June, 2010

Everyone it seems is familiar with Las Vegas’ famous son Wayne Newton. Mr. Las Vegas as he is known to all near and far will go down in history for his 1970’s No4 success ‘Daddy Don’t You Walk So Fast’.

Wayne and his wife have acquired considerable wealth over Wayne’s long and illustrious career, and have much of it invested in assets which included a 38 acre ranch ‘Casa de Shenandoah’, on Pecos Road, Las Vegas, Nevada. In order to leverage other investments, the Newton’s obtained a guarantee from a friend in an application to borrow $3.75m from the Bank of America. The loan has subsequently been defaulted on to the tune of $3.35m, and the guarantor was called upon to honor the security. As the guarantee was secured by the Newton’s 38 acre ranch and a $2m private jet, the guarantor is now seeking to foreclose on the property in lieu of the $3.35m outlaid in satisfaction to the Bank of America.

Certainly it appears odd that the Bank of America was unable to secure the loan against the Newton’s property, but it may well have been a matter of cash flow and ability to meet monthly installments that was the issue at hand. In any event, it appears that foreclosure is a matter of course in light of the fact that the bank loan was left in default.

The Newton’s at this point need time to arrest the process of foreclosure and regain the financial control of their assets. Wayne still has a healthy income from performing regularly at the Tropicana Hotel in Las Vegas, and it may merely be a matter of time before the Newton’s are once again on track.

Of course, if indeed they wish to free themselves of the financial commitments they face and be done with them, they would certainly benefit from avoiding the foreclosure process due to the simple fact that the creditor will be intent on recovering their debt, rather than achieving the best possible price in the market.

If the Newton’s were to approach Eureka Luxury Short Sales for instance, Eureka would make a competitive offer to the creditor in full satisfaction of the outstanding amount. Once a short sale agreement is reached, Eureka will invest resources to market the property in a professional and forthright manner in order to attract the best possible sale price. With Eureka’s involvement, their privacy is respected and in addition, the Newton’s relationships are preserved.

Category : Avoiding Luxury Foreclosures &Celebrities &Headlines &Las Vegas

While every economy needs the lubrication of consumer spending, the events of the last 3 years and the Global Financial Crisis have given homeowners and prospective buyers an opportunity to reflect.

Often it is the case that our modern financially based economy reveals an opportunity to be had in taking the largest mortgage possible. The benefits of this lie in being able to purchase a more valuable home, in a better location with more valuable land, and built of finer materials and design. In an economic boom the sense of this strategy becomes reality as capital values soar with remarkable speed. A certain degree of comfort is then enjoyed by the mortgagor who by now is still laboring under a huge mortgage repayment schedule, but now has a pleasing buffer of equity as their reward.

Of course, in anyone’s language this is a tenuous position that can only make sense if repayments are maintained. If not, some form of distress will visit the property as foreclosure and its alternatives are considered by the lender.

Unemployment has risen across the board in the US to almost 12% in 2009 and has only recently subsided to approximately 10%. With this in mind, it comes as no surprise that many Americans who had taken a large mortgage on a luxury home have also been driven to defaulting on their repayments; in fact mortgages over $1m are defaulting at twice the national rate.

Many of these individuals have not only lost their employment but also their investments. Retirement funds are under a statutory mandate to invest a certain portion of their assets in property and blue chip stocks. With the collapse of world stock markets in 2007 & 2008, many Americans lost much of their intended nest egg, with the collapse of the US property market, more so. For many, redundancy or a dramatic reduction in salary was simply the catalyst to inevitable default, and it wasn’t long before lenders were knocking at the door. The gravy train had halted abruptly.

For these million dollar properties, their future is uncertain as banks are desperate to get them off their books with a recoup of whatever value possible. With the FDIC watchdog panting down their necks, lenders are wary of carrying Non Performing Assets (NFP’s) on their books too long. Sometimes it’s simply better to take a loss all at once as it frees up capital to generate positive cash flows in the future.

Additionally the cost of maintaining a million dollar property is invariably far higher than that of an average property of say $300k. When household income has been restricted this too is a luxury that simply cannot be afforded and mortgagors are often keen to extricate themselves of their debt obligations, even if it means that they are saddles with an outstanding amount after the execution of short sale.

