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Thursday, April 29, 2010
Florida Real Estate Prices Have Hit Rock Bottom
Even though they don't expect another boom any time soon, Florida real estate experts believe the worst of the state's wrenching downturn is over.
According to a quarterly survey by the University of Florida's Bergstrom Center for Real Estate Studies. The center asked appraisers, commercial real estate brokers, bankers, investors and others to take stock of the state's real estate market.
The verdict: Commercial and residential property have hit bottom.
Timothy Becker, director of the Bergstrom Center, states:
"They're saying things like 'not getting worse' or 'getting less bad. That's not to say Florida is poised to bounce back. The state is battling record-high unemployment and tight credit that continue to hinder any recovery."
Shopping centers are suffering from weak consumer spending, while office demand is meager in a state that has been shedding jobs. And home sales are hampered by the glut of foreclosed homes, Becker said.
A silver lining: apartments. As former homeowners lose their homes to foreclosure, they need to live somewhere.
Another reason for hope: Life insurers and real estate investment trusts are beginning to buy investment properties again. Those real estate investors had taken a hiatus, but they have cash to spend and don't need mortgages to buy commercial properties.
Becker states:
"People continue to pay their life insurance premiums, and MetLife and Prudential have to put those assets to use in different asset classes."
According to a quarterly survey by the University of Florida's Bergstrom Center for Real Estate Studies. The center asked appraisers, commercial real estate brokers, bankers, investors and others to take stock of the state's real estate market.
The verdict: Commercial and residential property have hit bottom.
Timothy Becker, director of the Bergstrom Center, states:
"They're saying things like 'not getting worse' or 'getting less bad. That's not to say Florida is poised to bounce back. The state is battling record-high unemployment and tight credit that continue to hinder any recovery."
Shopping centers are suffering from weak consumer spending, while office demand is meager in a state that has been shedding jobs. And home sales are hampered by the glut of foreclosed homes, Becker said.
A silver lining: apartments. As former homeowners lose their homes to foreclosure, they need to live somewhere.
Another reason for hope: Life insurers and real estate investment trusts are beginning to buy investment properties again. Those real estate investors had taken a hiatus, but they have cash to spend and don't need mortgages to buy commercial properties.
Becker states:
"People continue to pay their life insurance premiums, and MetLife and Prudential have to put those assets to use in different asset classes."
Wednesday, April 28, 2010
Too Early to Declare Victory on the Housing Front?
South Florida home prices dropped 0.3% from January on a seasonally adjusted basis, according to the Standard & Poor’s/Case-Shiller home price index released Tuesday.
The South Florida metro area, which includes Palm Beach, Broward and Miami-Dade counties, saw prices decline by 4.4% from February 2009. South Florida was one of 11 communities that posted year-over-year declines, but the 20-city index showed a 0.6% increase during the same period.
David M. Blitzer, chairman of the Index Committee for Standard & Poor’s, said the national numbers indicate that home prices could decline further before any sustained gains are realized.
“It is too early to say that the housing market is recovering,” he said.
The index is considered a strong measure of home prices because it examines price changes of the same property over time, instead of calculating a median price of homes sold during the month, as the Florida Realtors trade group does.
The South Florida metro area, which includes Palm Beach, Broward and Miami-Dade counties, saw prices decline by 4.4% from February 2009. South Florida was one of 11 communities that posted year-over-year declines, but the 20-city index showed a 0.6% increase during the same period.
David M. Blitzer, chairman of the Index Committee for Standard & Poor’s, said the national numbers indicate that home prices could decline further before any sustained gains are realized.
“It is too early to say that the housing market is recovering,” he said.
The index is considered a strong measure of home prices because it examines price changes of the same property over time, instead of calculating a median price of homes sold during the month, as the Florida Realtors trade group does.
Tuesday, April 27, 2010
Fannie Mae Extends 3.5% Seller Assistance on its REO Properties
Fannie Mae announced Tuesday they would extend a seller assistance incentive on all Fannie Mae-owned HomePath properties, as part of its ongoing efforts to stabilize neighborhoods across the country.
Participating buyers will receive 3.5% of the final sales price to be used toward closing cost assistance or their choice of selected appliances. The offer is available to any owner-occupant who closes on the purchase of a property listed on the HomePath Web site by June 30, 2010.
Terry Edwards, Fannie Mae’s EVP of credit portfolio management, states:
“We are happy with the results of the program, which has helped us to sell properties quickly, thereby stabilizing neighborhoods and property values.”
Properties listed on the Web site are owned by Fannie Mae and include a wide selection of homes, including single-family homes, condos, and town houses. In addition to the seller assistance incentive, HomePath properties may be eligible for special HomePath mortgage and HomePath renovation mortgage financing, which offers prospective buyers an opportunity to purchase properties with as little as 3% down.
Monday, April 26, 2010
Have We Reached the Bottom? New Home Sales Rebound in March!
Talk about a turnaround. Following an all-time low in February, national new home sales shot up 27% in March, the biggest increase in any month since 1963. Sales in the South jumped 44%
South Florida sales of existing homes and condominiums were especially robust last month.
Much of the activity here and across the country can be attributed to buyers taking advantage of $8,000 and $6,500 tax credits that expire April 30. Sales likely will drop off after that.
But with continued low interest rates and cheap home prices, momentum is building for a housing bottom this year.
South Florida sales of existing homes and condominiums were especially robust last month.
Much of the activity here and across the country can be attributed to buyers taking advantage of $8,000 and $6,500 tax credits that expire April 30. Sales likely will drop off after that.
But with continued low interest rates and cheap home prices, momentum is building for a housing bottom this year.
Florida's Existing Real Estate Sales Rise Again
Continuing what’s been a common trend, Florida’s existing-home and condo sales soared in March, Florida Realtors reported Thursday. Existing-home sales increased 24% last month with a total of 16,294 homes sold statewide compared to 13,090 homes sold in March 2009. That means home sales activity in the Sunshine State has increased in the year- to-year comparison for 19 months. In addition, existing-home sales in March increased 37% over statewide sales activity in February.
The increase in sales for existing condos was even more impressive. Florida Realtors reported a 63% jump in statewide sales of existing condos in March compared to the same month last year. On a month-to-month basis, existing-condo sales surged 40.6%.
In total, 17 of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in March, and all MSAs had higher condo sales. Florida Realtors said a majority of the state’s MSAs have reported increased sales for 21 consecutive months.
Data regarding prices of existing homes and condos was mixed. Florida’s median sales price for existing homes last month was $137,000, down 3% from a year ago but up 4.3%from February. And the statewide existing-condo median sales price in March was $96,000, an 11 percent fall from last year but 5.1% higher than February.
The increase in sales for existing condos was even more impressive. Florida Realtors reported a 63% jump in statewide sales of existing condos in March compared to the same month last year. On a month-to-month basis, existing-condo sales surged 40.6%.
In total, 17 of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in March, and all MSAs had higher condo sales. Florida Realtors said a majority of the state’s MSAs have reported increased sales for 21 consecutive months.
Data regarding prices of existing homes and condos was mixed. Florida’s median sales price for existing homes last month was $137,000, down 3% from a year ago but up 4.3%from February. And the statewide existing-condo median sales price in March was $96,000, an 11 percent fall from last year but 5.1% higher than February.
Friday, April 23, 2010
Are Boca Raton Foreclosures A Good Deal?
Are Boca Raton Foreclosures Really Good Bargains?
The presumption that a majority of Boca Raton real estate home buyers have today is that foreclosures are really good bargains. In fact many buyers are only looking to buy a foreclosure or short sale property because they want a bargain. Here are the facts. You be the judge as to whether foreclosures are really good bargains.
The presumption that a majority of Boca Raton real estate home buyers have today is that foreclosures are really good bargains. In fact many buyers are only looking to buy a foreclosure or short sale property because they want a bargain. Here are the facts. You be the judge as to whether foreclosures are really good bargains.
Pros
Foreclosures are generally offered at discounted prices because the banks want to get rid of the inventory on their books and are not in the business of maintaining property.
