Beazer Homes, which has recently suffered hefty losses amid a downturn in the housing market, is now facing a federal investigation of home mortgage fraud and other allegations.
The FBI and the U.S. attorney’s office in Charlotte, N.C., along with the IRS and the U.S. Department of Housing and Urban Development, launched an investigation of Beazer Homes last week, FBI agent Ken Lucas said.
Lucas, a spokesman for the FBI’s Charlotte field office, said the inquiry involves “fraud in general,” and more specifically is related to corporate, Georgia mortgage and investment issues.
Asked whether investigators would seek to question corporate officers and subpoena the home builder’s records, Lucas said he wasn’t sure.
“We just started this,” Lucas said.
Lucas declined to release more details about the ongoing home loan investigation. He also would not say what prompted the inquiry in the first place, or what the next step(s) would be.
In a statement regarding the mortgage fraud investigation, Beazer said it “cannot comment on or verify any investigation. However, we will fully cooperate with any government agency.”
“Beazer Homes has a long-established commitment to managing and conducting business in an honest, ethical and lawful manner,” the statement said.
Last week, Beazer Homes said that its CFO, James O’Leary, was stepping down after four years with the home builder to become president and CEO of Kaydon Corp.
Beazer has suffered from the housing downturn.
Weak demand for new construction, slow new home sales, properties at very steep discounts and the need for inventory writedowns have taken a toll on the company’s results.
This is the latest major company to face allegations of mortgage loan impropriety stemming from the housing market cooling. We’ll be monitoring this situation to bring you the latest.
SOURCE: SmartMoney.com
The Atlanta Journal-Constitution reports that bad credit home loans helped fuel the housing boom in Georgia’s biggest city - but now they are feeding fears of a foreclosure epidemic.
In the past quarter, 13.5 percent of the nation’s subprime mortgage loans were in default. The rate was higher in Georgia — 17.4 percent, according to a report by the Mortgage Bankers Association.
Filings for Georgia mortgage foreclosures — the ultimate consequence of default — rose 67 percent in 2006. The state had the nation’s second-highest rate of foreclosure filings, according to RealtyTrac.
Weaknesses in the bad credit mortgage market made headlines last week when the Dow Jones industrial average fell 243 points on news that borrowers were falling behind on payments at the highest rate in years.
Several bad credit home loan lenders have already signaled financial distress.
Subprime loans are made on less favorable terms, at mortgage rates 1-3 points higher than prime rate loans, usually to home buyers with poor credit or few assets who don’t qualify for prime loans.
One outstanding Georgia mortgage loan out of every eight was subprime last quarter, according to the MBA. About 3.9 percent of prime loans in Georgia were past due; among subprime loans, it was 17.4 percent.
The subprime loan problems could have broader implications on the Atlanta housing market when and if the loans move into foreclosure.
Rising foreclosure rates dump more houses on the market, making it harder to sell any house. Home construction and sales are an important part of the economy.
With nearly one in five bad credit mortgage loans defaulting in Georgia, the emerging national turbulence may play differently in Atlanta and the state.
But experts differ on how vulnerable metro Atlanta is.
“The subprime lending is relatively more important in Atlanta than in the rest of the country,” said Mark Vitner, senior economist with Wachovia Securities. “It could have a little more of an impact in Atlanta.”
Still, Vitner and others say Atlanta’s relatively healthy economy could protect the region from serious economic impact. Atlanta has seen steady population growth and strong job creation.
While home prices have climbed, the increases did not hit the double-digit pace of hotter markets. There hasn’t been the “bubble” in the housing market here that worries the industry and economists in other regions.
That could make the region less vulnerable to mortgage woes, said Keith Corbett, executive vice president of the Center for Responsible Lending.
“When you look at the Atlanta area, it’s not as bad as everyone else,” he said.
Continue reading in the Atlanta Journal-Constitution …
Posted by Richard Barber on Mar 21 2007 under Georgia
You’ve heard it before, but we’ll say it again.
