YOUR CHANCE TO BE IN THE FORECLOSURE SPOTLIGHT KHOU-TV reporter Dave Fehling is trying to find people who might have interesting perspectives on how foreclosures are affecting various local neighborhoods — for a Channel 11 teevee news story he’s putting together. Can any Swamplot readers bail him out? Or maybe just point him in the right direction? Send Fehling an email (link at the bottom) with your sobering story. But really, if you’ve got something truly juicy to tell, we’ll want to hear about it too! [Swamplot inbox]
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Foreclosures
Buyers didn’t show up for the latest sale at the old JCPenney building next to West Oaks Mall. So Wachovia Bank will foreclose on the property soon, the CoStar Group reports.
The bankruptcy trustee for the collapsed financial empire of Edward H. Okun had listed the vacant building, which Okun’s 1031 Tax Group had bought for $4 million. But no buyers were willing to pay even the amount of the financing, which was $3 million.
The Houston JCPenney building and a mall in Salina, Kansas — also now facing foreclosure — are Okun’s last remaining properties.
- Trustee’s Newsletter #12 [The 1031 Tax Group Bankruptcy Trustee]
- Last of Okun Empire Will End in Foreclosure [CoStar Group]
- Previously in Swamplot: West Oaks Mall Bankruptcy Sale: JCPenneys on the Dollar, West Oaks Mall: Your Exchanges Are No Good Here
The developer of the Mosaic highrise overlooking Hermann Park — a limited partnership between Phillips Development & Realty and publicity-shy Florida Capital Real Estate Group — declared bankruptcy earlier this week to avoid foreclosure on a $71 million loan from Chicago lender Corus Bankshares. Florida Capital, originally the equity partner, will be taking over as the general partner.
The bankruptcy covers just the first Mosaic tower. The second tower, rebranded the Montage, has not yet defaulted on its separate $71 million Corus loan.
So how have sales been going at the Mosaic? It depends, the Houston Business Journal‘s Jennifer Dawson learns, who you ask:
Need a place to crash somewhere in Houston for a short visit — say, a week — but don’t want to stay in a hotel?
Phillips Development & Realty, developers of the Mosaic and freshly rebranded Montage towers across Almeda from Hermann Park, is handling rentals of Mosaic condos owned by investors — as well as rentals of the many units the developer has been unable to unload. Now a source passes on a new rumor to Swamplot: Some of those available rentals may be extremely short-term.
Not a bad idea for a property that’s close to the Med Center! With that rumor, though, come a couple more:
Phillips’s Corporate Leasing Director will be taking over management of the Mosaic’s homeowners association from the company that had been running it since the building opened last year. But Phillips’s new tenure at the HOA may be a short-term one too. Why?
Because Florida Capital Real Estate Partners, the Mosaic’s lender, might just be foreclosing on Phillips’s property soon — both the Mosaic and an apartment complex in Tampa called the Casa Bella. Swamplot’s source also suggests that Camelot Realty Group — the company that’s clearly been very busy handling the Mosaic’s many condo sales — may already have had discussions with Florida Capital about taking over onsite rental duties from Phillips once the foreclosure takes place.
- Mosaic Splits in Two [Swamplot]
- Mosaic Rumor: Second Tower Going Rental? [Swamplot]
- Casa Bella on Westshore [Phillips Development & Realty]
Photo of Mosaic and Montage: Swamplot inbox
THE COMING FORECLOSURE FLOOD “Harris County foreclosures totaled 11,837 in 2008, up 0.6 percent from 11,766 during the prior year, according to The Woodlands-based Foreclosure Information & Listing Service. The figures represent foreclosed homes up for sale on the first Tuesday of each month at the courthouse. The next auction won’t be until January. . . . Foreclosures had made double-digit percentage gains in the prior two years. But they began to moderate toward the end of 2008 because the now government-controlled mortgage finance giants Fannie Mae and Freddie Mac halted foreclosure sales between Nov. 26 and Jan. 9. Also, earlier in the year, the U.S. Department of Housing and Urban Development put a 90-day moratorium on foreclosures in areas affected by Hurricane Ike. Additionally, lenders typically hold off on foreclosures during the Christmas season, adding to the slowdown, said Michael Weaster, an agent who specializes in selling foreclosed properties for banks. ‘Nobody wants to look like ogres during the holidays,’ Weaster said. ‘So what we’ve got in the pipelines is significant.’†[Houston Chronicle]
Late last night city officials were able to get an emergency court order allowing a trustee to take over the La Casita Apartments at 313 Sunnyside near Northline. And MGC Mortgage, the company left holding onto the foreclosed property, has “transferred oversight” of the 600-unit complex behind Gallery Furniture to a new management company. The agreements, along with other interventions by the city, mean the more than 1,000 residents of the all-bills-paid apartments will not be evicted, have their water or electricity shut off, or lose credit for the monthly rent they just paid:
Residents of the La Casita Apartments already felt neglected by managers who let buildings run down, even before Hurricane Ike broke windows and tore patches off roofs. But instead of starting on repairs to make the apartments livable after the storm, management skipped town, keeping the rent money and leaving the bills unpaid.