Some properties have been discounted as much as 30%- 50%. As a result of so many foreclosures and short sales on the market, non-foreclosure properties have been discounted as well.
Because the bank now owns the property, the title has been cleared and you are able to get title insurance opposed to purchasing a home at a foreclosure sale.
If you are buying a Fannie Mae owned properties, Fannie Mae will pay some of your title and closing costs if you negotiate that in your purchase contract.
Cons
Some REO (bank owned properties) have been stripped by their former angry homeowners. You will find homes that have no appliances, missing cupboards, missing kitchen counters, and no toilets or light fixtures.
Homes need repairs, are major fixers or tear-downs. However, if you are willing to make the repairs, you may be getting a great deal on a property in a terrific area.
Since no seller’s disclosure is required, you do not know the history of the home. It is important to have a home inspection done. Properties are sold in an “as is” condition.
There is a misconception that the banks are giving away the properties. The truth is that a number of bank owned properties are selling close to the bank’s asking price because the prices have already been discounted 30% to 50% at the time they are listed. Buyers who are making very low offers may not get a response from the bank.
What to Look For
A home that is in move in condition and does not need major repairs unless you can do them yourself or are getting the home at a price way below market value.
A home that is priced at market or slightly under.
Do your due diligence. Have a home inspection.
Use a local Realtor to assist you. Someone who is knowledgeable about the area prices and that can help you find the right property and assist you with your negotiations.
If you are buying a condo that is a foreclosure unit or even if it is not, ask how many units in the condo building are in default or in foreclosure, because even if the property is a great deal you may not be able to get financing because the building may not meet the new Fannie Mae lending guidelines for Florida condos.
Bank foreclosures and short sales can be good investments if you do your homework and find what you are looking for. Just because a home is a foreclosure, does not mean that it is necessarily the right deal for you. You should also consider looking at other homes in the area that are not foreclosures and that are competitively priced.
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Thursday, April 22, 2010
Condo Sales Soar in Broward & Palm Beach
Sales of existing homes and condominiums skyrocketed last month in South Florida as buyers rushed to take advantage of two federal tax credits that expire April 30.
Palm Beach County had 843 homes change hands in March, up 23% from a year ago, the Florida Realtors trade group said Thursday. The median price of $246,100 was an 8% increase from a year earlier.
In Broward County, 734 homes sold in March, up 8% from a year ago. The median price of $214,000 was off 3 percent.
Broward’s condo sales rose 46% to 1,140, leading all of Florida. The county’s median condo price fell 10 percent to $73,600.
Palm Beach County had 999 condo sales, a 45% increase. The county’s median condo price of $90,900 was off 9% from last year.
First-time buyers can receive $8,000 tax credits if they sign sales contracts by April 30 and close by June 30. Current homeowners who want to buy new principal residences will get $6,500.
David Dweck, a real estate agent in Broward and Palm Beach counties, said homes are going under contract quickly, within a week, if they’re priced right and sellers help with closing costs.
Some real estate agents and analysts say South Florida’s housing market has hit bottom. But others insist sales and prices will fall once the tax credits expire.
Palm Beach County had 843 homes change hands in March, up 23% from a year ago, the Florida Realtors trade group said Thursday. The median price of $246,100 was an 8% increase from a year earlier.
In Broward County, 734 homes sold in March, up 8% from a year ago. The median price of $214,000 was off 3 percent.
Broward’s condo sales rose 46% to 1,140, leading all of Florida. The county’s median condo price fell 10 percent to $73,600.
Palm Beach County had 999 condo sales, a 45% increase. The county’s median condo price of $90,900 was off 9% from last year.
First-time buyers can receive $8,000 tax credits if they sign sales contracts by April 30 and close by June 30. Current homeowners who want to buy new principal residences will get $6,500.
David Dweck, a real estate agent in Broward and Palm Beach counties, said homes are going under contract quickly, within a week, if they’re priced right and sellers help with closing costs.
Some real estate agents and analysts say South Florida’s housing market has hit bottom. But others insist sales and prices will fall once the tax credits expire.
Mortgage Rates Hold Steady
After retreating last week, mortgage rates remained mostly flat this week, Freddie Mac and Bankrate reported Thursday.
According to Freddie Mac’s Primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 5.07% with an average 0.7 point for the week ending April 22, 2010, unchanged from last week but notably higher than this same week in 2009 when 30-year fixed-rate mortgages averaged 4.8%.
Freddie Mac said 15-year fixed-rate mortgages moved only slightly. Nudging down from last week’s average of 4.4%, 15-year fixed-rate mortgages averaged 4.39% with an average 0.6 point this week. This week’s average was lower than last year at this time when rates averaged 4.48%.
“Mortgage rates on fixed loans were relatively unchanged this week…,” said Frank Nothaft, Freddie Mac VP and chief economist. “These low mortgage rates are revitalizing the home construction industry.”
Bankrate reported the same trend of steady rates. According to its weekly national survey, 30-year fixed-rate mortgages averaged 5.22% with an average point of 0.42 this week, budging up from 5.21% last week. In addition, the tracking company said 15-year fixed-rate mortgages averaged 4.5%, a minor move down from 4.56% last week.
So far, mortgage rates seem to be largely unaffected by the close of the Federal Reserve’s mortgage purchase program, but to keep rates low, Bankrate said the Fed may need to “sharpen the rhetoric about raising interest rates when it becomes necessary to do so.” If the Fed instead appears soft, investors could lose confidence in their willingness to keep inflation at bay, and mortgage rates would quickly lose their anchor to these historic lows, the company explained.
Complementing Bankrate’s survey it its weekly Rate Trend Index, in which mortgage experts predict which way rates are headed over the next week. A rise in mortgage rates was forecast by 47% of those polled, and 41% said rates will remain more or less unchanged. Just 12 percent predicted a week-to-week decline.
According to Freddie Mac’s Primary Mortgage Market Survey, 30-year fixed-rate mortgages averaged 5.07% with an average 0.7 point for the week ending April 22, 2010, unchanged from last week but notably higher than this same week in 2009 when 30-year fixed-rate mortgages averaged 4.8%.
Freddie Mac said 15-year fixed-rate mortgages moved only slightly. Nudging down from last week’s average of 4.4%, 15-year fixed-rate mortgages averaged 4.39% with an average 0.6 point this week. This week’s average was lower than last year at this time when rates averaged 4.48%.
“Mortgage rates on fixed loans were relatively unchanged this week…,” said Frank Nothaft, Freddie Mac VP and chief economist. “These low mortgage rates are revitalizing the home construction industry.”
Bankrate reported the same trend of steady rates. According to its weekly national survey, 30-year fixed-rate mortgages averaged 5.22% with an average point of 0.42 this week, budging up from 5.21% last week. In addition, the tracking company said 15-year fixed-rate mortgages averaged 4.5%, a minor move down from 4.56% last week.
So far, mortgage rates seem to be largely unaffected by the close of the Federal Reserve’s mortgage purchase program, but to keep rates low, Bankrate said the Fed may need to “sharpen the rhetoric about raising interest rates when it becomes necessary to do so.” If the Fed instead appears soft, investors could lose confidence in their willingness to keep inflation at bay, and mortgage rates would quickly lose their anchor to these historic lows, the company explained.
Complementing Bankrate’s survey it its weekly Rate Trend Index, in which mortgage experts predict which way rates are headed over the next week. A rise in mortgage rates was forecast by 47% of those polled, and 41% said rates will remain more or less unchanged. Just 12 percent predicted a week-to-week decline.
Wednesday, April 21, 2010
Fannie Mae Cuts Waiting Period for New Mortgage After Deed-in-Lieu of Foreclosure
Going forward, borrowers who previously experienced a deed-in-lieu of foreclosure won’t have to wait as long to get approved for a subsequent mortgage.
Last week, mortgage financier Fannie Mae changed its required waiting period (the amount of time that must elapse after a pre-foreclosure event) to reflect current market conditions.
In the past, borrowers had to wait four years after a deed-in-lieu of foreclosure to get approved for a mortgage with Fannie Mae.
