The percentage of past due loans held by the nation’s largest mortgage financier has fallen.
In its monthly summary report just released, Fannie Mae said the serious delinquency rate on single-family mortgages in its portfolio dropped to 5.47% in March, down 12 basis points from 5.59% in February.
It’s the first time the GSE’s serious delinquency rate has declined since March 2007, when it was a mere 0.62%.
Since that time it’s been a steady upward jaunt, with the pace picking up considerably over the last couple of years. In March 2008, the percentage of Fannie’s loans that were at least 90 days past due was 1.15%. By March 2009, it had risen to 3.15%, and now 12 months later, it stands at 5.47%.
As DSNews.com reported earlier, Fannie’s sibling is also seeing the downside of the delinquency arrow. Freddie Mac’s serious delinquency rate dropped 7 basis points to 4.13% in March, also marking its first monthly decline in three years.
Freddie reports delinquency numbers a month ahead of Fannie, and its downward trail is continuing. April marked the second consecutive month that Freddie Mac’s serious delinquency rate has fallen, declining another 7 basis points to 4.06%.
Is this the beginning of a trend that will soon spread through the rest of the industry?
Total nonperforming loans in Fannie Mae’s guaranty book of business were $223.9 billion as of March 31, 2010. At that time, the GSE held 109,989 REOs, carrying a total value of $11.4 billion.
Fannie also reported that its monthly transaction numbers include approximately $46 billion in loans purchased from mortgage-backed securities (MBS) trusts in April 2010 that will not be reflected as liquidated from MBS until May 2010.
Excluding these loan repurchases and the impact of March repurchases, the GSE’s total book of business would have declined at an annualized rate of 4.2% for April.
Both Fannie and Freddie announced back in February that they would begin buying back 120-plus day delinquent mortgages from securities pools, to minimize the impact of new accounting rules, which require lenders to account for certain securitized assets on their own books.
Friday, May 28, 2010
Thursday, May 27, 2010
Interest Rates Have Fallen to Their Lowest Level of the Year!
Mortgage interest rates have fallen to their lowest level of the year. Economists conclude that home buyers have the financial turmoil in Europe to thank for that, as overseas investors have put their dollars instead towards what they see as safer U.S. securities.
The mortgage industry has been bracing for a rise in interest rates now that the Federal Reserve has ceased buying mortgage-backed securities. But with international money being poured into U.S. Treasury bonds, which are closely tied to rates for home loans, that rise has yet to come about – a definite plus for the residential real estate market here in the states as it confronts an expected drop in sales activity now that the homebuyer tax credit has expired.
According to Freddie Mac’s rate report released Thursday, interest rates on 30-year fixed-rate mortgages (FRM) averaged 4.78% (0.7 point) this week, down from last week when the average rate was 4.84 percent. According to the GSE’s study, the 30-year FRM has not been lower since the week ending December 3, 2009, when it averaged 4.71%.
The mortgage industry has been bracing for a rise in interest rates now that the Federal Reserve has ceased buying mortgage-backed securities. But with international money being poured into U.S. Treasury bonds, which are closely tied to rates for home loans, that rise has yet to come about – a definite plus for the residential real estate market here in the states as it confronts an expected drop in sales activity now that the homebuyer tax credit has expired.
According to Freddie Mac’s rate report released Thursday, interest rates on 30-year fixed-rate mortgages (FRM) averaged 4.78% (0.7 point) this week, down from last week when the average rate was 4.84 percent. According to the GSE’s study, the 30-year FRM has not been lower since the week ending December 3, 2009, when it averaged 4.71%.
The 15-year FRM this week averaged 4.21% (0.7 point), Freddie Mac reported. That’s a slight drop from last week when it was 4.24%. Freddie says the 15-year FRM has not been lower since it started tracking 15-year rates in August of 1991.
“These low rates will help to elevate homebuyer affordability and soften the effects of the sunset of the homebuyer tax credit,” said Frank Nothaft, Freddie Mac’s VP and chief economist. “The latest information from Freddie Mac’s repeat-transactions home-price indexes also show some encouraging signs, with national metrics either slowing their descent or showing a modest rise, suggesting that the sharp downturn in national indexes since 2006 may be nearing an end.”
A separate study from Bankrate Thursday also puts mortgage rates at 2010 lows. Bankrate’s survey is based on data provided by the top 10 banks and thrifts in the top 10 markets.
Thirty-year fixed mortgage rates dropped to 4.92% (0.42 point) – a record low in Bankrate’s weekly survey. Last week, the 30-year rate came in at 4.96%.
The average 15-year fixed mortgage was unchanged from last week in Bankrate’s study at 4.34%, as was the larger jumbo 30-year fixed rate at 5.75%.
“The angst of investors around the globe about European debt, slower growth in China, and saber-rattling on the Korean Peninsula all feed into what is known as the ‘fear trade,’” Bankrate said in its report. “That fear trade has helped bring yields on U.S. Treasury securities considerably lower and mortgage shoppers have been direct beneficiaries.”
“These low rates will help to elevate homebuyer affordability and soften the effects of the sunset of the homebuyer tax credit,” said Frank Nothaft, Freddie Mac’s VP and chief economist. “The latest information from Freddie Mac’s repeat-transactions home-price indexes also show some encouraging signs, with national metrics either slowing their descent or showing a modest rise, suggesting that the sharp downturn in national indexes since 2006 may be nearing an end.”
A separate study from Bankrate Thursday also puts mortgage rates at 2010 lows. Bankrate’s survey is based on data provided by the top 10 banks and thrifts in the top 10 markets.
Thirty-year fixed mortgage rates dropped to 4.92% (0.42 point) – a record low in Bankrate’s weekly survey. Last week, the 30-year rate came in at 4.96%.
The average 15-year fixed mortgage was unchanged from last week in Bankrate’s study at 4.34%, as was the larger jumbo 30-year fixed rate at 5.75%.
“The angst of investors around the globe about European debt, slower growth in China, and saber-rattling on the Korean Peninsula all feed into what is known as the ‘fear trade,’” Bankrate said in its report. “That fear trade has helped bring yields on U.S. Treasury securities considerably lower and mortgage shoppers have been direct beneficiaries.”
The Essentials of Bank Owned Properties
"I will tell you how to become rich. Close the doors. Be fearful when others are greedy. Be greedy when others are fearful."
- Warren Buffett
It’s no coincidence that Buffett, Trump and all of the millionaire tycoons make their fortunes in hard times. As history would tell us, after every depression, came a new wave of incredibly wealthy millionaires. What do they all realize? They realize exactly what Buffett said above.
Right now, the Real Estate Market has become a subject of fear. But for the investors who understand Buffett’s quote, the Real Estate Market has become a subject of wealth and opportunity. In fact, the Real Estate Market has never gave us such an awesome opportunity in history. Right now, the REO Home Market is, quite frankly, amazing. We have the ultimate motivated seller, the Banks. And not only that, but our motivated seller has A LOT of properties and homes. And we really mean A LOT of homes.
June 8, 2009, the number of homes in foreclosure skyrocketed to over one million. As of January of this year, RealtyTrac reported a total of 1.50 million bank-owned properties for sale. But that’s not all, the Bank are also holding out on a large chunk of Foreclosed Inventory, known as “Shadow Inventory”. This inventory is enormous, and can perhaps be as big as 80% of the inventory listed for sale. This is what Makes the REO Market So Huge and so widely available.
It's an evolving real estate market and right now, its the REO home market that's changing so drastically. So what exactly is an REO home? Well REO stands for "Real Estate Owned" which is an internal term banks use to describe homes that have been foreclosed and that are now under their possession. Essentially , they are "Bank Owned" homes. The same way banks repossess cars and than sell them off cheap at auctions to cut losses is the basically what they are doing with their REO homes.
Except now they are in an incredibly bad situation. Banks are now handing many of these REO homes away for pennies on the dollar. Why are they doing this? Well because they can't afford not to. When the banks acquire a certain number of foreclosures in their portfolio, they are forced to get rid of them else the government steps in and kicks the owners from control. The owners want to keep making money, so that's the last thing they want - the government to control their money flow.
Right now, foreclosures are pouring in at a rate that banks can't nearly keep up with. This has a lot to do with their selfish acts in 2002, 2003, 2004, and 2005, making a lot of bad mortgages that they knew was no where near possible for the people to actually pay. These bad mortgages however, increased their own lending power and stock value. Now its coming back to bite them and the entire economy in the butt. The hundreds of thousands of mortgages that were authorized by the banks were set to detonate in 5 years. This is why we began seeing the foreclosure bomb explode in late 2007 and throughout 2008. But that's nothing. Our banks in their god awful greediness manufactured more of these 5 years mortgage bombs in 2003 than they did 2002. More in 2004 than they did in 2003. More in 2005 than they did in 2004. It's a wonder why no one stopped them sooner.
But all is well. By doing this, the Bank has put themselves on their knees making them the ultimate Motivated Seller and with plenty to sell. This is why the REO Market is so spectacular. You can literally find REO homes for pennies on the dollar, if not pennies in your pocket. Banks, especially during quarter closing and the end of the month are just slashing properties from their portfolios to keep the government off their bakcks. And through all of the REO's being tossed left and right, occasionally, there's a Gem of an REO home tossed away as well. We here at GSIG LLC find those gems and put it in the hand of our investors, and in the hands of a proud homeowner.
Except now they are in an incredibly bad situation. Banks are now handing many of these REO homes away for pennies on the dollar. Why are they doing this? Well because they can't afford not to. When the banks acquire a certain number of foreclosures in their portfolio, they are forced to get rid of them else the government steps in and kicks the owners from control. The owners want to keep making money, so that's the last thing they want - the government to control their money flow.
Right now, foreclosures are pouring in at a rate that banks can't nearly keep up with. This has a lot to do with their selfish acts in 2002, 2003, 2004, and 2005, making a lot of bad mortgages that they knew was no where near possible for the people to actually pay. These bad mortgages however, increased their own lending power and stock value. Now its coming back to bite them and the entire economy in the butt. The hundreds of thousands of mortgages that were authorized by the banks were set to detonate in 5 years. This is why we began seeing the foreclosure bomb explode in late 2007 and throughout 2008. But that's nothing. Our banks in their god awful greediness manufactured more of these 5 years mortgage bombs in 2003 than they did 2002. More in 2004 than they did in 2003. More in 2005 than they did in 2004. It's a wonder why no one stopped them sooner.
But all is well. By doing this, the Bank has put themselves on their knees making them the ultimate Motivated Seller and with plenty to sell. This is why the REO Market is so spectacular. You can literally find REO homes for pennies on the dollar, if not pennies in your pocket. Banks, especially during quarter closing and the end of the month are just slashing properties from their portfolios to keep the government off their bakcks. And through all of the REO's being tossed left and right, occasionally, there's a Gem of an REO home tossed away as well. We here at GSIG LLC find those gems and put it in the hand of our investors, and in the hands of a proud homeowner.
Wednesday, May 26, 2010
REO Sales Down as Short Sales Increase
According to the latest Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions, the proportion REOs sold during April plunged, due to an increase of distressed borrowers turning to short sales as an alternative to foreclosure. The survey found that short sales represented the largest portion of the distressed property housing market in April, accounting for 17.9% of all transactions. And as short sales surged, the portion of damaged REO transactions fell to 12.8% in April from 15.4% in March.
In addition, the survey found that first-time home buyers started to desert the housing market in April, ahead of expectations. While first-time buyer participation grew at a rapid rate from January to March, April’s data represented a clear reversal in that trend.
According to the survey, first-time buyers accounted for 43.4% of April’s home purchase transactions, a significant drop from March’s figure of 48.2%. This early departure was unexpected, as these buyers had until the end of April to sign a home purchase contract to qualify for an $8,000 tax credit.
“We were surprised to see the early decline in first-time home buyer participation,” said Thomas Popik, research director for Campbell Surveys. “When the tax credit was expected to expire last November, we saw a peak of first-time home buyers in October. Now, the first-time home buyer peak appears to have occurred not one month, but two months early.”
