Real Estate Tax Talk

By Stephen Fishman, Sunday, August 14, 2011.

Inman News™

From time to time the IRS releases tips designed to help people with their taxes. Some of these are quite useful.

Last week the agency released “Ten Tax Tips for Individuals Selling Their Home,” (IRS Summertime Tax Tip 2011-15).

As a real estate agent or broker, it is not your job to give home sellers tax advice. Indeed, it is advisable not to, since you could end up getting sued if you give wrong advice.

Instead, refer sellers to this list of IRS tips. It’s a good starting place for them to begin to understand this often complex area of tax law. You could even print it out and hand it to anyone who asks you about these issues.

 

Here are the IRS’s top 10 tax tips for home sellers:

1. In general, you are eligible to exclude the gain from income if you have owned and used your home as your main home for two years out of the five years prior to the date of its sale.

2. If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

3. You are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

4. If you can exclude all of the gain, you do not need to report the sale on your tax return.

5. If you have a gain that cannot be excluded, it is taxable. You must report it on Form 1040, Schedule D, Capital Gains and Losses.

6. You cannot deduct a loss from the sale of your main home.

7. Worksheets are included in Publication 523, Selling Your Home, to help you figure the adjusted basis of the home you sold, the gain (or loss) on the sale, and the gain that you can exclude.

8. If you have more than one home, you can exclude a gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

9. If you received the first-time homebuyer credit and within 36 months of the date of purchase, the property is no longer used as your principal residence, you are required to repay the credit. Repayment of the full credit is due with the income tax return for the year the home ceased to be your principal residence, using Form 5405, First-Time Homebuyer Credit and Repayment of the Credit. The full amount of the credit is reflected as additional tax on that year’s tax return.

10. When you move, be sure to update your address with the IRS and the U.S. Postal Service to ensure you receive refunds or correspondence from the IRS. Use Form 8822, Change of Address, to notify the IRS of your address change.

These tips can be found on the IRS website at http://www.irs.gov/newsroom/content/0,,id=104608,00.html.

Stephen Fishman is a tax expert, attorney and author who has published 18 books, including “Working for Yourself: Law & Taxes for Contractors, Freelancers and Consultants,” “Deduct It,” “Working as an Independent Contractor,” and “Working with Independent Contractors.” He welcomes your questions for this weekly column.

by gbravo on October 29, 2008 ·

in Business Start Up Advice

Trulia: Former homeowners flooding rental market

By Inman News, Monday, January 24, 2011.

Inman News™

Despite the rising number of renters across the country, it is cheaper to buy a home rather than rent one in 72 percent of the 50 largest cities in the U.S., according to an index released by real estate search and marketing site Trulia.

“Since the start of the ‘Great Recession,’ many former homeowners have flooded the rental market. Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets,” said Pete Flint, CEO and co-founder of Trulia, in a statement.

“Though necessary for achieving true economic recovery, stricter bank lending practices have also further aggravated the struggling housing market in the short term. Even highly qualified homebuyers face intense scrutiny on their income, savings, existing debt and credit history before they can get a mortgage loan.”

Trulia’s rent vs. buy index compares the median list price with the median rent on two-bedroom apartments, condominiums and townhomes listed on Trulia.com as of Jan. 10, 2011.

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A price-to-rent ratio of 1 to 15 means that it’s much cheaper to buy than to rent in a particular city. A ratio between 16 and 20 means that it’s more expensive to rent than to buy, but, depending on the family’s situation, buying could “make financial sense,” the site said. Any ratio above 20 indicates that owning is much more costly than renting in a city.

In 36 out of 50 of the country’s most populous cities, buying a two-bedroom home is less expensive than renting one. These cities include many areas that have been hit hard by foreclosures, such as Las Vegas, Phoenix and Fresno, Calif.

Top 10 cities to buy vs. rent:

Source: Trulia

In 10 cities, renting is cheaper, but buying might make more financial sense, according to Trulia. These cities include Los Angeles, Boston, and Fort Worth, Texas.

The index considers the total cost of homeownership compared to the total cost of renting. Calculations for the total cost of homeownership include mortgage principal and interest, property taxes, hazard insurance, closing costs at time of purchase, homeowners association dues, and private mortgage insurance. The homeownership cost calculation also includes tax advantages from mortgage interest, property tax and closing-cost deductions.

