Ugly Houses in Your Neighborhood – What To Do?

July 4, 2011 by Michael Borger Leave a Comment

Aloha! I hope everyone has enjoyed a fun and safe Independence Day Weekend here in our beautiful Hawaii. As I sit here in a street cafe writing this post in Kapahulu, the afternoon sun is out, the winds are blowing through the trees and you can tell everyone’s having a great time. Sounds good to me! But while the the setting sun and fireworks may be a beautiful sight to see, there’s something in our midst that is anything but beautiful — ugly houses!

I’m sure you’ve seen them about, maybe even in your own neighborhood. Possibly even your next door neighbor! You know what I’m talking about — high grass, weeds, mail piling up, peeling paint, junked cars, rusted mailbox, etc. So what’s really going on behind the scenes of these ugly houses? Maybe the owners still live there, maybe there are bad tenants or maybe it’s been abandoned altogether.

While on the exterior it’s obvious there’s some form of distress — whether personal, family, medical, financial — the cause of this distress might be any of the following:

Owners cannot keep up with the mortgage payments, possibly facing foreclosure, and abandoned the property
Owners cannot afford to maintain the property
Owners have some other type of family or personal distress that’s keeping them away from maintaining the house
Bad tenants are neglecting to keep the house in proper condition
Owners live outside of Hawaii and are not aware of the deteriorating condition of the house
Owners have passed away and the surviving heirs are tasked with the maintenance
Anything else where the payments or maintenance of the house are not given proper priority or attention

So what can you do if you have one of these ugly houses in your neighborhood?

Do you have to just take it and allow it to drag down your own property value? Not necessarily. There is some action you can take to figure out what the underlying situation is and to help fix the problem. Here are just a few choices:

If you have a cordial relationship, ask if they need the name of a good handyman or general contractor. This is much more tactful than saying “What’s up with your head-high lawn?” They might respond with the true story of why the house is in poor shape.
Talk to the next door neighbors. They might know more than you do.
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If the owners can’t be found or are uncooperative in addressing their property’s effect on the neighborhood, then call the Honolulu County Department of Planning and Permitting’s Residential Code Enforcement Branch at (808) 768-8127.

Even the best neighborhoods in Hawaii have that one house that’s an eyesore, that makes all the other responsible homeowners wince every time they drive by. You don’t have to sit around hoping it will resolve itself. Somewhere there’s a problem that needs a solution, a situation that needs to be resolved, a homeowner that needs help. You can help by reaching out or anonymously speaking with an investor or the local authorities.

Abercrombie Signs Hawaii Foreclosure Moratorium Bill SB 651

May 16, 2011 by Michael Borger 4 Comments

On May 5, 2011, Hawaii Governor Neil Abercrombie signed into law SB 651 which is being called the nation’s toughest foreclosure bill on record, putting a supposed to end to robotic and other forms of unlawful or inappropriate foreclosures on Hawaii’s real estate property owners. Provisions of SB 651 enact a moratorium on all new non-judicial foreclosures through July 1, 2012 (owner-occupants only – does not apply to second homes). The new legislation gives owners the option to meet face to face with their lender before a foreclosure can occur.

“The credit for this today is, in fact, a reflection of what we try to be in Hawaii, which is good neighbors and good friends to one another,” said the Hawaii governor. “We want to try and avoid if we can, to put the consumer, the homeowner, in a position where they feel the entire institutional establishment is lined up against them.”

The primary objective of the mediated in-person meetings between mortgagor and mortgagee is that a compromise can hopefully be reached. This is a direct aim at the local notion that Hawaii’s high foreclosure rate (11th in the nation according to recent figures) can largely be attributed to a mental disconnect between Hawaii homeowners and mainland lenders.

However, residents currently in preforeclosure should not jump for joy just yet. This is not a free pass to avoid foreclosure in Hawaii. Homeowners will still be required to bring all documentation to mediation and prove that they can financially pay a modified loan, if that is their goal. At the other end of the table, the lender must show that it has the legal authority to foreclosure upon the mortgagee. This means demonstration of proof of chain of title.

How SB 651 Affects YOU

So what does this mean for the Hawaii homeowner currently in preforeclosure or in general trouble with their mortgage? Well, you might be able to take a deep breath and relax – a bit. You still need to do some legwork yourself to increase your odds of a successful loan modification, but you can also take some comfort under the umbrella of a new law designed for your protection.

If you’re a Hawaii real estate investor, then you may want to consider a change in your marketing strategy a bit since there may be fewer homeowners seeking a short sale and opting for loan mod’s instead. If you’re a foreclosure buyer, then it seems you’ll have to focus on judicial foreclosures instead – not the norm here in the Aloha State but they do happen.

And for the general resident, does this affect you? Do you expect to somehow share in the cost of this new program via new taxes? Is it worth it? How do you feel this will affect real estate prices in your neighborhood? Are you in favor of SB 651 or not?

Hangover: Tequila or the Market?