As first-time buyers began their departure from the housing market in April, existing homeowners picked up the slack. The survey results revealed that these buyers expanded their share of the home purchase market from 33.5% in March to 38.7% in April.
But a National Association of Realtors practitioner survey showed a different story. According to this survey, first-time buyers purchased 49% of homes in April, up from 44% in March. The survey also found that investors accounted for 15% of transactions in April, down from 19% in March, and the remaining sales (36%) were to repeat buyers.
Index Shows Flat Prices in South Florida
According to a national report released Tuesday.South Florida home prices were flat in March over February.
The showing in Palm Beach, Broward and Miami-Dade counties mirrored Standard and Poor’s / Case-Shiller home price index of 20 U.S. cities. Eight cities posted gains, while 10 had declines. Tampa, like South Florida, had no change. The numbers are seasonally adjusted.
Don't get too excited about the monthly numbers, though. South Florida prices fell 1.7% in the first quarter compared to a year ago, according to the index.
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.
On Monday, the Florida Realtors said home sales and prices increased in Broward and Palm Beach counties in April compared to a year ago. Of course, much of the demand was fueled by the April 30 expiration of two federal tax credits. Still, some analysts say demand is here to stay because affordability has returned to the market.
David M. Blitzer, chairman of the Index Committee at Standard and Poor’s, said in a statement that the nation's housing market is in better shape than this time last year. But the end of the tax credits doesn’t bode well for the months ahead.
“We don't expect to see a boost in relative demand,” he said.
The showing in Palm Beach, Broward and Miami-Dade counties mirrored Standard and Poor’s / Case-Shiller home price index of 20 U.S. cities. Eight cities posted gains, while 10 had declines. Tampa, like South Florida, had no change. The numbers are seasonally adjusted.
Don't get too excited about the monthly numbers, though. South Florida prices fell 1.7% in the first quarter compared to a year ago, according to the index.
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.
On Monday, the Florida Realtors said home sales and prices increased in Broward and Palm Beach counties in April compared to a year ago. Of course, much of the demand was fueled by the April 30 expiration of two federal tax credits. Still, some analysts say demand is here to stay because affordability has returned to the market.
David M. Blitzer, chairman of the Index Committee at Standard and Poor’s, said in a statement that the nation's housing market is in better shape than this time last year. But the end of the tax credits doesn’t bode well for the months ahead.
“We don't expect to see a boost in relative demand,” he said.
Tuesday, May 25, 2010
New Supreme Court Rule Creates Backlog of Foreclosures
Foreclosure filings have decreased this year, but it may not be a brightening economy causing the decline.
According to RealtyTrac Inc, Broward County had 7,134 homes and condos in some stage of foreclosure last month, down 31% from April 2009. In Palm Beach County, foreclosure filings dropped 36% from March.
Partly responsible: a new Florida Supreme Court rule that requires lenders to verify they are the actual owners of a home before making the initial case for foreclosure. They now need to see the actual notes.
The problem is that the notes — legal promises from borrowers to repay a debt — have been sold and resold, bundled into securities, scanned into computers, sealed in unknown vaults and lost in other ways as homes got caught up in the puzzling markets of the real estate boom.
"The original note is something very significant, and they just seem to have lost thousands of them," said Boca Raton attorney Marlyn Wiener, who handles real estate cases. "Nobody knows where the stuff is."
The new rule was approved in February with the intention of unclogging the foreclosure courts, which have an estimated statewide backlog of 500,000 cases. It also gives judges power to sanction plaintiffs who make false accusations on the ownership of notes or missing notes.
"I believe it has affected the number of new filings," said Palm Beach County Circuit Judge Meenu Sasser, who handles the county's foreclosures. "It streamlines the process." Law firms handling the foreclosure overload, sometimes called foreclosure mills, have routinely filed a "lost note" claim with the original default notice, regardless of whether they looked for the note, said Miami-Dade Circuit Judge Jennifer Bailey.
The legal move gives lenders a statutory out if the original note truly can't be located. When asked what efforts were made to find the note, however, such statements as "searched file cabinet" and "searched fire proof safe" have appeared on several court records.
"It was very confusing. How can you foreclose on the note if the note is lost?" Bailey said. "The judges would be trying to track the note and they're saying they own it, but don't have it and don't know where it is."
But if a borrower didn't protest the foreclosure, the cases often sailed through.
Judges also were finding, according to a statewide foreclosure task force that recommended the verification rule, that two lenders would sometimes file suit on the same note at the same time because it wasn't clear who the true owner was.
Defense attorneys, too, got keyed in on the lost note strategy, challenging the veracity of a lender's claim to a home and further stalling the process. "There was just an abuse of the lost note statute," said Scott Haft, an attorney with LaBovick & LaBovick, which has offices in Palm Beach Gardens and West Palm Beach.
Haft said at least half of his foreclosure defense cases include lender pleas of lost notes. He almost always asks for evidence of the original document. "They can say it's a stalling tactic, but how can I not defend my client and seek out every route in his defense?" Haft said. "Now the courts are saying you have to do your due diligence before filing."
Anthony DiMarco, executive vice president for government affairs for the Florida Bankers Association, said he doesn't believe the new rule is causing the slowdown. He attributes it more to an increase in loan modification workouts between borrowers and banks, and banks' increased willingness to approve short sales. It is another hoop for banks to jump through, he acknowledged, but something that was supposed to be happening all along.
Bailey, who was on the foreclosure task force, said the rule wasn't needed before the real estate boom when home loans were more straightforward and foreclosures fewer. She states: "There's some weird stuff going on."
According to RealtyTrac Inc, Broward County had 7,134 homes and condos in some stage of foreclosure last month, down 31% from April 2009. In Palm Beach County, foreclosure filings dropped 36% from March.
Partly responsible: a new Florida Supreme Court rule that requires lenders to verify they are the actual owners of a home before making the initial case for foreclosure. They now need to see the actual notes.
The problem is that the notes — legal promises from borrowers to repay a debt — have been sold and resold, bundled into securities, scanned into computers, sealed in unknown vaults and lost in other ways as homes got caught up in the puzzling markets of the real estate boom.
"The original note is something very significant, and they just seem to have lost thousands of them," said Boca Raton attorney Marlyn Wiener, who handles real estate cases. "Nobody knows where the stuff is."
The new rule was approved in February with the intention of unclogging the foreclosure courts, which have an estimated statewide backlog of 500,000 cases. It also gives judges power to sanction plaintiffs who make false accusations on the ownership of notes or missing notes.
"I believe it has affected the number of new filings," said Palm Beach County Circuit Judge Meenu Sasser, who handles the county's foreclosures. "It streamlines the process." Law firms handling the foreclosure overload, sometimes called foreclosure mills, have routinely filed a "lost note" claim with the original default notice, regardless of whether they looked for the note, said Miami-Dade Circuit Judge Jennifer Bailey.
The legal move gives lenders a statutory out if the original note truly can't be located. When asked what efforts were made to find the note, however, such statements as "searched file cabinet" and "searched fire proof safe" have appeared on several court records.
"It was very confusing. How can you foreclose on the note if the note is lost?" Bailey said. "The judges would be trying to track the note and they're saying they own it, but don't have it and don't know where it is."
But if a borrower didn't protest the foreclosure, the cases often sailed through.
Judges also were finding, according to a statewide foreclosure task force that recommended the verification rule, that two lenders would sometimes file suit on the same note at the same time because it wasn't clear who the true owner was.
Defense attorneys, too, got keyed in on the lost note strategy, challenging the veracity of a lender's claim to a home and further stalling the process. "There was just an abuse of the lost note statute," said Scott Haft, an attorney with LaBovick & LaBovick, which has offices in Palm Beach Gardens and West Palm Beach.
Haft said at least half of his foreclosure defense cases include lender pleas of lost notes. He almost always asks for evidence of the original document. "They can say it's a stalling tactic, but how can I not defend my client and seek out every route in his defense?" Haft said. "Now the courts are saying you have to do your due diligence before filing."
Anthony DiMarco, executive vice president for government affairs for the Florida Bankers Association, said he doesn't believe the new rule is causing the slowdown. He attributes it more to an increase in loan modification workouts between borrowers and banks, and banks' increased willingness to approve short sales. It is another hoop for banks to jump through, he acknowledged, but something that was supposed to be happening all along.
Bailey, who was on the foreclosure task force, said the rule wasn't needed before the real estate boom when home loans were more straightforward and foreclosures fewer. She states: "There's some weird stuff going on."
Monday, May 24, 2010
Housing Market Recovery: Sales + Prices Rise in April
Home sales and prices increased last month in South Florida as the housing market continues to stabilize following a steady, four-year decline.
Broward County had 766 sales of existing homes in April, up 11% from 690 a year ago, the Florida Realtors trade group said Monday. Palm Beach County had 918 homes trade hands, a 35% increase from 681 last April.
Broward’s median price of $204,300 rose 7% from $191,300 a year earlier. Palm Beach County’s median rose 2% to $239,100.
Even existing condominium prices show signs of rebounding. Palm Beach County’s median condo price of $102,000 increased 4% from last April. Broward’s median condo price of $79,300 was down 1% from a year ago.
Much of the activity is the result of two federal tax credits. To qualify for the $8,000 and $6,500, buyers had to sign contracts by April 30, but they don’t have to close until June 30.
With the incentive gone, some analysts expect sales to decline gradually over the next few months. That also could hurt prices.
Still, Mike Larson, a housing analyst with Weiss Research in Jupiter, doesn’t forecast a major decline in sales because affordability will keep buyers interested. He expects a steady, if stagnant, recovery.
“For a market that’s already gotten killed, I don’t think there’s some new huge plague out there,” Larson said.
Broward County had 766 sales of existing homes in April, up 11% from 690 a year ago, the Florida Realtors trade group said Monday. Palm Beach County had 918 homes trade hands, a 35% increase from 681 last April.
Broward’s median price of $204,300 rose 7% from $191,300 a year earlier. Palm Beach County’s median rose 2% to $239,100.
Even existing condominium prices show signs of rebounding. Palm Beach County’s median condo price of $102,000 increased 4% from last April. Broward’s median condo price of $79,300 was down 1% from a year ago.
Much of the activity is the result of two federal tax credits. To qualify for the $8,000 and $6,500, buyers had to sign contracts by April 30, but they don’t have to close until June 30.
With the incentive gone, some analysts expect sales to decline gradually over the next few months. That also could hurt prices.
Still, Mike Larson, a housing analyst with Weiss Research in Jupiter, doesn’t forecast a major decline in sales because affordability will keep buyers interested. He expects a steady, if stagnant, recovery.
“For a market that’s already gotten killed, I don’t think there’s some new huge plague out there,” Larson said.
Broward County Online Foreclosure Auction Begins This Friday!!!
Broward County online foreclosure auctions were set to start Friday at 2 p.m. after a technical issue prevented bidders from accessing the website at the regular 10 a.m. start time.
The website, http://Broward.realforeclose.com, reflects the change and bidders are being contacted as well, said Lloyd McClendon, chief executive of RealAuction.com. The Plantation-based company runs the online auctions in Broward, Miami-Dade and other Florida counties.
This is the first such delay in Broward since the sales went online in March, McClendon said. It’s not something that will jeopardize the future of the online auction process, he said.
The website, http://Broward.realforeclose.com, reflects the change and bidders are being contacted as well, said Lloyd McClendon, chief executive of RealAuction.com. The Plantation-based company runs the online auctions in Broward, Miami-Dade and other Florida counties.
This is the first such delay in Broward since the sales went online in March, McClendon said. It’s not something that will jeopardize the future of the online auction process, he said.
Step by Step Guide to Short Sales & Foreclosures
1. A financially troubled homeowner is served with a foreclosure notice or decides to seek a short sale, dumping the home for less than what's owed on the mortgage.
