor Bill Biondi has consistently opposed the buyout program because it stipulates that such parcels remain as environmental buffers into perpetuity, removing them from the tax rolls.

“We’re nervous, because we don’t want to see our tax rolls dwindle down to nothing,” he said, adding that he has heard complaints from residents who think the sales are taking too long. Others, he said, felt blindsided by the application of the federal Stafford Act, requiring that any insurance payouts for repairs be deducted from NY Rising’s award for damages.

“People found out that they’re not getting as much as they owe on their homes,” he said, and some, like Gorman, decided to sell instead.

“I never thought I would leave that house,” Gorman said. “I always thought I would live there until I was way old and my kids decided what to do with me.”

She said the storm may have been a sign for her to move to North Bellmore, a Nassau community that is not in the 100-year floodplain.

“I’m at peace with my decision,” Gorman said. “It took a long time to get to that, but I’m at peace with it.”

Article source:

Keep My Montana Home helps more than 200 families

Posted: Saturday, September 27, 2014 10:33 pm

Keep My Montana Home helps more than 200 families

Attorney General Tim Fox announced Thursday that more than 200 Montana families who were facing foreclosure or struggling to make their house payments have had successful outcomes facilitated by the Keep My Montana Home program since its inception. The program is run through the Office of Consumer Protection at the Montana Department of Justice.

“Montana is known as ‘The Last Best Place’ – to work, to play, and to live,” Fox said in a statement.  “However, that doesn’t mean we are immune to the challenges of homeownership that hit the country during the economic downturn. The Keep My Montana Home program was implemented to help Montana homeowners and mortgage lenders work in concert toward mutually beneficial solutions.”

Those solutions include several different options.  For certain homeowners, that means modifying their existing home loan to create affordable monthly payments. Others may qualify to re-finance their mortgage at a lower interest rate to bring down their monthly payment, and some who have a long term inability to pay for their home may qualify for a short sale or a deed-in-lieu of foreclosure—both options that ultimately avoid foreclosure.

The program has helped families like Sandy’s from Townsend, who was struggling working with her bank until it was almost too late. “Our home would not have been saved from foreclosure without the Keep My Montana Home program and the Attorney General’s Office,” Sandy said.  “It was right up to the courthouse steps for auction when their assistance stopped the foreclosure and allowed us to keep our home. We are forever grateful.” Sandy and her husband received a permanent modification and will be living in their home indefinitely.

“I’m pleased that we’ve reached this unexpected milestone of success in the second year of the program’s three year length,” Fox said. “Thanks to the hard work of our Keep My Montana Home team, including attorney Chuck Munson and foreclosure specialist Duncan Adams, the dream of homeownership has been kept alive for more than 200 families across the state. Lives have been changed and homes have been saved, which in turn positively impacts Montana’s neighborhoods and overall economic health.” Fox also acknowledged the assistance of NeighborWorks Montana and the Montana Legal Services Association in finding solutions for homeowners in distress.  

Of the more than 200 current success stories, the overwhelming majority involve family homes that were permanently saved through a modification, such as a principal reduction and/or a reduction of the interest rate that allowed for an affordable monthly payment. A few of them involved a foreclosure avoided through the facilitation of a short sale or deed-in-lieu, and even fewer involved significant monetary settlements typically called “Cash for Keys” that were negotiated for people who needed to transition out of a home that had already been foreclosed. 

Consumers who have a mortgage serviced by Bank of America, Citibank, JP Morgan Chase, Wells Fargo or GMAC and who are facing foreclosure or struggling to make their house payments and may qualify for help. Interested homeowners are encouraged to call 1-800-481-6896 or contact Keep My Montana Home Program Home Foreclosure Specialist Duncan Adams by phone at 406-444-2556 or by email at


Saturday, September 27, 2014 10:33 pm.

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Housecalls: Monopoly, Foreclosure, IRS

Monopoly, deeds and automobiles

Dear Edith: My grandfather left his cabin to me years ago, and I was given a deed to the property from my aunt, who was executor of the estate. I have it safely put away. Now my cousins want to buy the cabin, and we are in agreement about everything. There isn’t any mortgage on the place.

