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NWCLANorthern Worcester County Landlord Association

“Landlords Helping Landlords”“Landlords Helping Landlords”

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Volume 55 May 2009Landlords Helping Landlords

NWCLA President’s May LetterDear NWCLA Membership,

At our April NWCLA members’ meeting we had the advantage of having two topics for discussion for our members. We featured our very own NWCLA Board Members, Realtors and property

owners, Jamie Merrill and Jay Johnson. We also had the pleasure of having representative, Mary Ann Cantu, President ofNational Tenant Network, Boston Chapter come out and discuss with the group the finer details of tenant screening.

Jamie and Jay discussed market indicators that are happening in real estate today. They went into detail explaining the workings of what it takes to negotiate deals and navigate your way around the world of short sales (SS), real estate owned (REOs), and working with your Realtor to close these deals. As many of you already know, patience is the bottom line. The banks holding the paper on these deals are often out of the market where they hold, unaware of what condition the property is in, and their desks are buried with the weight of hundreds of cases awaiting review. Both Jamie and Jay are very excited about the rea; estate deals that are out there, and compounded with today’s lower interest rates, reaffirm we are in a buyer’s market Phase 1. Work with your Realtors, talk to your lenders, and take advantage of the market while it lasts.

Mary Cantu of the National Tenant Network, Boston Chapter, shared with us some of the practices and experiences she has had dealing with the prescreening of tenants. Mary is not only the President of the NTN Boston Chapter, but she is a lanldlord right here in the state of Massachusetts with all of us too. She is well aware of the challenges we face and feels our pain being in a tenant friendly state. The National Tenant Network is a service to help landlords get the best tenants and help to avoid some of the nightmare tenants out there who are working the system to their advantage. The NTN, besides prescreening tenants, can assist you in getting your judgements for collection recorded on the credit score of the offender until that judgement is paid in full. They really are there to help you – before, during, and after dealing with problem tenants.

On a real estate market highlight, Spring has sprung and the real estate market has picked up quite a bit. Last Fall, we were placing offers on apartments and many times, we were the only bidder on some of these deals. Maybe it was a combination of the recession,

fear of unemployment, not being able to get the deal financed, or the end of the Summer buying market - but there was little to no competition for the deals we have landed recently.

In contrast, on the very first day of Spring, we saw one listing we were interested in. It was a six family, plenty of parking, asking a fair price and right in our buying market. Per the usual, we booked our showing the very day it hit the market and went up earlier than our scheduled time to take a look around and tag along if the broker showed up early. We found out there had already been a ton of activity and the broker had booked 9 showings for that very same morning. This was just the first day on the market too! We haven’t seen any prices increase much, but there are indicators that there will be bidding wars this season.

We only have two more NWCLA member meetings before the Summer break and you don’t want to miss these topics in our open forum. At our May meeting, we have the opportunity to sit with officials from the Worcester Housing Courts who will discuss new changes in the court system and then open the floor to your questions for discussion. This is a rare opportunity to actually discuss what is going on in the courts - before you need to be in court. I have attended this venue over the years as a NWCLA member, and I have to tell you, our members have told us – this is one of our best speaker presentations. Sincerely, Brian LucierNWCLA President 2009 – [email protected]

In This Issue Page

President’s Letter 1 NWCLA Useful Notes 2 NWCLA Members’ Sponsor Testimonial Program 2 Upcoming Topics, 4 BUY-SELL-TRADE-FREE 4 Is Commercial Real Estate the Next Shoe to Drop? 5 Web Site: http://www.diynetwork.com/ 5 Lawyer’s Corner with Michael J. Ciota – Reminding Landlords 6 – 7 U. S. Foreclosure Filings Hit Record for Second Straight Month 8 – 9 SPECIAL REPORT: Road to Rescue 9 – 10 Appraisals Killing Deals in Many Markets 11 Schmidt’s Smorgasbord 12


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NWCLA Membership $80 Membership Benefits Include:• Monthly NWCLA Newsletter• Local Drug Arrest List • Housing Court Eviction List• Member to Member Support• Informative Monthly Seminars• Association Attorney• Legislative Updates• E-mail Alerts on Housing Issues• Web Site - www.nwcla.com• NWCLA Blog posts at

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PresidentBrian Lucier [email protected] Vice PresidentDebbie Greelish [email protected] TreasurerTina [email protected]

Secretary/ClerkTheresa [email protected]

Membership DirectorBrenda [email protected] Newsletter DirectorRick Dupuis [email protected]

Welcoming CommitteeTheresa [email protected]

Advertising DirectorJay Johnson [email protected] Web Site DirectorBrian Lucier [email protected]