The apparent owner of La Casita is an Indiana company named Briarwood Houston LP. The complex failed a Houston Housing Authority inspection last month. Police officials are investigating the management company’s handling of the payments.
- City helps halt evictions [Houston Chronicle]
- Residents Of Foreclosed Apartments Keep Homes [Click2Houston]
- Previously in Swamplot: Foreclosure Hits Northline Renters
FORECLOSURE HITS NORTHLINE RENTERS Residents of the La Casita Apartments are worried that they may be kicked out of their homes or have their water turned off. The all-bills-paid complex is being foreclosed on. Representatives from the city are planning a meeting this evening at Northline Elementary to discuss the situation with the more than 150 1,000 people who live in the complex, which sits behind Gallery Furniture just east of the North Freeway. Officers carrying assault rifles arrived at La Casita yesterday after apartment manager Ed Thomas called the police. After a notice was posted on the property informing the renters that they would be forced to move out immediately, upset residents had blocked Thomas’s car, complaining that he wasn’t giving them acceptable answers about their situation. [abc13]
DELINQUENT DEBT: WEST OAKS MALL SALE! Here’s another chance to clean up some of the wreckage left by mysterious investor Edward Okun: “West Oaks Mall in Houston . . . has $81.3 million in delinquent debt attached to it in the form of commercial mortgage-backed securities. Joseph Luzinski, the federally appointed bankruptcy trustee for West Oaks Mall, said he hopes to sell the mall by year’s end, though store closures continue to hamper its value. [The mall] . . . is about 80% occupied, having lost a J.C. Penney, Linens ‘n Things and Whitehall Jewelers. The mall recently cut a deal to keep its Steve & Barry’s LLC store open amid that retailer’s bankruptcy. The special servicer for the mall’s debt, LNR Partners Inc., attempted to foreclose in September 2007, but Mr. Okun forestalled the move by putting the mall into Chapter 11 bankruptcy protection the next month. A federal grand jury indicted Mr. Okun on fraud charges last March after his 1031 Tax Group LLP, a company that helped facilitate tax-free real-estate deals for small investors, collapsed into bankruptcy and didn’t return $132 million of investors’ money.” [Wall St. Journal; previously]
THE MICHAEL B. SMUCK APARTMENT FLIPS BEGIN Triumph Land & Capital Management, the company that bought two other former Smucked apartment complexes, has already flipped a third: “‘The seller had bought the loan on Village at Loch Katrine, then foreclosed on it, then sold the property,’ says Russell D. Jones, vice president of Apartment Realty Advisors in Houston. He says Andrew Chong had signed the purchase agreement before Triumph Land & Capital foreclosed on the loan. Although Jones kept mum about the price, area sources believe the Village at Loch Katrine, situated at 16545 Loch Katrine Lane, sold for $6.5 million to $7 million.” [Globe St.; previously]
A Dallas real-estate firm is ready to rescue the Huntwick Apartments on FM 1960 near Wunderlich Rd. from receivership — and also from its management, before that, by Louisiana real-estate investor Michael B. Smuck.
As of last year, just as it prepared to file for bankruptcy, Smuck’s Louisiana-based MBS Companies owned 65 apartment buildings in Texas — 33 of them in the Houston area. Even prior to that, the company’s property-maintenance skills had reached legendary status. The president and executive vice president of the Houston Apartment Association relayed complaints from residents and neighbors of MBS apartments to the Wall Street Journal last year, and reported that the griping had only increased after the influx of residents fleeing Hurricane Katrina in late 2005.
Here’s a commenter on the Houston Politics blog back in April (quoted in Swamplot), describing the scene at the 288-unit Huntwick:
Balconies have collapsed, lots of overgrown vegetation, the paint is peeling, there is obviously a total lack of maintenance. A large tree split in half on their property adjacent to Coral Gables Dr., and after the dead half lay on the ground (in plain view) for over 6 months, a crew finally cut it into smaller pieces, which then lay in the same spot for another 6 months.