Calculations for total rental cost include rent and renters insurance.

The total cost of homeownership was highest, compared to the cost to rent, in New York; Seattle; Kansas City, Mo.; and San Francisco.

Top 10 cities to rent vs. buy:

Source: Trulia

“Although owning a home is relatively more affordable in most cities, market conditions have caused an interesting demographic swap between traditional renters and buyers,” said Tara-Nicholle Nelson, consumer educator for Trulia, in a statement. Nelson is also an Inman news columnist.

“For example, lifelong renters are seizing the opportunity to become homeowners while affordability is high. At the same time, a growing number of longtime homeowners are finding themselves tenants — some by choice and others by necessity.”

Through newly acquired startup Movity, Trulia created interactive maps comparing each city’s population, projected job growth, and unemployment and foreclosure rates.

By Susan V. Gregory

You can get the help you need to apply and qualify for a loan modification by ordering and downloading the best selling handbook for homeowners, The Complete Loan Modification Guide. This is a low cost, easy to read home edition loan mod kit that will provide you with everything you need to prepare a professional and acceptable loan modification application. You are provided with all of the necessary forms and given detailed directions on how to complete them properly. The Complete Loan Modification Guide will take you step by step through calculating your debt ratio, completing the financial statements, writing your hardship letter and then putting it all together to submit to your lender. Learn how to apply and qualify for the Obama federal program too. Get started today on the path to secure home ownership, order and download The Complete Loan Modification Guide.

For more information about mortgage loan modification, please call me 210 880 7153

Philadelphia Man Forecloses On Wells Fargo

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A Philadelphia homeowner started foreclosure proceedings on a Wells Fargo mortgage office after winning a rather strange legal judgement against the bank.

After Patrick Rodgers got no reply to three letters asking why he was being forced to pay a home insurance premium for a $1 million house when he bought his 3-story Victorian home for $180,000, he decided to force his mortgage company to pay attention, ABC News reported.

According to the Philadelphia Inquirer, Rodgers discovered the Real Estate Settlement Procedures Act, which requires mortgage companies to acknowledge written requests within 20 business days or face penalties. He took Wells Fargo to court, winning a default judgement because the bank didn’t show up in court.

Passed in 1974 to protect borrowers, RESPA stipulates a standard complain letter that can be sent to lenders. (For more information on RESPA, check out the U.S. Department of Housing and Urban Development’s website here.)

Rodgers won a $1,173 judgment against the bank, and when they still failed to reply to his letters, he started foreclosure proceedings.

The contents of Wells Fargo Home Mortgage’s offices at 1341 North Delaware Avenue are reportedly still scheduled for a March 4 sherif’s sale.

The homeowner placed a sheriffs levy against Well’s Fargo’s local mortgage office, to cover the $1,173 judgment, plus tax. The bank paid up in January, but still had not responded to his letters, so he started a foreclosure sale on the Wells Fargo office.

One Couple’s Housing Nightmare

For the past 30 days, Kendra and Todd Parker have been trying to figure out what to tell their four children, fearing that they, like millions of other Americans facing foreclosure, could be tossed out of their home.

But unlike the vast majority of homeowners in their predicament, Kendra Parker says she can prove she and her husband have not missed a single mortgage payment.

The Parkers’ mortgage began like any other that might have emerged from the housing boom: the neighborhood bank that originally issued their mortgage sold the loan, and it eventually landed in the hands of one of the nation’s largest mortgage companies. In industry parlance, the loan was “securitized,” or sliced into parts and combined with hundreds, possibly thousands of other mortgages, then sold piecemeal to investors. The complex reality of the modern mortgage system was supposed to have very little effect on the Parkers — they would simply mail their monthly payment to a mortgage servicer, which would handle the payment on behalf of the investors holding the mortgage securities.

But, along the way, that machinery broke down. No one, the Parkers say, told them their loan had been sold. With no word from the new servicer, New Jersey-based PHH Mortgage, the Parkers sent their first payment to the original bank, which mailed the check to PHH, according to documents the Parkers provided to The Huffington Post. But that check went missing. The Parkers say that despite the fact that they made every other payment, that missing check led to foreclosure proceedings, and a wrecked Kendra Parker’s credit rating.