Oil Program DirectorJay Johnson [email protected] Food CommitteeDave & Laura Schmidt [email protected]

Program ManagerJeff Landry [email protected]

Legislation DirectorJamie Merrill 978-407-7174 [email protected]

Board MemberMatthew Moore 978-345-7971 [email protected]

Board MemberRon LeShane Jr. [email protected]

NWCLA Board Members “NWCLA – Landlords Helping Landlords”

We are proud to serve the following communities:Ashby Ashburnham Athol Clinton

Fitchburg Gardner Harvard Hubbardston

Lancaster Leominster Lunenburg Phillipston

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P.O. Box 276 – Fitchburg, MA 01420 – 978-345-1887 – http://www.nwcla.com

NWCLA Members Testimonial Program Every month we are going to extend to you an opportunity to highlight the positive experiences you’ve had with any of the vendors in our newsletter. Please take a moment to e-mail me a few words describ-ing the work that was done for you and the name of the contractor who completed the job. Your affirmative input will let other property owners in our group know that working with our advertisers can be a positive experience. This is also a great way to say “thanks” to the business men and women who contribute to the Northern Worcester County Landlord Association and our goal of being the best landlords that we can be!

Jay’s e-mail is [email protected] or mail him stories to:NWCLA, ATTN: Jay Johnson, P.O. Box 276, Fitchburg, MA 01420

NWCLA Useful Notes• Summary Process Summons &

Complaint Forms are available for $5.00 NWCLA meetings

• The newsletter committee needs you to E-mail your stories, ads, helpful hints, to [email protected]

• The Successful Landlord is avail-able to purchase at our meeting. Cost is $40.00. while supplies last

• Anyone seeking past eviction lists please go to our web site to download the latest copy.

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Our office is a dedicated Real estate Law Office. We strict-ly handle Real Estate conveyancing matters. Count on us to assist you in your next Real Estate transaction. Visit our web site for more information and news updatesOur clients consist of: • Real Estate Investors • Real Estate Buyers and Sellers • Local and National Mortgage Lenders • Private Mortgage LendersWe provide our clients: • General Counsel in the sale & purchase

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Please Note: The information in this newsletter is not intended to be construed as legal, accounting, or other professional advice. Seek legal advice from licensed professionals for answers relating to your particular questions and circumstances.


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FOR SALE 2 Stoves 2 Refrigerators1 Washing Machine1 3-bay metal sink1 plastic utility sinkGreat for your apartments! Starting at $100.00Call Tim Damon @ 978-297-5254 __________________________ http://www.forrentorsale.net/ 3 different Ken Roberts training videos, and tapes complete with the manuals. Call Mark @ 978-502-5723 or e-mail: [email protected] __________________________NEW, sliding glass door unit for a 4 foot tub enclosure. Hard to find. Paid $200., Will sell for $100. Call Marria @ 978-534-5982 ___________________________ 1.) Used HP MX.70 17 inch desktop monitor color grey apx 4 yrs old not used for 2. Complete with box manual, pwr cord Excellent condition like new.Asking $65.00 or BO. First $50.00 takes it2.) Also have HP 845c color ink jet printer (grey) excellent condition like new with pwr adapter, no ink. Asking $35.00 or Bo. First $25.00 takes it.

Will sell all items above for $75.00 cash. All items are in working order and sold as is. I have all boxes; will deliver for slight fee w/i 30 mile radius of Fitchburg. These are my sons units - I need the room, he needs the money. Call Ken @ 978-342-0639 or e-mail: [email protected]___________________________36” x 80” outside door, hardwood with 6 windows, with frame. Dead-bolt lock included. $50.00 or BRO call Ken Anderson at 978-534-9533 or 508-641-1559 ___________________________ 4 COLOR MONITORS!!! 19”& 20”VIEWSONIC Each in excellent condition. Left overs from recent professional graphics studio upgrades. Asking $80 each or BRO call Brian at 978-448-3873 or [email protected].

REAL ESTATELOOKING FOR INVESTORS!!!Seasoned real estate investor seeks other like-minded investors to partner on large apartment complexes. Call Brian at 978-448-3873 for more information or e-mail. [email protected] ___________________________Looking for Property in Gardner, Leominster, Athol Areas. Any and all calls welcome for 10+ multi-family units. Have financing approved and ready to go. Call 978-448-3873 and mention this ad from the NWCLA Newsletter for more information. Ask for Brian. [email protected] ___________________________Timeshares Available For Rent in Aruba, Florida, Las Vegas. Any and all calls welcome 978-448-3873 and mention this ad from the NWCLA Newsletter for more information. Ask for Brian. [email protected] ___________________________Ad listings are free to members. There are three ways to submit your ad: (all ads are subject to review and editing)1.) Bring your classified ad(s) to the

meeting and post on the bulletin board

2.) E-mail your classified ad(s) to: [email protected] 3.) Mail your classified ad(s) to:

Attn Terry NWCLA PO Box 276 Fitchburg, MA 01420

a.) State classification – Wanted, For Sale, Free, etc.b.) Describe the item – color, size,

condition, age, model number, price, etc.

c.) Contact name – first and last name please (must be NWCLA member)

d.) Contact information – telephone and or e-mail address

All ads subject to space limitations in our newsletter.