That time period has been slashed to just two years, though the maximum loan-to-value is limited to 80%. After four years, the maximum LTV climbs to 90%.
Pre-foreclosure sales and short sales, which Fannie categorizes as the same event, a property sold in lieu of foreclosure for less than the total amount owed, will also have a two year waiting period with the same LTV requirements.
Additionally, certain extenuating circumstances will allow borrowers to get loans after just two years at up to 90% LTV.
In all cases, borrowers must re-establish their credit, meaning they must meet minimum credit score requirements and eligibility requirements.
Last week, mortgage financier Fannie Mae changed its required waiting period (the amount of time that must elapse after a pre-foreclosure event) to reflect current market conditions.
In the past, borrowers had to wait four years after a deed-in-lieu of foreclosure to get approved for a mortgage with Fannie Mae.
That time period has been slashed to just two years, though the maximum loan-to-value is limited to 80%. After four years, the maximum LTV climbs to 90%.
Pre-foreclosure sales and short sales, which Fannie categorizes as the same event, a property sold in lieu of foreclosure for less than the total amount owed, will also have a two year waiting period with the same LTV requirements.
Additionally, certain extenuating circumstances will allow borrowers to get loans after just two years at up to 90% LTV.
In all cases, borrowers must re-establish their credit, meaning they must meet minimum credit score requirements and eligibility requirements.
Tuesday, April 20, 2010
Monday, April 19, 2010
Foreclosure Filings Jump in South Florida
Foreclosure filings rose last month by 38% in Broward County as homeowners struggled with unemployment and "underwater" mortgages, RealtyTrac Inc. said Thursday.
Broward had 6,341 homeowners in some stage of foreclosure in March, up from 4,599 a year ago, according to the Irvine, Calif.-based company that tracks mortgage defaults nationwide. Broward had the eighth-highest foreclosure rate among Florida's 67 counties, with one in every 127 housing units receiving a filing.
Palm Beach County filings in March totaled 3,983, more than double the 1,509 in March 2009. The county had the state's 17th-highest foreclosure rate.
The problem isn't likely to improve soon, as job losses mount and home price declines add to the number of homeowners who owe more than their properties are worth.
"We're going to continue to have a dark cloud hanging over our real estate market for some time," said Greg McBride, senior financial analyst with Bankrate.com in North Palm Beach.
Initial foreclosure filings in both counties were down substantially compared with February, perhaps an early indication that a government-sponsored foreclosure-alternative program started recently is working, RealtyTrac said.
The plan is designed to remove barriers to so-called short sales and promote deeds in lieu of foreclosures, in which homeowners hand back their properties to the banks. The plan took effect April 5, but some lenders were using it earlier this year.
The program is sure to be popular with people who want to get out from under onerous mortgages. But it will drag down home prices, creating more underwater borrowers who may fall into foreclosure, Fort Lauderdale real estate lawyer Shari Olefson said.
"I don't know that this is the answer," she said.
RealtyTrac spokesman Daren Blomquist said it's important to speed up short sales because that will clear the inventory of available homes and ultimately help the housing market recover.
Meanwhile, South Florida remains one of the busiest areas in the nation for loan modifications. A Treasury report on the Making Home Affordable program showed that the Miami-Fort Lauderdale-Pompano Beach metropolitan area accounted for 4.7% of loan modification activity under the program.
But those efforts aren't likely to ease the foreclosure crisis, according to the Congressional Oversight Panel, a watchdog agency monitoring the federal government's bailout program.
RealtyTrac compiles default notices, scheduled foreclosure auctions and bank repossessions. Not all homeowners who get notices lose their properties.
Florida had the nation's fourth-highest foreclosure rate in March, with one in every 149 housing units receiving a filing, RealtyTrac said.
In December, the Florida Supreme Court ordered the creation of a statewide mediation program for homeowners and lenders before a property can be sold through foreclosure.
Broward's 17th Judicial Circuit Court has appointed the American Arbitration Association to administer its mediation program starting July 1. Program details for the 15th Judicial Circuit Court in Palm Beach County are not yet clear.
A bill in Florida's Legislature that would allow banks to foreclose without going before a judge appears to have died.
While the state's clogged foreclosure system needs an overhaul, the proposed bill was too radical, said Rod Petrey, president of the Collins Center for Public Policy. The nonprofit group provides mediation services for four state circuit courts.
"With someone's home, where their family is, we ought to move very slowly in taking that away," Petrey said.
Broward had 6,341 homeowners in some stage of foreclosure in March, up from 4,599 a year ago, according to the Irvine, Calif.-based company that tracks mortgage defaults nationwide. Broward had the eighth-highest foreclosure rate among Florida's 67 counties, with one in every 127 housing units receiving a filing.
Palm Beach County filings in March totaled 3,983, more than double the 1,509 in March 2009. The county had the state's 17th-highest foreclosure rate.
The problem isn't likely to improve soon, as job losses mount and home price declines add to the number of homeowners who owe more than their properties are worth.
"We're going to continue to have a dark cloud hanging over our real estate market for some time," said Greg McBride, senior financial analyst with Bankrate.com in North Palm Beach.
Initial foreclosure filings in both counties were down substantially compared with February, perhaps an early indication that a government-sponsored foreclosure-alternative program started recently is working, RealtyTrac said.
The plan is designed to remove barriers to so-called short sales and promote deeds in lieu of foreclosures, in which homeowners hand back their properties to the banks. The plan took effect April 5, but some lenders were using it earlier this year.
The program is sure to be popular with people who want to get out from under onerous mortgages. But it will drag down home prices, creating more underwater borrowers who may fall into foreclosure, Fort Lauderdale real estate lawyer Shari Olefson said.
"I don't know that this is the answer," she said.
RealtyTrac spokesman Daren Blomquist said it's important to speed up short sales because that will clear the inventory of available homes and ultimately help the housing market recover.
Meanwhile, South Florida remains one of the busiest areas in the nation for loan modifications. A Treasury report on the Making Home Affordable program showed that the Miami-Fort Lauderdale-Pompano Beach metropolitan area accounted for 4.7% of loan modification activity under the program.
But those efforts aren't likely to ease the foreclosure crisis, according to the Congressional Oversight Panel, a watchdog agency monitoring the federal government's bailout program.
RealtyTrac compiles default notices, scheduled foreclosure auctions and bank repossessions. Not all homeowners who get notices lose their properties.
Florida had the nation's fourth-highest foreclosure rate in March, with one in every 149 housing units receiving a filing, RealtyTrac said.
In December, the Florida Supreme Court ordered the creation of a statewide mediation program for homeowners and lenders before a property can be sold through foreclosure.
Broward's 17th Judicial Circuit Court has appointed the American Arbitration Association to administer its mediation program starting July 1. Program details for the 15th Judicial Circuit Court in Palm Beach County are not yet clear.
A bill in Florida's Legislature that would allow banks to foreclose without going before a judge appears to have died.
While the state's clogged foreclosure system needs an overhaul, the proposed bill was too radical, said Rod Petrey, president of the Collins Center for Public Policy. The nonprofit group provides mediation services for four state circuit courts.
"With someone's home, where their family is, we ought to move very slowly in taking that away," Petrey said.
Friday, April 16, 2010
Mortgage Rates Fall After 4 Weeks on the Rise
This week, 39% of the mortgage industry experts surveyed by Bankrate.com believe mortgage rates will rise over the next week or so. Another 22% think rates will fall, and the rest (39%) believe rates will remain relatively unchanged. Rates for long-term mortgages dropped this week but still remained above 5%, Freddie Mac said Thursday.
The average rate on a 30-year fixed rate mortgage was 5.07% this week, down from 5.21% a week earlier, a survey by the mortgage financier Freddie Mac said. Last week’s average rate for a 30-year fixed mortgage had been the highest since mid-August, when it was 5.29%.
Rates had dropped to a record low of 4.71% in December, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ended at the end of March, but the Fed left the door open to reviving the program if the economy weakens.
Low rates make mortgages less expensive for home buyers.