I don’t see any reason why we need to have an expensive ceremony to change the ownership. Is there any reason why I can’t just sign over the deed? — W. V., via

Answer: There’s a common confusion here, and it comes from used cars and the game of Monopoly.

But first — even with an amicable agreement like yours, those cousins should receive some assurances before they hand over the purchase price — that property taxes are paid up to date, for example, that no one else is likely to show up with a legal claim to ownership, that you agree about the boundaries of the property.

More to the point — people often get confused about the meaning of a deed. The one you received had only one purpose — to transfer the estate’s ownership of the cabin to you. A young lawyer once told me that after a deed is on file in the local public records office, it has no further use. You could safely just throw it in the wastebasket, he said.

Here’s where I think the problem comes from:

Anyone who grew up playing Monopoly knows that a deed is a little square of cardboard with a colorful strip across the top. When the property is sold to another player, the card is just handed across the table. Same with the title to a car. That document is signed and given to the next owner of the vehicle.

No wonder people get confused. But that’s not the way it works in real estate. The deed doesn’t prove you own the property. It simply shows that the estate transferred whatever it owned to you. Legal proof of ownership would involve researching documents in the public records, listing how the estate received the property, then how your grandfather became owner and then an unbroken chain of title as far back as the local practice calls.

When you sell the cabin, I strongly recommend following whatever procedures are common for real estate closings in the area. In a few places, including New York and New Jersey, they’re usually handled by lawyers. In other states, transfers may be handled by title companies, escrow companies, lenders or even real estate brokers. In Maine and much of New England, buyer and seller pass papers. In California and 10 other states the parties go to escrow.

Everywhere, though, the same things happen. Funds due each party are calculated and exchanged. The buyer receives a brand-new deed, with (or without) warranties, which are guarantees appropriate to the particular transaction. The deed lists the legal description of the property, not just an address, and it’s signed and acknowledged by the seller. In theory, you can do all this on your own, but I think that’d be penny-wise and pound-foolish.


Foreclosure brought a surplus

Dear Edith: Our home sold at foreclosure last year for $22,000 more than was owed on it. I understand the overage goes to us. We found out by accident about the excess, and we have never been notified about any money due us. Can I write a letter to them to get the excess and if so, to whom do I write and what should I say? — W. R. D.

Answer: Other sums may have been subtracted from that sale price — legal expenses, for example, or past due property taxes. But with that much money involved, it’s worth consulting a lawyer who can investigate and act for you.


It’s not the IRS

Dear Ms. Lank: In a recent column you wrote, “The IRS says you can’t deduct a loss on the sale of a second home.” In fact, it is Congress (via the Internal Revenue Code) that says that. I think it is important that your readers (rather, all Americans) understand that Congress makes our tax laws — not the IRS. People blame the IRS for things that have nothing to do with the IRS.

Anyway, thank you for letting me vent a little bit. Keep up the fantastic work! — R.

Answer: And thank you for the reminder. I suspect I’ll go on making the same error in the future, though. It’s so much simpler to say, “The IRS doesn’t allow . . .” Sorry about that.

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Ghost Houses: Foreclosed properties run the gamut

Copyright © 2014 Albuquerque Journal

The house across the street from Bianca Sanchez in Southwest Albuquerque has been vacant for about five years. The people who lived there, she said, “just disappeared overnight.”

Since then, she said, thieves have broken into the vacant home and stolen copper piping, appliances and the gas meter. Sanchez, who has been in her home for 10 years, calls police when she notices activity at the vacant house at night.

“We see flashlights and candles and don’t know who’s in there,” she said.

Johnny Lopez lives next to the vacant house. He bought his home eight months ago and has called police numerous times because of people breaking in through the plywood-covered windows at the house next door. His own car was recently vandalized in his driveway and he’s afraid someone will break into his home.

Lopez is thinking of trying to sell.

“They’re nice houses in the neighborhood,” he said. “But it’s just too wild.”

Sanchez and Lopez have plenty of company, with an estimated 1,500 to 1,800 abandoned homes in the city at any given time. There are an estimated 700 more in Rio Rancho.