BUY-SELL-TRADE-FREE

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NWCLA Program Schedule 2009 May 14, 2009 Representatives from Housing Court

that will address our landlord/tenant questions in a casual open forum.

June 11, 2009 Representatives from State Police will address our landlord/tenant questions in a casual open forum.

July 9, 2009 No meeting, Summer Break

Aug 13, 2009 No meeting, Summer Break


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Useful Web Site of the Month http://www.diynetwork.com/From the makers of HGTV and Food Network, DIY Network is the go-to destination for rip-up, knock-out home improvement television. DIY Network’s programs and experts answer the most sought-after questions and offer creative projects for do-it-yourself enthusiasts. The site features broadband video channels including home improvement, crafts, automotive, gardening, and wood-working along with step-by-step instructions totaling more than 20,000 projects online.

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NWCLA Members – Did You Know?... That Legislation Director Jamie Merrill has been tracking pending legislation that effects all of us as land-lords including helping members deal with out of town landlords? Be sure to visit the Legislation page on the NWCLA Web Site for this information and more related legislation topics. Take Action!!! http://www.nwcla.com/

Is Commercial Real Estate the Next Shoe to Drop? By Alex Veiga

Even as banks grapple with rising foreclosures, many lenders have something else to worry about: A rising tide of potential losses from commercial real estate loans that could reach into the billions.

Delinquency rates and defaults on office and retail buildings and hotels have more than doubled in just six months. For apartments and industrial buildings, the rates have increased more than 80 percent, according to real estate research firm Reis.

While homeowners are defaulting at almost four times the rate of commercial landlords, the sudden spike in late payments has many industry insiders worried about the collateral threat to the economy and financial system. Nearly $73 billion worth of commercial real estate loans are in some level of financial distress, according to Real Capital Analytics.

The risk to the economy is unknown, but probably un-derestimated in the government’s stress test of 19 major banks. The results released last week projected that should the recession worsen, the losses from commercial real estate loans could hit $53 billion, or 8.5 percent of their overall loan losses over the next two years. The exercise notably left out the majority of the regional and local lend-ers, which hold a big chunk of the nation’s $3.5 trillion commercial property loans on their books and remain vulnerable.

“Because of the severity of the economic downturn, now the pressure ... for commercial real estate is much higher,” said Hessam Nadji, managing director at Marcus & Mil-lichap Real Estate Investment Services. The economy has forced many businesses to downsize and others like Linens ‘N Things and Circuit City to go out of business. That’s left behind empty storefronts, office buildings and warehouse space.

Landlords are finding it hard to attract new tenants. Increasingly, they are slashing rents or offering incentives like money for tenant renovation. Tenants, likewise, have also become more aggressive about demanding conces-sions from landlords. Starbucks, for example, recently pressed its landlords to renegotiate the rents for leases at company operated stores.

While interest rates have declined, commercial property owners are having difficulty refinancing their loans because credit markets remain frozen.

And that’s what is worrying people like Kyle McLaughlin.

Overall, some $270.5 billion commercial property loans are expected to come due this year alone, said McLaughlin, a financial analyst for Reis. And it’s likely many borrowers won’t be able to refinance. That’s what snagged General Growth Properties, the nation’s second-largest shopping mall owner. Unable to pay or restructure its debts, the company sought shelter from creditors last month, making it the largest U.S. real estate bankruptcy in history.

Real estate experts are concerned that financially strapped landlords from General Growth to General Motors may have to sell property at bottom-dollar prices.


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LAWYER’S CORNERBy Michael J. Ciota

RECENT CASES REMIND LAND-LORDS OF SIMPLE BUT IMPORTANT INFORMATION

In several cases, the appellate courts have decided cases based on the small but all-important

points of law that landlords need to remember.