If you’re looking for a mortgage to buy a house, now may be the perfect time to find the best deal.
After all, mortgage rates are near historic lows and there is an abundance of homes on the market. Such is the case in much of the country, and the housing market in Columbus, Ga., is no exception.
Realtors say the latest reports show home prices have bottomed out. That’s good news for buyers, not as much for sellers.
When Monica Dejarlais moved into her North Columbus home 16 months ago she didn’t think she’d ever leave. But last week she found herself putting her home back on the market.
“I need to sell it quickly,” she says. “Because I am looking to leave the area. Probably I’m going to have to be flexible in negotiations.”
Like we’ve seen in the Atlanta housing market, with so many homes for sale, there is a lot of competition among sellers hoping to cash in.
Bill Enfinger, a Georgia mortgage company owner in Columbus, says:
“They (buyers) are lowering prices one, two they are offering a lot more incentive for the buyers to buy the home, like pitching in part of closing costs and adding free upgrades to the home.”
Enfinger says in this selling environment, you have to know how to put the proper home price on your property in order to make sure it sells.
Julie Duncan says the housing market is hot.
As a Realtor, she advises sellers what their home will sell for and how to move it off the market. She advises, if you have the money, using a home improvement loan to update their kitchens, bathrooms, and fixtures. She says it also helps to have good landscaping.
Dejarlais’ master bathroom is what led her to buy her home. Now that she’s in the process of moving, she hopes it will be a selling point to attract another buyer.
“I’m just hoping someone will come in and fall in love with the house.”
SOURCE: WTVM News
Posted by Richard Barber on Mar 16 2007 under Georgia
The Jonesboro (Ga.) News-Daily reports today about impact fees, which are touted as a source of financial support for communities’ infrastructure demands generated by high growth.
Starting Monday, a series of public hearings will commence to gauge the sentiments of Clayton County residents on whether to adopt such an impact fee system and how they ought to be implemented.
The Clayton County Board of Commissioners is moving closer to rewriting zoning laws that will most likely include impact fees.
The firm researching the pros and cons associated with instituting impact fees in Clayton County will present its findings in June or July. Then, the commission will make a decision.
In the Atlanta housing market and surrounding counties, impact fees are one-time assessments levied against real estate developers, either before or shortly after they purchase a permit to build on a property.
In theory, the fees offset the financial strain that new development will have on services - such as providing new roads, schools, water, sewage, and public safety - making Georgia mortgage costs and property taxes lower.
Neighboring Henry County began impact fees during a building boom in the early 1990s. It was the seventh fastest growing county in the nation from 2000-2005. In one year alone, impact fees netted $11.4 million.
Impact fees, while desired by some, face a tough sell.
Clayton County Commissioner Wole Ralph believes Clayton County has missed a great opportunity to improve the infrastructure by not having them sooner.
“Clayton County hasn’t managed it’s growth wisely,” said Ralph.
“[This mismanagement] has “created a proliferation of low-value, low-cost housing, which has caused a strain on the infrastructure on the county. Higher-value houses are skipping us and going over to Henry, Ralph said.
Ralph, who supports impact fees, said the absence of fees in Clayton County has kept property values so low the county must charge the citizens higher property tax rates to provide basic services.
“We don’t have the benefits of higher-value housing to absorb some of the costs of those services,” he said. “The county budget is currently being generated from low-income housing. What you don’t want to become is the low-cost, low-value housing market.”
“You want property that will raise values and keep property taxes low.”
Ralph said many of the houses in Clayton are $150,000 or less, making them affordable for the average home mortgage loan seeker.
That’s all well and good, but he believes impact fees would encourage area home builders to also build new homes in the $250,000-450,000 range, making Clayton County more attractive to potential developers and retailers - thus raising the property values of every piece of real estate.
He said even if home loan costs rise, an increase in home values would bring better services to the county as well as encourage leaders and intellectuals to stay in the county, raising quality of life across the board.