2. The homeowner in foreclosure tries for a mortgage modification from the lender.
3. If the homeowner doesn't qualify for a modification, he or she negotiates settlement terms with the lender.
4. In a short sale, the homeowner lists the property and accepts an offer from a buyer. The bank must approve the agreed-upon price.
5. Before the short sale or foreclosure is finalized, the homeowner seeks from the lender a written release from ever having to pay back the mortgage debt.
6. Lenders typically don't pursue homeowners who negotiate in good faith or who default on their mortgages because of unforeseen circumstances, but homeowners shouldn't count on that.
7. Without an agreement, the lender can file a lawsuit for up to five years to recoup financial losses.
8. The lender can garnish wages or go after assets.
9. Lenders often will sell mortgage debt to collection agencies, which can hound borrowers for years.
10. If the lender agrees in writing not to go after the homeowner, the short sale or foreclosure proceeds to resolution.
2. The homeowner in foreclosure tries for a mortgage modification from the lender.
3. If the homeowner doesn't qualify for a modification, he or she negotiates settlement terms with the lender.
4. In a short sale, the homeowner lists the property and accepts an offer from a buyer. The bank must approve the agreed-upon price.
5. Before the short sale or foreclosure is finalized, the homeowner seeks from the lender a written release from ever having to pay back the mortgage debt.
6. Lenders typically don't pursue homeowners who negotiate in good faith or who default on their mortgages because of unforeseen circumstances, but homeowners shouldn't count on that.
7. Without an agreement, the lender can file a lawsuit for up to five years to recoup financial losses.
8. The lender can garnish wages or go after assets.
9. Lenders often will sell mortgage debt to collection agencies, which can hound borrowers for years.
10. If the lender agrees in writing not to go after the homeowner, the short sale or foreclosure proceeds to resolution.
Survey Shows 40% of Homeowners Would Consider Walking Away From 'Underwater' Mortgage
More than 4 in 10 homeowners with a mortgage say they would consider abandoning an "underwater" property, according to a national online survey released Thursday.
The study conducted this month by Harris Interactive for real estate firms Trulia and RealtyTrac touched on a topic that affects many South Floridians.
More than 371,000 homes in Palm Beach, Broward and Miami-Dade counties were worth less than the mortgage amount at the end of the first quarter, Zillow.com said recently. Pete Flint, chief executive of Trulia, said on a conference call with reporters he "absolutely expects" more homeowners to walk away in the coming years as the stigma of foreclosure fades.
This is the fifth such survey of consumer attitudes since 2008, but the first time questions about underwater mortgages were included, Flint said.
Because South Florida home prices have fallen by more than 40% since the peak of the housing boom in 2005, underwater borrowers here may have to stay put for a decade or more until they can break even in a sale, housing experts say.
Some of these homeowners say they're unwilling or unable to wait that long. RealtyTrac executive Rick Sharga said many borrowers are disgusted with their lenders, feeling as though the banks are "stonewalling" their attempts to seek mortgage modifications and stay in the homes.
"There's a lot of visceral anger at the banks right now," Sharga said, adding that there may be fewer people walking away from homes if they felt lenders were negotiating in good faith.
Lenders insist they are, pointing to the mortgage modification offices they've set up across the country to help borrowers who can demonstrate actual need.
"With people who can afford their payments but their home is worth less than what they owe, that is not considered a hardship," said Nancy Norris, a spokeswoman for banking giant Chase.
Sharga says the nation's housing market is in the process of a "long, slow, relatively flat recovery that probably won't feel much better until about 2013."
The Mortgage Bankers Association issued a report Wednesday that sent mixed signals about delinquencies and foreclosures. Some figures indicating a drop in the rate of distressed loans weren't seasonally adjusted, but other numbers that were adjusted showed minor increases in late payments.
Jay Brinkmann, chief economist for the trade group, said in a statement that Florida is getting worse when it comes to delinquencies and foreclosures.
Meanwhile, Sharga and Flint said lenders are doing a good job of managing inventories of foreclosed homes.
RealtyTrac has as many as 800,000 bank-owned homes in its database, but less than 30% are for sale. Gradually putting those on the market helps prevent major price declines, Sharga said.
The study conducted this month by Harris Interactive for real estate firms Trulia and RealtyTrac touched on a topic that affects many South Floridians.
More than 371,000 homes in Palm Beach, Broward and Miami-Dade counties were worth less than the mortgage amount at the end of the first quarter, Zillow.com said recently. Pete Flint, chief executive of Trulia, said on a conference call with reporters he "absolutely expects" more homeowners to walk away in the coming years as the stigma of foreclosure fades.
This is the fifth such survey of consumer attitudes since 2008, but the first time questions about underwater mortgages were included, Flint said.
Because South Florida home prices have fallen by more than 40% since the peak of the housing boom in 2005, underwater borrowers here may have to stay put for a decade or more until they can break even in a sale, housing experts say.
Some of these homeowners say they're unwilling or unable to wait that long. RealtyTrac executive Rick Sharga said many borrowers are disgusted with their lenders, feeling as though the banks are "stonewalling" their attempts to seek mortgage modifications and stay in the homes.
"There's a lot of visceral anger at the banks right now," Sharga said, adding that there may be fewer people walking away from homes if they felt lenders were negotiating in good faith.
Lenders insist they are, pointing to the mortgage modification offices they've set up across the country to help borrowers who can demonstrate actual need.
"With people who can afford their payments but their home is worth less than what they owe, that is not considered a hardship," said Nancy Norris, a spokeswoman for banking giant Chase.
Sharga says the nation's housing market is in the process of a "long, slow, relatively flat recovery that probably won't feel much better until about 2013."
The Mortgage Bankers Association issued a report Wednesday that sent mixed signals about delinquencies and foreclosures. Some figures indicating a drop in the rate of distressed loans weren't seasonally adjusted, but other numbers that were adjusted showed minor increases in late payments.
Jay Brinkmann, chief economist for the trade group, said in a statement that Florida is getting worse when it comes to delinquencies and foreclosures.
Meanwhile, Sharga and Flint said lenders are doing a good job of managing inventories of foreclosed homes.
RealtyTrac has as many as 800,000 bank-owned homes in its database, but less than 30% are for sale. Gradually putting those on the market helps prevent major price declines, Sharga said.
Friday, May 21, 2010
Submitting Bank Owned Offers the Right Way!
People everyday ask me: ”How do you get offers accepted by the bank owned real estate broker?” I tell them, “You need to make sure your offer is priced correctly”. But in reality, it’s far more complex than that. There’s a variety of things that will aid in your quest of obtaining a property and here I will reveal to you what they are…
1. Pricing – Be reasonable and think a little. If a house just came on the market yesterday for $100,000, and you low-ball them a $70,000 offer, chances are, your offer gets trashed and so will your credibility. Now I am not saying to lowball, but only do so when it’s the proper occasion. The previous would be a bad example of when to lowball. It’s hard to believe, but the Lenders also have minds and they place smart people in charge. They know that when they first put a property out, they would not take the measly low offer because they are testing waters. Plus, chances are likely that there are already many more offers higher than yours. So don’t waste your time and the realtor’s time submitting offers that will never go through – especially when properties first hit the market.
Now if you want to lowball, do it on the homes that sit on the market for 3 months or more. Keep in mind, the banks still want to get these suckers sold, so when you see a property just sitting on the listings without any action, give them an offer. Chances are A LOT higher that they will accept a lower offer in this occasion simply because they aren’t getting any other interest and therefore, no other offers.
2. Proof of Funds – When buying bank owned homes, this is a must. If you do not have this one piece here, stop all procedures and acquire it first. Otherwise, you are again wasting your time, and other people’s time and probably killing trees in the process. Lenders, asset management companies and even the broker’s will not even pay attention to your offer if you do not have a proper Proof of Funds. Now Proof of Funds can come in a couple forms. It can be a copy of a bank statement showing the money available in cash. It can be a pre-qualification letter by a lender for a mortgage. It can even be a letter authorizing an individual access for a certain amount of cash (of course must be secured by real funds). Most lenders prefer cash proof of funds and payment in cash. Why? Well, because it means they can get their home sold faster and easier. No mortgage work and none of that non-sense. It’s just a straight up As-Is sale. So if you are looking to offer to bank owned homes, please make sure you have proof of funds. If you got the cash, great, get it in writing (black out your account number). If you have friends who got the cash, great as well, get it in writing. If you need a mortgage, go to a mortgage broker and get a pre-qualification letter ASAP.
3. Outrageous Terms – These are bank owned deals, so you know the lenders want them gone, but again, these guys that did a number on our economy can still process and analyze information. Therefore, if you put outrageous terms in your contracts, you might as well not submit an offer at all. Here’s some examples of outrageous terms…
A. 30+ Day Inspection Period – Now 30 days is already really pushing it. Unless you got some previous background on the deal, don’t ask for more. You will more than often get denied.
B. Assign-ability - Just make sure this is checked as no. The assigning days of these contracts are long gone. Sorry, you missed out! You check mark this box and your offer becomes a paper basketball.
C. Tiny Deposit Amounts – Ten bucks ain’t gonna cut it here. In South Florida, it’s normal to see $1,000-$2,000 deposits on 50K-120K homes. Make sure you have a proper deposit on the line, otherwise, the wills think you are just fooling around and pay no mind to your offer.
D. Far Away Closing Date – Don’t close next year… Banks want homes gone Fast. You put a closing date that’s months away, and even if your offer is better, they will take the lower one who wants to pay up in the next 3 weeks. Make sure your closing date is within feasible range. 30 days or about a month is standard. You can put less if you really know what you are doing or if you really want to buy that particular property.
So what else can you do to make sure your offer get’s accepted? Well, that’s for the next article. There’s one last key element that can get you the good deals and cut your competition out. We will go over that next time.
1. Pricing – Be reasonable and think a little. If a house just came on the market yesterday for $100,000, and you low-ball them a $70,000 offer, chances are, your offer gets trashed and so will your credibility. Now I am not saying to lowball, but only do so when it’s the proper occasion. The previous would be a bad example of when to lowball. It’s hard to believe, but the Lenders also have minds and they place smart people in charge. They know that when they first put a property out, they would not take the measly low offer because they are testing waters. Plus, chances are likely that there are already many more offers higher than yours. So don’t waste your time and the realtor’s time submitting offers that will never go through – especially when properties first hit the market.
Now if you want to lowball, do it on the homes that sit on the market for 3 months or more. Keep in mind, the banks still want to get these suckers sold, so when you see a property just sitting on the listings without any action, give them an offer. Chances are A LOT higher that they will accept a lower offer in this occasion simply because they aren’t getting any other interest and therefore, no other offers.
2. Proof of Funds – When buying bank owned homes, this is a must. If you do not have this one piece here, stop all procedures and acquire it first. Otherwise, you are again wasting your time, and other people’s time and probably killing trees in the process. Lenders, asset management companies and even the broker’s will not even pay attention to your offer if you do not have a proper Proof of Funds. Now Proof of Funds can come in a couple forms. It can be a copy of a bank statement showing the money available in cash. It can be a pre-qualification letter by a lender for a mortgage. It can even be a letter authorizing an individual access for a certain amount of cash (of course must be secured by real funds). Most lenders prefer cash proof of funds and payment in cash. Why? Well, because it means they can get their home sold faster and easier. No mortgage work and none of that non-sense. It’s just a straight up As-Is sale. So if you are looking to offer to bank owned homes, please make sure you have proof of funds. If you got the cash, great, get it in writing (black out your account number). If you have friends who got the cash, great as well, get it in writing. If you need a mortgage, go to a mortgage broker and get a pre-qualification letter ASAP.
3. Outrageous Terms – These are bank owned deals, so you know the lenders want them gone, but again, these guys that did a number on our economy can still process and analyze information. Therefore, if you put outrageous terms in your contracts, you might as well not submit an offer at all. Here’s some examples of outrageous terms…
A. 30+ Day Inspection Period – Now 30 days is already really pushing it. Unless you got some previous background on the deal, don’t ask for more. You will more than often get denied.
