Homes For Sale-Florida

New rules could speed short sales of distressed homes

fl — Wed, 13 Jan 2010 03:24:53 +0000

WASHINGTON – Jan. 12, 2010 – The federal government is setting guidelines for short sales of homes, giving lenders a 10-day limit to respond to offers, freeing borrowers from debt and providing financial incentives to lenders. The new rules seek to address the many criticisms of short sales and figure to play a significant role in South Florida, where distressed properties dominate the market as the housing slump meanders into a fifth year.

“The cloud could be lifted,” said Domenic Faro of the Fort Lauderdale Real Estate firm. “This could bring us back to some normalcy. In a short sale, the homeowner unloads the property for less than what’s owed on the mortgage, and the lender forgives the difference. Nearly half of all single-family mortgage holders in Palm Beach, Broward and Miami-Dade counties are “under water,” meaning they owe more than their homes are worth, according to third-quarter data from Zillow.com, a Seattle-based real estate firm.

While short sales are considered the perfect solution for “underwater” homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to respond to offers. Frustrated buyers walk away during the delays. In some cases, lenders insist that borrowers share in the financial loss, holding up the transactions even longer.

To speed up the process, the U.S. Treasury is calling for lenders to respond to short sale offers within 10 business days. Sellers are eligible for $1,500 moving allowances, and they will not be on the hook for repayment of any debt.

Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing up to $3,000 in short sale proceeds to be distributed to less senior lenders. Loan servicers participating in the Obama Administration’s Home Affordable Modification Program are required to follow the guidelines.

The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which represent about half of all U.S. mortgage debt. The two government-run mortgage companies are working to finalize their own guidelines.

The Treasury plan, which must be implemented by lenders no later than April, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her Margate home. A buyer has offered $155,000, and she owes $233,000.

Sclafani, a 50-year-old psychologist, said she’s eager for the bank to approve the deal so she can put the experience behind her.

“I want to move on … but I can’t until somebody gives me permission to,” she said. “I’ve heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help.”

U.S. Rep Ron Klein, D-Boca Raton, agrees, saying the guidelines are meant to make short sales “a more usable tool.” Klein points out the rules provide standardized paperwork for all short sales and give buyers and sellers a more reasonable time frame for whether or not the sales will happen.

But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short sale proceeds is not sitting well with second lien holders, who have been demanding more money from sellers, the first lenders and real estate agents in exchange for releasing their claims and allowing the short sales to proceed.

“This is a great program if all these mortgages had only one lien holder,” said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. “But many of these properties have two liens.”

Meanwhile, some local real estate agents remain skeptical of the guidelines.

Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks “the banks will still play their little games with people and make life difficult for everyone.”

Edward Goldfarb of RE/MAX PowerPro Realty in Davie doubts the Treasury will enforce the new rules. “There’s no teeth to them,” he said.

A spokeswoman for the Treasury says it will hand down “substantial” penalties to lenders that don’t comply. They can include the withholding or reduction of payments and requiring improperly rejected loans to be modified.

Lenders have blamed short sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don’t submit proper paperwork in a timely manner.

In many cases, the banks are not to blame, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. Still, he thinks the guidelines are necessary to force lenders to clear the market of so many distressed properties.

“I think the pressure on (the banks) is a good thing,” Kellogg said.

Treasury: Millions more foreclosures coming

fl — Wed, 09 Sep 2009 21:01:57 +0000

Official says a strong housing market is crucial for the economy

Reuters-WASHINGTON - Only 12 percent of U.S. homeowners eligible for loan modifications under the Obama administration’s housing rescue plan have had their mortgages reworked, and millions more foreclosures are coming, the Treasury Department said on Wednesday.

A Treasury report showed 360,165 people had their monthly payments reduced through August, up from 235,247 through July, but a senior Treasury official conceded much more must be done to soften the impact of a severe and prolonged housing crisis. Treasury has begun releasing monthly reports on the loan modification program, called the Home Affordable Modification Program or HAMP.

In July, it said that just 9 percent of the estimated number of homeowners eligible had had their loans modified, so Treasury’s assistant secretary for financial institutions, Michael Barr, was able to claim modest progress in August.