For them, the discounted value of a static debt to be satisfied in the future is far more attractive than a current repayment schedule of outrageous proportions, no income, and equity that has turned from positive to deeply negative with the momentum of the property market collapse. Lenders on the other hand, find that short sales on luxury properties that have defaulted reduce FDIC capital requirements, and remove bad debts from their books.

Category : Distressed Luxury Real Estate News

The Baldwin brothers – Alec, Daniel, William and Stephen, of 30Rock, Mulholland Falls, Flatliners and The Usual Suspects fame respectively, have thrilled audiences with their theatrical talent on screen for almost two decades.

Stephen Baldwin however, having been raised with his brothers on Long Island, was experiencing what millions of Americans are going through, the threat of foreclosure.

So gamely is the devastation of the US property market however, the incidence of distressed property is not a monopoly of the working classes; it is shared in abundance with stars and celebrities from all areas of human endeavor.

Stephen aged 46, is still working in the movie business and no doubt has the opportunity to call this his vocation. However, he and his family have also hard difficulty in meeting the financial obligations pertaining to an $825 000 mortgage in favor of Bankers Trust.

The property in Old Mountain Road, Nyack, New York State, is a beautiful multi-storey circa 1850 home purchased by the Baldwin’s in 1997 for around $500 000. Certainly the property experienced some capital gain in subsequent years as financiers were willing to take legal mortgages on its value. Indeed in a bid to relocate to acreage, the Baldwin’s attempted to market the property immediately prior to the collapse of the property market in 2006. At that time it failed to sell at $3.6m and now the position is history.

All celebrities enjoy the fruits of their success, but rarely do they enjoy the public humiliation and personal intrusion into their family’s circumstances when scandal strikes close by. In the aftermath of the Global Financial Crisis, the media have been careful to report the demise of as many celebrities as possible, in order to secure a following by Americans who gain some comfort from knowing that they are not alone in their troubles. To many this seems a crass manner in which to conduct the press however, it is by now part and parcel of the risk of doing business in Hollywood.

It remains open however, for celebrities who find themselves in compromising positions such as imminent foreclosure or distressed property of some sort, to have their predicament managed effectively by a discrete 3rd party such as Eureka Luxury Short Sales.

Eureka specialize in assisting people avoid the consequences of foreclosure, and to consolidate their life choices before they spiral out of control, when matters are attributed to the responsibility of a mortgagee. When Eureka is engaged by a celebrity homeowner, discrete negotiations are undertaken with the mortgagee with a view to settling the outstanding debt in total. Not only will this short sale conveyance alleviate the need for foreclosure proceedings and preserve the celebrity’s financial reputation, but it will give the celebrity time to either regain their financial composure. Eureka will be conveying the property to their name, and will cover the extensive marketing expenses they outlay in order to obtain a healthy price for the property. Either way, the celebrity homeowner avoids the ungainly publicity that often visits them in such circumstances, and enjoys the freedom to negotiate a favorable agreement with Eureka. From here they can regain their financial control.

Category : Avoiding Luxury Foreclosures &Celebrities &Headlines &New York

When an economic downturn hits a modern economy the first sector to be affected is business and investment. Successful businesses have executive personnel that monitor the entire environment that the business is operating within. In order to maintain prosperity and value to shareholders, this individual will make alterations and amendments to the practices adopted by the enterprise on an ad hoc basis.

Almost immediately, business will reduce its capital investments and borrowings. This will reduce production and variable costs will also decline. Labor is one of the main variable costs that will be reduced, and while it will be a somewhat delayed consequence in order to comply with employment law, unemployment will eventually be felt throughout the economy. As more and more people lose their means to a livelihood, consumer spending and sentiment drop markedly.

The above scenario depicts precisely what the United States has endured for some 3 years now. Since the sub-prime mortgage crisis of 2007, a subsequent credit crisis evolved into a Global Financial Crisis which saw the US economy in steep recession.

That homeowners were unable to meet repayments was clear, for many had been lured into financial agreements that due to a huge interest component relied purely on a short term capital appreciation for its sustenance.

