Locals fear continued foreclosure problems

By Ben McLeod | bmcleod@flagler.edu

St. Augustine residents agree President Obama’s stimulus package will do very little to help the real estate market, especially foreclosures.

Eric Larson, St. Augustine resident and Flagler College graduate, was given 10 days notice to move out of his apartment and find a new place to live.

“I got kicked out because my landlord foreclosed on the apartment,” Larson said.

“It was scary not knowing where I was going to live next.”

Larson found a new apartment, but is worried the same situation will happen again. “I am going to be cautious about spending my money, because if I got kicked out again I would not be able to buy a home,” Larson said.

“Even with all the tax cuts, I still have student loans to pay off.”

Larson said he is in no hurry to look for homes, not just because money is tight, but because the market going to get worse.

“People are losing a lot of money on their places because the banks are letting them refinance at values their houses were never worth,” Larson said.

Philip Jacobs, a real estate broker for Sunliner Realty Group, Inc., said Obama’s stimulus package will not benefit real estate.

“The biggest problems going on right now are foreclosures, and I have seen nothing in there that will prevent foreclosures or help the real estate market,” he said.

According to Jacobs, the small amount of tax relief is not going to help first-time homebuyers.

“We have to get the banks situated so they will start loaning money at a reasonable rate again, and until then, no one is going to have enough to start purchasing,” Jacobs said.

Jacobs, 70, owns investment properties of his own and said he believes he will not recover from them for his lifetime. “I hope the Obama administration is right,” Jacobs said. “Sure, we might see a little spike, but I don’t see long term benefits.”

Mickey Fitts, a St. Augustine resident, is having problems as a lender. “I don’t think anyone is going to be interested in my home,” Fitts said. According to Fitts, the value of his home has dropped because of the market. “Right now it is empty and I just want it rented out,” Fitts said.

Perry Unwalla, agent owner for State Farm Insurance St. Augustine, said there is no guarantee of insurance for empty homes.

“If a house is empty from foreclosure or vacancy, there is a risk of crime and internal damage,” Unwalla said.

“This brings a whole new problem into the picture.”

According to Unwalla, the stimulus package should focus on preventing foreclosures. “If the owner no longer has an interest in the house, but the bank does, it changes the insurance policy because we don’t have a policy with the bank,” Unwalla said.

Unwalla said people living in homes should be helped before first-time buyers. “If someone’s house gets foreclosed, it is sad because that person is probably struggling to get by, and it is a big risk to insure their home,” he said.