Soon, the mortgage company informed the Parkers that they were three months past due and owed over $3,000.

As the housing bust led to the loss of millions of jobs, displaced families and eroded U.S. wealth, gaping holes in the mortgage market began to emerge, raising legal doubts about even the most mundane of transactions. Regulators and banks say that those who are current on their mortgages are almost never foreclosed on, but isolated cases remain.

Last year, court documents exposed potentially massive breakdowns of the mortgage industry. Inundated with thousands of foreclosures, mortgage servicers, some hired by banks, allegedly signed hundreds of foreclosure documents without examining them. These “robo-signer” cases spurred some major banks to temporarily halt their foreclosures nationwide. All 50 state attorneys general, federal prosecutors and a host of agencies have since launched investigations into foreclosure practices. Investors sued banks over the question of which soured mortgage securities banks should be forced to buy back.

Legal challenges to the fundamentals of the mortgage system have proliferated of late. In January, Massachusetts’ Supreme Judicial Court ruled against U.S. Bancorp and Wells Fargo, affirming a lower court’s ruling that invalidated two mortgage foreclosure sales. The court found that the banks, in their capacities as trustees for mortgage securities, did not prove that they actually owned the mortgages at the time of foreclosure. Legal experts say the decision is likely to lead more borrowers to sue for wrongful foreclosures.

Paul Collier, a lawyer based in Cambridge, Mass., who represented plaintiff Antonio Ibanez, said he believes wrongful foreclosures are more common than has been reported.

Collier said Ibanez’s house was actually purchased by the bank a full year and a half after the bank foreclosed on it, and that he had heard of other cases in which payments went missing or were applied to the wrong accounts. The chaos, he said, stretched through the entire life of some mortgages, from the securitization process to wrongful foreclosures.

With lenders and servicers contending with everything from loan modifications to foreclosures, Collier argued, some of this chaos may have seeped into the way servicers deal with customers who have legitimate concerns.

“The utter carelessness,” he said. “It would be great theater if it wasn’t people’s
homes.”

DREAM HOME AT RISK

In the past three months, Kendra Parker and her husband, Todd, said they have spent countless hours on the phone trying to straighten things out. When that went nowhere, they sent registered letters to everyone from the CEO of PHH to their state attorney general’s office. They finally secured the help of a lawyer who oversees foreclosures on behalf of the U.S. Department of Housing and Urban Development. But more than a month after they were informed of the foreclosure proceedings, nothing has changed.

Once the Parkers’ first payment was missing for 90 days, their account was considered delinquent, and the mortgage company automatically stopped accepting their payments. This is how even homeowners who appear to have made every single payment find themselves threatened with foreclosure.

The Parkers’ one-story brick house took about six months to build. One of Todd’s college friends who built houses on the side suggested a vacant lot. The couple looked at several preexisting houses, but none of them came close to the one they eventually built, said Kendra Parker, 39. “Every fixture, every thing in the house, we picked,” she said.

Last June, she signed the deed to the 1,800-square-foot house with four bedrooms, two bathrooms and enough room for four growing kids and three dogs, in a subdivision of Austin, Ark., called Shadow Creek. The Parkers secured a mortgage at Metropolitan National Bank, based in nearby Little Rock. The bank was the kind of place where you knew who you were dealing with, said Todd Parker, 40.

The Parkers signed the deed on June 30 of 2010, and were told to expect a statement. The first payment was due on Aug. 1, but the day came and went without that statement. When Kendra finally got in touch with the original lender, Metropolitan National Bank, she was told that her mortgage had been sold, and she should hold that first check until she got the first statement from her new mortgage servicer. On Aug. 27, Kendra got a letter from PHH Mortgage explaining that PHH would now be servicing their mortgage.

PHH Mortgage of Mount Laurel, N.J., is ranked eighth among America’s top 10 mortgage servicers by volume of loans serviced, according to a list compiled by Mortgage Servicing News. Bank of America and Wells Fargo top that list.