In February, Clayton County Fire Chief Alex Cohilas gave a very detailed presentation to the commission on the benefits of impact fees.
He argued that the fees have been widely used in Georgia since 1990 and they would have a positive affect on job growth, property values, and quality development.
Follow the link to continue reading in the Jonesboro News-Daily …
Posted by Richard Barber on Mar 13 2007 under Georgia
The Atlanta housing market will be spared the worst effects of the real estate downturn occurring around the U.S., economists and experts are predicting.
On Wednesday, Sam W. Norwood III, a senior partner with Tatum LLC, an Atlanta-based executive services and consulting firm, said that Atlanta’s diverse economic base makes it more resistant to such problems than other cities dependent on a single aspect of the economy.
According to the Daily Report, he noted that although the housing market is in decline around the country, the national economy grew 3.5 percent last year and may even approach 4 percent this year.
“The economy should be just fine in Atlanta this year,” Norwood said.
He was one of the panelists at a Wednesday breakfast discussion sponsored by the University of Chicago’s Graduate School of Business, Harry Norman Realtors, Bear Stearns and the Metro Atlanta Chamber of Commerce.
Robert Z. Aliber, professor emeritus of International Economics and Finance at the University of Chicago Graduate School of Business, said the national housing market is saturated, with an excess of 1.5-2 million homes on the market. This glut of inventory occurred because from 2003-2006, Americans built about 2 million new homes per year.
Aliber predicted between 1.1 million and 1.2 million housing starts for 2007.
Roger C. Tutterow, an economics professor at Mercer University, said that the softening market is less pronounced in Atlanta than in Las Vegas, where mean existing home prices shot up 52 percent in 2004.
Now the Las Vegas market and markets in California, South Florida and other coastal regions are experiencing a major correction.
As home sales and mortgage loan demand slip, there will be a much larger number of multi-level apartment units constructed this year in Atlanta, David F. Haddow, president of Haddow & Co., a real estate consulting firm, said.
He said during the past four or five years, low mortgage rates and creative financing options opened the door for people to purchase homes instead of renting, causing the demand for apartment space to drop.
But now, with Georgia mortgage costs higher than some people can afford to pay, developers who shied away from apartment complexes are coming back as a result of fears of an overbuilt condo market here.
Nonetheless, Haddow said the condo market is “here to stay.”
“Condos now are an accepted and significant part of the market,” he said.
The last condo boom was from 1983-1986, he said. For the next 10 years, hardly any condos were developed. But during the past 10 years, intown Atlanta witnessed 30,000 condos either built or converted.
In addition to condos and apartment buildings, multifamily-home construction will continue because it’s an affordable way to build housing inside the city. He said townhomes are an affordable alternative for those who may not be able to afford single-family homes on their own lots.
On the commercial real estate side, Haddow said the Atlanta office market experienced a big turnaround during the past three years, with about 3.75 million square feet of office space delivered each year from 2003-2006.
SOURCE: Daily Report Online
Posted by Richard Barber on Feb 22 2007 under Georgia
For potential home buyers in the metro Atlanta housing market, now is the time to buy, according to the Home Builders Association of Midwest Georgia, which just released its 2007 Economic and Housing Forecast.
Bob Chapin, senior vice president for SunTrust Mortgage in Atlanta, gave this evaluation to builders, Realtors and other industry professionals from the Atlanta metro area at a Thursday conference.
“We are not in a bubble market like some other parts of the nation,” said Chapin. “Local mortgage rates are near historical lows, and household formation and job growth projections are solid for Atlanta.”
Chapin provided information about the metro Atlanta housing market, noting that “seven of the top 10 subdivisions are south of I-20″ -among the top 10 communities ranked by sales, Coweta County’s SummerGrove community located on Lower Fayetteville Road in Newnan ranks fourth.
In neighboring Fayette County, reference was made to growing frustration among builders, who are having big problems moving inventory despite low Georgia mortgage costs.