“After rising for four consecutive weeks, mortgage rates eased back to where they were two weeks ago and still remain historically low,” said Frank Nothaft, Freddie Mac’s chief economist.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often tracking the interest rate paid on long-term Treasury bonds.
This week, the average rate on a 15-year fixed-rate mortgage was 4.40%, down from 4.52% last week.
Rates on five-year, adjustable-rate mortgages averaged 4.08%, down from 4.25% a week earlier. Rates on one-year, adjustable-rate mortgages dipped to 4.13% from 4.14%.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.
The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 15-year loans, 0.6 of a point for 30-year and 5-year loans, and 0.5 of a point for 1-year loans.
The average rate on a 30-year fixed rate mortgage was 5.07% this week, down from 5.21% a week earlier, a survey by the mortgage financier Freddie Mac said. Last week’s average rate for a 30-year fixed mortgage had been the highest since mid-August, when it was 5.29%.
Rates had dropped to a record low of 4.71% in December, pushed down by a campaign by the Federal Reserve to reduce borrowing costs for consumers. The program ended at the end of March, but the Fed left the door open to reviving the program if the economy weakens.
Low rates make mortgages less expensive for home buyers.
“After rising for four consecutive weeks, mortgage rates eased back to where they were two weeks ago and still remain historically low,” said Frank Nothaft, Freddie Mac’s chief economist.
Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders around the country. Rates often fluctuate significantly, even within a given day, often tracking the interest rate paid on long-term Treasury bonds.
This week, the average rate on a 15-year fixed-rate mortgage was 4.40%, down from 4.52% last week.
Rates on five-year, adjustable-rate mortgages averaged 4.08%, down from 4.25% a week earlier. Rates on one-year, adjustable-rate mortgages dipped to 4.13% from 4.14%.
The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.
The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 of a point for 15-year loans, 0.6 of a point for 30-year and 5-year loans, and 0.5 of a point for 1-year loans.
Thursday, April 15, 2010
Foreclosure Activity Up 7%
The foreclosure tide is still rising. RealtyTrac reported Thursday that foreclosure filings were brought against nearly one million properties during the first threemonths of 2010. That’s a seven percent increase from the previous quarter, 16% higher than a year ago, and equates to one in every 138 homes in the United States.
Altogether, foreclosure filings – including default notices, scheduled auctions, and bank repossessions – were reported on 932,234 properties from January to March of 2010. According to RealtyTrac, the number of scheduled auctions and bank repossessions hit new quarterly records.
All foreclosure types spiked in March. Filings were reported on 367,056 properties last month, an increase of nearly 19% from the previous month and the highest monthly total since RealtyTrac began issuing its report in January 2005.
“Foreclosure activity in the first quarter of 2010 followed a very similar pattern to what we saw in the first quarter of 2009: a shallow trough in January and February followed by a substantial spike in March,” explained James J. Saccacio, RealtyTrac’s CEO. “One difference, however, is that the increases were more tilted toward the final stage of foreclosure,” with REOs increasing in the first quarter of this year, compared to a decrease during the same period last year, he said.
“This subtle shift in the numbers pushed REOs to the highest quarterly total we’ve ever seen in our report and may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure prevention programs and processing delays slowed down the normal foreclosure timeline,” Saccacio said.
Altogether, foreclosure filings – including default notices, scheduled auctions, and bank repossessions – were reported on 932,234 properties from January to March of 2010. According to RealtyTrac, the number of scheduled auctions and bank repossessions hit new quarterly records.
All foreclosure types spiked in March. Filings were reported on 367,056 properties last month, an increase of nearly 19% from the previous month and the highest monthly total since RealtyTrac began issuing its report in January 2005.
“Foreclosure activity in the first quarter of 2010 followed a very similar pattern to what we saw in the first quarter of 2009: a shallow trough in January and February followed by a substantial spike in March,” explained James J. Saccacio, RealtyTrac’s CEO. “One difference, however, is that the increases were more tilted toward the final stage of foreclosure,” with REOs increasing in the first quarter of this year, compared to a decrease during the same period last year, he said.
“This subtle shift in the numbers pushed REOs to the highest quarterly total we’ve ever seen in our report and may be further evidence that lenders are starting to make a dent in the backlog of distressed inventory that has built up over the last year as foreclosure prevention programs and processing delays slowed down the normal foreclosure timeline,” Saccacio said.
During the first three months of this year, RealtyTrac’s data shows there were 257,944 properties repossessed by the lender – an increase of 9% from the previous quarter and an increase of 35% compared to the first quarter of 2009.
As it has for the past 13 quarters, Nevada continued to document the nation’s highest state foreclosure rate in the first quarter of 2010. One in every 33 Nevada homes received a foreclosure filing during the three-month period, more than four times the national average and an increase of nearly 15% from the previous quarter. Still, Nevada’s total of 34,557 properties receiving a foreclosure filing in the first quarter was down 16% from the first quarter of 2009.
Arizona’s foreclosure activity increased on both a quarterly and annual basis, helping the state to post the nation’s second highest state foreclosure rate for the third consecutive quarter. One in every 49 Arizona properties received a foreclosure filing during the quarter – nearly three times the national average.
With one in every 57 Florida properties in some stage of foreclosure, the state posted the nation’s third highest state foreclosure rate for the second straight quarter. Florida’s Q1 foreclosure activity also increased on both a quarterly and annual basis.
California foreclosure activity decreased 6 percent from the first quarter of 2009, but the state still documented the nation’s fourth highest foreclosure rate, with one in every 62 homes receiving a filing.
Utah’s foreclosure activity increased 75% from the first quarter of 2009, the highest annual rise among top-10 states, giving it the nation’s fifth highest foreclosure rate. Foreclosure filings were reported on 10,756 Utah properties, a rate of one in every 88 housing units and an increase of 21% from the previous quarter.
As it has for the past 13 quarters, Nevada continued to document the nation’s highest state foreclosure rate in the first quarter of 2010. One in every 33 Nevada homes received a foreclosure filing during the three-month period, more than four times the national average and an increase of nearly 15% from the previous quarter. Still, Nevada’s total of 34,557 properties receiving a foreclosure filing in the first quarter was down 16% from the first quarter of 2009.
Arizona’s foreclosure activity increased on both a quarterly and annual basis, helping the state to post the nation’s second highest state foreclosure rate for the third consecutive quarter. One in every 49 Arizona properties received a foreclosure filing during the quarter – nearly three times the national average.
With one in every 57 Florida properties in some stage of foreclosure, the state posted the nation’s third highest state foreclosure rate for the second straight quarter. Florida’s Q1 foreclosure activity also increased on both a quarterly and annual basis.
California foreclosure activity decreased 6 percent from the first quarter of 2009, but the state still documented the nation’s fourth highest foreclosure rate, with one in every 62 homes receiving a filing.
Utah’s foreclosure activity increased 75% from the first quarter of 2009, the highest annual rise among top-10 states, giving it the nation’s fifth highest foreclosure rate. Foreclosure filings were reported on 10,756 Utah properties, a rate of one in every 88 housing units and an increase of 21% from the previous quarter.
Wednesday, April 14, 2010
HAMP Report Shows 230,000 Homeowners in Permanent Mods
The administration’s Home Affordable Modification Program (HAMP) has been the target of some heavy criticism, with naysayers taking aim at everything from the program’s slow progress and below par results to servicers’ lack of capacity to handle large-volume modification work. The latest numbers may be more fodder for the fire.
According to the Treasury’s March HAMP report card released Wednesday, 230,801 homeowners have been granted permanent modifications under the program. Over 60,000 trial mods were converted in March alone, compared to just under 53,000 in February, and the Treasury says an additional 108,000 permanent modifications have been approved and are pending only borrower acceptance.
But market observers still say it’s a slow gait, and the conversion rate seems to be the program’s biggest sticking point, leaving some homeowners in limbo for months on end.
In testimony before the House Financial Services Committee Tuesday, Barbara Desoer, president of Bank of America Home Loans, said, “[R]ecent program changes requiring servicers to obtain and review income documentation before trial periods are commenced should help improve conversions from trial to permanent modifications.”