When this type of speculation is present in any market, irrational spirals downward in price is a matter of course.

So it was with the US property market. It was soon generously aided in its drop by a global economic recession that saw unemployment skyrocket from the conventional nonchalance of 5% in 2006 to a little under 12% in 2009.

As people lost their jobs, even what was considered to be a prime mortgage became fair game to a steep reduction in household incomes. Now, it was not only the foolhardy that never had the ability to maintain a sub-prime mortgage entered into at astronomical rates of interest, but also those that quite reasonably, relied on continuous employment in order to maintain their mortgage repayments.

The extent of these mortgage repayments however differ from case to case, but by and large, such was the sheer panic of the US property market that reason had nothing to do with it. As in most things economic, matters were compounded in a domino effect throughout the economy. Banks have certain prudential controls imposed upon them by the Federal Deposit Insurance Corporation. Banks must have enough capital to cover bad loans and operating expenses and the FDIC demands that this capital represent 10% of the bank’s total asset base. If this level drops to 5%, the FDIC will take action to protect the banks shareholder and other stakeholders.

Due to the fact that a loan is considered a non performing asset when a mortgagor is 90 days in default of a financial agreement, the rapid rate of defaults quickly eroded the capital ratio of many banks with 140 banks falling into insolvency by the end of 2009.

The cyclical nature of economics continued from here to raise the cost of capital borrowings, and so business investment reduced considerably. Unemployment continued to rise, and it was not until major stimulus packages were injected into the major developed economies of the world that jobs were created, consumer spending increased and business models reverted to a more positive outlook in increasing their employment.

With a job to provide income, US households were once again able to spend. Critically, more households were able to meet the demands of a mortgage, and considering the lowered interest rates to stimulate economic activity, the housing market in the US has shown signs of recovery.

Category : Distressed Luxury Real Estate News

Contrary to common belief that only lower and middle-class homes, hit by foreclosure select Short Sale as alternative option, it has gone upscale now, if the statistics are any indication.
Low-end home sellers in the housing markets have very widely been using Short Sale option already. News is even those multi-million dollar residences are being sold through Short Sale, as revealed by Valley real estate agents, who have witnessed such a clear trend.
A Short Sale is one where the distressed property sellers come to an understanding with their lenders, on a sale price which is less than what they owe as mortgage balance, to sell of the property. The difference between the consented sale price and the mortgage balance is mostly forgiven, although there are cases, where some lenders reserve the right for pursuing the mortgagee for that portion also.
One of the agents in Scottsdale, Joyce Tawes of Arizona Realty ONE Group is engaged in these types of listings – about 100 Short-Sales where homes of values from $700,000 to over $3 million are involved. He says that Short Sales and foreclosure homes are a reality in today’s real-estate market and therefore you can find many luxury homes in Scottsdale, Carefree, Paradise Valley and Phoenix, which fall either into Short Sale or foreclosure categories.
Another Short Sale specialist – a Valley Realtor and licensed in California too – Rosalie Soward says that nearly 80 percent of her current business is composed of Short Sales; she is optimistic that in the next two years there will be increased volumes of Short Sale along with increased average prices; as of now in Orange County there are at least three loans in the $800,000 to $1 million category homes, going into Short Sale and this summer this trend will see increase with more high-value properties.
Arizona Regional Multiple Listing Service’s data shows that in April, the residential Short Sales reached an all-time high figure of nearly 2,025, representing 22 percent of the total sales in the month, numbering 9,200 homes. Compared to last year, the overall Short Sale activity has gone up by more than 150 percent.
In February and March, the share of Short Sales was more than 20 percent of total homes sold – as per Michelle Lind, general counsel and assistant CEO for the Arizona Association of Realtors. That is the trend we are seeing and the federal government implemented a new incentive program, which may increase the numbers as well, Lind said.
With a view to expedite Short Sales potential to avoid foreclosure, the Home Affordable Foreclosures Alternatives program, which took effect on April 5, offers financial incentives. Lind said the above program provides incentives to lenders for completing a Short Sale; the incentives are not huge – sometimes may be $1,000 to the second-lien holder; but that may be the catalyst to increase the number of Short Sales.
Many lenders have streamlined the Short Sale process, which has helped make the Short Sale a dominant force in the housing market – according to Soward. She added that the banks have gotten smarter; it is going to cost them may be $40,000 for each property, which goes to foreclosure by the time they have to pay attorneys’ fees; get the property listed; get repairs on the property and so forth; some of the banks are easier to work with, and some of the banks may change their criteria of what qualifies as a Short Sale on a weekly basis; but in general it is easier to get results.
This year has seen even some commercial properties selling through Short Sale. The property of Jerry’s Audio/Video, located at 8680 E, Frank Lloyd Wright Boulevard in Scottsdale, owned by Jerry and Claudia Kowitz, was sold to Realty Unlimited for a price of $1.01 million through Short Sale in January.
The 11,464 square-foot property’s $1 million sale price was about half of the construction cost in 2000, according to seller’s representative Natan Jacobs of Vestis Group in Tempe and buyer’s representative Bill Bisniewski of Realty Unlimited.