B. Assign-ability - Just make sure this is checked as no. The assigning days of these contracts are long gone. Sorry, you missed out! You check mark this box and your offer becomes a paper basketball.
C. Tiny Deposit Amounts – Ten bucks ain’t gonna cut it here. In South Florida, it’s normal to see $1,000-$2,000 deposits on 50K-120K homes. Make sure you have a proper deposit on the line, otherwise, the wills think you are just fooling around and pay no mind to your offer.
D. Far Away Closing Date – Don’t close next year… Banks want homes gone Fast. You put a closing date that’s months away, and even if your offer is better, they will take the lower one who wants to pay up in the next 3 weeks. Make sure your closing date is within feasible range. 30 days or about a month is standard. You can put less if you really know what you are doing or if you really want to buy that particular property.
So what else can you do to make sure your offer get’s accepted? Well, that’s for the next article. There’s one last key element that can get you the good deals and cut your competition out. We will go over that next time.
Thursday, May 20, 2010
Record Setting Mortgage Delinquencies & Foreclosures
The housing debacle continues to set unwanted records, with more than 10% of U.S. homeowners missing at least one mortgage payment during the first quarter of 2010.
That's from a Mortgage Bankers Association survey released Wednesday. The percentage of loans in the process of foreclosure rose to 4.63%, another high mark.
The economy is generating jobs, helping to reduce layoffs, Jay Brinkman, MBA’s chief economist, said in a statement. But new unemployment insurance claims remained higher than expected in the first quarter.
“For several years, the four states of Florida, Arizona, Nevada and California have dominated the national delinquency and foreclosure numbers,” Brinkman said. “Florida is still getting worse, but California is showing signs of improvement. However, Washington, Maryland, Oregon, and Georgia showed the greatest overall increases in foreclosures started compared to last quarter.”
That's from a Mortgage Bankers Association survey released Wednesday. The percentage of loans in the process of foreclosure rose to 4.63%, another high mark.
The economy is generating jobs, helping to reduce layoffs, Jay Brinkman, MBA’s chief economist, said in a statement. But new unemployment insurance claims remained higher than expected in the first quarter.
“For several years, the four states of Florida, Arizona, Nevada and California have dominated the national delinquency and foreclosure numbers,” Brinkman said. “Florida is still getting worse, but California is showing signs of improvement. However, Washington, Maryland, Oregon, and Georgia showed the greatest overall increases in foreclosures started compared to last quarter.”
Homeowner Confidence Higher in South Florida
Even as home values continue their descent, homeowners in the South were overly optimistic about their own home’s worth.
Thirty-four percent of Southern homeowners said their home gained value in the past year, when, in reality, 27% of homes gained value, according to the Zillow Q1 Homeowner Confidence Survey.
The survey found 46% of Southern homeowners believe their homes value has decreased since the same time last year. In reality, 69% of home values in the South fell.
By comparison, in the fourth quarter, 49%of homeowners in the South believed their home’s value decreased, when, in reality, 64% of home values fell.
“It is clear that there is a lag between market realities and public perceptions of home values,” Zillow Chief Economist Stan Humphries said in a news release.
Looking ahead, 18% of homeowners in the South expect their home’s value to go down in the next six months, while 41% expect it to remain the same and 42% expect to see it rise.
“When homeowners across the country do start to believe that their home’s value has stopped declining, we can expect to see a lot of new inventory entering the market via sidelined sellers,” Humphries said. “This added inventory, combined with current elevated inventory levels and continued high rates of foreclosure in many areas, will likely serve to keep home values treading near the bottom for several years. Inventory must come down for home values to go up.”
Nationwide, 7% of homeowners – representing about 5.3 million homes – said they would be very likely to put their home on the market in the next 12 months if they see signs that the market is improving. An additional 8 percent said they would be likely, while 14% said they would be somewhat likely.
“These homeowners represent ‘sidelined sellers,’ a component of shadow inventory that, if materialized, could significantly delay timing of a market recovery,” Zillow noted in a news release.
Thirty-four percent of Southern homeowners said their home gained value in the past year, when, in reality, 27% of homes gained value, according to the Zillow Q1 Homeowner Confidence Survey.
The survey found 46% of Southern homeowners believe their homes value has decreased since the same time last year. In reality, 69% of home values in the South fell.
By comparison, in the fourth quarter, 49%of homeowners in the South believed their home’s value decreased, when, in reality, 64% of home values fell.
“It is clear that there is a lag between market realities and public perceptions of home values,” Zillow Chief Economist Stan Humphries said in a news release.
Looking ahead, 18% of homeowners in the South expect their home’s value to go down in the next six months, while 41% expect it to remain the same and 42% expect to see it rise.
“When homeowners across the country do start to believe that their home’s value has stopped declining, we can expect to see a lot of new inventory entering the market via sidelined sellers,” Humphries said. “This added inventory, combined with current elevated inventory levels and continued high rates of foreclosure in many areas, will likely serve to keep home values treading near the bottom for several years. Inventory must come down for home values to go up.”
Nationwide, 7% of homeowners – representing about 5.3 million homes – said they would be very likely to put their home on the market in the next 12 months if they see signs that the market is improving. An additional 8 percent said they would be likely, while 14% said they would be somewhat likely.
“These homeowners represent ‘sidelined sellers,’ a component of shadow inventory that, if materialized, could significantly delay timing of a market recovery,” Zillow noted in a news release.
Wednesday, May 19, 2010
Florida Ranks #2 in Loan-Mortgage Modifications
Florida's borrowers in trial and permanent loan modifications, representing 12.3% of the nation's total. For the second month in a row, Florida had the second highest number of loan-mortgage modifications among the states under the Obama administration's Making Home Affordable program in April.
California was No. 1, with 198,382 loans in trial or permanent modifications, the April report from the Treasury Department says. Florida had 114,486. Florida's borrowers in trial and permanent loan modifications represent 12.3% of the nation's total.
Much of that activity is concentrated in South and Central South Florida. The combined number of loan modifications reported in April for three Florida metro areas — Orlando, Tampa-St. Petersburg and Miami-Fort Lauderdale-Pompano Beach — is 76,861. By comparison, the nation's top-ranked metro area, Los Angeles, had 57,758 loan modifications; second-ranked New York had 57,097.
On the other hand, the number of people starting the process has declined. The Treasury does not report how many Florida residents were eligible for loan modifications, but the national figure is 1.7 million borrowers. Of that, about 17% had received a permanent loan modification by April, more than a year after the program began.
California was No. 1, with 198,382 loans in trial or permanent modifications, the April report from the Treasury Department says. Florida had 114,486. Florida's borrowers in trial and permanent loan modifications represent 12.3% of the nation's total.
Much of that activity is concentrated in South and Central South Florida. The combined number of loan modifications reported in April for three Florida metro areas — Orlando, Tampa-St. Petersburg and Miami-Fort Lauderdale-Pompano Beach — is 76,861. By comparison, the nation's top-ranked metro area, Los Angeles, had 57,758 loan modifications; second-ranked New York had 57,097.
On the other hand, the number of people starting the process has declined. The Treasury does not report how many Florida residents were eligible for loan modifications, but the national figure is 1.7 million borrowers. Of that, about 17% had received a permanent loan modification by April, more than a year after the program began.
Tuesday, May 18, 2010
South Florida Real Estate Market Statistics for April 2010
 SINGLE FAMILY MARKET STATISTICS CONDO MARKET STATISTICS |
Downtown Miami Condo Deals are Cutting into South Beach Sales
It's a tale of two sides of the causeway, where palm trees and high prices on one side give way to towering downtown buildings and relative bargains on the other.
On the sands of South Beach, sales of new condo units are sluggish, with only 17 closing in the first three months of 2010.
Across the MacArthur Causeway, the pace picks up. During the first quarter, buyers snapped up 713 units in the downtown Miami area -- nearly twice as many as during the first quarter of 2009.
A look at the price tag explains the difference: in South Beach, the average price per square foot for new condos was $1,364; downtown, buyers paid an average of $326 per square foot. Those figures are according to a report from the real estate research and brokerage firm Condo Vultures. It describes new condos as any built since 2003 with direct sales from the developer to a buyer.
``Many people are just sort of saying this is too good a value, so they're jumping over the causeway and going downtown,'' said Peter Zalewski, a principal with the firm. ``It's cheaper to live downtown.''
The situation is different in Broward County where more deals can be found on the beaches. There the average price per square foot for new coastal condos is $276. Over the last six months, 254 new units sold. Beach units were largely condo hotels, Zalewski said.
``In South Beach, you buy because you want to be there,'' he said. ``In [coastal] Fort Lauderdale, you buy because it's better value.''
The prime location in central Broward is east of Interstate 95, including downtown Fort Lauderdale, and west of the Intracoastal.
Prices are higher there -- an average of $587 per square foot -- than coastal and inland areas in Broward. Sales aren't as brisk as in downtown Miami, where the price per square foot is lower. Over the last six months, 470 new units closed in the urban area of Broward that includes downtown Fort Lauderdale.
West of I-95, ``new'' condos are mostly apartments converted to condos, even if they were built decades ago. There the average price is $86 per square foot, with 904 units sold in the last six months.
But in Miami-Dade, downtown is where the deals are.
Miami Beach-based real estate agent Kevin Tomlinson said now prices have gone down to where they belong on the mainland. ``If you've got $300,000 to spend, it's going to get you a prettier, newer building,'' he said. ``You're not going to get that over on Miami Beach.''
But he said the chic neighborhood south of Fifth Street on South Beach still has strong sales of high-priced existing condos, which were not included in the report from Condo Vultures.
He said the new building getting the most traffic on the Beach is the Caribbean, 3737 Collins Ave. There, 33 units closed in the first quarter at an average of $562 per square foot, according to Condo Vultures.
At Canyon Ranch Living-Miami Beach, 6801 Collins Ave., which wasn't included in the Condo Vultures report because sales weren't direct from the developer, 88 units have sold since last May at price points between $300 and $900 per square foot. The most popular units fall at about $600, according to a spokesman for the property.
Sunny Isles Beach, with an average price per square foot of $508, saw relatively strong sales with 103 units closing in the city in the first quarter.
Rita Japhet, broker-owner of Sunny Isles Real Estate, said about 65 percent of her buyers are foreign and most of them are looking for second homes.
Everyone, however, is looking for the best value.
``You can find here very good values on brand new luxury construction on the ocean, larger spaces than you would find on South Beach,'' she said.
Still, she said, many buyers are asking to see property beyond Sunny Isles Beach. They want Brickell.
They are not alone. Nearly three-quarters of the more than 22,000 condo units built in the downtown area are occupied, according to a study released earlier this year by the Miami Downtown Development Authority.
Developers have been forced to slash prices and investors have turned to renting out their units, bringing life into once-empty buildings.
``It used to be that you could shoot a cannon down Flagler Street after 7 at night,'' said Alyce Robertson, executive director of the DDA. Now, she said, the neighborhood shares something with South Beach: nightlife.
Dennis Bennett like his new Brickell neighborhood, including all the restaurants, well-kept public areas and lack of graffiti.
``I don't know what was there before, but boy do I feel safe and secure there now,'' he said.
Zalewski said his firm's research shows that it's likely three of four downtown units are bought by investors or second-home buyers. Most rent the units out to tenants who are lured from areas like Kendall, Aventura and South Beach by the good prices.
Alejandro Bonet, 26, had kept his eye on the Marquis project at 1100 Biscayne Blvd. since the preconstruction phase, when units were going for just under a million. Finally this year, he made his move, buying a 1,477-square-foot two-bedroom condo for the mid-$500,000s.
``I love the whole downtown area. I see it as picking up a lot, the vibe and the feeling of the area,'' he said. ``And finally the prices came down to a point where it would be a good buy.''
On the sands of South Beach, sales of new condo units are sluggish, with only 17 closing in the first three months of 2010.