1In Cote v. Sylvia, 2008 Mass.App.Div. 27, 2008 WL 217396 (2008), the Appellate Division of the

District Court had two separate secu-rity deposit claims before it. In each separate claim the landlord had taken a security deposit and failed to place it in an interest-bearing account in a Massachusetts bank, located in Mas-sachusetts under terms that protect it from the landlord’s creditors. The landlord had also failed to inform the tenant in writing of the location of the bank and the account number; ei-ther pay interest on the account to the tenant annually, or give the tenant the option of an interest credit against rent accruing; return the deposits to the ten-ant within 30 days of the termination of occupancy, § 15B(4); and provide the tenant with a written statement of particulars itemizing damages to the rental unit to which the deposits are to

be applied. Of course the court award-ed triple damages to the tenant. The second claim has the landlord committing the exact same legal er-rors. The difference is that the court awarded judgment to the landlord. The difference is crucial and is the les-son to be learned from this case. The court restates the purpose of the law and reminds us just how strict it is. “The law is unequivocal. Neither igno-rance, nor the absence of bad faith, on the part of the landlord is justification for noncompliance. (citation omitted). It falls to the landlord to demonstrate strict compliance with statutory terms. (citation omitted). The overarching objective is the protection of the tenant, who rarely has real bargaining power with the landlord. The landlord holds the deposit in trust for the tenant and is strictly accountable for both its safe-keeping and its prompt return to the tenant within 30 days from the day the tenant vacates the premises. (citation omitted).” Having taken the pains to remind the landlord how strict the statute is, the court did not allow an award of triple damages to the tenant because the landlord did one simple thing - he returned the deposit within a reason-able time after the tenant requested it. The second step in the process is to determine whether there has been a failure, or refusal, to return the deposit on demand. The landlord promptly returned the deposit in this case upon the tenant’s demand for

its return. (citation omitted). The com-mencement of an action may properly be deemed a demand. (citation omitted). The landlord’s noncompliance with the statute resulted in the forfeiture of his right to retain the deposit and imposed upon him the duty to return the deposit on demand. “Where the landlord discovers or acknowledges his error and returns the deposit, and the tenant is not forced to resort to litigation to vindicate his rights, the multiple damages and attorney’s fees provisions of subsection (7) have no application.” Contrast this situation with that in Davila v. Boston Realty Works, Inc. 71 Mass. App. Ct. 11112008, 2008 WL 583695. The landlord that “in good faith” returned the security deposit just after the tenant filed the small claim. This did not convince the court be-cause the landlord had not only failed to return the deposit after the tenants vacated, he had also failed to return it in response to the many requests they had made before filing the small claim. The court stated wryly: “The land-lord’s return of the security deposit ... can hardly be deemed prompt.... Even more problematic for the landlord’s purposes ... no formal demand by Davila was required at the conclusion of their landlord-tenant relationship. In the circumstances of this case, where statutory deductions were not permis-sible, the landlord was required to return Davila’s $1,900 to him within thirty days of the termination of the tenancy [by statute]. The landlord’s failure to return the security deposit –


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an act considered a particularly repre-hensible statutory violation – subjected it to liability for an award of treble damages.

2In Alicea v. Pinero, 77 Mass. App. Ct. 1127, 2009 WL 652381, the Appeals Court explained that

although federal requires that federal regulations “shall be judicially no-ticed,” 44 U.S.C. 1507 (2000)1, a party relying on a Federal regulation “must bring it to the notice of the trial judge.” Mastrullo v. Ryan, 328 Mass. 621, 622 (1952). The tenant was a section 8 tenant who was relying on a federal regulation to make her case. The tenant committed a fatal error. “The Federal regulation now urged as applicable by the tenant was not brought to the trial judge’s attention. We do not consider it. Moreover, the landlord testified at the hearing that it was his understanding that notice to the BHA was unnecessary where the BHA already had provided the landlord notice that the tenant’s benefits were to be terminated.” If you are going to rely on federal regulations in a court case, make sure you bring a copy of the regulations to the court.

3Equipment Exp., LLC v. Rizzo, 71 Mass. App. Ct. 1110, 2008 WL 482397, (2008) and Dolben Co., Inc.

v. Friedmann, 2008 App. Div.1, 2008 W L 81549, 2 -3 (2008), remind landlords about acceptance of rent after termina-tion of the tenancy. In each case the tenant argued that the landlord had unwittingly reinstated the tenancy by accepting the rent after the tenancy ter-

