Lowe’s Carlsbad

From sddt.com:

Sudberry Properties of San Diego reported it has secured more than $164 million in financing for five major properties, including money for its 230-acre Civita masterplan in Mission Valley

The largest financing commitment is $59.5 million for Circa 37, a planned 306-unit apartment property on 10.5 acres in the Civita masterplan.

The one- to three-bedroom floorplans range from 630 to 1,400 square feet.

Colton Sudberry, Sudberry president, said Wells Fargo Bank and Cigna are providing the construction lending for Circa 37.

Dale Northrup, Wells Fargo Bank senior vice president, said in a statement that the launch of Civita is an important milestone for real estate development in San Diego.

“Residential construction has been at historic lows and we are pleased to participate in Circa 37, which is well-conceived and raises the bar for quality development in Mission Valley,” Northrup said. “It sets a fine precedent for all that will follow in Civita.”

When completed, Civita — being built on the site of an old rock quarry — will be a major mixed-use community with as many as 4,780 residential units and nearly 1 million square feet of retail, office, open and civic space.

Construction is now under way on the Civita’s first for-sale neighborhood, Origen by Shea Homes, a collection of three- and four-story row homes. The grand opening is for that project is scheduled for later this year.

The other new Sudberry project being financed is Palomar Airport Commons, where a $16.9 million construction loan was secured for the 184,000 square foot community shopping center at the southwest corner of Palomar Airport Road and El Camino Real in Carlsbad, on the site of the closed Olympic Resort Hotel and Spa.

Sudberry said Bank of America is also the lender for that Lowe’s-anchored project.

Mike Atkins, senior vice president and client manager for BofA, said the timing is excellent for launching the new Lowe’s-anchored center in Carlsbad.  “Sudberry worked very hard to put together a project that is almost institutional grade in the quality of the investment,” Atkins said.

The loans that make up the remainder of the $164 million in funding are to refinance existing shopping centers.

These includes a $53.3 million refinance package for the 155,600-square-foot Village Walk at Eastlake, with Henry’s Farmers Market, Petco, TJ Maxx and Trader Joe’s as tenants. Ladder Capital Finance and Redwood Financial Group were the lenders on this Chula Vista center.

A $22.82 million refinance is being used for the 76,900-square-foot Marketplace in Santee, with Henry’s, U.S. Bank, FedEx, Starbucks and newly opened Via Moto as tenants. Cantor Fitzgerald is the lead lender.

The last piece of funding was an $11.5 million refinance for the Canyon Hills Marketplace in Lake Elsinore, with CVS Pharmacy and Stater Brothers as anchor tenants.

That loan was bankrolled by Cantor Fitzgerald and Wrightwood Capital.

Sudberry said he is expecting another $17 million loan on a property that he declined to identify until it closes.

So, is financing becoming any easier?

“It was easier than it was 18 months ago, but it has gotten a bit worse. We had a brief window and we were able to jump through it,” Sudberry said. “There are monies from life companies. Our $17 million loan is coming from a life company. It would be even more difficult if the life companies weren’t there.”

Despite the concerns, however, Sudberry said his future sentiment is buoyed by the loans he has already received.

“We are optimistic about the continued strength of the economy in our area and pleased to have major lending institutions validate that faith,” Sudberry said.

Strategic-Defaulters in NSDCC

How many people try to short-sell their house, before getting foreclosed?

Those on the default list get bombarded with save-your-credit and extend-your-free-rent offers from realtors – plus kickbacks too.  To resist, a defaulter must be really committed to NOT short-selling.

Of the 41 SFRs that were foreclosed in North SD County Coastal since June 1st:

Tried short-selling: 14 (34%)

No attempt to short-sell: 27 (66%)

I guess there could be a few who thought that their loan modification still had a chance of succeeding, but the bank foreclosed on them prematurely.  But the vast majority of the 27 who didn’t try to short-sell must have been determined to let that house go.

On a side note – having just 41 foreclosed in almost two months,  in an area that closed 410 detached sales during the same period, is discouraging news for buyers waiting for additional REO inventory.

Reduce Principal Share Equity

From HW:

Ocwen Financial Corp. launched a new modification program to reduce the principal on a mortgage for delinquent borrowers, while compelling them to share in the future appreciation of the home’s value with the investor.

Mortgage modifications will only be available for homeowners in negative equity.

Atlanta-based Ocwen holds a $74 billion servicing portfolio after acquiring Litton Loan Servicing and HomEq. Ocwen launched the Shared Appreciation Modification program as a pilot in August 2010, a program the company believes will make a major dent in the roughly 14 million mortgages currently in negative equity, according to Moody’s Analytics.

Through the program, Ocwen will write down qualified loans to 95% of the underlying property’s market value. The amount written down is forgiven in one-third increments over three years as long as the homeowner remains current. When the house is later sold or refinanced, the borrower will be required to share 25% of the appreciated value with the investor.