Treasury’s data shows that homeowners who’ve received HAMP modifications have lowered their monthly mortgage payments by a median of $500, but the report also shows that the number of permanently modified loans to re-default nearly doubled from February to March.
Since the program’s inception, 2,879 borrowers with a permanent loan restructuring have become delinquent again, according to the details provided in the March report. That’s up from 1,499 in February and 1,005 in January.
According to the Treasury’s March HAMP report card released Wednesday, 230,801 homeowners have been granted permanent modifications under the program. Over 60,000 trial mods were converted in March alone, compared to just under 53,000 in February, and the Treasury says an additional 108,000 permanent modifications have been approved and are pending only borrower acceptance.
But market observers still say it’s a slow gait, and the conversion rate seems to be the program’s biggest sticking point, leaving some homeowners in limbo for months on end.
In testimony before the House Financial Services Committee Tuesday, Barbara Desoer, president of Bank of America Home Loans, said, “[R]ecent program changes requiring servicers to obtain and review income documentation before trial periods are commenced should help improve conversions from trial to permanent modifications.”
Treasury’s data shows that homeowners who’ve received HAMP modifications have lowered their monthly mortgage payments by a median of $500, but the report also shows that the number of permanently modified loans to re-default nearly doubled from February to March.
Since the program’s inception, 2,879 borrowers with a permanent loan restructuring have become delinquent again, according to the details provided in the March report. That’s up from 1,499 in February and 1,005 in January.
Home Buying Checklist
Wouldn't it be great to have a home buying checklist? Something you could stick in your pocket that would remind you to ask all the right questions and make a smart home buying move?
As we count down the final few weeks to take advantage of the $8,000 first-time home buyer tax credit and $6,500 long-term homeowner tax credit, it's helpful to have a checklist all home buyers can turn to.
Ilyce's Home Buyer Checklist:
1. Understand the difference between what you want in a house and what you need. Just because you want a house with five bedrooms, five bathrooms and a pizza oven in the outdoor kitchen, that doesn't mean you need all that. The concept is to get everything you absolutely need in a property and a few of the things you want -- without breaking your bank account.
2. Identify your neighborhood(s) of choice. Write down what characteristics your neighborhood of choice should have and compare that list with actual neighborhoods in which you might want to live and can afford to buy. Then spend time in that neighborhood, driving around during the day and night. Visit the local schools, see who hangs out in the grocery store and coffee shop, and drive the commute to your office during rush hour.
3. Figure out how much you can comfortably afford to spend. While lenders are more conservative in handing out loans, they may offer you a bigger loan than you're prepared to take. Start by calculating how much you can afford to spend -- and want to spend -- on your mortgage, property taxes and insurance each month. Then add in all of the other expenses you pay for each month (and don't forget to save a few bucks for the upkeep and maintenance expenses you'll have to pay for as well). Once you're done, figure out how much money you have left in your paycheck and whether you want to spend a little more of it on your housing expenses each month. (Remember, part of the housing crisis came about because people bought homes -- and lenders that gave them loans -- that they couldn't afford over the long haul.)
4. Pull a copy of your credit history and credit score. Do this at www.annualcreditreport.com. You'll get a free copy of your credit history from each of the three credit reporting bureaus (Equifax, Experian and Trans-Union) plus, you'll have the opportunity to pay around $9 for a copy of your credit score.
5. Gather your paperwork together before you shop for a loan. You'll need copies of your W2, bank account and retirement account statements, as well as tax information. I have a full list at ThinkGlink.com (www.thinkglink.com/article/2008/09/11/mortgage-loan-applicants-need-more-documents). You'll need even more documentation if you're getting a jumbo loan or if you own your own business.
6. Shop around for a mortgage. Talk to at least five different types of lenders. Most lenders will offer you a 15-year or 30-year fixed rate mortgage through Fannie Mae, Freddie Mac or FHA.
7. Find an amazing real estate agent. While the information available on the Internet makes buyers feel as though they've got everything they need to negotiate a great deal, they're actually missing the key ingredient: experience. A great agent with years of experience negotiating for buyers and sellers in your neighborhood of choice is invaluable.
8. Understand what "true value" means in your neighborhood(s) of choice. Start collecting information about the local housing stock. Ask your agent to walk you through each home that has recently sold, so you begin to understand the relationship between price, condition and value.
9. Apply for your loan. Try not to chew your nails off while waiting to be approved.
10. Work with your agent to identify the homes for sale in your neighborhood(s) of choice that meet your wants and needs. As you walk through these homes, try to decide if the homes you're seeing meet all of the needs on your list. Is the agent listening to you? Do you need to have another conversation to help you refine what you're looking for? Or, is the agent showing you property that meets your needs and wants better than what you thought you wanted originally?
11. Put together the other pieces of your home buying team. Now that you have the agent, you'll need a few other people to help you buy the right property. Choose your home inspector and your lender (and decide what kind of loan you want). Think about hiring a good real estate attorney (especially if you're buying a foreclosure or short sale, and even if real estate attorneys aren't normally used to close house deals in your state).
12. Understand the true costs of home ownership. You don't want to be stressed out over the monthly expenses of owning a home as well as the other unexpected surprises that come so often with buying a home.
13. Don't let anyone push you around. You should work hard to set your own home buying agenda. If someone demands that you make a decision immediately, politely step back from the situation. Remember, there will always be another house for you to buy -- especially as we continue to work through the glut of homes on the market after the Great Recession.
14. Make a smart offer. Look at how much other homes in the area have sold for, and then build an offer that gives the seller something he or she wants (mostly, that's money, but it might be time) in exchange for whatever you really want.
15. Stay focused until the closing. Schedule the movers. Pack your boxes. Set up utility accounts at the new property and shut off your utilities as of the morning of the move. Put in a change of address notice with the post office, your financial services companies, your employer, etc. And don't forget to buy your homeowner's insurance policy, with enough coverage for the home and its contents. You may also need other insurance that are not generally covered in a policy, such as flood coverage, back-up sewer coverage, coverage for collectibles if you have any or jewelry.
Clip this home buying checklist and keep it in your pocket, so that you're always making a smart move.
(Ilyce R. Glink's latest book is "Buy, Close, Move In!" If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. Contact Ilyce through her Web site, www.thinkglink.com.)
(c) 2010 ILYCE R. GLINK. DISTRIBUTED BY TRIBUNE MEDIA SERVICES, INC.
As we count down the final few weeks to take advantage of the $8,000 first-time home buyer tax credit and $6,500 long-term homeowner tax credit, it's helpful to have a checklist all home buyers can turn to.
Ilyce's Home Buyer Checklist:
1. Understand the difference between what you want in a house and what you need. Just because you want a house with five bedrooms, five bathrooms and a pizza oven in the outdoor kitchen, that doesn't mean you need all that. The concept is to get everything you absolutely need in a property and a few of the things you want -- without breaking your bank account.
2. Identify your neighborhood(s) of choice. Write down what characteristics your neighborhood of choice should have and compare that list with actual neighborhoods in which you might want to live and can afford to buy. Then spend time in that neighborhood, driving around during the day and night. Visit the local schools, see who hangs out in the grocery store and coffee shop, and drive the commute to your office during rush hour.
3. Figure out how much you can comfortably afford to spend. While lenders are more conservative in handing out loans, they may offer you a bigger loan than you're prepared to take. Start by calculating how much you can afford to spend -- and want to spend -- on your mortgage, property taxes and insurance each month. Then add in all of the other expenses you pay for each month (and don't forget to save a few bucks for the upkeep and maintenance expenses you'll have to pay for as well). Once you're done, figure out how much money you have left in your paycheck and whether you want to spend a little more of it on your housing expenses each month. (Remember, part of the housing crisis came about because people bought homes -- and lenders that gave them loans -- that they couldn't afford over the long haul.)
4. Pull a copy of your credit history and credit score. Do this at www.annualcreditreport.com. You'll get a free copy of your credit history from each of the three credit reporting bureaus (Equifax, Experian and Trans-Union) plus, you'll have the opportunity to pay around $9 for a copy of your credit score.