minated.2 The message from these cas-es is always helpful to repeat. Once the tenancy has terminated, acceptance of the rent creates the presumption (dif-ficult to overcome) that the landlord has established a new tenancy. In each of these cases the landlord showed that the assumption was not supportable. In the Dolben case, the court noted that the landlord’s notice to quit saved the day for the landlord: “Dolben’s notice to quit included the following language: ‘Any money paid by you to your landlord after your receipt of the Notice will be accepted solely for use and occupancy of the leased unit pursuant to the Notice and without any intention of reinstating your tenancy, establishing a new tenancy, or waiving any rights to proceed with eviction.’ On that basis alone, evidence of Dolben’s reservation of rights could not be clearer. See Corcoran Mgt. Co. v. Withers, 24 Mass.App.Ct. 736, 745, 513 N.E.2d 218 (1987). To submit otherwise is, at best, careless and, at worst, disingenu-ous and dishonest.” In the Rizzo case, a commercial ten-ancy, the landlord showed that the money accepted was properly applied to part of the tenant’s arrears and not for periods of time after the tenancy terminated 1 The court has to accept them as federal law and be bound by them and they can be proven without introducing them into evidence. 2 Landlords need to be wary because this principle works differ-ently in terminations of residential tenancies based on a 14 day notice. A tenant, especially under a lease, has the right to “cure” the non-payment by paying.

Buyers Wage Bidding Wars as Real Estate Bottoms Out Boston Business Journal - by MIchelle Hillman

Jessica Ye has tapped into a segment of the real estate market that gets little attention today. It’s a market where sell-ers receive multiple competing offers to buy their homes for more than their asking price and buyers are entering counteroffers.

On the surface, the return of bidding wars doesn’t add up given the resi-dential real estate market is in one of the worst slumps in decades. But with home prices back to 2002 levels, savvy buyers are snapping up unprecedented bargains — and to a growing extent, competing with each other to get them — before the market hits bottom and prices start rising broadly.

Ye, a real estate broker with Keller Wil-liams Realty in Cambridge who repre-sents buyers and sellers, has witnessed bidding wars on both sides of deals. Buyers are competing for aggressively priced properties in exclusive Boston neighborhoods and bedroom communi-ties in the inner suburbs where steep discounts have rarely been found. The sales range from traditional single-fami-ly homes, to short sales, to properties in foreclosure that are being unloaded by banks. Regardless of the property type, buyers are after deep discounts and finding pockets of the real estate market to be hotter than ever.

Story continued on Page 8


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“It’s almost like a market within a mar-ket,” Ye said. “If you are well-priced and your condition is great, these (homes) are moving.”

Ye ticked off a half-dozen properties where she’s been involved in bidding wars on behalf of clients. In some cases, the bidders are proposing prices that are thousands of dollars above the ask-ing price.

Recently Ye sold a three-bedroom, one-bath home at 186 Bainbridge St. in Malden where the winning bidders paid $14,000 above the asking price. Ye said she received seven offers on the 1,344-square-foot Colonial, which was listed for $265,000. The buyers paid $279,300 after their original offer of $285,000 was reduced following the home inspection.

Across the state buyers and their agents are finding themselves in a contest for homes that are selling for much less than the assessed value.

Scott McNeill listed an 809-square-foot condo in Boston’s inventory-con-strained North End and received three offers. The property — which features granite kitchen countertops, travertine bathroom tile and rooftop rights — is under agreement for above the $489,000 asking price. McNeill, a sales manager at East Coast Realty in Boston, didn’t disclose the price because the deal will not close until June.

Bidding wars are taking some buyers by surprise. McNeill said another client of his was outbid on a one-bedroom, 789-square-foot condo in the Fenway. His client eventually won when the previous bidder walked away from the deal. The property was listed for $389,000 and is under agreement for close to the asking price.

“The reason she lost out is because she didn’t believe the market is as hot as it is,” McNeill said. “She just couldn’t believe there was actually someone bid-ding against her.”

McNeill said he believes buyers are willing to pay over the asking price

for properties because they are tired of waiting for the bottom of the market and want to seize the chance to own condos in trendy neighborhoods like the South End and brownstones on picturesque Back Bay streets.

Brian Rugg of Rugg Realty and for-merly of ERA Boston has a client who was outbid twice in the last month. The first offer was made on a Wayland home that was on the market for ap-proximately $389,000 and sold within “cents” of the asking price. His client then bid $376,000 on a home in Reading that was listed for $410,000. The offer was rejected even after Rugg’s clients increased their bid to $395,000. Rugg believes the home sold for $399,000.

Rugg said people are watching the market intensely. In highly sought-after areas from Boston to the inner suburbs, Rugg encourages clients to make offers as quickly as possible.

“We clearly saw this kind of behavior back in the heyday in 2003, 2004, 2005,” Rugg said.

U.S. Foreclosure Filings Hit Record for Second Straight Month By Dan Levy

Foreclosure filings in the U.S. rose to a record for the second consecutive month in April as banks increased efforts to seize homes from delinquent borrowers.

A total of 342,038 properties received a default or auction notice or were seized last month, RealtyTrac Inc. of Irvine, California, said today in a statement. One in 374 households got a filing, the highest monthly rate since the property data service began issuing such reports in 2005.

