Citigroup to suspend foreclosures for 30 days

MSNBC.com

Citigroup to suspend foreclosures for 30 days

Bank is working on ‘long-term fundamental alternatives’ to foreclosure

The Associated Press

updated 5:45 a.m. MT, Thurs., Dec . 17, 2009

WASHINGTON - Citigroup Inc. will suspend foreclosures and evictions for 30 days in a temporary break for about 4,000 borrowers during the holiday season.

The New York-based bank said Thursday the suspension will run from Friday through Jan. 17. It applies only to borrowers whose loans are owned by Citi. Borrowers who make payments to Citi but whose loans are owned by other investors are out of luck.

"We want our borrowers to have a much less stressful time, to spend their time with their families during the holidays as opposed to worrying about their homes," Sanjiv Das, head of the company's mortgage division, said in an interview.

The suspension means Citi will halt foreclosure sales and stop evicting homeowners from properties it has already seized. The company projects it will help 2,000 homeowners with scheduled foreclosure sales and another 2,000 that were due to receive foreclosure notices.

Das also said the company is working on "some long-term fundamental alternatives" to foreclosure, but declined to be specific. "We know that moratoriums are not permanent solutions," he said.

Most major lenders suspended foreclosures last winter while the Obama administration developed its $75 billion loan modification program. Foreclosures picked up again after those suspensions lifted. In recent months, they have fallen as banks evaluate whether borrowers qualify for the government program.

Citi has enrolled about 100,000 borrowers in the Obama program, but had made only about 270 of those modifications permanent as of the end of last month, according to a Treasury Department report. But Das said the low number resulted from a "reporting error" and said it will rise dramatically by year-end.

"I have put a lot of pressure on my team to make sure that there is almost nothing left in the pipeline," he said.

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

URL: http://www.msnbc.msn.com/id/34460803/ns/business-real_estate/

Fannie, Freddie halt foreclosures for two weeks during holidays

Fannie, Freddie halt foreclosures for two weeks during holidays

WASHINGTON (AP) — Mortgage finance companies Fannie Mae (FNM) and Freddie Mac (FRE) are suspending foreclosures and evictions for about two weeks in a temporary break for borrowers during the holiday season.

The suspension, announced Thursday by the government-controlled companies, runs from Saturday through Jan. 3. "No family should have to face the prospect of being evicted during the holiday season," Michael Williams, Fannie Mae's chief executive, said in a statement.

Earlier Thursday, Citigroup announced a 30-day suspension of foreclosures and evictions, affecting about 4,000 borrowers. Fannie and Freddie did not estimate how many homeowners would get this grace period.

INTERACTIVE MAP: Home foreclosures state-by-state in the third quarter

GRAPHIC: Tracking housing market's rise, fall and rebound

Last winter, most major lenders suspended foreclosures while the Obama administration developed its $75 billion loan modification program. But foreclosures picked up again after those suspensions lifted.

Investor Report: Tax Extender Act

Investor Report: Tax Extender Act

by Kenneth R. Harney

Real estate investors are facing a squeeze play on Capitol Hill, with important tax incentives nearing an end-of-the-year deadline.

Last week the House approved what's known as the Tax Extender Act, a Christmas tree bill filled with nearly 50 tax program extensions beyond their December 31st scheduled expiration date.

Two of the extenders are especially significant for investment real estate: First is the so-called "leasehold improvements" provision, which allows owners of commercial, retail, hotel and office buildings -- large and small -- to use an accelerated 15-year depreciation schedule in writing off renovations and upgrades they make to their real estate.

The House bill extends favorable leasehold writeoffs for another year.

The second key one year extension in the bill involves depreciation writeoffs for developers who clean up so-called "brownfield" sites that have experienced environmental damage from toxic chemicals or pollution.

But the House bill also contains a massive penalty for real estate, a multi-billion dollar tax increase for investors in real estate partnership deals.

The House bill would remove favorable capital gains treatment that now exists for a type of compensation that general partners frequently receive, known as "carried interest," and instead tax it at ordinary income tax rates.

For many investors functioning as general partners, that would mean a crushing tax increase -- more than double their tax rates overnight.

Though strongly opposed by housing, real estate and other financial market groups, the extender bill with the "carried interest" tax change has now gone to the Senate for a vote.

And that's where the deadline squeeze comes in. The Senate already has a jampacked year-end schedule dominated by health care, and is not likely to take up the tax extender bill before December 31st.