Residents across the metropolitan area can tell of hearing trucks being loaded at night, and waking up the next morning to find neighbors gone and their home vacant.

It can then take months, even years, for a “For Sale” sign to go up at the vacant residence. In between, all kinds of not-so-good things can come about: weeds, litter, graffiti, squatters, drug activity, and theft of appliances, plumbing fixtures and copper, said Albuquerque’s code compliance manager Brennon Williams.

“We feel unsafe,” said Lopez, who lives next to the boarded-up house in a newer subdivision near Old Coors and Gonzales SW.

Foreclosed properties in Albuquerque run the gamut, from high-dollar custom homes in tony areas in far Northeast Albuquerque and Los Ranchos, to manufactured homes and a North Valley residence that was the scene of a murder-suicide.

In Rio Rancho, the local Multiple Listing Service website recently had listings for a 4,676-foot home with a pool for $555,000 and a two-bedroom condo for $57,500.

Owners walk away

During the Great Recession, many homes were abandoned when the homeowners got notice of foreclosure. With a mortgage in excess of equity, many simply pulled up stakes and drove away, leaving the home to the lender.

PEA: Her district is in high-foreclosure area

PEÑA: Her district is in high-foreclosure area

Now, the motivating factor is more likely to be a personal crisis but the net effect is the same.

The length of time a house sits vacant affects the quality of life for neighbors, said Albuquerque City Councilor Klarissa Peña, whose Southwest Albuquerque district is in an area of the city with the highest foreclosure rate.

Realtor Talia Freedman of Signature Southwest Properties said it’s hard to quantify how having foreclosed homes in a neighborhood affects a home’s value.

“But we know that lots of vacant houses on a street make a house hard to sell,” she said.

FREEDMAN: Vacant houses hurt sales on street

FREEDMAN: Vacant houses hurt sales on street

The continued presence of abandoned and often deteriorating houses in Rio Rancho – one councilor recently estimated there are more than 700 in the city – prompted councilors there to ask the city attorney if the city’s nuisance abatement ordinance could be made more effective.

Councilors spent half of a monthly work session this summer discussing how to find a practical, cost-effective way to combat the problem.

CLAYTON: Vandals hit empty home on his street

CLAYTON: Vandals hit empty home on his street

Currently, the city can petition the District Court for an inspection order, but it is a monthslong process.

Rio Rancho City Councilor Lonnie Clayton talked about an abandoned home on his street, where vandals painted an obscene image on the garage door. He wants the city to have the ability to compel whoever is responsible for the empty homes to maintain them.

Rio Rancho passed an ordinance in 2011 requiring financial institutions that own foreclosed homes to maintain them, but councilors who discussed the issue this summer said they want legislation with more teeth.

WILLIAMS: Complaints overwhelm inspectors

WILLIAMS: Complaints overwhelm inspectors

An Albuquerque city ordinance passed in 2004 requires owners of homes that are vacant for 90 days or more and aren’t listed with a real estate agent to register them with the city. Williams estimated the Duke City typically has 1,500 to 1,800 vacant abandoned residential homes registered.

Williams’ code enforcement staff receives 45 to 50 complaints daily during the winter and up to 180 a day during the summer months, primarily about vacant homes. Williams said his 15 field inspectors are overstretched.

In cases where his staff or police respond repeatedly to complaints about break-ins or suspected drug activity, the City Council has the authority to condemn a property for demolition. Williams estimated that’s happened to 15 to 20 properties in the past year.

Albuquerque police detective Daniel Champine said appliances and metal stolen from abandoned houses are typically sold to pawn shops or recycling yards.

High-end foreclosure

Valerie Padilla’s parents live across the street from a four-bedroom, five-bath foreclosed home on a street of custom homes north of Paseo del Norte which was listed for $522,600.

“The people just seemed to leave one night and got everything out. You could hear the trucks,” Padilla said. She said the place has been empty a few months and they hadn’t had any problems, but, she added, “This is a nice neighborhood.”