Category : Distressed Luxury Real Estate News

Like all other celebrities who were multi millionaires once, Lenny Dykstra announced also bankruptcy last summer. By that time, he also started to default on the glorious mansion. The mansion was purchased in the year 2005 from a popular hockey player named Wayne Gretzky. He had bought the mansion at astonishing rate of $17.4 million.

Last summer Lenny Dykstra had placed property in market for a lot more than what he bought it for in the year 2005. He asked for $25 million for his home situated in California, Thousands Oaks. However, the house had been damaged due to his financial struggles and frustrations. He was trying to sell the house from some time but soon he realized that he could be facing much serious consequences of foreclosure.

This was the time when he got bridge loan $850,000 from Index Investors firm and they had filed foreclosure documents on home as per Washington Mutual he owed $12 million. His six-bedroom house witnessed a price drop by around $16.5 million. And all of a sudden the price has again got pushed upto around $25 million.

Ex baseball player’s preliminary lawsuit alleged Washington Mutual, which is currently possessed by JP Morgan, to provoke him for borrowing, money more than he could afford to buy a home worth $17.4 million House. He also claimed that the bank had later reneged on promise for letting him refinance home. In the agreement with Bankruptcy trustee, Morgan consented on paying $400,000 for Dykstra’s estate and surrendering the interest in proposed $500,000 for the insurance settlement. Trustee inturn will pay 92,000 from the insurance proceeds for cleaning the residence and allowing bank to proceed with the foreclosure.

All this has affected the reputation of Lenny Dykstra. The foreclosure was in news for long and magazine named The Players Club displaying professional athletes to keep track of their money and not joining the league of players who have made millions and then ended up in monetary trouble, added Lenny’s name too. Since this time, he has been in news for various creditors and lawsuits related to magazine.

The famous ex baseball player would not have been a subject of gossip, if we were handling his case. Allowing borrowers to start afresh, we make sure that their names are not publicized.

Category : Avoiding Luxury Foreclosures &Celebrities &Headlines

The San Diego based research firm, MDA DataQuick in its compiled review of Chronicle records the following data – about 1,000 homes each worth over $730,000 went into repossession by the lending banks in the nine-county SF Bay Area, during each of the last two years. In the same value bracket, about 223 homes have been reported to be repossessed by lending banks from January so far.

In contrast such high value foreclosures were few in numbers – in 2005 when real estate boom was in full swing, only 42 such Bay Area properties in value over $730,000 fell into foreclosure trap and in 2006 only 80 properties met this fate.

Andrew LePage, an analyst with DataQuick said that the numbers are certainly high by historical standards. What is even more striking is the upward trend of behind-mortgage payments – the very first step in the foreclosure process – in affluent neighborhoods.

The mortgage tidal wave is sweeping across the high-end properties, although not on the massive scales yet, and inescapably the underlying causes and the shift in foreclosure activity is reflected by the growth. The reasons for the mortgage distress in these areas are – economic conditions of unemployment, stock losses etc; and ARM – adjustable rate mortgage loans also have their part in it.

LePage remarked that in high-end areas, the default notices which started first at super low levels have grown 50 to 100 percent higher.