In an interview with Housing Wire last year, PHH President Luke Hayden said despite being relatively small, the company could compete by being efficient. “There are opportunities for lenders who are willing to rethink traditional approaches to originating, servicing and investing mortgage products,” he told Housing Wire. “We are currently embarked on a yearlong initiative to drive efficiency and take more than $100 million out of our cost structure on a run-rate basis.”

The letter Kendra Parker got from PHH Mortgage on Aug. 27, which was reviewed by The Huffington Post, listed two addresses, under which the letter instructs Parker, “Please do not send your mortgage payments to this address.” By September, she said, there was still no word on where they should send their payment. The Parkers got in touch with their original bank, and were advised to send the first payment as originally intended. Metropolitan National Bank, they were told, would forward the payment to the PHH, they said.

The Parkers sent a check for $1,111.86 to Metropolitan National Bank on Sept. 8. Documents from Metropolitan National Bank provided by Kendra Parker show the bank sent the check by registered mail via UPS to a “Mortgage Servicing Center” in Chicago and that it arrived on Sept. 9. Someone in the firm’s mailroom would have had to have signed for it. It appears that that check went missing, and that payment was never applied.

“It looks like one payment got misplaced and that started the domino effect,” said lawyer Greg Nelson, who works for law firm Michaelson, Connor & Boul. The law firm examines all foreclosures stemming from loans by lenders approved by the Federal Housing Administration. When an FHA approved loan is foreclosed on, the firm can help some homeowners to stay in their homes. After hearing the story, and seeing the proof Kendra had to offer, he too forwarded the details to PHH.

When the Parkers made their second payment, on Sept. 17, it was applied as their first payment, and from that point, they were considered in arrears. The clock started ticking.

LOST IN THE SHUFFLE

The Parkers’ story is one of the more extreme battles between mortgage servicers and homeowners. There are popularly-repeated tales of foreclosure confusion: the two different law firms that, in two different short sales, sold the same Florida house to two different people. The attempt to foreclose on a house that had no mortgage on it.

As the housing bust gathered steam, homeowners have increasingly demanded that banks produce “the note,” a document which proves ownership of a mortgage. These documents, homeowners contend, often went missing, which led to a burgeoning “Where’s the Note?” movement.

Lenders and servicers often argued that a system of electronic registrations between banks was sufficient proof, but a federal bankruptcy judge dealt a legal blow to this argument earlier this week. MERSCorp, a company that electronically tracks half of all U.S. mortgages, has no legal right to transfer mortgages, the judge found.

Given the sheer volume of loans, and the emotions tied to large sums of money, homes, and foreclosures, the relationship between homeowners and financial services firms is bound to regularly become a contentious, whether or not the servicer actually did anything wrong.

There are few comprehensive examinations of the action of mortgage servicers, but lawyers have looked at cases in which servicer abuses have been proven. In a Texas Law Review article titled “Misbehavior and Mistake in Mortgage Servicing,” Katherine Porter, a law professor at the University of Iowa who testified in front of the Congressional Oversight Panel in October, found mortgage servicing abuse could be as serious as illegal and unwarranted fees or forced insurance:

In Rawlings v. Dovenmuehle Mortgage, Inc., the servicer repeatedly asserted that homeowners had failed to make the payments even though the servicer itself had erred by applying the payments to the wrong account. After the servicer sent notices of default and imposed late fees, the homeowners spent over seven months attempting to resolve the servicer’s error.[...]

The likelihood that such practices translate into concrete harms is sharpened because consumers report serious difficulty in communicating with mortgage servicers when they perceive that an error or overcharge has occurred.

“To me, it’s an injustice that we can pick out cell phone providers, we can pick our utility companies, and we pick out all this based on the service they provide us and their ability to meet our needs,” Kendra Parker said. “But when it comes to our mortgage company, [mortgages] can just be sold off to anybody, we have no control over it. They can be incompetent, and service us poorly, and make all these errors, and there’s nothing we can do.”

Last week, the Obama administration announced plans to back a national standard for mortgage servicers, after a federal investigation into the mortgage industry reportedly found “widespread weaknesses.”