Across the MacArthur Causeway, the pace picks up. During the first quarter, buyers snapped up 713 units in the downtown Miami area -- nearly twice as many as during the first quarter of 2009.
A look at the price tag explains the difference: in South Beach, the average price per square foot for new condos was $1,364; downtown, buyers paid an average of $326 per square foot. Those figures are according to a report from the real estate research and brokerage firm Condo Vultures. It describes new condos as any built since 2003 with direct sales from the developer to a buyer.
``Many people are just sort of saying this is too good a value, so they're jumping over the causeway and going downtown,'' said Peter Zalewski, a principal with the firm. ``It's cheaper to live downtown.''
The situation is different in Broward County where more deals can be found on the beaches. There the average price per square foot for new coastal condos is $276. Over the last six months, 254 new units sold. Beach units were largely condo hotels, Zalewski said.
``In South Beach, you buy because you want to be there,'' he said. ``In [coastal] Fort Lauderdale, you buy because it's better value.''
The prime location in central Broward is east of Interstate 95, including downtown Fort Lauderdale, and west of the Intracoastal.
Prices are higher there -- an average of $587 per square foot -- than coastal and inland areas in Broward. Sales aren't as brisk as in downtown Miami, where the price per square foot is lower. Over the last six months, 470 new units closed in the urban area of Broward that includes downtown Fort Lauderdale.
West of I-95, ``new'' condos are mostly apartments converted to condos, even if they were built decades ago. There the average price is $86 per square foot, with 904 units sold in the last six months.
But in Miami-Dade, downtown is where the deals are.
Miami Beach-based real estate agent Kevin Tomlinson said now prices have gone down to where they belong on the mainland. ``If you've got $300,000 to spend, it's going to get you a prettier, newer building,'' he said. ``You're not going to get that over on Miami Beach.''
But he said the chic neighborhood south of Fifth Street on South Beach still has strong sales of high-priced existing condos, which were not included in the report from Condo Vultures.
He said the new building getting the most traffic on the Beach is the Caribbean, 3737 Collins Ave. There, 33 units closed in the first quarter at an average of $562 per square foot, according to Condo Vultures.
At Canyon Ranch Living-Miami Beach, 6801 Collins Ave., which wasn't included in the Condo Vultures report because sales weren't direct from the developer, 88 units have sold since last May at price points between $300 and $900 per square foot. The most popular units fall at about $600, according to a spokesman for the property.
Sunny Isles Beach, with an average price per square foot of $508, saw relatively strong sales with 103 units closing in the city in the first quarter.
Rita Japhet, broker-owner of Sunny Isles Real Estate, said about 65 percent of her buyers are foreign and most of them are looking for second homes.
Everyone, however, is looking for the best value.
``You can find here very good values on brand new luxury construction on the ocean, larger spaces than you would find on South Beach,'' she said.
Still, she said, many buyers are asking to see property beyond Sunny Isles Beach. They want Brickell.
They are not alone. Nearly three-quarters of the more than 22,000 condo units built in the downtown area are occupied, according to a study released earlier this year by the Miami Downtown Development Authority.
Developers have been forced to slash prices and investors have turned to renting out their units, bringing life into once-empty buildings.
``It used to be that you could shoot a cannon down Flagler Street after 7 at night,'' said Alyce Robertson, executive director of the DDA. Now, she said, the neighborhood shares something with South Beach: nightlife.
Dennis Bennett like his new Brickell neighborhood, including all the restaurants, well-kept public areas and lack of graffiti.
``I don't know what was there before, but boy do I feel safe and secure there now,'' he said.
Zalewski said his firm's research shows that it's likely three of four downtown units are bought by investors or second-home buyers. Most rent the units out to tenants who are lured from areas like Kendall, Aventura and South Beach by the good prices.
Alejandro Bonet, 26, had kept his eye on the Marquis project at 1100 Biscayne Blvd. since the preconstruction phase, when units were going for just under a million. Finally this year, he made his move, buying a 1,477-square-foot two-bedroom condo for the mid-$500,000s.
``I love the whole downtown area. I see it as picking up a lot, the vibe and the feeling of the area,'' he said. ``And finally the prices came down to a point where it would be a good buy.''
Monday, May 17, 2010
Friday, May 14, 2010
Broward County Foreclosures Decline Since Last Year; Palm Beach Foreclosures Increase
Broward County foreclosures declined in April from a year ago, but the county still posted Florida's third-highest foreclosure rate, RealtyTrac Inc. said Thursday.
There were 7,134 Broward homes and condos in some stage of foreclosure last month, down 31 percent from April 2009. One in every 113 units in the county received a filing.
Palm Beach County had far fewer filings in April – 3,037 – but that was a 7% increase from a year ago.
Florida posted the nation's third-highest foreclosure rate, despite an annual decrease in activity. Nationally, foreclosures fell 2% from a year ago. It was the first annual decline in the five-year history of the report from the Irvine, Calif.-based foreclosure tracking firm.
Still, bank repossessions nationally hit a record monthly high of 92,432.
Overall foreclosure activity appears to be leveling off but likely will remain high in the near future, RealtyTrac says.
There were 7,134 Broward homes and condos in some stage of foreclosure last month, down 31 percent from April 2009. One in every 113 units in the county received a filing.
Palm Beach County had far fewer filings in April – 3,037 – but that was a 7% increase from a year ago.
Florida posted the nation's third-highest foreclosure rate, despite an annual decrease in activity. Nationally, foreclosures fell 2% from a year ago. It was the first annual decline in the five-year history of the report from the Irvine, Calif.-based foreclosure tracking firm.
Still, bank repossessions nationally hit a record monthly high of 92,432.
Overall foreclosure activity appears to be leveling off but likely will remain high in the near future, RealtyTrac says.
Thursday, May 13, 2010
New Palm Beach County Foreclosure Filings Continued to Fall in April.
Palm Beach County courts are making a dent in the crush of pending foreclosures, ramping up efforts to clear cases as new filings continued to fall in April.
Initial notices of bank takeovers dropped to 1,529 last month, a 47 percent decrease from April 2009, according to numbers released late Monday by the Palm Beach County Clerk and Comptroller.
Between January and April, Palm Beach County initial foreclosure notices totaled 7,764, a 30 percent tumble compared to the first four months of 2009.
At the same time, the backlog of foreclosures in the county stands at about 53,500 -- 1,500 fewer than earlier this year. "I am literally working night and day on these," said Judge Meenu Sasser, who heads the foreclosure division for the 15th Judicial Circuit Court. The district includes Palm Beach County. "I'm hopeful that by the end of 2010, a significant portion of the backlog will be cleared."
Martin County has about 2,320 pending foreclosure cases. St. Lucie County's backlog was not available Tuesday, but stood at more than 11,000 earlier this year.
To help with the statewide foreclosure backlog, estimated at 500,000 cases, lawmakers approved $6 million to hire senior judges, magistrates and case managers. Peter Blanc, chief judge of the circuit, said Tuesday he expects to receive about $646,000 from the one-time legislative allowance.
"Backlogged cases are not good for either side, and we have a lot of people who aren't party to the foreclosure that are affected, such as homeowners associations," Blanc said.
While the number of foreclosures in Palm Beach County has dropped this year compared to 2009, it is still more than double what was seen in all of 2004.
In Martin County, foreclosure filings through April totaled 592, a small dip from the 622 filed during the same time in 2009.
"The numbers have gone down but are still incredibly high for this division," said Steven Levin, chief judge of the 19th Judicial Circuit Court, which includes Martin, St. Lucie, Indian River and Okeechobee counties. "We are attacking the crisis as best we can."
St. Lucie County foreclosures for January through April were 2,175, but 2009 numbers for the same time period were unavailable Tuesday.
Irvine, Calif.-based RealtyTrac is scheduled to release its foreclosure measurements for April on Thursday. The company's March analysis showed a jump nationally in bank repossessions of homes, the final stage of a foreclosure, but initial filings nationwide were down 1 percent compared to March 2009.
Blanc said it's unclear why foreclosures appear to be slowing.
"I don't know that anyone is convinced this is a permanent turnaround," he added.
But Paul Baltrun, director of loss mitigation for the law firm LaBovick & LaBovick, said he's seeing more people trying to get loan modifications and more banks willing to give them.
Loan modifications made through the federal Making Home Affordable Program give incentives to banks that reduce mortgage payments by cutting interest rates, reducing principal amounts, and prolonging the life of the loan.
"People are being more proactive and seeking workout solutions before their file goes into foreclosure," Baltrun said.
Initial notices of bank takeovers dropped to 1,529 last month, a 47 percent decrease from April 2009, according to numbers released late Monday by the Palm Beach County Clerk and Comptroller.
Between January and April, Palm Beach County initial foreclosure notices totaled 7,764, a 30 percent tumble compared to the first four months of 2009.
At the same time, the backlog of foreclosures in the county stands at about 53,500 -- 1,500 fewer than earlier this year. "I am literally working night and day on these," said Judge Meenu Sasser, who heads the foreclosure division for the 15th Judicial Circuit Court. The district includes Palm Beach County. "I'm hopeful that by the end of 2010, a significant portion of the backlog will be cleared."
Martin County has about 2,320 pending foreclosure cases. St. Lucie County's backlog was not available Tuesday, but stood at more than 11,000 earlier this year.
To help with the statewide foreclosure backlog, estimated at 500,000 cases, lawmakers approved $6 million to hire senior judges, magistrates and case managers. Peter Blanc, chief judge of the circuit, said Tuesday he expects to receive about $646,000 from the one-time legislative allowance.
"Backlogged cases are not good for either side, and we have a lot of people who aren't party to the foreclosure that are affected, such as homeowners associations," Blanc said.
While the number of foreclosures in Palm Beach County has dropped this year compared to 2009, it is still more than double what was seen in all of 2004.
In Martin County, foreclosure filings through April totaled 592, a small dip from the 622 filed during the same time in 2009.
"The numbers have gone down but are still incredibly high for this division," said Steven Levin, chief judge of the 19th Judicial Circuit Court, which includes Martin, St. Lucie, Indian River and Okeechobee counties. "We are attacking the crisis as best we can."
St. Lucie County foreclosures for January through April were 2,175, but 2009 numbers for the same time period were unavailable Tuesday.
Irvine, Calif.-based RealtyTrac is scheduled to release its foreclosure measurements for April on Thursday. The company's March analysis showed a jump nationally in bank repossessions of homes, the final stage of a foreclosure, but initial filings nationwide were down 1 percent compared to March 2009.
Blanc said it's unclear why foreclosures appear to be slowing.
"I don't know that anyone is convinced this is a permanent turnaround," he added.
But Paul Baltrun, director of loss mitigation for the law firm LaBovick & LaBovick, said he's seeing more people trying to get loan modifications and more banks willing to give them.
Loan modifications made through the federal Making Home Affordable Program give incentives to banks that reduce mortgage payments by cutting interest rates, reducing principal amounts, and prolonging the life of the loan.
"People are being more proactive and seeking workout solutions before their file goes into foreclosure," Baltrun said.
Will Home Prices Decline Without the Tax Credit?!?
According to Real estate analytics firm CoreLogic, national housing prices stopped falling early this year, and rose over the 12 months which ended in February. But all now is expected to change now, now that tax credit for home buyers has expired.
Mark Flemming, CoreLofic chief economist said that “home prices will struggle for maybe another year”. “Tax credit is the big reason home prices have been so buoyant, and sales will drop, you will see a double dip in housing prices” said Paul Ashworth of Capital Economics.
The National Association of Realtors reported this Thursday that the first quarter, distressed homes typically sold at discounted prices, accounted for 36% of first quarter sales.
It’s too early to say that the housing market is recovering said David Blitzer, chairman of SandP’s index committee. But we can be sure we are not going to experience a meltdown like the one we had in the last couple of years.
Mark Flemming, CoreLofic chief economist said that “home prices will struggle for maybe another year”. “Tax credit is the big reason home prices have been so buoyant, and sales will drop, you will see a double dip in housing prices” said Paul Ashworth of Capital Economics.
