Saint George Real Estate News from Dara

Seizing Mortgages Through Eminent-Domain Power.

Dara Tancredi (Southern Utah Development, SUREIA and Real Estate Weekly) — Sat, 07 Jul 2012 09:35:08 -0700

I don't like the idea of eminent domain except under unusual circumstances, but it usually requires 2 things: 1. the government to pay fair market and to use it for public good. But in this case it is a rigged deal-they are specifically going targeting properties where the property values are temporarily depressed, to make a gain for political cronies by picking out the plum homeowners that are current on their mortgage. I would like to see the legal brief that explains why it makes sense from the standpoint of the "public good" to eminent domain only those current on their mortgage and ignore those who are delinquent. We have got to beat back the crony capitalism of the current regime. At least one group in California has beaten a Goliath of government power. Check out this legal battle that was finally won The Community Youth Athletic Center

http://www.ij.org/victimizing-the-vulnerable-eminent-domain-abuse-in-national-city-calif

Via Tim Maitski (Atlanta Communities Real Estate Brokerage):

Eminate-domain power is being considered by some California cities as a way to turn around the housing market. The Wall Street Journal writes about it today.

At first glance, it might sound really good. It reduces the principle down to current home values and allows upside homeowners to get right side up again. That is deemed to be a public good which is being argued as a legitimate use of eminent-domain power.

But look whose idea this was.

"The eminent-domain gambit is the brainchild of San Francisco-based venture-capital firm Mortgage Resolution Partners, which has hired investment banks Evercore Partners and Westwood Capital to raise funds from private investors. The company's chief executive, Graham Williams, is a mortgage-industry veteran who helped pioneer lending programs for low-income borrowers at Bank of America Corp. BAC -1.91%in the early 1990s. Its chairman, Steven Gluckstern, is an entrepreneur who once owned the New York Islanders hockey franchise. Evercore's founder and co-chairman, Roger Altman, served in the Clinton administration and is raising funds for President Barack Obama's re-election effort."

Isn't that nice. Let's just use the power of government to set up some sweet deals for the politically connected.

They aren't going after the mortgages that are in default or where the borrower has a hardship. These are going to be mortgages where borrowers will be required to be current on their payments. So it's a really sweet deal for the investors because they get to make loans to borrowers who have proven to be good risks.

I guess it's a good deal for everyone except for the investors of the original mortgage. Today they have a mortgage that is current, at an interest rate that probably is higher than current rates. Then out of no where, the government swoops in and pays them maybe 50 cents on the dollar. They are forced to take a big hit right now but then don't have the opportunity to get in on the new mortgage, unless they are connected to the right people. To me, that just doesn't sound like America. That sounds like a banana republic.

Here is a typical scenario that they envision:

"For a home with an existing $300,000 mortgage that now has a market value of $150,000, Mortgage Resolution Partners might argue the loan is worth only $120,000. If a judge agreed, the program's private financiers would fund the city's seizure of the loan, paying the current loan investors that reduced amount. Then, they could offer to help the homeowner refinance into a new $145,000 30-year mortgage backed by the Federal Housing Administration, which has a program allowing borrowers to have as little as 2.25% in equity. That would leave $25,000 in profit, minus the origination costs, to be divided between the city, Mortgage Resolution Partners and its investors."

Between this and the recent ruling on the Affordable Health Act, is there no limit to what the government can do? Do we still have property rights? Do we still have a free market? Independence Day? Yippee!!!

What Drives You to Action?

Dara Tancredi (Southern Utah Development, SUREIA and Real Estate Weekly) — Sat, 14 Apr 2012 08:49:58 -0700

How do you decide which advice to follow? I have recently blogged about the dwindling inventory in St. George Real Estate and what it means to this real estate market. As a home buyer, if someone gave you important, credible,market information that would impact you and your family financially, would you listen? It can pay to listen.

Almost 5 years ago I remember “the rant heard round the world” by Cramer on MSNBC. I credit this rant with pushing me to finally sell all of the "marginal" real estate investments that I held at the time and taking a business loan that today would be unattainable for my real estate business. What drives you to action? This rant is courtesy of MSNBC Aug 3, 2007, 4 1/2 years ago-what a wild ride it has been since then. Notice that we have just finally returned to those levels on the Dow.....

Open the discount window rant from Cramer

ST George UT Real Estate Market Report - April 2012

Dara Tancredi (Southern Utah Development, SUREIA and Real Estate Weekly) — Fri, 13 Apr 2012 10:31:57 -0700

This is a market report from Real Estate Weekly for the Greater St George Area April 2012. According to the Washington County MLS as of April 11th, 2012, there were 1338 single family residential listings. Of the 1338 listings in Greater St. George, only 250 (18.6%) were short sales. It is notable that 206 (15.4%) were new construction listings (58 of those listings were "to be built"). There has been an over 8 or 9 % increase in residential sales prices from March 2011 to March of 2012 for respectively, the average sale and median sale prices in Greater St. George. Based upon this and other data previously published by Real Estate Weekly, I am of the opinion that the "distressed market" has largely moved to the background as we exit the distress phase and move into the expansion phase (creation of new units and increasing prices). During this early expansion phase we are experiencing a disconnect between the buyers who are largely being told by national media outlets that we are in a "buyers market" and the reality of a falling inventory and rising prices, which could actually slow current unit sales until more buyers come to terms with the market shift.

Entrada at Snow Canyon-Spring Time Activities Beckon!

Dara Tancredi (Southern Utah Development, SUREIA and Real Estate Weekly) — Tue, 26 Apr 2011 14:17:08 -0700

People that are looking for a home in Saint George are drawn to communities that are a part of Entrada At Snow Canyon Country Club due to the many social activities available there as well as the golf. As a an Equity member of Entrada, I recently had the opportunity to attend a presentation from the founder of Tuacahn Amphitheater, Hyrum Smith, in a special "members only" event last week. There are many events that outside agents will not be privvy to, so in order to get the inside scoop here at Entrada, give me a call an I would love to schedule a tour to show you the fantastic facilities as well as some amazing homes.