KeNo's Housing and Economic Portal: Wednesday February 9 Housing and Economic stories

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FBI looks into bid rigging at courthouse auctions - (www.sfgate.com) Foreclosure auctions take place every weekday on the steps of courthouses throughout California. Now the FBI is investigating whether some real estate speculators are illegally rigging bids for these sales. "Last week, the FBI conducted interviews and executed search warrants through the entire Bay Area as part of a long-term investigation of anti-competitive practices at trustee sales of foreclosed homes," said bureau spokeswoman Julie Sohn. The probe is shaking up the tight-knit world of investors who bid at these auctions. The issue, sources say, is that some participants allegedly pay others to refrain from bidding on certain properties to keep their prices low. Such bid-rigging violates the federal Sherman Antitrust Act and can carry a maximum penalty of 10 years in prison and a $1 million fine. That maximum can be increased to twice the perpetrator's gain or twice the victim's loss. "There have always been rumors of collusion at the courthouse steps," said Sean O'Toole of ForeclosureRadar.com, a Discovery Bay company that provides detailed information on properties sold at the auctions. At a typical auction, many investors clutch clipboards with printouts from his website. "If you have a small crowd of guys that talk to each other every day, it's natural for them to say, 'Why are we bidding each other up? Let's just buy this and work it out afterward.' " O'Toole said. But when he speaks to real estate clubs and others, O'Toole said, "I am very clear. I say: 'This is illegal. Don't do it.' "

Rich and famous and in foreclosure - (finance.yahoo.com) How does Nicolas Cage get behind on his mortgage payments? The same way other rich and famous people do. "They've stretched themselves higher than they probably should have," says John Anderson, owner of Twin Oaks Realty in Minneapolis and a National Association of Realtors expert in foreclosures. Some couldn't keep up when the rates on their adjustable rate mortgages shot up, Anderson says. Price drops at the high end of the market were so steep that a sale wouldn't cover the debt. In other words, high-end homeowners face the same problems that plague the not-so-rich-and-famous. Here are five of the biggest names on the of list homeowners falling to foreclosure. We've included a bit of info about the current markets where these stars once lived. You know, in case you'd like to hunt for a foreclosure deal in one of those tony neighborhoods.

Co-op Houseboats in Sausalito - (www.baycitizen.org) For more than a half-century, low-rent “pirates” have inhabited ramshackle floating homes in Richardson Bay, just north of Sausalito. The last remnants of this independent seaside tribe are the inhabitants of 38 houseboats at Gates Co-op, a community stranded at low tide in the mud at Waldo Point Harbor. Free Beachfront: In the 1950s, beatniks squatted in the wreckage of Marin County’s abandoned World War II shipbuilding industry, living in vacant construction buildings and scrapped barges. Hippies joined them in the 1960s and ’70s. Back then, Sausalito was known as a haven for struggling artists. Handmade Architecture: Gates Co-op houseboats are often redesigned World War II landing crafts or are built atop lifeboat hulls or cement barges. Richard Haskell bought a 22-foot boat hull for $100 in 1973; on top of it he constructed a house made of wood salvaged from a Petaluma chicken coop.

Socialite Patricia Kluge Faces Foreclosure - (blogs.wsj.com) Talk about a hangover. Winemaker and socialite Patricia Kluge, ex-wife of the late Metromedia founder John Kluge, is facing foreclosure proceedings on her Albemarle House in Charlottesville, Va. According to local paper The Daily Progress, Bank of America filed suit alleging Patricia—who got the house in her divorce—defaulted on nearly $23 million in loans on the 23,500-square-foot mansion. A representative for Patricia Kluge wasn’t immediately available for comment. The house had been on the market since late 2009, and Kluge chopped the asking price to $48 million from $100 million last February. Sotheby’s International, which bills the property as “one of the most important residences created in the United States since the Golden Age,” now lists the home for a veritable steal: $24 million. The neo-Georgian house has eight bedrooms, 13 bathrooms, two half-baths and a helipad. Oh, and a wine cellar.

Fannie, Freddie's $24 Billion Property Glut Imperils Recovery - (www.businessweek.com) Fannie Mae and Freddie Mac’s combined inventory of foreclosed residential property has quadrupled in just three years and now stands at a record $24 billion. The number of properties on their rolls -- now at nearly 242,000 -- has increased fivefold. That’s roughly a third of the total U.S. portfolio of repossessed homes. And it’s growing because the two mortgage companies operating under U.S. conservatorship aren’t finding buyers faster than new foreclosures come in. So far, officials at Fannie Mae and Freddie Mac say, the two companies have been trying to stabilize neighborhoods by selling their massive inventory at prices that are close to market. With home seizures projected to increase this year, some housing analysts predict they may have to drop prices, with potentially far-reaching impacts on the real-estate market.