The National Association of Realtors reported this Thursday that the first quarter, distressed homes typically sold at discounted prices, accounted for 36% of first quarter sales.
It’s too early to say that the housing market is recovering said David Blitzer, chairman of SandP’s index committee. But we can be sure we are not going to experience a meltdown like the one we had in the last couple of years.
Wednesday, May 12, 2010
Everything You Ever Wanted to Know About Buying Bank Owned Properties
Now if you are not familiar with bank owned homes, let me be the enlightener. Bank owned homes are basically homes that have been foreclosed. Say a homeowner cannot afford his payments anymore and stop paying. The bank or lender would than follow through by filing foreclosure on the property to get possession of it. Once the previous ownership of the home shifts from the previous owner to the lender’s, it than becomes what is known as a bank owned home.
So far, not much positive info huh? Well, this is where the good stuff kicks in. Praise to you with the resources to be able to buy a home in this market. There are a ton of bank owned homes hitting your local property listings and even more so filed every week. When you have this many properties, it drives the prices of the homes down considerably. Hence, we see the real estate market collapse. But because the prices are so low, you can buy awesome homes for incredible prices. Right now, real estate investors are making a killing just buying old beat up homes at literally pennies on the dollar and flipping them over at retail price. When I say pennies on the dollar, basically, they are buying homes worth 200 thousand dollars in TODAY’S market for less than 50% of the market value.
But what does this all mean to you? It means you are in an excellent position my friend. You are in a buyer’s market and you want to buy a home! All of those million dollar mansions are now half the price so if you always wanted one of those, well start shopping because the banks are itching to get those off their books. Buy, baby, Buy! buy! buy!
So now that we have established that the market is highly in your favor, let’s explain why you should and shouldn’t tackle a bank owned deal. First off, banks want to get rid of there properties. Wait, let me restate that. The desperately need to sell their properties! They have so many homes in inventory that they can barely hire enough people to sell liquidate them. So the banks price their properties at very competitive and sometime ludicrously low prices. But in exchange, they want things done on their terms and in their way. They are giving you a steal basically. Might as well play a little by their rules shall we not?
First off, a majority (a very large percentage) of bank owned homes are sold AS IS. Meaning there is no warranty on the home. You will need to get it inspected and properly looked over before committing to buy. “As Is” means what is means. It is sold to you as is in the condition it’s in, with or without the Chinese drywall. To solve this issue, get an inspector to look through all potential homes. Make sure they are licensed and insured – so if they botch up and miss the fact that there’s lead paint, you are all covered.
Secondly, cash up front or proof of financing. Banks are looking to get homes sold FAST. They will completely disregard your offer unless you have proof of funds or financing. Now if you got the dough to through down, all you would need is a bank draft or statement with the amount on there. And you are all set to start offering on properties. Now, if you need a mortgage, get pre-qualified first. Again, the banks are in it to sell their real estate fast and they have no time to waste waiting for you to get approval. Get an approval first and than start approaching the offering tables. But as a standard rule, the banks are the seller, and the seller has ultimate decisions on which offer to take. They LOVE cash offers and would take one any day over a mortgaged offer. Cash is just that much quicker and therefore, balances their books that much faster. So if you plan to low-ball them, and by all means please do, make sure you hit them with cash.
Lastly, get the price you want. This is a buyer’s market! There are tons of homes for sale. If the bank doesn’t want to take your offer, don’t fret. The house right next door or across the street may enter foreclosure soon and will be on the market later in the year. In this real estate market, anything can happen. The banks are not sitting on their high horse in the position of negotiating. YOU ARE. If the deal doesn’t suit what you like, walk away, chances are they will contact you later if the property doesn’t sell, and hey, you may even pick it up cheaper!
Tuesday, May 11, 2010
Florida #2 in Delinquent Mortgages Nationwide
Fewer Americans were late with their mortgage in the first quarter, with the ratio of borrowers 60 days or more past due at 6.77%. That’s down from 6.89% in the fourth quarter, according to the latest data from TransUnion.
"The fall in mortgage delinquency is indeed good news for the consumer, the mortgage industry, and the current economic recovery," said FJ Guarrera, vice president in TransUnion's financial services business unit, in a news release.
The statistic traditionally is seen as a precursor to foreclosure.
Nevada had the highest delinquency rate, at 15.98%, followed by Florida, at 14.65%. However, Florida is expected to experience the highest mortgage delinquency rate by the end of the year, reaching as high as 18.2%, according to TransUnion.
The average national mortgage debt per borrower decreased 0.47%, to $192,774 from the previous quarter's $193,690. The first quarter average represents a 1.39% decrease from the $195,500 average mortgage debt per borrower in 2009’s first quarter.
The Washington, D.C., area had the highest average mortgage debt per borrower, at $369,526, followed by California, at $351,506 and Hawaii, at $314,132.
The lowest average mortgage debt per borrower was in West Virginia, at $99,677.
Year-over-year mortgage originations dropped almost 38%.
"The fall in mortgage delinquency is indeed good news for the consumer, the mortgage industry, and the current economic recovery," said FJ Guarrera, vice president in TransUnion's financial services business unit, in a news release.
The statistic traditionally is seen as a precursor to foreclosure.
Nevada had the highest delinquency rate, at 15.98%, followed by Florida, at 14.65%. However, Florida is expected to experience the highest mortgage delinquency rate by the end of the year, reaching as high as 18.2%, according to TransUnion.
The average national mortgage debt per borrower decreased 0.47%, to $192,774 from the previous quarter's $193,690. The first quarter average represents a 1.39% decrease from the $195,500 average mortgage debt per borrower in 2009’s first quarter.
The Washington, D.C., area had the highest average mortgage debt per borrower, at $369,526, followed by California, at $351,506 and Hawaii, at $314,132.
The lowest average mortgage debt per borrower was in West Virginia, at $99,677.
Year-over-year mortgage originations dropped almost 38%.
More Mortgages Underwater Even Though Home Sales Are Up
Although the market for selling a home is slowly improving, the price a homeowner can get for that home continues to decline nationwide and in South Florida, according to Zillow.
Home sales in the tri-county area rose 48.3%, year-over-year, in the first quarter, and were up 14.7%, quarter-over-quarter.
However, more than half (51.3%) of all homes sold in March in South Florida went at a loss, according to Zillow.
And, in the first quarter, 44.3% of all single-family homeowners in South Florida were underwater with their mortgages at the end of the first quarter, up from 41.2% in the fourth quarter.
Broward County home sellers took the biggest hit, with 54.3% selling at a loss. Miami-Dade home sellers took a loss 53.9% of the time. And 43% of Palm Beach County home sellers took a loss in the first quarter.
Nationwide, 23.3% of single-family homes had mortgages underwater, up from 21.4% in the fourth quarter of 2009.
Home values in Miami-Dade County fell to $160,500, down 19.9%, year-over-year. In Broward County, home values slid 17.3% to $135,900. And in Palm Beach County, home values fell 5.6%, year-over-year, to $158,900.
Nationwide, home values fell 3.8%, year-over-year, to $183,700.
But, home sales were up in the tri-county area. In Miami-Dade, sales rose 66.8%, year-over-year. They were up 55.7% in Broward and up 16.8% in Palm Beach.
"It's a very positive sign that several large markets have hit what appears to be a tentative bottom in home values," Zillow Chief Economist Stan Humphries said in a news release. "While this is no guarantee that home values there will not fall again, it is more likely than not that they will remain above their lowest point last year.”
Home sales in the tri-county area rose 48.3%, year-over-year, in the first quarter, and were up 14.7%, quarter-over-quarter.
However, more than half (51.3%) of all homes sold in March in South Florida went at a loss, according to Zillow.
And, in the first quarter, 44.3% of all single-family homeowners in South Florida were underwater with their mortgages at the end of the first quarter, up from 41.2% in the fourth quarter.
Broward County home sellers took the biggest hit, with 54.3% selling at a loss. Miami-Dade home sellers took a loss 53.9% of the time. And 43% of Palm Beach County home sellers took a loss in the first quarter.
Nationwide, 23.3% of single-family homes had mortgages underwater, up from 21.4% in the fourth quarter of 2009.
Home values in Miami-Dade County fell to $160,500, down 19.9%, year-over-year. In Broward County, home values slid 17.3% to $135,900. And in Palm Beach County, home values fell 5.6%, year-over-year, to $158,900.
Nationwide, home values fell 3.8%, year-over-year, to $183,700.
But, home sales were up in the tri-county area. In Miami-Dade, sales rose 66.8%, year-over-year. They were up 55.7% in Broward and up 16.8% in Palm Beach.
"It's a very positive sign that several large markets have hit what appears to be a tentative bottom in home values," Zillow Chief Economist Stan Humphries said in a news release. "While this is no guarantee that home values there will not fall again, it is more likely than not that they will remain above their lowest point last year.”
Housing Market Tailspin Leaves Sellers at a Loss : 'Underwater' Mortgages Hurting Region
More than half of all Broward County homes sold in March went for a loss, a reminder that South Florida's housing hangover continues despite recent talk of a turnaround.
Broward sellers accepted less than they paid 54% of the time, essentially unchanged from a year ago, online real estate firm Zillow.com said Monday. In Palm Beach County, 43% of homes sold for a loss in March, up 2% from a year earlier.
Nationally, 32% of homes sold for a loss in March.
Most people dumping properties for losses bought during the peak of the housing boom in 2004 and 2005, before prices plummeted. Many strapped homeowners are negotiating short sales, in which lenders take less than what's owed on the mortgages and forgive part or all of the remaining debt.
"People are having to move for work or to reduce expenses," said Stan Humphries, chief economist for Seattle-based Zillow, which compiles data from public property records. "They don't have the luxury of waiting things out."
In Palm Beach County, median home prices have fallen 42 percent from a peak of $421,500 in November 2005, according to the Florida Realtors trade group. In Broward, prices in March, the latest data available, were off 45% from a peak of $391,000.
Selling at a loss is a result of "underwater" mortgages, when a home's appraised value is worth less than what's owed on it. Zillow said Monday that 44 percent of single-family homeowners with mortgages in Palm Beach, Broward and Miami-Dade counties were underwater at the end of the first quarter. That works out to 371,387 homes.
Analysts say it could be 15 years or longer before some of these homeowners have their equity restored.
"It's sad," said Brad Hunter of the Metrostudy research firm in Palm Beach Gardens. "I certainly feel for the people in that position."
The Zillow report shows that many sellers still are at a disadvantage, even as two federal tax credits have brought more buyers into the market in recent months. Increased sales have helped stabilize prices, offering hope that the market is nearing a bottom.
But some real estate analysts say the expiration of the credits April 30 will slow sales dramatically in the coming months, leading to more price declines. Humphries says home values will hit bottom for the nation in the third quarter of this year, but he said South Florida's bottom will occur later than that.
Jon Klein, a real estate agent for Coldwell Banker in northwest Broward, said some of his clients understand what's happening in the market and are prepared to lose money on a sale. But others are misinformed, he said.
"People still think their houses are worth more than they are," Klein said.
Broward sellers accepted less than they paid 54% of the time, essentially unchanged from a year ago, online real estate firm Zillow.com said Monday. In Palm Beach County, 43% of homes sold for a loss in March, up 2% from a year earlier.
Nationally, 32% of homes sold for a loss in March.
Most people dumping properties for losses bought during the peak of the housing boom in 2004 and 2005, before prices plummeted. Many strapped homeowners are negotiating short sales, in which lenders take less than what's owed on the mortgages and forgive part or all of the remaining debt.
"People are having to move for work or to reduce expenses," said Stan Humphries, chief economist for Seattle-based Zillow, which compiles data from public property records. "They don't have the luxury of waiting things out."
In Palm Beach County, median home prices have fallen 42 percent from a peak of $421,500 in November 2005, according to the Florida Realtors trade group. In Broward, prices in March, the latest data available, were off 45% from a peak of $391,000.