“What you’re seeing is the inevitable result of severe job losses,” Nicolas Retsinas, director of housing studies

at Harvard University in Cambridge, Massachusetts, said in an interview. “Until we stem the job losses, we can expect to see continuing foreclosures.”

Unemployment is hampering the hous-ing market as property prices fall. The U.S. jobless rate rose to 8.9 percent, the highest in more than a quarter century, the Labor Department said May 9. Home prices fell the most on record in the first quarter to a median $169,000 amid sales of foreclosure properties, the National Association of Realtors said yesterday.

Foreclosure filings jumped 32 percent from the year-earlier period, RealtyTrac said. Filings were little changed from March as some states delayed seizures. Ten states accounted for three- quarters of all foreclosures in April, with Califor-nia leading the nation.

Declines Slowing?

U.S. Housing and Urban Development Secretary Shaun Donovan and former Federal Reserve Chairman Alan Green-span said yesterday there are signs the real estate market is recovering.

“Since January we’ve seen both home sales moving up and down around a relatively stable number and we are seeing the first signs that the rapid decline in home prices is starting to abate,” Donovan said at an NAR con-ference in Washington.

March prices fell less than in February and 17 states showed sales increases, yesterday’s NAR report showed, as buyers took advantage of mortgage rates below 5 percent. The Federal Reserve is purchasing mortgage-backed securities to spur lower rates.

While price declines are slowing, it’s likely bank seizures will increase in the coming months, RealtyTrac Chief Executive Officer James Saccacio said.

“Lenders and servicers are beginning foreclosure proceedings on delinquent loans that had been delayed by legislative and industry moratoria,” Saccacio said.

Story continued from Page 7



California was No. 1 in April with 96,560 filings, a 42 percent increase from a year earlier, RealtyTrac reported. Florida climbed 75 percent to 64,588, Nevada rose 111 percent to 16,266 and Arizona rose 40 percent to 16,245.

State Rankings

Illinois ranked fifth in filings with 13,647, up 54 percent from a year ear-lier. Other states among the top 10 were Ohio with 12,324, Georgia with 11,521, Texas with 11,314, Michigan with 10,830 and Virginia with 6,254.

Nevada had the highest foreclosure rate as one in 68 households there received a filing, more than five times the national average. Bank seizures dropped 44 percent from the previous month, Real-tyTrac said.

Florida had the second highest rate at one in 135 households, almost three times the national average, and bank seizures fell 7 percent from March. California ranked third at one in 138 households, and Arizona was fourth at one in 164.

Utah, Georgia, Illinois, Colorado and Ohio were among the other with the 10 highest foreclosure rates.

Connecticut had the 19th highest rate, one in 662 households. Filings rose 25 percent from a year earlier to 2,174.

New Jersey’s Rate

New Jersey had the 22nd highest rate, one in 695 households, and filings fell 4 percent to 5,034. New York ranked 36th at one in 1,420 households, and filings fell 1 percent to 5,591.

Las Vegas had the highest rate for metropolitan areas with populations of 200,000 or more. A total of 14,073 prop-erties, or one in 56 households, received a filing, almost seven times the national average, RealtyTrac said.

Cape Coral-Fort Myers in Florida ranked second at one in 57 households. The city also had the steepest price decline in the first quarter, down 59 percent from a year ago, the NAR said yesterday. Miami and Orlando ranked ninth and tenth.

California cities ranked third through eighth: Merced, Modesto, Riverside-San Bernardino, Bakersfield, Vallejo- Fair-field, and Stockton, according to Real-tyTrac, which collects default data from 2,200 U.S. counties representing about 90 percent of the population.

“The housing problem is now an eco-nomic problem,” Retsinas said. “On the margins you have some investors who think they may have found the bottom, but on the other side are foreclosures.”

Story continued on Page 10

SPECIAL REPORT Road to Rescue By Les Christie

Foreclosures: ‘April was a shocker’A record number of foreclosure filings took place during April, but the number of repossessions fell 11%.

NEW YORK (CNNMoney.com) -- Foreclosures in April exceeded even March’s blistering pace with a record 342,000 homes receiving notices of default, auction notices or undergo-ing bank repossessions, according to a regular industry report.

One of every 374 U.S. homes received a filing during the month, the highest monthly rate that RealtyTrac, an online marketer of foreclosed properties, has recorded in four-plus years of record keeping.

“April was a shocker,” said Rick Sharga, a spokesman for RealtyTrac. “I would have bet on a dip because March foreclosures were so high.

Instead, filings inched up 1% from March and rose 32% compared with April 2008.