Nathan Clark lives next to an older adobe home near Fourth and Alameda NW where, he said, a son shot his father and then himself. The three-bedroom, one-bath foreclosed house is listed at around $45,000. Clark said it’s had renters but has mostly been empty for about four years.

Unlike during the recession in 2009, when the country saw an explosion in foreclosures linked to sub-prime mortgages, most foreclosures now are the result of a personal crisis, said Alan Fowler, executive vice president for First Mortgage Company in Albuquerque.

“It’s an event, a job loss, divorce, death or going from a full-time job to part time,” Fowler said.

Foreclosure processes required by the state and individual financial institutions are the key reasons it can take so long to get an empty house sold, Fowler said.

This foreclosed home on Gonzales Road SW appeared on the local Multiple Listing Service at just under $38,000. Southwest Albuquerque has the highest rate of foreclosures in the city. (Greg Sorber/Albuquerque Journal)

This foreclosed home on Gonzales Road SW appeared on the local Multiple Listing Service at just under $38,000. Southwest Albuquerque has the highest rate of foreclosures in the city. (Greg Sorber/Albuquerque Journal)

Why so long

In New Mexico, foreclosure is a judicial procedure requiring a court action that typically takes longer than in states with non-judicial procedures.

Before that process can start, a homeowner must be at least four months behind on payments. There are also “loss mitigation” programs that oblige lenders to work with borrowers for up to 12 months to avoid foreclosure, Fowler said.

A borrower who files for bankruptcy protection can also stave off a foreclosure. Fowler had a case where a husband and wife filed separately, one after another.

“They were playing the system. They knew what they were doing. They ended up living in the house three-and-a-half years without paying for it,” Fowler said.

Sometimes the companies responsible for processing payments don’t want to take on the legal and financial responsibility of owning more homes. As soon as foreclosure is completed, a bank becomes responsible for costs such as property taxes, repairs and homeowners’ association dues, according to

Freedman said foreclosed homes can be a low-cost buying opportunity for buyers who are often looking to fix them up and resell or rent them.

But unless they pay cash, said Freedman, would-be buyers of foreclosed properties often have difficulty getting proper documentation and financing, particularly if the homes need extensive repairs.

Between mid-September 2013 and mid-September this year, 20 percent of the 6,502 homes sold in Albuquerque were cash deals, according to Southwest Multiple Listing Service data.

FOWLER: Law change could speed foreclosures

FOWLER: Law change could speed foreclosures

Court action means slow foreclosures

At present, New Mexico is one of more than a dozen states where foreclosure is a judicial process requiring court action. It can typically take several months to complete.

Speeding up the process would require a change in state law to allow a trustee to oversee the process instead of going through a court, said Alan Fowler, executive vice president for First Mortgage Company in Albuquerque.

In states where foreclosure is a non-judicial process, it typically takes less time to complete, Fowler said.

There has been some talk at the Legislature about changing the law but no action has been taken so far.

This four-bedroom, five-bath custom home north of Paseo del Norte was on the local Multiple Listing Service at $522,600, one of the more expensive foreclosed residential properties for sale in the city. (Rosalie Rayburn/Albuquerque Journal)

This four-bedroom, five-bath custom home north of Paseo del Norte was on the local Multiple Listing Service at $522,600, one of the more expensive foreclosed residential properties for sale in the city. (Rosalie Rayburn/Albuquerque Journal)

Foreclosure rates falling in ABQ area

Although foreclosure rates for the metro area continue to drop in the aftermath of the Great Recession, Albuquerque and Rio Rancho still have hundreds of abandoned and neglected homes.

The slow economic rebound and sluggish job growth continue to put some mortgage holders in a squeeze.

One in every 1,181 homes in Albuquerque was in some stage of foreclosure in July, according to California-based RealtyTrac, which gathers housing data. In Rio Rancho, one in 455 homes was in foreclosure. The national average was one in 1,203 housing units in foreclosure in July.

Rio Rancho at one point had one of the highest foreclosure rates in the country. In early 2009, one in 32 homes was in some stage of foreclosure, according to RealtyTrac. That put Rio Rancho in a league with Stockton, Calif., and Detroit.