May 6, 2011 by Michael Borger Leave a Comment

How’s Your Head?

If you didn’t notice, yesterday was Cince de Mayo. Most Americans mistakenly believe this is some sort of Mexican Independence Day. In truth, it’s a minor celebration south of the border that commemorates an unlikely victory over French forces in the Battle of Puebla in 1862 (yes, I Wikipedia’d it – don’t tell me you don’t use it, either!). Back when I lived in Washington, DC, we had huge parties downtown as the Latino population in the nation’s capital is quite large. I had friends from every Latino country you could think of: Guatemala, Bolivia, El Salvador, Peru, Honduras, Panama – you name it. I think they even made some countries up just to screw with me (yes, I’m talking about you, Luis from Guatadorexiru).

Well, we have the same thing here in Honolulu, of course. The annual block party last night was full of revelers in the streets, despite the intermittent rains. I bet they even tore it up in the streets of Anchorage and Boise as well. It seems that having a large Mexican population is not a requirement to drown in tequila on a Thursday night (yes, I know we have a Mexican population here, but you gotta admit it’s not the first image that comes to mind when discussing Hawaiian demographics). The biggest questions of the night become:

Salt or not salt?
Frozen or on the rocks?
Would you like me to call you a cab? (which is invariably followed by: “Well I don’t know where you live, either.”)

But while some may have woken to a heightened awareness of cranial sensitivity (re: hangover), there’s another matter on the minds of many Hawaii residents as we approach the midway point of 2011:

What’s going on with the local Hawaii real estate market?

It seems like just a few moments ago everyone was cheering the apparently imminent arrival of a foreclosure moratorium designed to put the brakes on the banks and lenders. But where’s that moratorium now? Last time I checked there were 4 or 5 different versions being floated around the halls of the local legislature. Still hanging your hat on that? Get back to me in September and let me know how that’s working for you.

If you look the stats, they’re in the eyes of the…um… stats-holder. Volume of sales is up while median prices are flat or even down in many places. Do you see signs of recovery? I don’t — not if you take a broad outlook. Anyone who points you to signs of a rebound ahead just based on the previous 30 days’ activity is just jerking you around. Don’t fall for those positive ‘blips’ on the radar. That’s someone with an agenda and you’re smarter than that. Look at three months minimum then see if a trend shows its face. Otherwise there is no trend, no rebound (or dip, for that matter – keepin’ it real just for you).

So as the tender aroma of Jose Cuervo and lime juice dissipates from the streets of Chinatown and the thumping of merengue music stops ringing in our ears, remember that we’re on our own for our market research, our decisions of whether or not to buy or sell our house, whether to seek a loan modification or short sale, whether to buy in Millani or Waipahu, whether to invest in Waikiki condos or to simply sit on the sidelines and wait for better times (although as an investor, I’d say the best time is actually now – if you do it wisely). Do not wait for others — government or otherwise — to lead you down the path.

What’s your take? Are you disappointed in the stalling of the moratorium? Have your 2011 real estate plans changed from earlier in the year? Do you agree with the consensus of another dip in the market or do you see it coming back before year’s end? SHARE YOUR THOUGHTS — BE HEARD!

Latest Hawaii Foreclosure News

April 25, 2011 by Michael Borger 3 Comments

Saturday night I had dinner at Kona Brewing Co. in Hawaii Kai with some friends after hiking the beautiful and relatively unknown Tom Tom trail by Makapuu. Someone had picked up the recent Honolulu Weekly and conversation quickly turned to Hawaii real estate matters and the foreclosure mess that’s invaded the national psyche and wreacked havoc throughout our islands. The cover story, “The Foreclosure Fiasco”, takes a stab at the big banks and lenders, namely Bank of America which has a large share of the mortgages here in Hawaii. A lot of is apparently justified as there has been a tremendous amount of mortgage impropriety and nonsense. MERS, robo-signing – pick your poison. This is serious news in any state, but it’s widely known that Hawaii’s foreclosure rate was ranked 11th in the nation in 2010, so the issues surrounding foreclosures is especially critical to our community welfare.

So where’s the problem? Is it the banks? The lenders? Or is it a lack of regulatory oversight? What about homeowner responsibility? All of the above?

More importantly, what’s the way out? The moratorium debate rages on with nothing to show for it yet. According to the article, Bank of America is sending a team of a dozen employees here this week to presumably right the ship on all the statewide troubled loans, face to face. While it’s too early to gauge any results, the in-person meetings being arranged between lender and borrower are at the least a step in the right direction. Maybe that course of action will be followed in turn by the other lenders when a borrower enters into preforeclosure. Or maybe that’s reaching for the stars.

Your thoughts? Opinions?

Side note – the article quotes four of the most important foreclosure bills currently being reviewed in the state legislature: HB 1411 (Omnibus reform bill), HB 894 (five month foreclosure moratorium), SB 651 (mandatory mediation) and SB 652 (task force recommendations).

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