There were 63,900 bank repossessions, the last stop in the foreclosure process. More than 1.3 million homes have now been lost to foreclosure since the mar-ket meltdown began in August 2007.

The increasing foreclosures will force RealtyTrac to rethink its forecasts, according to Sharga. “We had been pre-dicting 3.4 million filings for the year,” he said, “but we’ll blow those numbers out of the water.”

The lion’s share of April’s filings were ones in the early stages of the process, such as notices of default, according to James Saccacio, RealtyTrac’s CEO.

Bank repossessions actually fell 11% for the month, compared with March.

Rank State Households per foreclosure 1 Nevada 65 2 Florida 135 3 California 138 4 Arizona 164 5 Idaho 255 6 Utah 312 7 Georgia 344 8 Illinois 384 9 Colorado 387 10 Ohio 411 1Source:RealtyTrac

Top 10 statesWhere rates of foreclosure filings are the highest.1


www.nwcla.com10

Ginny’s FOOD DRIVE Bring your canned goods or non-perishable food items to the next NWCLA meeting Get involved and make a difference to what Ginny has been doing for years for the local community. This is also another way to get the word out about how our landlord association is helping our community By participating in the food drive at the monthly meeting, you also get a free raffle ticket for our monthly member’s incentive program raffle for door prizes.

Invite NEW MEMBERS to Join Do you know someone thinking of becoming a landlord or property manager? If so, invite them to become an NWCLA member. It is the mission of the NWCLA to educate, inspire and assist landlords in their business. The membership of the NWCLA is filled with knowledgeable, ex-perienced and helpful people. Meetings are held the second Thursday of each month at 7:00 PM. Contact Brian Lucier via email at brian @bhbgroup.com or call (978) 448-3873 for more info.

http://www.nwcla.comMembers are given a password to access the member’s only section. We welcome feedback and hope you find it informative.

NWCLA Bucks Up for Grabs For each new member that you refer to NWCLA , you will receive $10 (ten) dol-lars in NWCLA bucks. You may redeem these dollars at our monthly meetings to buy items that will be available for sale or… you may save them up towards your yearly membership fee.

The Successful Landlord Is a must have for your landlord library and is now available to purchase at meet-ings. Cost is $40.00.

To contribute stories or articles for the newsletter or the web site contact Brian Lucier [email protected]

Brian Lucier also maintains online forums, blogs, and posts at http://realestateinvestor.com/brianlucier and at http://brianlucier.wordpress.com/

Our NWCLA group can be seen at http://www.realestateinvestor.com/groups/69/

Story continued from Page 9

That’s due, according to Saccacio, to the many legislative and company moratoriums that have prevented the foreclosure process from starting on delinquent loans.

Because fewer loans entered the process in past months, there had been fewer getting all the way to repossession. But now that those moratoriums are over, the volume of foreclosure filings is increasing.

“It’s likely that we’ll see a correspond-ing spike in [repossessed properties] as these loans move through the foreclo-sure process over the next few months,” Saccacio said in a prepared statement.

Ten states accounted for 75% of all fore-closure activity, and they fell generally into two categories: one-time bubble markets and the rust belt.

California, which easily outpaced every other state with with 96,560 filings. Other hard-hit former boom towns were Florida, Nevada and Arizona.

Those rust belts towns with the most fil-ings were Illinois, Ohio and Michigan. Georgia, Texas and Virginia filled out the rest of the top 10 list.

Nevada, with one filing for every 68 households had the highest foreclosure rate in the land. Florida, with one for every 135 households ranked second;

and California, with one for every 138, was third.

Las Vegas continued to be the worst-hit metro area. It had more than 14,000 fil-ings in April, one for every 56 house-holds and 20% more than in March.

The Cape Coral-Fort Myers, Fla., area was second with one in 57, a 31% month-over-month rise. Merced, Calif., where home prices have plunged almost two-thirds from their peak, had the third-highest rate.

Five other California metro areas ranked in the top 10: Modesto was fourth, Riverside-San Bernardino fifth, Bakersfield sixth, Vallejo seventh and Stockton eighth. Miami and Orlando rounded out the list.Raised expectations

Not helping, of course, is the steady erosion of home prices. The National Association of Realtors reported record home price losses Tuesday.

“[The home price decline] will lead to more foreclosures,” said Mike Larson, a real estate analyst for Weiss Research.

The loss of home values put many more mortgage borrowers underwater, mean-ing they owe more on their loans than their homes are worth. That increases foreclosure rates in two ways: Under-water borrowers have no home equity

to draw on should to pay for unexpect-ed expenses such as big medical bills or major car or home repairs. That’s makes them more likely to miss payments. And when home values fall far below mortgage balances, homeowners often walk away from their loans.