As a result, the popular leasehold improvements and brownfields tax programs are likely to expire, effectively go into limbo, as of January 1st.

Real estate industry legislative analysts say the Senate could take up the tax extenders bill as early as January or February, but will probably not accept the House's controversial carried interest changes.

Should investors worried about the expired tax benefits get upset?

Not quite yet, lobbyists tell Realty Times. If the Senate can quickly cobble together some alternative tax increases to satisfy the House, the extender bill is likely to pass sometime early in the year with a January 1 retroactive date - minus the tax increase for real estate partnerships.

Then again, nothing is certain on Capitol Hill.

So talk to your tax advisor before committing to investment decisions that might be affected by the expiration.

Published: December 18, 2009

Homeowners sue management company accused of not forwarding rent

Homeowners sue management company accused of not forwarding rent

posted by Dan Boniface Jace Larson Date last updated: 12/21/2009 4:31:01 AM

Associated Images

DENVER - More than a dozen homeowners claim they are out thousands of dollars after their property management company did not pay them rent on time or did not pay it at all.

A multi-agency investigation is under way into Mile High Management, which also goes by the name Move in Colorado.

The Colorado Division of Real Estate and the Arapahoe County District Attorney's office confirm ongoing investigations into the company's practices.

Three lawsuits filed against Mile High Management or company owner Kevin Allen claim he owes homeowners $21,991, according to court records obtained by 9Wants to Know. Two of the lawsuits are closed, one of the lawsuits is still pending.

The Division of Real Estate provided 9Wants to Know with copies of 10 complaints against Mile High Management or Allen. The Arapahoe County District Attorney's office confirmed it also received complaints.

9Wants to Know went undercover making appointments to view a house Allen's company listed for rent on Craigslist. Allen and Mile High Management Operations Director David Gladu showed our producer around a three-bedroom house in Centennial.

"We don't do any credit check," Gladu said. "We won't even call your references."

When asked how rent payments are set up, Gladu told us renters pay the company and it pays the homeowners.

"You'd be sending us the money and we'd be forwarding it on," he said.

But the homeowners and renters who filed complaints say that is not what happened.

"I will tell you, he is one smooth talker," flight attendant Debra Black said. She is in a legal battle trying to get back some of the money she says Allen owes her.

When it came time to get paid, Black says Mile High's checks often arrived late and eventually not at all.

She hired him to manage her Aurora condo after she decided to transfer with United Airlines from Denver to Washington, D.C.

"I'm worse off today than I was a year ago," she said. "The reason I went to Washington, D.C. and rented my home with all of my belongings in it, everything I own, was to get financially stable."

In court paperwork from a claim filed in Arapahoe County, Black says Mile High Management paid her from February through July 2009 but claims she wanted to terminate her agreement with the company for cause "to include not having timely paid over the rent."

She asked her tenant, Jessie Carter, to pay her directly.

Carter told 9Wants to Know he worried he would be liable for breaking his agreement with Mile High Management, but did not want to pay the company if Black was not getting her money, so he sued them both.

"It's been a nightmare that I cannot even believe," Black said.

9Wants to Know called Allen to ask him about homeowners' and renters' claims of not being paid on time or fully. Allen agreed to meet with us, but never showed at the scheduled time.

Allen's attorney, Dion Persson, called to say his client had decided not to talk to 9NEWS so 9Wants to Know went to Allen's house.

"These people are getting their money," Allen told 9Wants to Know. He said all funds are forwarded on to the owners.

After 9NEWS spoke with Allen, his attorney sent a letter calling the number of lawsuits "small."

He said Allen and Mile High Management "are working hard to resolve these disputes," and said some of them arose from a business policy where Mile High Management guaranteed the homeowner would receive the rents from the tenant.

"In these cases, the tenants stopped paying and the company was unable to honor the guarantees. The company is working with these homeowners to address these claims. Of course, the company no longer provides that type of guarantee," Persson wrote in the letter to 9Wants to Know.

Persson said his client is a good businessman.

"Regretfully, the company has had a few unfortunate disputes in connection with its business," Persson wrote. "Due to the lessons learned from these disputes, the company has improved its systems to provide security to the homeowners and ensure compliance with all applicable laws."

If you have information about Mile High Management or a tip for 9Wants to Know Investigator Jace Larson, e-mail him at jace.larson@9news.com or call 303-871-1432.