Thursday, July 10, 2014

Real Estate Developers Want To Evict 98-Year-Old Woman To Turn Her Apartment Into Condos

Real Estate Developers Want To Evict 98-Year-Old Woman To Turn Her Apartment Into Condos

"The company is using a 1986 state law called the Ellis Act to boot Phillips from her apartment in a building at 55 Dolores Street. That property was bought in late 2012 for about $2.5 million, according to Trulia.com, marking a nearly $1.2 million profit for the previous owners who had bought it in early 2011. In April, 2013, the new owners served Phillips with an eviction notice...The man behind the company has used the Ellis Act 43 times in the past 10 years, according to the group. Ellis Act evictions fell in the wake of the financial crisis, but have been on the rise again as the economy has recovered and San Francisco property values have spiked over the past two years.  The law was intended to protect landlords who wanted to get out of the business from being forced to continue renting properties they would prefer to sell. But the majority of Ellis Act evictions in recent years have been initiatedby speculators rather than landlords, according to Steve Collier of the Tenderloin Housing Clinic. “What we’ve seen is groups of investors are banding together to buy property, usually it’s when a landlord dies and it’s sold as an estate sale, or when someone just wants to sell to retire and then the speculator buys the property [and] evicts the tenants by using the Ellis Act,” he told the local NBC News affiliate in October."
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That's just what San Francisco needs:  more overpriced condos.

Crony Capitalism Has No Place in the Supreme Court - NationalJournal.com

Crony Capitalism Has No Place in the Supreme Court - NationalJournal.com:

From Norman Ornstein, a different take on Hobby Lobby and other USSC decisions that expand the power of corporations over little people:  "But for the majority on the Roberts Court, through a series of rulings that favor corporations over labor or other interests, it is clear that corporations are king, superior to individual Americans—with all the special treatment in taxes and protection from legal liability that are unavailable to us individuals, and now all the extra benefits that come with individual citizenship. Call it the new Crony Capitalism."

Tuesday, July 08, 2014

Home equity lines due for reset may be looming financial disaster--Los Angeles Times

Home equity lines due for reset may be looming financial disaster--Los Angeles Times:

"Some mortgage and credit experts worry that billions of dollars of home equity credit lines that were extended a decade ago during the housing boom could be heading for big trouble soon, creating a new wave of defaults for banks and homeowners.  That's because these credit lines, which are second mortgages with floating rates and flexible withdrawal terms, carry mandatory "resets" requiring borrowers to begin paying both principal and interest on their balances after 10 years. During the initial 10-year draw period, only interest payments are required.  But the difference between the interest-only and reset payments on these credit lines can be substantial — $500 to $600 or more per month in some cases. If borrowers cannot afford or choose not to make the fully amortizing payments that reduce the principal debt, the bank that owns the note can demand full payment and foreclose on the house if there is sufficient equity.  According to federal financial regulators, about $30 billion in home equity lines dating to 2004 are due for resets next year, $53 billion the following year and a staggering $111 billion in 2018."

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Conventional wisdom says the foreclosure crisis is nearly over, but that doesn't take into account the second mortgages that are bumping up against their ten-year reset period.