5. Gather your paperwork together before you shop for a loan. You'll need copies of your W2, bank account and retirement account statements, as well as tax information. I have a full list at ThinkGlink.com (www.thinkglink.com/article/2008/09/11/mortgage-loan-applicants-need-more-documents). You'll need even more documentation if you're getting a jumbo loan or if you own your own business.
6. Shop around for a mortgage. Talk to at least five different types of lenders. Most lenders will offer you a 15-year or 30-year fixed rate mortgage through Fannie Mae, Freddie Mac or FHA.
7. Find an amazing real estate agent. While the information available on the Internet makes buyers feel as though they've got everything they need to negotiate a great deal, they're actually missing the key ingredient: experience. A great agent with years of experience negotiating for buyers and sellers in your neighborhood of choice is invaluable.
8. Understand what "true value" means in your neighborhood(s) of choice. Start collecting information about the local housing stock. Ask your agent to walk you through each home that has recently sold, so you begin to understand the relationship between price, condition and value.
9. Apply for your loan. Try not to chew your nails off while waiting to be approved.
10. Work with your agent to identify the homes for sale in your neighborhood(s) of choice that meet your wants and needs. As you walk through these homes, try to decide if the homes you're seeing meet all of the needs on your list. Is the agent listening to you? Do you need to have another conversation to help you refine what you're looking for? Or, is the agent showing you property that meets your needs and wants better than what you thought you wanted originally?
11. Put together the other pieces of your home buying team. Now that you have the agent, you'll need a few other people to help you buy the right property. Choose your home inspector and your lender (and decide what kind of loan you want). Think about hiring a good real estate attorney (especially if you're buying a foreclosure or short sale, and even if real estate attorneys aren't normally used to close house deals in your state).
12. Understand the true costs of home ownership. You don't want to be stressed out over the monthly expenses of owning a home as well as the other unexpected surprises that come so often with buying a home.
13. Don't let anyone push you around. You should work hard to set your own home buying agenda. If someone demands that you make a decision immediately, politely step back from the situation. Remember, there will always be another house for you to buy -- especially as we continue to work through the glut of homes on the market after the Great Recession.
14. Make a smart offer. Look at how much other homes in the area have sold for, and then build an offer that gives the seller something he or she wants (mostly, that's money, but it might be time) in exchange for whatever you really want.
15. Stay focused until the closing. Schedule the movers. Pack your boxes. Set up utility accounts at the new property and shut off your utilities as of the morning of the move. Put in a change of address notice with the post office, your financial services companies, your employer, etc. And don't forget to buy your homeowner's insurance policy, with enough coverage for the home and its contents. You may also need other insurance that are not generally covered in a policy, such as flood coverage, back-up sewer coverage, coverage for collectibles if you have any or jewelry.
Clip this home buying checklist and keep it in your pocket, so that you're always making a smart move.
(Ilyce R. Glink's latest book is "Buy, Close, Move In!" If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. Contact Ilyce through her Web site, www.thinkglink.com.)
(c) 2010 ILYCE R. GLINK. DISTRIBUTED BY TRIBUNE MEDIA SERVICES, INC.
Dwyane Wade Takes a Loss When Selling House
Selling a house in this market is no slam dunk -- even for basketball superstar Dwyane Wade.
The Heat guard lost nearly $1.5 million last week when he resold his 9,000-square-foot palace near Miami for less than he paid.
Wade, who is going through a divorce, sold the six-bedroom home in Pinecrest for $2.5 million, according to CondoVultures, a Bal Harbour-based real estate firm. He and wife Siohvaughn bought the house at the height of the housing boom in 2005 for $3.98 million.
Miami-Dade County property appraisers have assessed the house at $2.9 million.
Wade, a free agent at the end of the season, has not yet decided whether to remain in Miami or sign a big-money deal with another team.
The Heat guard lost nearly $1.5 million last week when he resold his 9,000-square-foot palace near Miami for less than he paid.
Wade, who is going through a divorce, sold the six-bedroom home in Pinecrest for $2.5 million, according to CondoVultures, a Bal Harbour-based real estate firm. He and wife Siohvaughn bought the house at the height of the housing boom in 2005 for $3.98 million.
Miami-Dade County property appraisers have assessed the house at $2.9 million.
Wade, a free agent at the end of the season, has not yet decided whether to remain in Miami or sign a big-money deal with another team.
Tuesday, April 13, 2010
Distressed U.S. Home Sales: Nearly 3 in 10
According to First American CoreLogic, short sales and foreclosures accounted for 29% of all U.S. home sales this past January.
Riverside, Calif., led the nation's top 25 markets with so-called distressed sales accounting for 62% of the transactions. Fort Lauderdale was at 42% and Miami was at 32% although those numbers are down compared with a year ago.
Although Florida and foreclosures seemingly are synonymous, only two Florida markets -- Orlando and Cape Coral -- cracked the top 10 for distressed sales. CoreLogic, a California research firm, says the most likely reason is that foreclosure cases take longer to process in the Sunshine State than in California, Arizona or Nevada.
Riverside, Calif., led the nation's top 25 markets with so-called distressed sales accounting for 62% of the transactions. Fort Lauderdale was at 42% and Miami was at 32% although those numbers are down compared with a year ago.
Although Florida and foreclosures seemingly are synonymous, only two Florida markets -- Orlando and Cape Coral -- cracked the top 10 for distressed sales. CoreLogic, a California research firm, says the most likely reason is that foreclosure cases take longer to process in the Sunshine State than in California, Arizona or Nevada.
Monday, April 12, 2010
More Wealthy Home Owners Face Foreclosure
According to the Wall Street Journal, houses costing more than $5 million will be part of the next foreclosure boom.
In 2009, 1,312 homes costing more than $5 million faced foreclosure auctions. In February 2010 alone, 352 homes were on the auction block.
First American CoreLogic tracks 1,700 homes nationwide that have mortgages greater than $4 million. Of those, 14.8 percent were 90 days or more past due as of Jan. 31. That is almost double the 8.7 percent of homes with lesser mortgages that were similarly past due.
These pricey properties are difficult to sell because there are fewer buyers and financing is hard to get, but there’s a psychological element to the problem too. "It's very, very difficult for these [home owners] to believe they've had such a severe reversal of fortune," says Maggie Navarro, an associate with Coldwell Banker Old Pasadena in Southern California.
Source: The Wall Street Journal, Craig Karmin and James R. Hagerty (04/09/2010)
In 2009, 1,312 homes costing more than $5 million faced foreclosure auctions. In February 2010 alone, 352 homes were on the auction block.
First American CoreLogic tracks 1,700 homes nationwide that have mortgages greater than $4 million. Of those, 14.8 percent were 90 days or more past due as of Jan. 31. That is almost double the 8.7 percent of homes with lesser mortgages that were similarly past due.
These pricey properties are difficult to sell because there are fewer buyers and financing is hard to get, but there’s a psychological element to the problem too. "It's very, very difficult for these [home owners] to believe they've had such a severe reversal of fortune," says Maggie Navarro, an associate with Coldwell Banker Old Pasadena in Southern California.
Source: The Wall Street Journal, Craig Karmin and James R. Hagerty (04/09/2010)
Want Your $8,000 Home Buyer Tax Credit? Better Hurry....
First-time buyers can receive $8,000 tax credits if they sign sales contracts by April 30 and close by June 30. Existing homeowners who want to buy new principal residences will get $6,500.
The trade group Florida Realtors is holding its first statewide open house this weekend to promote sales by the end of April
The Orlando-based group estimates at least 10,000 homes from the Panhandle to Key West will participate in the event.
Janet Russell, an agent for Prudential Florida Realty who hopes to sell a four-bedroom Boca Raton house for $534,000, states:
"I think this is a great idea, and it helps the buyers. If you have 20 or 30 homes in an area all having open houses, buyers really get a chance to see what the market is like."
In recent years, more buyers have been searching for homes on the internet, therefore causing open houses to decrease in popularity.
"Open houses did lose their luster for a while, but I do believe they're making a comeback," said Better Homes & Gardens agent Maggie Dunne, who has a Fort Lauderdale listing in the statewide event. "I'm looking for a pretty good turnout."