Selling at a loss is a result of "underwater" mortgages, when a home's appraised value is worth less than what's owed on it. Zillow said Monday that 44 percent of single-family homeowners with mortgages in Palm Beach, Broward and Miami-Dade counties were underwater at the end of the first quarter. That works out to 371,387 homes.
Analysts say it could be 15 years or longer before some of these homeowners have their equity restored.
"It's sad," said Brad Hunter of the Metrostudy research firm in Palm Beach Gardens. "I certainly feel for the people in that position."
The Zillow report shows that many sellers still are at a disadvantage, even as two federal tax credits have brought more buyers into the market in recent months. Increased sales have helped stabilize prices, offering hope that the market is nearing a bottom.
But some real estate analysts say the expiration of the credits April 30 will slow sales dramatically in the coming months, leading to more price declines. Humphries says home values will hit bottom for the nation in the third quarter of this year, but he said South Florida's bottom will occur later than that.
Jon Klein, a real estate agent for Coldwell Banker in northwest Broward, said some of his clients understand what's happening in the market and are prepared to lose money on a sale. But others are misinformed, he said.
"People still think their houses are worth more than they are," Klein said.
Monday, May 10, 2010
South Florida’s Condo Market: Numbers Don't Lie
$155,832
Average price in 2009, lowest since 2002
$286,629
Average price in 2006
78,546
Units sold in 2004
43,268
Condos sold in South Florida in 2008, fewest in nearly a decade
78,546
Units sold in 2004
5
Condo units permitted in January 2010 in Palm Beach County
364
Units permitted in January 2005 in Palm Beach County
Average price in 2009, lowest since 2002
$286,629
Average price in 2006
78,546
Units sold in 2004
43,268
Condos sold in South Florida in 2008, fewest in nearly a decade
78,546
Units sold in 2004
5
Condo units permitted in January 2010 in Palm Beach County
364
Units permitted in January 2005 in Palm Beach County
Miami Realtors' Group Inroduces Plan to Quicken Short Sales
The Realtor Association of Greater Miami and the Beaches announced Wednesday it’s introducing a program to improve the short sale process.
ShortSaleSolutions will reduce the time for processing short sales and help the market recover, according to the Realtors’ group, which is partnering on the project with the Greater Miami Chamber of Commerce.
The program is designed to reach homeowners who don't qualify for short sales through various government programs, said Deborah Boza-Valledor, chief operating officer of RAMB.
The goal of ShortSaleSolutions is for homeowners to get prequalified in five business days. Participating lenders then will be asked to come up with a price they'd be willing to accept within five days. After the real estate agent lists the home and gets an offer, lenders will have another five days to respond.
The key, of course, is the number of lenders that agree to participate. Ocean Bank is one. Boza-Valledor said RAMB still is finalizing the complete list.
The program can work, even if it starts out with only a handful of lenders, she said.
"Once something is successful, people will want to participate," Boza-Valledor said.
ShortSaleSolutions will reduce the time for processing short sales and help the market recover, according to the Realtors’ group, which is partnering on the project with the Greater Miami Chamber of Commerce.
The program is designed to reach homeowners who don't qualify for short sales through various government programs, said Deborah Boza-Valledor, chief operating officer of RAMB.
The goal of ShortSaleSolutions is for homeowners to get prequalified in five business days. Participating lenders then will be asked to come up with a price they'd be willing to accept within five days. After the real estate agent lists the home and gets an offer, lenders will have another five days to respond.
The key, of course, is the number of lenders that agree to participate. Ocean Bank is one. Boza-Valledor said RAMB still is finalizing the complete list.
The program can work, even if it starts out with only a handful of lenders, she said.
"Once something is successful, people will want to participate," Boza-Valledor said.
Las Olas Centre Settles Foreclosure Lawsuit
The owner of the Las Olas Centre in downtown Fort Lauderdale said Monday it has handed the landmark office complex back to the lender to settle a foreclosure lawsuit.
Wachovia Bank, now part of Wells Fargo, filed the suit against BentleyForbes last summer, alleging that the Los Angeles-based company defaulted on more than $220 million in loans. BentleyForbes bought Las Olas Centre in July 2007 for about $231 million, or nearly $500 a square foot.
"In this particular situation, it became prudent for BentleyForbes as a fiscally responsible investor to relinquish its interests in this specific asset since a meaningful modification to the existing financing structure could not be attained," Stephen B. Meister, a lawyer for the company, said in a statement.
Wells Fargo could not be reached for comment Monday.
Meister said last year that Wachovia asked to help underwrite BentleyForbes' proposed initial public offering and urged the company to buy the Las Olas Centre with temporary financing provided by the bank. The parties agreed that the loan would be repaid from the proceeds of the offering, but the IPO market later collapsed.
Also Monday, Stiles Corp. of Fort Lauderdale said it will replace BentleyForbes as the property manager for the complex at 350 and 450 Las Olas Blvd. Stiles built the 468,000-square-foot property in 1997.
Wachovia Bank, now part of Wells Fargo, filed the suit against BentleyForbes last summer, alleging that the Los Angeles-based company defaulted on more than $220 million in loans. BentleyForbes bought Las Olas Centre in July 2007 for about $231 million, or nearly $500 a square foot.
"In this particular situation, it became prudent for BentleyForbes as a fiscally responsible investor to relinquish its interests in this specific asset since a meaningful modification to the existing financing structure could not be attained," Stephen B. Meister, a lawyer for the company, said in a statement.
Wells Fargo could not be reached for comment Monday.
Meister said last year that Wachovia asked to help underwrite BentleyForbes' proposed initial public offering and urged the company to buy the Las Olas Centre with temporary financing provided by the bank. The parties agreed that the loan would be repaid from the proceeds of the offering, but the IPO market later collapsed.
Also Monday, Stiles Corp. of Fort Lauderdale said it will replace BentleyForbes as the property manager for the complex at 350 and 450 Las Olas Blvd. Stiles built the 468,000-square-foot property in 1997.
Fannie Mae Boosts Financing in South Florida Condo
Only about 40 of the 253 condominiums at Regent Park in downtown Hollywood are occupied by people who own them.The rest are vacant or being rented by investors to tenants. They don't have a stake in the pet-friendly development, so keeping it clean and appealing isn't necessarily their top priority, said Mitch Anton, the board president.
But it's hard to attract new owners who will live there because condo mortgages are hard to get following the housing debacle. Anton is pinning his hopes on a new program from Fannie Mae that seeks to change that.
In recent weeks, the government-run mortgage company, the nation's largest backer of home loans, gave Regent Park and 107 other Florida condos a special designation to make mortgage financing more readily available for individual buyers.
"It can only help us," said Anton, 60, who has lived in Broward County since he was 4 years old.
The designation is meant to address a complex problem.
The crash in condo prices during the past few years pushed many who bought near the boom into financial distress. Buyers fell into foreclosure, creating widespread vacancies, while higher monthly maintenance fees were passed on to owners who remained. In many cases, they couldn't keep up.
"Almost none" of the state's 25,000 condo associations escaped financial trouble, said Donna DiMaggio Berger, executive director of the Community Advocacy Network, a statewide advocacy group for common-interest ownership communities.
"I've yet to meet anybody who says, 'Yeah, we're good,'" Berger said.
Condo boards struggled to maintain the developments, collect fees and attract potential buyers. As a result, Fannie stopped backing loans in some Florida buildings that posed too great a risk for widespread foreclosures. Without Fannie's guarantee, primary lenders also were leery of making loans in those developments.
That left the market mostly to investors paying cash. Condo buyers who needed mortgages often were shut out, unless they were able to come up with down payments of 20 percent or more.
So Fannie announced in January that it will relax some of its financing requirements and review hundreds of condo projects across Florida that previously did not meet the company's eligibility criteria. Developments now deemed to be financially stable will get a designation, meaning lenders can sell mortgages in these projects to Fannie Mae.
"The state's condo market has been particularly hard hit by the housing downturn, and we're working with the industry … to do all we can to stabilize the market and help spur recovery," Karen Pallotta, a Fannie Mae executive, said in a statement at the time.
Its sibling company, Freddie Mac, recently announced a separate program to improve financing options in Florida condos.
Condo sales have soared recently across Florida, particularly in Broward and Palm Beach counties.
Statewide, sales rose 63% in March from a year ago, according to the Florida Realtors. Broward had 1,140 sales in March, while Palm Beach County recorded 999. Both figures were the most of any month in either county since the trade group started tracking condo sales four years ago.
While the government programs alone are not responsible for the sales surge, it "would be disingenuous to say they haven't helped," said Moe Veissi, a Miami real estate agent and executive with the National Association of Realtors.
The Hollywood-based Continental Group manages 25 condo developments statewide that have received Fannie's designation. Knowing what it could mean for those developments, "we did cartwheels and back flips," said Bill Worrall, a corporate vice president of Continental.
Because the Fannie Mae program still is so new, the effect on Continental's condos isn't yet apparent, Worrall said. But he expects those buildings ultimately to attract owners who intend to live there, which will help bring financial stability to the individual condo boards.
In Palm Beach and Broward counties, 10 condos have received the designation. Most of the other projects on the list are in Miami-Dade County, center of the nation's condo bust. Fannie workers are scouring the state, reviewing projects and updating the list each week.
Regent Park received its special designation April 21.
Anton said the condo board has been aggressive in foreclosing on units in which owners aren't paying their monthly maintenance fees. Once it takes title, the board rents the units, and the resulting cash flow of $20,000 a month has improved the board's finances, persuading Fannie Mae to offer the designation, Anton said.
South Florida's condo crash didn't spare Regent Park, where prices now hover around $100,000 after climbing close to $380,000 during the boom years. Still, Anton said he's looking forward to the community becoming a desirable destination for first-time buyers getting mortgages backed by Fannie Mae.
"People will be able to qualify for loans now and be able to buy and move in here very inexpensively," Anton said. "In the long run, it doesn't help to have renters in there. We want to attract owners who want to make the place look nice."
Some mortgage brokers say lenders will remain hesitant about financing condos in Florida. But Ward Kellogg, chief executive of Boca Raton-based Paradise Bank, insists the Fannie Mae designation is an important part of the housing market's recovery.
At the Cascades of Lauderhill, roughly 20 percent of the 492 units are vacant or occupied by residents who aren't paying the monthly condo fee, said Stanley Green, the board president. As a result, the association is short about $200,000.
It's unclear when or if Fannie Mae will issue the condo a designation.
Although wary of government intervention, resident Paulette Segal, 66, said Cascades needs help.
"This is too beautiful a place to go down the drain," she said.
Thursday, May 6, 2010
CityPlace in Danger of Default
Fitch Ratings Service has categorized the outdoor shopping mecca CityPlace's owner as in "imminent default" on a $150 million loan.
Also uncertain is how CityPlaces's loan trouble could affect one of the county's most pressing economic needs: construction of a convention center hotel across the street. The long-delayed convention center project was recently awarded to a developer with ties to CityPlace.
The ownership of CityPlace Partners LLC includes Related Cos., led by Miami Dolphins majority owner Stephen Ross. In March, Related won the right to build the 400-room, $100 million-plus convention center hotel.
To hear CityPlace Partners tell it, the loan rating isn't a problem at all, rather it's a maneuver designed to get better terms for its interest-only loan at the retail property. No payments to lenders were missed, CityPlace Partners emphasized in a written statement.
A New York firm that tracks commercial real estate investments cites a letter from CityPlace owners to financiers, which states that income is "well below" what's needed to meet annual $9.6 million debt payments and that "significant shortfalls" are expected over the life of the loan. Fitch cites it as a "loan of concern."
The financial issue arises as Related and the county are cobbling together a financing plan for the hotel.
Ross has said Related could pay roughly $26 million of the hotel's cost and borrow another $39 million. "The actions CityPlace Partners have taken have absolutely no bearing on Related Cos.' abilities to undertake the convention center hotel development," said CityPlace Partners spokeswoman Carey O'Donnell.
