Checking In With Cape Coral, Fla. The housing crisis has affected communities in every state. Some places are just bruised; others have taken a beating. We examine how hard-hit Cape Coral, Fla. is coping with the slumping markets.
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Checking In With Cape Coral, Fla.

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Checking In With Cape Coral, Fla.

Checking In With Cape Coral, Fla.

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MADELEINE BRAND, host:

The Cape Coral/Fort Myers region in Florida has one of the highest foreclosure rates in the nation. Ernie Gennelli(ph) is a mortgage broker there, and we've checked in with him before; he's on the line again now. Ernie, last time I talked to you, you were in pretty dire straits. You had laid off most of your staff, and you were saying wow, this is pretty bad. Have things improved at all?

Mr. ERNIE GENNELLI (Owner, Advanced Mortgage Financial, Cape Coral, Florida): No, it's actually worse. We had a client a couple weeks ago that closed a loan. Great credit, great income, great assets, and there was 29 stipulations on that loan.

BRAND: What do you mean stipulations?

Mr. GENNELLI: Stipulations - is like, get me an updated bank statement, give me a new comp for the appraisal. It's a big process now because as soon as you say Florida and then southwest Florida, they didn't really want to lend in this area. It's like right when you're about to get your clear to close, it's like they throw on two or three more stipulations that they want. And usually they're appraisal-related, which is hard in this area because what was today is gone tomorrow as far as value.

BRAND: Right, and still dropping, right?

Mr. GENNELLI: It's just ridiculous. And the market here is so all over the place because there isn't really a full spectrum on who you could say market value actually is. You could have the same house on the same street - four, five different houses, and every single one of them is selling at a different price.

BRAND: So you have a situation where you have people interested in buying these properties, because the prices have fallen and there are good deals out there, but they can't get the loans because the credit is so tight, and so then the prices drop again and then you've got a problem with the comps, right? You can't figure out how much a house is worth.

Mr. GENNELLI: Yes and no. Obviously, the appraisal's always going to follow the market value. It's like a cat and mouse game. If the market's really hot the appraisals are going to come in low. If the market's really, really low, like it is today, the appraisals are usually coming in a little bit higher, because obviously things are degrading and declining.

BRAND: As we said earlier, your area is one of the top areas for foreclosure. So what has that done to housing prices? How much does an average home cost now? And compare that to a year ago.

Mr. GENNELLI: I'll just give you a perfect example. We just put a brand-new, 2006 house with a pool, tile roof, beautiful, about 2,500 square foot. Two to three years ago, that house was 750 to 800,000. We just put an offer on one for 335,000.

BRAND: Wow!

Mr. GENNELLI: There's deals out there. And then as far as your regular houses, like your average house in Cape Coral three to four years ago was probably, say, 300,000, give or take. That same house is anywhere from 100,000 to 150,000 today.

BRAND: So half price.

Mr. GENNELLI: Yeah, easily.

BRAND: Ernie, thank you.

Mr. GENNELLI: You're welcome.

BRAND: That's Ernie Gennelli. He's owner of Advanced Mortgage Financial in Cape Coral, Florida.

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