FIGHTING TO KEEP THEIR HOME

After their first payment went missing, the Parkers started making payments online, and over the phone to make sure the money got through. The Parkers kept calling PHH to find out what happened to that first payment. “I cannot tell you how many times customer service said, ‘We’re reviewing it,’” Kendra said.

When the Parkers did get through, they said, they were told not to cancel that first check. If it was located and applied, then found to be canceled, Kendra said she was told, that could complicate things.

Kendra, who works for a company that provides security and loss-prevention investigations for retail clients, was used to following paper trails, and said she has kept extensive records of the family’s case, even asking for proof that the original bank sent the first check, sending copies of the documents to PHH. The company, she said, promised to get back to them.

Todd Parker estimated he’d spent around 30 hours on the phone since the saga began. Each call, he said, meant an hour of waiting and telling, then retelling the entire story to two, three, or four people before he could get through to a supervisor who’d routinely promise to look into it and get back to him in 24 to 48 hours. The one time they did get back to him, after he left a particularly nasty message, he says, they told him they were looking into it. They’d get back to him in 24 to 48 hours.

“It’s horrible, it’s time wasted from my work day,” said Todd Parker, who works in insurance.

On Tuesday, Jonathan McGrain, senior vice president of communications at PHH, said the firm was actively “working with the borrower.”

“There’s been frequent communication with the borrower,” McGrain said. “We have a fairly complex set of processes around customer services and complaint resolution.”

One of the documents provided by Parker, a letter from their original bank, details the notes on their account. It appears Metropolitan National Bank forwarded proof that that original payment had been sent to PHH Mortgage, and asked the Parkers for proof they’d made all the subsequent payments, which they forwarded to PHH Mortgage. Mortgage representatives at Metropolitan National Bank got through to the same supervisor that Todd and Kendra had made progress with, who promised to look into it.

Kendra also made several attempts to get through to someone who had the power to stop the foreclosure. She sent registered letters to the CEO and the vice president of customer relations at PHH Mortgage. When she realized the alleged delinquency had been reported to the credit-rating agencies, she filed complaints with three major agencies. She even wrote to her state attorney general’s office and to the U.S. Department of Housing and Urban Development. At that point, Greg Nelson, the lawyer at Michaelson, Connor & Boul, got involved on her behalf.

“I realize many consumers may have a difficult time getting through the labyrinth of customer service.” Nelson said, adding that he just wanted to get the Parker’s file into the right hands. “That’s half the battle, just getting through to the right person.” Two weeks after he forwarded the documents, he was still waiting for a response.

In January, the Parkers decided to hire their own lawyer.

“It is a scandal of epic proportions in America,” said the lawyer, Steve Owings. “We have a government who has been deeply ineffectual in dealing with this, people are being divested of their interest in real property by rapacious loan servicers and collection companies.”

FACING DOWN FORECLOSURE

In documents the Parkers shared with The Huffington Post, it appears that they made the first three payments on the three-month-old loan, including the missing check that was not applied.

In November, 90 days after that first payment had gone missing, the PHH Mortgage refused the fourth payment, returning the check with a letter that explained the account was in arrears. “Our November statement was actually grossly inaccurate,” said Kendra. “It said, basically, we were three months behind, and we’re like, ‘Okay, this is a three-month-old loan of which we’ve made all three payments, one of which you’ve lost, but we’re definitely not three months behind.’”

“They sent our house into foreclosure on December 29,” Kendra Parker said, adding that the letter, from a law firm based in West Memphis, Ark., had came as a shock. “Basically, it read like we’re a bunch of deadbeats, that have just ignored all our payments.”

To make sure it was clear that they were intent on paying the mortgage, and had the funds, the Parkers kept sending money for all the rejected payments in November, December, January and February, Kendra Parker said. Then, on the advice of their lawyer, they canceled that first check and resent the first payment online, sending a total of $5,558.

So the Parkers continue to wait for something to happen, in what Kendra refers to as their “holding pattern.” This week, there were signs of progress. Kendra Parker received a letter from PHH stating that they had asked the credit-ratings agencies to restore her credit history. Parker was not convinced, she said — the letter didn’t explain why.

“It’s heart-wrenching, we just finally finished decorating, and we just got the kids’ rooms the way they want,” she said. “For the past 30 days, I’ve had the shakes inside out. It’s hard to focus on work, it’s hard to focus on anything but this.”