Real estate professionals close to the project say they had expected a financing deal to be brought before the county commission within weeks. However, when asked how long it would be before Related must come up with a plan, Assistant County Administrator Shannon LaRocque said, "There is no schedule."
Just across the street from the proposed hotel, CityPlace does not appear to be struggling. It's at 94% occupancy, but it has cut rent deals to lure and keep tenants.
The letter from CityPlace Partners LLC to lenders refers to "loss of tenants, higher leasing costs, and lower rents." The letter also says the property has never generated enough money to cover its debt service, nor is it expected to in the near future.
There's nothing wrong with the property and nothing wrong with management either, said Neil Merin, chairman of the NAI Merin Hunter Codman commercial real estate company in West Palm Beach. "It's an inappropriate loan for the property, that's all," Merin said. "It's almost as if you bought too big a suit and never grew into it."
Also uncertain is how CityPlaces's loan trouble could affect one of the county's most pressing economic needs: construction of a convention center hotel across the street. The long-delayed convention center project was recently awarded to a developer with ties to CityPlace.
The ownership of CityPlace Partners LLC includes Related Cos., led by Miami Dolphins majority owner Stephen Ross. In March, Related won the right to build the 400-room, $100 million-plus convention center hotel.
To hear CityPlace Partners tell it, the loan rating isn't a problem at all, rather it's a maneuver designed to get better terms for its interest-only loan at the retail property. No payments to lenders were missed, CityPlace Partners emphasized in a written statement.
A New York firm that tracks commercial real estate investments cites a letter from CityPlace owners to financiers, which states that income is "well below" what's needed to meet annual $9.6 million debt payments and that "significant shortfalls" are expected over the life of the loan. Fitch cites it as a "loan of concern."
The financial issue arises as Related and the county are cobbling together a financing plan for the hotel.
Ross has said Related could pay roughly $26 million of the hotel's cost and borrow another $39 million. "The actions CityPlace Partners have taken have absolutely no bearing on Related Cos.' abilities to undertake the convention center hotel development," said CityPlace Partners spokeswoman Carey O'Donnell.
Real estate professionals close to the project say they had expected a financing deal to be brought before the county commission within weeks. However, when asked how long it would be before Related must come up with a plan, Assistant County Administrator Shannon LaRocque said, "There is no schedule."
Just across the street from the proposed hotel, CityPlace does not appear to be struggling. It's at 94% occupancy, but it has cut rent deals to lure and keep tenants.
The letter from CityPlace Partners LLC to lenders refers to "loss of tenants, higher leasing costs, and lower rents." The letter also says the property has never generated enough money to cover its debt service, nor is it expected to in the near future.
There's nothing wrong with the property and nothing wrong with management either, said Neil Merin, chairman of the NAI Merin Hunter Codman commercial real estate company in West Palm Beach. "It's an inappropriate loan for the property, that's all," Merin said. "It's almost as if you bought too big a suit and never grew into it."
Wednesday, May 5, 2010
Foreclosure Guide
NEW YORK (CNNMoney.com) -- You want to buy a foreclosure? Remember, there are both great opportunities and great pressures and pitfalls in this market.
First, you have to decide at what stage of foreclosure you want to buy. There are three options: 1. pre-foreclosure; 2. sheriff's auction; 3. repossession, called REO (for real estate owned by the bank).
"The safest and best way to buy is when it's a bank-owned property," said Rick Sharga, a spokesman for RealtyTrac, the online marketer of foreclosure properties.
Pre-foreclosure: These homes are in the foreclosure process, but they have yet to be sent to auction. Owners are typically trying to unload them because they are "underwater," owing more on the homes than they are worth.
As a result, potential buyers must negotiate a deal with the lender as well as the owner. That makes buying at this stage of foreclosure complicated and slow. But, you have the advantage of being able to inspect the home before purchase -- which isn't the case in other types of foreclosure sales. Sharga warned, however, that prices are usually higher than at other stages of foreclosure.
Sheriff's auction: These sales yield the lowest prices, but they are fraught with difficulties. Often the house is unavailable for inspection, leaving buyers with a long list of expensive repairs -- and much larger bill than they intended. This stage is usually best left to the professionals, the contractors and investors who regularly bid on these places and know what they're doing.
Repossession: This occurs after the home has gone through a sheriff's auction but does not sell and the bank gains possession of the property. Homebuyers may not get the best bargains during this stage, but they can nearly always perform a thorough inspection before closing, minimizing costly surprises. Plus, the property comes with a clear title.
In addition, the banks selling these places may extend preferential financing terms to the buyers and may have made some repairs before putting the property on the market.
Even in this safer stage, though, homes are still usually sold in "as is" condition. "That means the bank won't pay for cosmetic issues," said Adam Wiener, a spokesman for the Redfin, the online real estate marketer. "Although, they will often pay for some or all of repairs that are health and safety issues. That makes the home inspection even more critical."
He also pointed out that, since you're buying from a corporation, not an individual, the buying process can be faster, so be prepared to move quickly. Many times a listing goes on sale on a Friday and is sold over the weekend.
"The buyers and their agents need to be on top of everything from the inspection to the financing," said Wiener. "Some banks will even charge a per diem fee for late closings."
Once you've decided which type of home to buy, there are several common mistakes foreclosure buyers should take care to avoid. These include:
Getting caught up in a bidding frenzy: The banks often under-price repossessions, hoping to generate excitement, attract multiple bids and sell them quickly. The problem is, as in any auction-type sale, bidders get excited and pay too much.
"Remember," said Sharga, "there are 800,000 REOs in the banks' inventories. There'll be another home to bid on tomorrow."
Underestimating repair costs: Take full advantage of the home inspection and don't delude yourself about much the repairs will cost.
"Take along someone who can give you a good estimate of how much repair costs will come to," said Sharga.
Redfin coaches its agents to warn buyers to factor in a cushion of 10% to 20% of the purchase price to pay for unexpected repairs. "If you end up not using it, go on vacation after 6 months," Wiener said.
Not knowing what comparable properties cost: This is important in any market but especially in this endeavor. In high foreclosure areas, prices can be eroding very quickly. You want to have the latest homes sale prices on repossessed properties and try to keep your bid comparable or lower.
Buying in a neighborhood flooded with foreclosures: This is most important for people buying for the short-term. Any neighborhood saturated with REOs and foreclosures may be headed for further price falls. If you're planning to relocate within a few years or buying a bigger house, that could mean selling at a loss. A better bet, if you can find it, is to buy the only foreclosed home in an otherwise stable community. That's more likely to hold its value.
Not having financing in place: If you don't have a pre-approved mortgage, you're really not in the market. "You have to be able to move quickly," Sharga said.
Banks don't want to dilly-dally on sales; they're losing money every day that homes sit on the market. That means they'll often jump on the highest bid with the best financing already in place.
Having a loan beforehand carries another advantage: It tells you how much credit you have available. You won't spend time shopping for homes that are too expensive.
Remember that pre-approved financing is different from pre-qualified financing; it means the loan is ready to go. Pre-qualified is more like an opinion of a loan officer and there's still work to be done before final approval.
For more information on Bank Owned REO foreclosures, visit our site at www.g-sig.com
For more information on Bank Owned REO foreclosures, visit our site at www.g-sig.com
Tuesday, May 4, 2010
Miami Metro Area Housing Market Heats Up!
The Miami metro area housing market is heating up. According to a report recently released by MDA DataQuick, a San Diego-based provider of property data, 6,658 new and resale houses and condos closed escrow in March in the metro area encompassing Miami-Dade, Palm Beach, and Broward counties. This was the highest number of total escrow closings for March since 2007.
As a result, total home sales were up 43.3% from February and were 43.1% higher than March 2009. MDA DataQuick said a month-to-month increase in sales is normal for the season, but the notable 43.3% gain was well above the average February-to-March increase of 30.8% since 1997, when the firm’s complete Miami-area stats began.
As a result, total home sales were up 43.3% from February and were 43.1% higher than March 2009. MDA DataQuick said a month-to-month increase in sales is normal for the season, but the notable 43.3% gain was well above the average February-to-March increase of 30.8% since 1997, when the firm’s complete Miami-area stats began.
March marked the 13th consecutive month in which the region’s overall sales rose on a year-over-year basis, and it marked the 16th straight month that re-sales of single-family detached houses and condos combined have increased from one year to the next. In addition, new-home sales in March were higher than a year ago for the first time since last November, but were still the second-lowest for March in the history of MDA DataQuick’s stats for the Miami metro area.
Data regarding home prices was mixed. The median price for all new and resale houses and condos sold in March in the Miami metro area was $142,000, up 0.5% from February but down 11.3% from March 2009. The last time the median was higher than this was in December of last year.
March’s median price was 51 percent below the peak median in June 2007, as prices have fallen on a year-over-year basis for 30 consecutive months. However, the 11.3% drop from March of last year to March of this year marked the smallest year-over-year decline since May 2008.
Short Sales Are Your Friends!
Ok so let’s picture this situation. You live in a beautiful home with your family which you currently have a mortgage for. But during the real estate boom, you decided to buy another home at relatively outrageous price. As we all know now, that home’s price is anything but outrageously low, but you still owe quite a bit on it.
Now you are paying mortgages on your current home, AND another property that’s worth almost 50% of what it was worth. Not to mention the economic times are getting tough and prices of about everything are going up except our properties.
Does it make any sense to shell out an additional one thousand? Two thousand? Maybe even three thousand dollars a month on a home worth a lot less than what you bought it for? No, not really at all.
But there’s a solution! It’s called a short sale. Yes I know this word pops up like a hundred times throughout the day and it may even have a bad connotation to it, but let me explain what it is exactly. A short sale is simply a deal done with the bank to sell the property for less than what’s owed. Often times, the original debt is than wiped out and the homeowner walks away owing no more money, and the bank recovers some of their losses.
Now I said “Often Times” because you need to work with a broker that knows what they are doing. Some real estate agencies will short sale your home, and than the bank still holds you liable for the remainder debt! So now you are out a property and you STILL owe money.
But we don’t do that at G-SIG. Hey, if you want to short sale your home, give us a buzz. You can stop the bleeding and stop forking over monthly mortgage payments for a property that really isn’t worth it anymore. And let me give you a broker’s insider’s tip. The market really isn’t going to pick up until another 3 years at least. Do your math. $1,000 mortgage payment x 36 Months = $36,000 minimum. That’s a lot of money that can be used for many other things.
Visit our site at http://www.G-SIG.com or find us on a variety of social networking sites and connect with us.
Or just pick up the phone and get in contact with us immediately. 561.245.8843 x 205.
Now you are paying mortgages on your current home, AND another property that’s worth almost 50% of what it was worth. Not to mention the economic times are getting tough and prices of about everything are going up except our properties.
Does it make any sense to shell out an additional one thousand? Two thousand? Maybe even three thousand dollars a month on a home worth a lot less than what you bought it for? No, not really at all.
But there’s a solution! It’s called a short sale. Yes I know this word pops up like a hundred times throughout the day and it may even have a bad connotation to it, but let me explain what it is exactly. A short sale is simply a deal done with the bank to sell the property for less than what’s owed. Often times, the original debt is than wiped out and the homeowner walks away owing no more money, and the bank recovers some of their losses.
Now I said “Often Times” because you need to work with a broker that knows what they are doing. Some real estate agencies will short sale your home, and than the bank still holds you liable for the remainder debt! So now you are out a property and you STILL owe money.
But we don’t do that at G-SIG. Hey, if you want to short sale your home, give us a buzz. You can stop the bleeding and stop forking over monthly mortgage payments for a property that really isn’t worth it anymore. And let me give you a broker’s insider’s tip. The market really isn’t going to pick up until another 3 years at least. Do your math. $1,000 mortgage payment x 36 Months = $36,000 minimum. That’s a lot of money that can be used for many other things.
Visit our site at http://www.G-SIG.com or find us on a variety of social networking sites and connect with us.
Or just pick up the phone and get in contact with us immediately. 561.245.8843 x 205.
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