“If you’re building in Fayette County, you know the unique building permitting process that is going on,” said Home Builders Association of Midwest Georgia president Mike Daughtry.
Others say it’s not time to sound the alarm.
“Don’t panic yet. We are still working through this process. Commissioners are learning the other side of the story,” said Bob Barnard, past-president of the Home Builders of Georgia. “I expect there will be relief by the end of the month.”
For 2007, Chapin said the Atlanta housing market “will continue to cool off after several years of overheating, while the overall economy should stay healthy.”
Existing home sales will contine their decline in 2007, and a lack of affordable housing continues to affect the housing market, being at its lowest since the 1980s. A housing recovery is expected to begin in late 2007 and early 2008, experts feel.
He noted that industry professionals will find that second mortgage demand will bounce back, as will second home sales as baby boomers near retirement age and relocate to the region.
Chapin said that builders nationwide are experiencing continued pressure on margins and are cutting home prices or offering buyer incentives to quickly move inventory. The primary issue is the quantity of lots on the ground.
In terms of the Atlanta commercial real estate market, there is a decrease in vacancy rates for office space. Industrial properties are experiencing increased vacancy rates.
Both are undergoing new housing starts and pre-leasing. For retail, consumer spending is slowing and there are increased vacancy rates, said Chapin.
SOURCE: The Times-Leader
Posted by Richard Barber on Feb 19 2007 under Georgia
A steady increase in mortgage interest rates was the impetus for a slowdown in single-family home permits in Gwinnett County in 2006 and likely will cause another decrease in 2008, according to a Georgia State University analyst and forecaster.
“It’s not quite as cheap as it was a year or two ago to take out a [Georgia mortgage] and that’s starting to scare home buyers a little bit. When home buyers get scared, developers start to pull back,” said Kristin Diver, analyst and assistant director of GSU’s Economic Forecasting Center in the J. Mack Robinson College of Business.
According to Diver, Gwinnett’s total residential permits - for both single- and multifamily homes - were down by 6 percent in the first three quarters of 2006. In Fulton County, however, residential permits during that same period were up 20 percent, due mostly to an increase in multifamily units.
“That does not mean Gwinnett is crashing. Even though this figure is negative, this still means that Gwinnett in 2006 is registering 9,300 residential permits for the year,” Diver said. “We predict it will be about the same in 2007 and then drop 6 percent again in 2008 to about 8,800 - again because of interest rate scares.
But that doesn’t mean that no homes will be built. Building will just decline slightly. Since 2001, Gwinnett has been over 9,000 permits every single year and that indicates a strong market.”
That higher-than-average strong residential market in Gwinnett over the past few years may be just what is leading some real estate agents to become concerned with this year’s slight decrease, said Bill Lawson, a Realtor and branch manager for Harry Norman, Realtors in Stone Mountain.
“We were spoiled. We got spoiled during the last 10 years when we got into the mid-1990s and Gwinnett was such a fast-growing county,” said Lawson, who has been licensed for 32 years.
According to Lawson, Gwinnett’s residential inventory was 28 percent higher at the close of 2006 than at the close of 2005. In addition, he said, sales for the year were down 33 percent for single-family and multifamily homes.
Still, Lawson maintains, 2007 will show a soft landing for an Atlanta housing market that has proven for more than a decade to be strong. But that soft landing may not be soft enough for Gwinnett-area real estate agents, Lawson added.
The main reason for Gwinnett’s recent decrease, according to Lawson and Diver, is the exodus of Atlanta-area residents closer to downtown.
“In Fulton County, residential permits have been out of control because suddenly, we’re seeing this push for intown living and a movement into downtown and Midtown,” Diver said. “However, the majority of the residential permits issued in 2006 in Fulton County were in the first six months. In the last month, we’ve seen the rate of those permits come to a screeching halt and in 2007, we expect to see a major pullback because they were way, way above trend in 2006.”
Overall, however, residential permits have been extremely high for quite a while, Diver said.