A real estate agent with Empire Realty Associates in Walnut Creek, John Sefton says that it definitely seems like the focus is shifting; we are seeing more defaults, foreclosures and short sales in the more-affluent communities; and the activity in outlying lower-cost areas has dropped off.

Another significant share of high-end foreclosures – valued over $1 million – has come to light. In the Bay Area, lending banks repossessed total properties worth $289 million in 2008; 305 such properties were taken back in 2009; and in the first three months of this year, Bay Area homes worth $86 million fell into foreclosure repossession.

The foreclosure numbers, experts say, do not fully reflect how far the high-end properties are put into short sales, as banks are more likely to allow short sale option for these expensive homes, where the home owner stays put but the home is marketed for less than the mortgage loan balance.

Pat Lashinsky, CEO of Emeryville’s ZipRealty, a nationwide brokerage, said that on high-end properties, banks take the time to short-sale, because they get a higher return and better valuation. He added that when high-end homes are sold, their condition is significantly more important, since the buyers expect them to be well-maintained. But homes tend to get thrashed in the case of foreclosure.

An agent with Vanguard Properties in San Francisco, Kendra Wall, did sell nearly 30 foreclosures during last year, which included quite a few properties worth over $700, 000. Her experience is different, as she says with any of the high-end foreclosed properties she finds them vacant while takeover, they are always stripped bare and cited one instance, where the home owners had sold everything on eBay, including the kitchen cabinets, granite countertops and the appliances.

Late last year, Kendra Wall had sold a foreclosure property in San Francisco’s Eureka Valley for $1.37 million; the same was sold for $1.725 million in 2005. This property was stripped clean as this was a high-end re-model and perhaps the contractor took out the appliances, all the fixtures, and all the hardware off the doors for not being paid for his services.

There is another view that the banks are planning repossessions and sales strategically and so buyers looking at high-end foreclosure properties should not expect fabulous deals.

Diane DeFaria, a broker with D&F Properties in San Jose commented that these high-end properties sell fast when hitting the market, since the banks are doing a very good job on this; with a view not to flood the market, banks are withholding lots of these properties and plan the repossession, after foreclosure sale public auction, and their sales to prospective buyers.

She listed another property in January, a four-bedroom foreclosed home in Meadowlands Ranch area of San Jose, for $849,000 on the low-end scale; she got about 20 offers; and sold it for $950,000. The home had sold for $1.235 million in 2006.

Lashinsky says Realtors do not always list homes as short sale, as they believe it puts them at a disadvantage while negotiating. This makes the data on the number of Short Sales unavailable, but according to ZipReality data, there is a definite upswing in the number of short sales of higher-end homes, especially in Contra Costa, Alameda, San Mateo and Santa Clara counties.

Real estate experts agreed on the point that high-end properties take longer time to become foreclosures, as affluent people are savvier and have multiple resources, so that they can extend the time, whenever they are struggling for repayments.

Adjustable Rate Mortgages would reset more in the near future, because during the real estate boom years, buyers of high-end properties often relied upon ARMs, which allowed them initially just pay the interest alone or less than that. This added to the mortgage balance eventually and most ARMs will recast loans, after the initial period of 5 years and this will cause repayment installments to soar.

Already some ARMs have recast, but as these flourished only from 2005 to 2008, the recasts are expected to swell during this year end and continue over the few years next.

The analyses made by Chronicle previously found that in the Bay Area, option ARMs were used heavily, accounting for 20 percent of all homes which were either bought or refinanced during the period from 2004 to 2008. These ARMs were used for properties averaging in value of about $823,000.

Lashinksy summarized the picture thus “I think the combination of option ARMs and the unemployment picture is taking a heavy toll on the upper end; it tends to be a little more resilient to the economy, but when you combine those option ARM resets with portfolios that have taken a dramatic drop, people start thinking this asset is a noose around their neck and they have to get out from it or it will strangle them.”

Category : Distressed Luxury Real Estate News

The once Most Valuable Player of the American League has his home foreclosed.

Jose Canseco has been very infamous for breaking rules during the game, but this time the playfield is a little different. It is real estate for a change where he has broken a mortgage contract. This professional sports star who has turned a reality television star has quit his mortgage deal because he was not able to afford it any longer. He had purchased a home for $2.5million which is spread across 7,300 square foot in California USA. Its value was continuously decreasing with time but the amount he had to pay for the mortgage was not. So Jose Canseco decided to quit out of the mortgage deal right in the middle of it.