After the jump: What’s happening to the Huntwick, plus the complete Michael B. Smuck Houston apartment roster!
PROPERTY TAX PROTESTS: DIFFERENT COUNTIES, DIFFERENT RULES Bring up the number of foreclosures and the amount of time properties have been sitting on the market in your neighborhood when you protest your property taxes, and the Harris County Appraisal District will take that evidence into account. But the Fort Bend County Appraisal District won’t. [Houston Press]
Chronicle reporter Matt Stiles continues his tour of substandard Houston apartments, stopping this week for a visit at the 172-unit Candlewood Glen Apartments, near the 5400 block of DeSoto:
Now, only about 12 units remain legally occupied, and the management office is shuttered. Rotting trash sits in piles. Copper pipes and air conditioners’ coils have been ripped on a mass scale from burglarized units. The swimming pool is filled with water the color of crude oil.
“It’s just a horrible place,” said Roy Millmore, executive director of the Near Northwest Management District, an organization that focuses on reducing crime in the area.
The poor conditions inside the complex have persisted for months, in part because many of the property’s 43 fourplexes are owned by out-of-state investors, rather than a single owner. That makes applying pressure to improve conditions more complicated for city inspectors.
Still, code inspectors had not visited the property in a decade until the Houston Chronicle documented its conditions. City officials say they had not received complaints from people living there and that they are trying to enforce codes more aggressively than in years past.
After the jump: Stiles’s Candlewood Glen Apartments photo tour. Plus: Available now!
We get mail . . . from a reader who’s considering renting one of the many available condos in Montrose’s famed Tremont Tower:
I am moving to Houston in June and when I was looking around for housing I found an ad for a rental at Tremont Towers. I went to look at the place and liked it but something seemed odd to me. If this place is as nice as it looks, it is in Montrose (apparently a desirable area to live) why is is so silent and why does one man own at least 5 separate units and even more odd, why are they so cheap when last year they were valued at >300K (odd even in this real estate market). So, I plugged them into Google and started following a trail. I read about Jordan Fogle and Heather Mickelson.
I talked to my possible future landlord and he told me a story that Jordan Fogle confused the builder of Tremont with the ones who built her home. In addition he offered a story that the Heather Mickelson had purchased the property and then not long after moving in decided to move out with her boyfriend. Since they would not purchase the property back from her she sabotaged the apartment by opening her windows through all weather which then lead to some horrible development of mold.
My issue is that since the coverage in 2005-2006 I haven’t been able to find much information and I cannot verify either side of this tale. I was wondering if any readers had passed on more information about the Towers or if anything had been done in this building that had nearly 100% foreclosure. I am concerned because I would prefer to avoid paying nearly a thousand a month just so I can get sick and not be able to work.
A little more below, plus: your chance to help!
A story by Paul Knight in this week’s Houston Press adds a little color to the Houston foreclosure map:
Houston’s 77449 ZIP code, on the northwest side, made the top 100 in the nation for 2007. The area saw rapid growth in the early part of the decade, with retail strip centers and a sea of new homes popping up almost overnight.
“They started developing that area really aggressively,” says Erion Shehaj, a Houston realtor who specializes in foreclosed homes. “Like clockwork…[foreclosures] have been popping up one after another, because they were pushing them to people that couldn’t really afford them in the first place.”
Large signs are now planted along the roadside, advertising housing deals such as “Inventory Clearance!” and “Closeout Specials.”
One subdivision in the area that was hit particularly hard is Bear Creek Meadows. The neighborhood was developed about five years ago, with houses priced in the $120,000 range and marketed to first-time buyers.
Below the fold: More on Bear Creek Meadows, plus a few photos to illustrate Knight’s reporting on foreclosure cleanups.
Git yer fresh, hot foreclosure listings right here! Hey, not all of them are newish red-brick homes in the low hundreds outside Beltway 8!
This house at 1902 Wagon Gap Trail, for example . . . isn’t brick! It’s in Ponderosa Forest, just north of FM1960, which means it’s super-convenient to . . . FM1960! And it just popped up on the market, listed for $129,000! Not bad for a 1970s 4-bedroom, 3 1/2-bath, 3,119-sq.-ft. two-story with diagonal wood siding.
After the jump, a few furtive interior shots of this foreclosed-upon bargain, plus a special something in back!