“In fact, Georgia is No. 9 in the nation in terms of population but we’re No. 4 in terms of home building,” Diver said. “That’s because we have a lot of space.”
Real Estate Journal has come out with a report on the best place to purchase a second home. The survey covers vacation spots that offer relatively affordable properties, along with economic outlooks likely to support local home prices.
For those considering a Georgia mortgage on a second residence, we present a snapshot of Helen, GA. Why is it included in the aforementioned report?
The town is 1.5 hours from the Atlanta housing market. It receives two to three million visitors a year, according to Harriet Carter of North Georgia Mountain Realty in Sautee, Ga.
Surrounded by forest, the region is popular for hiking, river tubing, canoeing, fishing, mountain biking, horseback riding and golf. Several lakes are within 40 minutes of town.
The real estate market is generally steady. The region has been slow to develop and hasn’t attracted speculators, Carter notes. People who buy in Helen generally purchase for the long term, with the median home price around $225,000.
Prices have risen 8% from a year ago. And there’s no reason to think this appreciation won’t continue.
Posted by Jed Moss on Dec 27 2006 under Georgia
While there may be legitimate reasons to take out a Georgia mortgage at the moment, those that did so a few years ago are feeling a financial burden. And it’s one almost unprecedented around the country.
With one new foreclosure filing for every 439 households, Georgia had the nation’s third-highest state foreclosure rate for the second month in a row, according to RealtyTrac’s November 2006 U.S. Foreclosure Market Report.
Georgia reported 7,056 properties entering some stage of foreclosure in November - a 2 percent jump from October and a nearly 60 percent increase from November 2005.
The highest rate befell Colorado mortgage holders, while Nevada came in second.
The U.S. Foreclosure Market Report also 120,334 properties across the United States entered some stage of foreclosure during November - an increase of 4 percent from October and a jump of 68 percent from November 2005. The report further shows a national foreclosure rate of one new foreclosure filing for every 961 U.S. households - the highest monthly foreclosure rate reported so far in 2006.
“Defaults, auctions and bank repossessions all trended higher in November, bringing the year-to-date foreclosure total to almost 1.2 million - up 43 percent from the same 11-month period of 2005,” said James J. Saccacio, RealtyTrac CEO.
“With home price appreciation slowing, and even declining in some areas of the country, home buyers who stretched themselves financially to purchase a property don’t have much equity to work with if they experience even a small bump in their mortgage rate or disruption in their income.
However, the recent dip in interest rates, combined with relatively low unemployment in most areas of the country, should keep foreclosures from accelerating to the point where they impact the entire housing market.”
Looking for a great deal on a home you actually can afford with a modest Alabama, Tennessee or Georgia mortgage? Today just might be your lucky day.
According to the Birmingham Business Journal, Hudson & Marshall, Inc., will host a real estate auction in which 15 foreclosed properties in Alabama and more than 200 properties in Georgia and Tennessee are sold off month.
The Dallas-based company said in a news release that the real estate up for sale is currently owned by mortgage lenders and asset management companies across the U.S., some of which purchased the properties after foreclosure.
The value of the properties to be auctioned range from $10,000-400,000, and in addition to low asking prices, there’s another incentive for aspiring buyers.
Each home will come with title insurance, effectively guaranteeing there are no back taxes due or liens on the properties. This is a big deal for someone buying a foreclosed property.
In the past eight years, Hudson & Marshall has sold more than 40,000 houses on behalf of many a mortgage lender looking to get out of the property managing business ASAP, as well as on behalf of investors who gobble up distressed homes and look to flip them for a quick profit.
And as we’ve discussed, the market for this kind of activity is heating up.
Foreclosures have skyrocketed across the United Sates in recent months, and the south, where more people are having trouble paying their Florida and Tennessee mortgage loans (among others) is no exception.
For the month of October, Alabama, to use just one example, had a total of 519 properties in foreclosure, an increase of 228 percent compared with October 2005.