COLLEGE STATION (Office of Federal Housing Enterprise Oversight, Real Estate Center) – According to recent figures from the Office of Federal Housing Enterprise Oversight, home prices in Texas increased 6.8 percent during first quarter 2007, well above the 4.3 percent national average.

“Despite the national slowdown, Texas is still strong,” said Dr. James Gaines, research economist with the Real Estate Center at Texas A&M University. “There’s no reason prices shouldn’t continue to rise despite the increase in foreclosures and the slowdown in transactions, construction and new home starts.”

By comparison, home appreciation slowed to 1.2 percent in California and 3 percent in New York. Nevada price increases virtually disappeared at just .6 percent. Even rapidly growing Florida and Arizona reported value increases of 4.3 percent and 5.2 percent, respectively.

Within Texas, there is a wide variation in appreciation rates in the 25 metropolitan areas. Among the state’s large metro areas, Austin and San Antonio are seeing the strongest rate increases at more than 10 percent.

Meanwhile, the energy industry is fueling strong housing markets in some smaller metros. Home prices are up more than 21 percent in Midland and 16 percent in Odessa. Victoria prices are up 8.3 percent.

Some border communities are on fire as well, thanks to a surge in government hiring and business activity. Laredo is up 16.6 percent, while El Paso is up 11.2 percent.  Source: RECON

for the mot up to date information call me at 210 210 880 7153 or e mail me soldbygilbert@yahoo.com

Gilbert Estrada

210 880 7153  or 210 200 8585

www.facebook.com/gilbertoestradabroker

Rachel Stone
Express-News Business Writer While the U.S. housing industry struggles under the weight of the some of highest delinquency and foreclosure rates on record, Bexar County and Texas are enjoying a bit of a dip in foreclosure rates — but not for long.The number of homes up for foreclosure in Bexar County next month is down to the lowest level in two years, according to a report released Friday.

Next month, 606 homes will be sold at the Bexar County foreclosure auction, according to the Addison-based Foreclosure Listing Service Inc. That’s down 18 percent from 737 in June and down 3 percent from 623 July 2006.

The picture is even brighter in the rest of the state. In the 20 counties across Texas that the Foreclosure Listing Service tracks, the number of homes posted for foreclosure auction is down 35.6 percent to 4,665.

These recent numbers are in stark contrast to the seemingly dire foreclosure situation in the rest of the country.

The Mortgage Bankers Association reported Thursday that the percentage of late payments 30 days or more past due on subprime adjustable-rate mortgages jumped to 15.75 percent in the first three months of 2007, which is the highest percentage on record.

Nationally in May, there were 176,137 foreclosures, up 19 percent from April and up 90 percent from May 2006, according to RealtyTrac, an online listing service of foreclosures. That’s the highest number since RealtyTrac began tracking foreclosures in 2005.

It’s still unclear what July’s foreclosure dip might mean for a state that has had one of the country’s highest foreclosure rates for months.

In May, Texas had the third-highest number of foreclosures with 11,012 filings, according to Bargain Network, an online listing service of foreclosures.

But in Bexar County, the Foreclosure Listing Service characterized the July downturn in Central Texas as an “ebb” and an “anomaly.”

The year-to-date number of foreclosures is still up in Bexar. So far this year, there have been 5,210 foreclosure auction postings, 6 percent more than at this point last year.

The Foreclosure Listing Service still isn’t changing its long-term forecast that foreclosures in Bexar County will continue to rise.

But the foreclosure dip could be related to the strong home price appreciation in San Antonio and Texas, said research economist Jim Gaines of the Real Estate Center at Texas A&M University.

“When prices go up, lenders don’t get in as much trouble because (homeowners) are able to refinance or sell the house to cover the loan,” Gaines said.

Home prices in the San Antonio and Austin areas appreciated an average of almost 11 percent in the first three months of 2007 compared with the previous quarter, according to the government’s Office of Federal Housing Enterprise Oversight. Statewide, the average was about 7 percent.

That’s much better than the national average for home-price appreciation, which increased just 0.5 percent in the first quarter, according to the OFHEO.