In a television interview, Canseco said that he did not find it sensible anymore to pay mortgages on a home that was technically not owned by him but someone else. His inability to repay the money back was the reason for all the fuss. And this has not been restricted to celebrities only. The sub-prime crises in the USA enabled many smaller investors to borrow money from banks for buying homes and the banks did not consider their credibility to repay the money back. This accumulation of outstanding loans went to great heights and shattered the banking system in USA whose jitters could be felt in almost every other country of the world. USA has seen an increase in foreclosures due to the sub prime crises.

The sports star also said that his case was a little different from other households who own just one property in their name and do not have any other place to go if they get evacuated due to foreclosure. He also believed that a major 41 percent of his earnings go the government and whatever he is able to retain, has to be used for the entire family, all this making his situation not much different from rest of the people.

Negative publicity can be avoided by our short sale transactions where keep the confidentiality and maintain no public exposure all the way to closing.

Category : Avoiding Luxury Foreclosures &Celebrities

The collapse of the housing market has shown its result among the celebrities too. As any average american citizen, celebrities or high positioned officials can face foreclosure. The most recent example is Chamillionaire, the millionaire rapper, who’s Houston mansion has been foreclosed by the bank. The mansion is a 7,583 square foot home, which Chamillionaire picked up four years ago for $2 million. The real estate has entered in the bank’s possession.

However, the rapper says, this was a business decision, because he ‘"decided to let that house go". The reason behind is the real estate market, which went down so the house had become a bad investment. Chamillionaire says it was his most expensive mortgage, he owns other homes as well, and he could easy afford the monthly tab for the $2 million Houston property, and there wasn’t any "financial negligence or anything like that". He just let it go.

Chamillionaire also added, that he never was in that house, simply because he was always on the touring. "I just didn’t feel like it was a good business investment to pay that much mortgage for a house I was never at."

Chamillionaire claims he is very far from being broke. "I still got all the cars," he said.

Contact us if you wan to avoid similar public exposures.  We will conduct short sale on you distress property in privacy avoiding exposure to the media.

Category : Celebrities &Distressed Luxury Real Estate News

Foreclosures are coming fast as well as furious these days. One of the addition to the foreclosure league was Evander Holyfield. His mansion situated in the Fayette County in Georgia has witnessed foreclosure due to his bad bank balance.

Home worth around $10 millions all set for being auctioned by the Washington Mutual. Evander has been sued by some consulting company because of his inability pay the loan back of around $550,000. This can very explain reason behind this 45 years old boxing champion to return in boxing ring for heavyweight championship. Evander has made good money over course of years but like many other sports person has not been able to hold much of it.

As per the local reports, ten million dollar mortgage on property was due and home has gone for auction. As stated by the attorneys for Holyfield, foreclosure was altered but for the ex boxer, this came as a big blow on ego. The reason why he does not want to call boxing quits is because he is still paying back his mortgage. Interesting thing about the house is that he built this mansion in Fayette County’s northern part, which is mostly rural. But since that time, the place has witnessed much development focused on the black professionals. This part of the county is attracting other professionals including entertainers and athletes.

Evander appeared on verge of losing the home, located in south of Futon County line when he got a notice by the lending company. The boxing champion did not commented on the foreclosure listing. But it surely would be a disheartening process as the mansion is quite big with 109 rooms. Lien holder is demanding full payment of the original loan of $10 million. Having met the man and heard about his stories, reveals that he was a good man with big heart. However, excesses marking typical professional athletes lifestyle seems to leave them broke more than often. Use of some common sense and self-discipline can help them go a long way.

Saving homes from foreclosures is no more a daunting task with the assistance of our team. We take care of the short sales in the best possible way. Whether one is facing foreclosure or facing high mortgage payments, our team leaves no stone unturned to help our clients.  The best part about getting in touch with us is that we make sure that no information is leaked. The celebrity status is taken care well by our team.

Category : Avoiding Luxury Foreclosures &Celebrities &Headlines