“There has been much more ‘deed-in-lieu-of foreclosure’ activity lately,” said Sharga. This is a transaction in which borrowers simply tell their banks that they’re not going to pay their mortgage and hand back their keys, and deeds, to their lenders.

“People are making the rational finan-cial decision to walk away from under-water homes,” he said.



Michelle Schmidt Realtor Cell: 978-828-0817 Email: [email protected]

“Call me today!

I’m glad to help with allof your real estate needs!”

Appraisals Killing Deals in Many MarketsWhat to do if value comes in below negotiated price By Dian Hymer

Finding the right house to buy is never easy; selling a home today is also challenge. It’s best to prepare yourself for obstacles that could cross your path so that you’re prepared should they arise.

In some markets, one in three transactions doesn’t close. This is a high ratio compared to the fallout ratio in previous years when the housing market was stronger and financing options were plentiful. In past years, most transactions fell apart over inspection issues. The biggest hitch today is financing, which is not to say that property defects don’t come into play.

For some time, lenders have tightened up on their qualifying crite-ria, making it more difficult for buyers to obtain the financing they need to close a sale. Recently, appraisals have become problematic, particularly in low-inventory, higher-priced neighborhoods.

There are three components to lender approval. The borrower must be financially qualified. This requires a good credit score, sufficient cash for a down payment and closing costs, as well as verifiable income. The lender also needs to approve a title report on the prop-erty to confirm that the seller has marketable title to the property. And, the lender needs an appraisal of the property to confirm that the buyer is not overpaying.

Previously, lenders’ underwriters required three comparable sales in the area that occurred within the last six months to validate the purchase price. Due to the soft housing market, lenders now want to see comparable sales information on listings that sold and closed within the last three months. The listing inventory in some areas was very low from December 2008 through March 2009, making it difficult for appraisers to come up with enough comparable sales information to satisfy the lenders.

To complicate matters, some appraisers and lenders automatically lower the appraised value by a certain amount if the property is in an area that is deemed as a declining market. This can result in an appraised value that is lower than the price the buyer and seller agreed to in the purchase contract.

HOUSE HUNTING TIP: What can you do if an appraisal comes in under the negotiated price? Your agent should talk to the appraiser to find out which properties were used as comparable sales. Your agent might be able to provide the appraiser with comparable sale information that can support the contract price, particularly if the appraiser is from out of area.

The most accurate appraisals are done by appraisers who know the local market well. Unfortunately, changes in the lender’s practices are resulting in more appraisals done by appraisers from outside

the local area. Many lenders no longer have their own, in-house ap-praisers; many are relying on large nationwide appraisal services to provide appraisal services.

If the appraiser can’t be convinced that the appraised value is low, and the buyers and sellers want to make the transaction work, it requires a compromise.

Let’s say a listing sold for $1 million, but appraised for only $950,000. One way to resolve the problem is for the buyers and sell-ers to split the difference. In this case, the sellers lower their price by $25,000 and the buyers put an additional $25,000 cash down.

For the cash-strapped, this is not an option. In this case, the sellers would have to lower the price by $50,000 to keep the deal together. Some sellers might be willing to carry a second mortgage as long as it doesn’t exceed the lender’s loan-to-value (LTV) limit and the loan isn’t due for at least five years.

THE CLOSING: Check with your lender before attempting to nego-tiate a seller carry-back; some lenders won’t allow it.

Dian Hymer is a nationally syndicated real estate columnist and author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books. ***

May 2008Landlords Helping Landlords

NWCLAP.O. Box 276Fitchburg, MA 01420

Association of the year for 2003


NORTHERN WORCESTER COUNTY LANDLORD ASSOCIATION

Schmidt’s Smorgasbord

NWCLA Monthly Meeting Menu

May, 2009 3 types of sandwiches, Chicken salad, Egg and Tuna salad, and a potato salads,. For desert we have fruit cups and pudding; Coffee, tea, hot chocolate – decaf also

June, 2009 Beef Stew, bread rolls and butter; Dessert as-sortment; Beverages – Coffee, tea, hot choco-late – decaf also

Dave and Laura are new to this post and want to hear from you. If you have menu suggestions or ideas, kindly talk with David or Laura Schmidt at the food table! We welcome your comments.

NWCLA MEETING NOTICE • SPECIAL GUEST SPEAKERS

May’s meeting will feature Representatives from Housing Court that will address our landlord/tenant

questions in a casual open forum.

Thurs., May 14th, 2009 7 PM – 9 PM ALL Members are welcome to attend the meeting at

The Monty Tech Cafeteria located in Fitchburg, MA

“landlords helping landlords” nwclanwcla.com/images/news/nwcla050109.pdf · with your realtor...

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