Big trouble starts when home values decline, which is happening in Arizona, California, Florida and Nevada — four of the seven states with the highest rates of foreclosure, Gaines said.

Lenders also could be reluctant to foreclose on loans in certain markets because foreclosure isn’t profitable, Gaines said.

“They’d rather work something out so the borrower doesn’t lose his home and the lender has a performing asset on his balance sheet,” he said.

Armando Barbosa, who owns Vision Mortgage Co. in San Antonio, has seen that in this market.”I know of some companies that are being pretty patient with buyers, so that could be an industry trend,” he said. “They could be delaying foreclosure if it seems like there’s light at the end of the tunnel.”

But he agreed with the Foreclosure Listing Service’s “anomaly” characterization.

Interest rates are growing higher, and he still sees clients wishing to get “bail-out” loans to prevent foreclosure.

“Everything points to quite the opposite of what these numbers are showing,” he said.

---

rstone@express-news.net

Gilbert Estrada

210 421 6344

www.gilbertestrada.com www.alamodreamhomes.com www.casasyterrenosentexas.com www.lincolnfundinggroup.net

Web Posted: 02/28/2007 10:49 PM CST

Melissa S. Monroe and Meena Thiruvengadam
Express-News Business Writers After thriving in Mexico for 55 years with more than 200 locations, Gorditas Doña Tota was looking to expand. But instead of scouting out another Mexican city, the company looked to San Antonio.Gorditas Doña Tota’s concept is fairly simple. Workers shape and pat tortillas in order for them to puff up on the grill, while others cut fresh ingredients and cook meat for an authentic Mexican taste.

More than a decade after U.S. retailers began moving south of the border, Mexican retailers large and small are strengthening their northward migration.

“Many people in San Antonio know us from Mexico, especially Monterrey,” said Laura Lopez Gavito, Gorditas Doña Tota’s national director of quality assurance. “San Antonio has an established market, and Mexican companies are watching where to go where there’s more profitability. The demographic here is a definite deciding factor.”

She said the Tamaulipas-based company hopes to open at least 10 more stores in San Antonio in the next few years, and it will open stores in McAllen and Laredo within the next few months.

Gorditas Doña Tota’s isn’t the first restaurant to leap across the border and probably won’t be the last.

El Taco Tote, which opened its first store in Juárez in 1988 and eventually launched about 10 more in northern Mexico, now has restaurants in Texas, Arizona, New Mexico and Colorado.

Jewelry store Oro de Monte Alban started in Oaxaca in 1947, and it opened a San Antonio office in 2000 to create credibility among Internet shoppers.

“For the people who buy from other countries, they are more trusting of offices located in the United States than in Mexico,” said Georgina Cardenas, who manages an Oro de Monte Alban retail location that opened in San Antonio in July.

Fine gifts retailer Marti’s started in 1954 in Nuevo Laredo and is planning to open its first U.S. location on West Commerce Street in downtown San Antonio by this fall, said owner Pablo Jacobo “Jack” Suneson Bautista.

For Marti’s, the lure of San Antonio wasn’t so much its Hispanic demographic but the vibrant tourist market.

“It has the Mexican influence and it’s an international city,” Suneson said.

In addition to Mexican businesses expanding to San Antonio, Mexican nationals are also looking to the city for new business opportunities, said local attorney Rolando Pablos, who gets calls daily from people needing his help coming here.

He said many of his richer clients are looking for big real estate deals or established businesses and that others need help starting a restaurant or business service.

A lot of his clients, Pablos added, are looking for security when coming to San Antonio.

“They feel comfortable with the Hispanic community and feel at home here,” said Pablos, who has created a niche in helping Mexican entrepreneurs. “The business community is very accessible, and San Antonio is close to Mexico.”

Mexican businesses also don’t have to completely re-engineer their products or services because of America’s increasing Hispanic population, said Robert Barnett, a San Antonio attorney specializing in international business law.

“The U.S. is the logical place,” Barnett said.

And locating in San Antonio is even better, said Sarah Sanchez, interim director of Free Trade Alliance San Antonio.