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Efforts underway to stave off foreclosure of Rockingham Speedway

For the last several years, Andy Hillenburg and Bill Silas have put everything they had to resurrect and return Rockingham (N.C.) Speedway back to success.

For a while, things looked promising, including NASCAR bringing the Camping World Truck Series there in 2012 and 2013.

But financial difficulties – with more than $4.7 million in arrears – have left the track on the verge of foreclosure.

According to the Richmond County (NC) Daily Journal, attempts are underway to allow Hillenburg and Silas more time to avoid foreclosure.

Superior Court Judge David Lee has issued a temporary restraining order to give the track’s two co-owners additional time to reach agreement on a potential modification of terms with Farmers and Merchants Bank of Salisbury, N.C.

Bank attorneys claim Hillenburg and Silas took out a $550,000 line of credit on a $4.2 million loan in 2008. According to the Daily Journal report, the co-owners now owe $567,909 in principal and interest on the line of credit, as well as $3,964,886 they still owe on the initial loan.

In addition, the pair reportedly owes approximately $200,000 in Richmond County property taxes from 2011, 2012 and 2013, according to court filings.

“I get the sense that this is all going in the right direction, in a positive direction,” Lee said during a hearing Thursday. “I’m certainly going to have the court try to work with you.”

Lee added further, “If you’re asking me that you’re trying to resolve something … take as much time as you need.”

According to the Daily Journal,

“Court filings show that lawyers for the speedway’s owners had been in discussions with the bank’s attorneys to sell the 1.017-mile track at a private auction under a forbearance agreement that would halt FM’s seizure of the speedway property.

“FM Bank attorney David M. Schilli requested the order on behalf of the plaintiffs and said the restraining order could be extended “for a very brief period of time so that we can go back and draw up another order that will be tendered to the court with all the parties’ consent.”

The track is currently being operated by The Finley Group, a bank affiliate that Lee appointed on Sept. 8 as managing agent of the speedway and adjacent property.

Hillenburg and Silas are reportedly attempting to sell the speedway and surrounding property at auction, rather than face foreclosure.

“From what we are hearing, various auctioneers have indicated that they would not be surprised by a bid in excess of $5 million for the raceway,” Silas attorney Allen Armour wrote in an Aug. 12 email to the Daily Journal. “Accordingly, the Silas members feel that it is in the best interest of all parties to start the auction listing process as soon as possible.”

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Oakland City Attorney Sues Landlords Of Apartment Complex Notorious For …



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OAKLAND (KPIX 5) — The Oakland City Attorney has sued the landlords of an apartment complex that they said has become a base for a violent gang. Residents said they have experienced robberies, shootings and gang members chasing down tenants.

Video provided to KPIX 5 from the Oakland City Attorney shows gang members openly carrying guns at the Hillside Apartments to intimidate tenants. Many families at the 100-unit complex said they rarely leave their apartments because of the constant shootings.

A tenant named Ronnett, who would not give her last name, said, “This is a prison. This is Hillside, ‘Killside’ prison.”

A teenager was shot dead over the weekend in front of the complex.

Jamie Lewis moved to the complex last year, Since then, two people have been shot and killed, and she has had to run for cover.

Lewis recalled one incident and said, “We’ve seen these cars, coming from that way, speeding. By the time they got to the stop sign, you heard arguing, and you see a dude pulling out a gun and start shooting at the other car. I had to turn around and run with my son in a car seat, back in the gate.”

Oakland City Attorney Barbara Parker is suing the two property owners, saying they have broken promises to hire security and evict problem tenants. “The failure of the owners to maintain proper standards and security, it appears to have become a magnet for crime. It is one of the top in the city for calls for service,” Parker said.

Aside from the crime, tenants said the complex is infested with bugs and fleas.

The tenants KPIX 5 talked to said they can’t afford to leave. “I would do anything to move, but it’s hard to move.” Ronnett said.

The property owners live in Walnut Creek area. KPIX 5 repeatedly contacted the property owners Thursday, but they have not responded.

The landlords are also facing unrelated federal charges. They recently pled guilty to rigging bids at foreclosure auctions.

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