Recent home sales in South Florida have been decent, but unspectacular. Broward and Palm Beach counties saw modest sales gains in February compared with a year ago.
Housing analysts say the sales surge occurred last fall when first-time buyers thought the $8,000 credit would expire Nov. 30. The government extended the credit and added a new one, but most experts don't predict another extension.
Scott Agran, president of Lang Realty in Boca Raton, states:
"While people know the credits are still around, they don't seem to have that same call to action."
Still, the $8,000 credit has pushed about 900,000 additional buyers into the market, said Lawrence Yun, chief economist for the National Association of Realtors. Those buyers have helped stabilize prices, he added.
"It is laying the foundation for more normal housing market conditions," Yun said, "and helping assure that we have a sustainable economic recovery as homeowners don't see further destruction of their wealth."
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Coral Gables apartments hit with foreclosure
BankUnited has filed a foreclosure lawsuit against two Coral Gables apartment buildings. According to Miami-Dade County Circuit Court records, the Miami Lakes-based bank filed the action on Wednesday against Venetian Townhomes, along with managing members Raul Benitez, Carlos Valera and Jorge Redondo.
It targets the 14-unit, 11,048-square-foot building at 920 Sevilla Ave., and the 18-unit, 22,044-square-foot building at 915 Palermo Ave., just blocks away from the historic Biltmore Hotel.
Venetian Townhomes bought the apartments for $6.5 million in 2006 with the help of a $4.6 million mortgage from BankUnited FSB, which has since failed. The loan was modified at $4.4 million in April 2009 – a month before the bank failed and its assets were transferred to the new BankUnited under a loss-sharing agreement with the Federal Deposit Insurance Corp.
It targets the 14-unit, 11,048-square-foot building at 920 Sevilla Ave., and the 18-unit, 22,044-square-foot building at 915 Palermo Ave., just blocks away from the historic Biltmore Hotel.
Venetian Townhomes bought the apartments for $6.5 million in 2006 with the help of a $4.6 million mortgage from BankUnited FSB, which has since failed. The loan was modified at $4.4 million in April 2009 – a month before the bank failed and its assets were transferred to the new BankUnited under a loss-sharing agreement with the Federal Deposit Insurance Corp.
Friday, April 9, 2010
Thursday, April 8, 2010
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Wednesday, April 7, 2010
Many Factors Behind Foreclosures
This past Tuesday, Florida Realtors released a report showing that rather than just loss of a job or a bad loan, there is usually more than one factor pushing Floridians into foreclosure.
Foreclosed homeowners' problems are generally more complex, said Joel Searby of Strategic Guidance Systems, which conducted the study, "The Face of Foreclosure: Florida,'' for Florida Realtors, the trade association for 115,000 real estate professionals in the state.
Joel Searby states:
"Contrary to what some researchers have argued, many Florida homeowners were not driven into foreclosure by simply being trapped in bad loans, or losing their jobs or taking pay cuts. What we found in talking with people who've gone through foreclosure is that there's a `plus one' factor,'" meaning job loss coupled with other circumstances such as divorce or health problems usually led to homeowner distress.
The study also found that foreclosure touched homeowners across a broad range of incomes and demographic backgrounds.
The report looked at statewide foreclosure filings between March 2006 and February 2009, and compiled demographic information about affected homeowners from public records and personal interviews.
Researchers focused on five of the most active foreclosure markets, including Miami, which topped the list of Florida cities for foreclosure filings during that three-year period.
One section of the report highlighted the relationship between the unemployment rate and foreclosures filings in Miami, which began to see joblessness increase steadily in May 2007. Foreclosures and the unemployment rate have more or less risen in tandem for much of the past three years in South Florida.
Here are other findings:
Read more: Miami Herald
Foreclosed homeowners' problems are generally more complex, said Joel Searby of Strategic Guidance Systems, which conducted the study, "The Face of Foreclosure: Florida,'' for Florida Realtors, the trade association for 115,000 real estate professionals in the state.
Joel Searby states:
"Contrary to what some researchers have argued, many Florida homeowners were not driven into foreclosure by simply being trapped in bad loans, or losing their jobs or taking pay cuts. What we found in talking with people who've gone through foreclosure is that there's a `plus one' factor,'" meaning job loss coupled with other circumstances such as divorce or health problems usually led to homeowner distress.
The study also found that foreclosure touched homeowners across a broad range of incomes and demographic backgrounds.
The report looked at statewide foreclosure filings between March 2006 and February 2009, and compiled demographic information about affected homeowners from public records and personal interviews.
Researchers focused on five of the most active foreclosure markets, including Miami, which topped the list of Florida cities for foreclosure filings during that three-year period.
One section of the report highlighted the relationship between the unemployment rate and foreclosures filings in Miami, which began to see joblessness increase steadily in May 2007. Foreclosures and the unemployment rate have more or less risen in tandem for much of the past three years in South Florida.
Here are other findings:
- More than 20% of homeowners who were foreclosed upon had household incomes ranging from $50,000 to $75,000. Another 20% had incomes in excess of $100,000.
- One in four Floridians facing foreclosure were college grads. Another 30% had at least some college education.
- 92% of foreclosed-upon Floridians were married homeowners, and 8% were single. Nearly two-thirds of Florida foreclosure cases involved families with children.
- 35% of those in foreclosure had lived in their homes for 10 years or more. More than 40% had lived in the homes fewer than 5 years.
Read more: Miami Herald
South Florida Q1 Foreclosures Slide 21%
The number of foreclosure filings in South Florida fell 2%, year-over-year, to less than 20,000 in the first quarter of 2010.
According to the report from Condo Vultures LL, there were 20% fewer filings in March, 19% fewer in February and 7% fewer in January
The Bal Harbour-based real estate consultancy found that, between January and March, there were 4,600 filings in Miami-Dade County – 33% less than a year ago.
Palm Beach County saw a 22% drop, with 6,300 actions filed by lenders. There were 9,100 foreclosures filed in Broward County – 12% less than the same three-month period a year earlier.
Peter Zalewski, a principal with Condo Vultures, states:
"The federal government programs coupled with the pure financial feasibility of working with troubled borrowers to keep them in their homes is translating into lenders filing fewer foreclosure actions in South Florida."
According to the Condo Vultures database, lenders initiated 33,000 foreclosure filings in 2007, 76,000 in 2008 and 97,000 in 2009. Based on the first quarter findings, South Florida is on pace to record less than 80,000 foreclosure filings, putting this year on par with 2008.
According to the report from Condo Vultures LL, there were 20% fewer filings in March, 19% fewer in February and 7% fewer in January
The Bal Harbour-based real estate consultancy found that, between January and March, there were 4,600 filings in Miami-Dade County – 33% less than a year ago.
Palm Beach County saw a 22% drop, with 6,300 actions filed by lenders. There were 9,100 foreclosures filed in Broward County – 12% less than the same three-month period a year earlier.
Peter Zalewski, a principal with Condo Vultures, states:
"The federal government programs coupled with the pure financial feasibility of working with troubled borrowers to keep them in their homes is translating into lenders filing fewer foreclosure actions in South Florida."
According to the Condo Vultures database, lenders initiated 33,000 foreclosure filings in 2007, 76,000 in 2008 and 97,000 in 2009. Based on the first quarter findings, South Florida is on pace to record less than 80,000 foreclosure filings, putting this year on par with 2008.
Tuesday, April 6, 2010
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How Much House Can I Afford? Calculating Your Home Affordability
"How much house can I afford?"
That's the question of the year for home buyers who have begun to realize that with today's new rules of mortgage finance, affordability rests a great deal on factors other than annual income.
Sure, how much money you earn each year is an important part of answering the affordability question. If you don't have verifiable income, your mortgage loan application won't be approved.
But other factors play into the affordability question as well -- starting with your credit history and credit score.
If you have a lower credit score, the interest rate on the loan you eventually secure will be higher, and the answer to the "How much house can I afford" question will be "Less."