“Like all modifications, SAMs help homeowners avoid foreclosure. But they also restore equity. That’s a significant benefit to the customer and, we believe, the economy and housing market. Psychologically, it’s important too,” said Ocwen CEO Ronald Faris. “Our analytics tell us that an underwater mortgage is one-and-a-half to two-times more likely to default than one with at least some positive equity.”

SAM is one of the first principal reduction programs initiated by a private company without the prodding of a government agency. Other servicers have sporadically used Hardest Hit Fund and Home Affordable Modification Program dollars to write down principal, but only in select states.

Since August, Ocwen said 79% of the borrowers accepted the offer with a redefault rate of 2.6%. Ocwen said it has regulatory clearance to push the program into 33 states.

J.T. Smith, the chief investment officer for the boutique investment bank Aristar Funding Group said there are many still unknown parts of how Ocwen will structure the modifications such as tax liens and future title issues, but granting the borrower 75% of the appreciation is “very generous.”

“This program is a win for the borrower and very, very generous of Ocwen and investors,” Smith said. “Silent seconds are a more equitable solution, so Ocwen borrowers should take these modifications and run with it.”

SD Case-Shiller Index – May

The San Diego Case-Shiller Index for May is out.

I don’t know how much it matters, but they have two measurements – seasonally-adjusted, and non-seasonally adjusted.  Here are the recent troughs and peaks:

CSI – SD Trough Mo. Score Peak Mo. Score May ’11 Trough-to-today chg
June ’09
May ’10
April ’09
July ’10

What does it mean? We had a price bump last year, and since then we’ve given back about half of the gain. From my perspective, pricing remains under pressure mostly from fraudulent short-sale listings, and when they hit a neighborhood, they hit hard. But other than those, we’re just bumping along.


I know we’re supposed to be fans, but Padres’ management isn’t committed to winning it all.

I was glad to see Boch and Flan win the World Series last year – here’s a glimpse of Sunday’s game during a mini-family reunion over the weekend where most of us were at AT&T Park for the first time (better than Petco Park but over-zealous security), and Monday’s trip to the White House:

Loan Limits May Extend?

From NMN:

Mortgage, housing, and even local politicians are stepping up pressure on congressional appropriators to extend the maximum $729,750 loan limit on government-backed loans for another year, fearing that a failure to act will damage already stressed real estate markets.

Industry trade groups report that some large lenders have already stopped making high balance loans above $625,500, which will become the maximum limit on October 1 if Congress does not pass an extension.

Mortgage bankers, Realtors and others say lenders will stop making the higher balance loans by mid-August because they fear getting stuck with paper that soon will be ineligible for sale to Fannie Mae, Freddie Mac, and Ginnie Mae securitizers.

This will halt “some homes sales, and will greatly curtail lending in many communities,” according to a joint letter sent to House and Senate appropriators on Friday.

Fifteen housing industry groups, including lenders, Realtors, builders as well as the National League of Cities and U.S. Conference of Mayors signed the joint letter.

The Obama administration and many Republican leaders support a reduction in GSE loan limits as a way to diminish Fannie and Freddie’s grip on the mortgage market. However, that view may be changing, at least in regards to the White House.  On Friday, Rep. Barney Frank said he believes the Obama administration will reverse course and support an extension of the maximum loan limit, according to one wire report.

The ranking Democratic on the House Financial Services Committee said there is a “real chance” Congress will pass an extension.

Bankers Contolling Pace

ocerenter noted two posts ago – could the foreclosure crisis be turning a corner?

I join in his skepticism, due to the numerous ways the data can be manipulated – primarily, we’ll never know how many defaulters are not being foreclosed.  The bankers can just let people live for free if they want, and the public won’t know.

In San Diego County, there are more REOs and short-sale closings, than properties being foreclosed (based on MLS vs foreclosureradar stats):

Time Period REO + SS = REO & SS Totals Trustee sales Diff
2010 7,372 6,332
1H11 3,844 3,250
2Q11 1,999 1,710
June 672 570

If anything, the liquidation flow indicates that the bankers have become better at managing the pipeline – as long as they keep it around 1,000 properties per month. At least they are providing some inventory!

But what about the shadow inventory? Will the underwater folks provide an unmanageable event for servicers in the future? Not as long as selling about 1,000 properties per month is acceptable to the bankers and investors. Defaulters will just have to wait in line!

Queensland Beach House

The future house for a retired couple was the brief for this beachside house. The site is relatively steep, which allows direct entry from the street level to all main living spaces with guest accommodation on a lower level.

From the street, the building appears low in scale, whilst still gaining good elevation on the beach front.

Cantilevering upper floor elements combined with a bridge form breezeway threshold let the house float above the dunal vegetation giving the building a sense of lightness about it.

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