“A lot of companies choose San Antonio because the rest of the nation is going to look like San Antonio in 20 to 30 years down the road. It’s a good launching point for a new product or new idea,” she said. “Also, the political situation in Mexico is stable, and when the economy tends to grow, there’s more money for expansions.”

That was the case for Mexican furniture retailer FAMSA. It moved to San Antonio last year when it acquired the locally based National Furniture chain.

The company had already begun developing a presence in places such as Los Angeles, Dallas and Houston. FAMSA now has more than 1,000 employees and 25 stores in the United States.

National was an attractive acquisition because of its track record of providing financing for Hispanic customers, said Ted Caffey, FAMSA’s director of operations.

“We felt it was a real business opportunity for us,” he said.

Rachel Stone
Express-News Business Writer Doomsayers who prophesy a real estate market downturn aren’t talking about Texas.

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“All this negative news is not happening in Texas,” said Mark Dotzour, chief economist at the Real Estate Center at Texas A&M University.

The Texas economy is among the nation’s strongest, and San Antonio and Austin have two of the hottest real estate markets, said Dotzour, who was in the Alamo City on Wednesday for a meeting with the Real Estate Council of San Antonio.

“Our job growth is double the national average, and our population growth is unbelievable,” Dotzour said, referring to Texas overall.

Texas gets about 400,000 new residents every year, he said.

Of San Antonio, Dotzour said: “The taxes are low, and it’s one of the best places in America for corporations to relocate.”

“Our houses are affordable, and we’re not overbuilding.”

He warned that Dallas and Houston could be getting close to overbuilding in commercial real estate, which would cause prices to start dropping.

“I don’t see that happening in San Antonio,” he said.

Commercial property values are increasing rapidly, especially in Central and South Texas, Dotzour said. He used Austin’s Frost Bank Tower as an example. Equity Office Properties Trust bought the downtown office tower last year for $188 million, setting a Texas real estate transaction record at $354 per square foot. Blackstone Real Estate Advisors bought Equity last year for $39.2 billion.

Now Blackstone is selling the tower to Los Angeles-based Thomas Properties Group Inc., along with nine other office buildings, for $1.15 billion.

“And they think that’s a great deal,” Dotzour said.

The economist’s remarks contradicted a report released Wednesday from Moody’s, which ranked San Antonio among the worst markets for commercial real estate, based on limited data. Moody’s is an investor services company that provides credit ratings, research and risk analysis.

New York-based Moody’s tracks commercial real estate markets based on data from seven property types but only captures numbers for three in San Antonio: multi-family, full-service hotels and limited-service hotels. Missing are data for retail, downtown office, suburban office and industrial property types.

The report concluded that developers overbuilt apartments and hotels in response to a population increase from Hurricane Katrina evacuees and that now there’s a supply of apartments and hotels that is too high, making it a risky market for lenders.

“In certain circles, those reports are very relied upon. They’re very valid, and they can give a good indication of the strengths and weaknesses of certain markets,” said Kim Gatley, research director for REOC Partners Ltd., who tracks the retail, office and industrial markets in San Antonio.

“It seems that the Moody’s report always shorts the San Antonio market, and it’s because they don’t weigh in on all the data.”

The Moody’s report doesn’t give an accurate picture of the local commercial real estate market, she said.

“All indications are that we’re going to have another strong year in San Antonio,” she said.

Commercial real estate seems to be just one segment of an overall hot real estate market in the area. Dotzour noted that San Antonio and Austin also have two of the strongest housing markets.

San Antonio has 4.8 months of existing home inventory. A 6.5-month inventory is considered healthy, and anything less is considered a high-demand market.

“You’d think builders would be stampeding, but they’re not,” Dotzour said.

He thinks large-volume home builders have slowed down in reaction to lowered demand in other parts of the country but aren’t making exceptions for Texas, where demand is high and supply is low.

That more builders aren’t building new homes in San Antonio and Austin “defies economic logic,” he said.

Dotzour warned real estate professionals to watch the mortgage industry for signs of economic trouble.

“They’ve made serious mistakes by lending to people they shouldn’t have, and that’s coming to roost now,” he said.

Dotzour also will speak about the Texas real estate economy today at the Annual Outlook for Texas Land Markets conference at the Hyatt Regency San Antonio hotel.