Most lenders will require you to have a credit score between 620 and 660 if you want to qualify for an FHA loan. If you want to get a conventional loan, you'll need a credit score above 680, and preferably over 720.
Another crucial factor is how much cash you have on hand for closing costs and a down payment. Not only will you get a better interest rate if you have more cash to put down on the property, but if you have at least 20 percent to put down on your house purchase, you'll also avoid paying private mortgage insurance (PMI).
Paying PMI is expensive, and a lender will subtract the amount of the insurance premium from the income that's available to make your mortgage payment.
If you're buying a condominium, co-op, townhouse or a single-family house in a community that has a homeowner's association, the monthly fee you're assessed will be deducted from the total amount you have available to make your mortgage payment.
Other monthly, recurring costs will also be deducted from the amount a lender believes you have to pay your mortgage. For example, if you carry a balance on your credit cards, and have for a long time, the monthly "debt service" you pay to the credit card company reduces the funds you have available to pay your monthly mortgage.
Lenders will also subtract your monthly debt service on student loans, car loans and any other monthly debt payments you make -- all of which could leave you with precious little to make those monthly mortgage payments.
For those home buyers who own their own businesses, how much income you declare on your tax return will be the driving factor behind how much house a lender believes you can afford.
The days of qualifying for your mortgage based on cash flow in the business, rather than on income you declared on your taxes, is over for the moment. Stated income loans (where you tell the lender how much money you earn or claim to have earned) have virtually disappeared.
Mortgage lenders want to see at least two years' of tax returns for your business as well as a profit and loss statement for the current year, among a myriad of other documents.
Home buyers who depreciate investment property on their tax returns to the extent it reduces income down to perhaps nothing, may find it even more difficult to qualify for a mortgage.
It all comes down to the new rules of mortgage finance.
Finally, don't just accept what lender says that you can afford on a home. Make sure that you feel comfortable with that amount and can live comfortably with the future monthly payments for the loan as they come due.
Ilyce R. Glink's latest book is "Buy, Close, Move In!" If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. Contact Ilyce through her Web site, www.thinkglink.com.
That's the question of the year for home buyers who have begun to realize that with today's new rules of mortgage finance, affordability rests a great deal on factors other than annual income.
Sure, how much money you earn each year is an important part of answering the affordability question. If you don't have verifiable income, your mortgage loan application won't be approved.
But other factors play into the affordability question as well -- starting with your credit history and credit score.
If you have a lower credit score, the interest rate on the loan you eventually secure will be higher, and the answer to the "How much house can I afford" question will be "Less."
Most lenders will require you to have a credit score between 620 and 660 if you want to qualify for an FHA loan. If you want to get a conventional loan, you'll need a credit score above 680, and preferably over 720.
Another crucial factor is how much cash you have on hand for closing costs and a down payment. Not only will you get a better interest rate if you have more cash to put down on the property, but if you have at least 20 percent to put down on your house purchase, you'll also avoid paying private mortgage insurance (PMI).
Paying PMI is expensive, and a lender will subtract the amount of the insurance premium from the income that's available to make your mortgage payment.
If you're buying a condominium, co-op, townhouse or a single-family house in a community that has a homeowner's association, the monthly fee you're assessed will be deducted from the total amount you have available to make your mortgage payment.
Other monthly, recurring costs will also be deducted from the amount a lender believes you have to pay your mortgage. For example, if you carry a balance on your credit cards, and have for a long time, the monthly "debt service" you pay to the credit card company reduces the funds you have available to pay your monthly mortgage.
Lenders will also subtract your monthly debt service on student loans, car loans and any other monthly debt payments you make -- all of which could leave you with precious little to make those monthly mortgage payments.
For those home buyers who own their own businesses, how much income you declare on your tax return will be the driving factor behind how much house a lender believes you can afford.
The days of qualifying for your mortgage based on cash flow in the business, rather than on income you declared on your taxes, is over for the moment. Stated income loans (where you tell the lender how much money you earn or claim to have earned) have virtually disappeared.
Mortgage lenders want to see at least two years' of tax returns for your business as well as a profit and loss statement for the current year, among a myriad of other documents.
Home buyers who depreciate investment property on their tax returns to the extent it reduces income down to perhaps nothing, may find it even more difficult to qualify for a mortgage.
It all comes down to the new rules of mortgage finance.
Finally, don't just accept what lender says that you can afford on a home. Make sure that you feel comfortable with that amount and can live comfortably with the future monthly payments for the loan as they come due.
Ilyce R. Glink's latest book is "Buy, Close, Move In!" If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11a-1p EST. Contact Ilyce through her Web site, www.thinkglink.com.
South Florida Red Roof Inns Face Foreclosure
Two Red Roof Inn properties in South Florida have been hit with foreclosure actions as part of a securitized lender’s move to repossess up to 52 of the company’s hotels.
As the representative of a commercial mortgage-backed securities (CMBS) fund managed by Miami Beach-based LNR Partners, DMARC 2007-CD5 LeJeune Road filed a foreclosure lawsuit against R-Roof IV and R-Roof V, according to Miami-Dade County Circuit Court records. It concerns the 201-room, 83,765-square-foot hotel at 3401 N.W. 42nd Ave. (LeJeuene Road).
In Broward County, DMAC 2007-CD5 Powerline Road filed a foreclosure lawsuit against R-Roof IV and R-Roof V over the 38,320-square-foot hotel at 4800 N.W. Ninth Ave. (North Powerline Road).
Miami attorney Michael Kreitzer, who represents the CMBS fund in both lawsuits, did not immediately return a call seeking comment.
The defendants are managed out of Columbus, Ohio, where Red Roof Inn is headquartered. A call to a company spokeswoman was not immediately returned.
Both hotels were secured by a $310 million mortgage covering multiple Red Roof Inns in 2007, according to county records. Loan documents say $30.8 million of that loan secured Florida hotels.
According to data from CMBS analysis firm Trepp LLC, Red Roof Inns has $358.5 million of securitized debt among four securitized funds. Of that, $101.2 million is in foreclosure and the rest is more than 90 days past due, Trepp indicated.
The CMBS fund that holds the loan to the Red Roof Inns in Miami and Fort Lauderdale has 52 properties. Trepp listed the loan status as foreclosure. The only other Florida property covered by that loan is the Red Roof Inn on Horace Avenue in Tampa. It is facing a foreclosure lawsuit, as well.
Red Roof Inns also has franchise locations, so not all of the hotels under its flag are secured by troubled loans.
As the representative of a commercial mortgage-backed securities (CMBS) fund managed by Miami Beach-based LNR Partners, DMARC 2007-CD5 LeJeune Road filed a foreclosure lawsuit against R-Roof IV and R-Roof V, according to Miami-Dade County Circuit Court records. It concerns the 201-room, 83,765-square-foot hotel at 3401 N.W. 42nd Ave. (LeJeuene Road).
In Broward County, DMAC 2007-CD5 Powerline Road filed a foreclosure lawsuit against R-Roof IV and R-Roof V over the 38,320-square-foot hotel at 4800 N.W. Ninth Ave. (North Powerline Road).
Miami attorney Michael Kreitzer, who represents the CMBS fund in both lawsuits, did not immediately return a call seeking comment.
The defendants are managed out of Columbus, Ohio, where Red Roof Inn is headquartered. A call to a company spokeswoman was not immediately returned.
Both hotels were secured by a $310 million mortgage covering multiple Red Roof Inns in 2007, according to county records. Loan documents say $30.8 million of that loan secured Florida hotels.
According to data from CMBS analysis firm Trepp LLC, Red Roof Inns has $358.5 million of securitized debt among four securitized funds. Of that, $101.2 million is in foreclosure and the rest is more than 90 days past due, Trepp indicated.
The CMBS fund that holds the loan to the Red Roof Inns in Miami and Fort Lauderdale has 52 properties. Trepp listed the loan status as foreclosure. The only other Florida property covered by that loan is the Red Roof Inn on Horace Avenue in Tampa. It is facing a foreclosure lawsuit, as well.
Red Roof Inns also has franchise locations, so not all of the hotels under its flag are secured by troubled loans.
Monday, April 5, 2010
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