Foreclosures ensnare low-income renters

Karen Tapia-Andersen / Los Angeles Times

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At a Lake Elsinore housing office, Kelly Porec, left, goes over paperwork with Ruth Cordoba, a 28-year-old mother of three who has brought along 3-year-old Joseph. Cordoba is trying to find another place to live after she and her children were evicted from a Section 8 rental that had fallen into foreclosure.

Tenants subsidized by federal Section 8 funds are finding themselves out of a home when the landlord defaults.

Ruth Cordoba has never owned a home, but she is feeling the effects of the mortgage meltdown acutely.

Cordoba, 28, rented a three-bedroom home in Riverside for six months with the help of so-called Section 8 funds, money provided by the federal government through local housing agencies. In June, when her landlord could no longer make the mortgage payments on the house Cordoba was renting, she and her three children had to move to a hotel.

"I never missed a rent payment," Cordoba said. "Then I hear someone outside one morning, and I go outside and see a sign on my door that says they're auctioning the house."

The collapse of home mortgage lending, which according to U.S. Housing Secretary Steve Preston may lead to 2.5 million foreclosure filings nationwide this year, sent shock waves up the income strata -- from home buyers who took out subprime loans they couldn't pay, through banks that couldn't cover their losses on those loans, and onto high-end investors who had bought the banks' bad loans.

Now the mortgage crisis is radiating downward and cracking the already fragile finances of people like Cordoba. There are more than 300,000 households getting Section 8 assistance in California, and their median income is $14,428, according to the Department of Housing and Urban Development.
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Jail, foreclosures occupy Richland sheriff

MANSFIELD -- Radios, Tasers, ping pong tables and inmate uniforms were all on the $93,650 list of needs the sheriff's department presented to commissioners Tuesday.

"We're kind of getting nickled and dimed to death," Sheriff Steve Sheldon said of the list compiled by Maj. Roger Paxton. "We've burned up a lot of our resources."

Sheldon said he hired four women last week and has plans to hire 10 more people. He is authorized to have 72 people on a staff that is now at 56.

The sheriff, accompanied by Paxton and Chief Deputy Rick Reeves, met with the board about some of the ongoing issues at the $21.5 million facility that houses both city and county inmates. Commissioners asked Sheldon to break down the list of needs to items that will be used for 20 years or more so they can decide where funding might come from.

Commissioner Ed Olson commended Paxton for doing an excellent job in running the 260-bed jail, but said it has numerous technology problems. The county is withholding about $200,000 in payments until vendors make things right, he said, citing the telephone system. Olson also said the county is spending less money on overtime at the jail than it will when the facility is fully staffed.

"We are in budget, if not slightly below budget," Olson said.

Paxton said the sheriff's department moved everything it could from the old jail rather than buying new. The jail population was listed at 265 Tuesday.

Sheldon, civil division deputy sheriff Kathy West and Clerk of Courts Lin Frary also discussed House Bill 138, which requires sheriffs to file deeds for foreclosure sales. The law that goes into effect Sept. 11 was designed to help properties from being in limbo if deeds aren't filed. It gives local governments more tools to get control of vacant tax-delinquent parcels.

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Official seeks foreclosure moratorium

SAN DIEGO, Aug. 26 (UPI) -- San Diego City Attorney Mike Aguirre will ask the City Council to declare a moratorium on home foreclosures, he told Legal Newsline on Tuesday.

Aguirre said he will formally make his request to councilors during their Sept. 9 meeting. On Tuesday, Aguirre's office submitted a draft resolution seeking the crisis designation, Legal Newsline reported.

"According to the latest reports," Aguirre said, "foreclosures in the city are up 213 percent, the highest number in the history of the city."

Aguirre's draft resolution states: "The City of San Diego is experiencing a crisis in the real estate market fueled by an unprecedented number of foreclosures in the wake of lending institutions' predatory lending practice and widespread use of sub-prime loans."

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Foreclosures: Worst still to come, experts say

Phoenix had a staggering 534 percent increase in foreclosures in the first half of 2008, and it appears the worst may be yet to come.

The percentage gain represents an increase of about 5,000 homes foreclosed from year to year, according to data provided by Information Market.

"This is not surprising," said Phoenix City Councilman Claude Mattox, who represents the hardest-hit areas of the city. "We're well aware of the problem, and we are doing all we can to mitigate it."

The real tidal wave may be yet to come.

Phoenix had 12,573 foreclosure notices for the first half of the year, and experts say more than half of them are likely to become foreclosures.

The hardest-hit parts of town were the west and southwest sides, where increases of 700 percent or more were common. Only one other area, the eastern portion of northeast Phoenix's Desert Ridge, had a similar increase, but it had far fewer foreclosures.

Metro foreclosures drop

Finally, some good news on foreclosures: Filings in the seven-county Denver area in the second quarter fell by 7.5 percent from the first quarter.

There were 6,992 foreclosure filings in the metro area in the second quarter, compared with 7,565 filings in the first quarter.

In the first half of the year, however, foreclosures are still up 15.6 percent from the same period in 2007.

Foreclosures remain on a record pace with 14,600 filings received in the first six months by public trustee offices in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas and Jefferson counties, compared with 12,626 in the same period last year. But experts are encouraged that the pace of foreclosures is slowing.

In the first half of 2007, foreclosures rose by 25 percent from the same period in 2006, for example.

Adams County saw a 48 percent increase in foreclosures in the first six months of 2007 compared with the same period in 2006, while this year foreclosures are up 12 percent compared with the first half of 2007.

"I'm hoping that this foreclosure tsunami that has wiped out so many homes is starting to roll back," said Ed Jalowsky, principal of Hottest Homes Realty. "But I still think it is going to take six to 12 months for it all to work itself out."
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U.S., States Probe Real-Estate Loan Broker

The Federal Bureau of Investigation and securities regulators in California and Pennsylvania are probing a Philadelphia-based loan broker over allegations that more than 100 prospective borrowers lost millions of dollars through a practice in which the firm collected upfront fees for real-estate development but didn't find any funding.

Authorities say they are trying to determine whether Remington Financial Group Inc. and a related firm, BlueStone Real Estate Capital, accepted fees without seriously trying to obtain financing for clients.

"We have been made aware of the allegations and we are looking into the matter," says Special Agent Jerri Williams in the FBI's Philadelphia division.

California's Department of Corporations is investigating Remington and BlueStone, and also is looking into LandBridge Equity LLC, a land-investment company based in Washington, D.C., according to a person familiar with the matter. Jack Kemp, the former U.S. Housing and Urban Development secretary and vice-presidential candidate, is a senior adviser and director of LandBridge.

Remington is named as a defendant in six civil lawsuits filed in California's Superior Court that allege the company conducted an "advance fee scheme" by collecting nonrefundable fees from would-be borrowers with "no intention of providing the financing." The company has denied the plaintiffs' allegations.

Former San Diego Acting Mayor Ed Struiksma says he paid Remington $25,000 in fees, and received no financing from the company for land he wanted to buy for a housing development. A Toronto developer, Greg Heller, says he paid Remington $20,000 and didn't secure financing for a hotel project in Egypt. Both men say the soured deals cost them much more in penalties and delays.

Andrew Bogdanoff, Remington's founder and chairman, says he isn't familiar with either deal, but that dissatisfied clients could seek arbitration under their agreements with the company.

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