He told a House Financial Services subcommittee that the program launched in February, which brings banks and loan servicers together with at-risk homeowners, was on target to help a half million Americans homeowners by November 1.

But that is a small start on a huge problem at the heart of U.S. economic woes.

Barr said that "even if HAMP is a total success, we should still expect millions of foreclosures" as administration and industry efforts continue to stabilize a crisis-stricken housing sector.

Barr said a strong housing market was "crucial" to a sustained U.S. economic recovery and described the slump in prices and demand in the housing sector as being "at the center of our financial crisis and economic downturn."

He noted that analysts anticipate more than six million Americans could lose their homes in the next three years.

"Much more remains to be done and we will continue to work with other agencies, regulators and the private sector to reach as many families as possible," Barr said.

The Treasury report showed that some lenders had not helped any of their borrowers who were eligible for loan modifications. Others had helped varying numbers of those who were 60 or more days delinquent on their mortgages, ranging up to 100 percent for one bank that only had one eligible borrower.

Existing homes selling fast - record fast

fl — Fri, 21 Aug 2009 15:31:10 +0000

The volume of home re-sales has been on the upswing for four consecutive months.

By Les Christie, CNNMoney.com staff writer

Last Updated: August 21, 2009: 11:04 AM ET

NEW YORK (CNNMoney.com) — Sales of existing homes rose in July for the fourth consecutive month, lending support to economists who argue a recovery is near.

Sales of previously owned single-family homes were up 7.2% compared with June and 5% from July 2008, The National Association of Realtors (NAR) reported Friday. The monthly gain was the largest on record for existing-home sales, which NAR has tracked since 1999. "The housing market has decisively turned for the better," said Lawrence Yun, NAR’s chief economist. "A combination of first-time buyers taking advantage of the housing stimulus tax credit and greatly improved affordability conditions are contributing to higher sales."

July home sales hit an annualized rate of 5.24 million proprieties, marking the first breach of the 5 million annualized rate mark since last September, when they hit 5.1 million. Since then, they have stayed in a very narrow range, bouncing between between January’s low of 4.49 million and October’s high of 4.94 million.

The July performance far exceeded expectations: A consensus of real estate experts had forecast sales of 5 million.

Of course, homes should be selling. Prices have fallen more than 32% from their peaks, set in the summer of 2006. Plus, mortgage rates near historic lows makes the cost of purchasing a home lower than they’ve been in nearly 20 years.

"In some recovering markets like San Diego, Las Vegas, Phoenix and Orlando, the demand for foreclosed and lower priced homes has spiked, and a lack of inventory is becoming a common complaint," Yun said.

Overall though, the national inventory rose by more than 7% to 4.09 million units. That will continue to keep prices low, according to Mike Larson, a housing analyst with Weiss Research.

"There’s a bifurcation of the market," he said. "There’s excess supply putting downward pressure on prices and people respond to the lower prices by buying homes."

Housing is its most affordable in many years, he pointed out. "Falling prices is not part of the problem, they’re part of the solution," he said.

Hurting home sales have been stubborn increases in job losses. More than 6.7 million jobs have been lost since the beginning of 2008.

That’s one reason why Robert Dye, a senior economist for PNC Financial Services (PNC, Fortune 500), is keeping his optimism in check.

"I wouldn’t go overboard on this number," he said. "The economy is still healing and will continue to run into some bumps. But it does bode very well for the future and shows buyer confidence is increasing."

There is one potential bump, however: The looming end of the first-time homebuyers credit. The credit gave first-time homebuyers an up to $8,000 refund on their taxes if they close on a deal before Dec. 1. That credit has been motivating buyers, and when it expires, demand could dry up.

"Just like with the cash-for-clunkers program, we run the risk of a letdown as the program runs its course," Dye said.

Homes Havent Been This Affordale In Decades

fl — Tue, 18 Aug 2009 14:47:06 +0000

TAMPA – Aug. 17, 2009 – Homes haven’t been this affordable in decades. Real estate agents have plenty of business. Desirable properties can be had for less than half the price of two years ago.

So why aren’t sales booming?

Fear.

“I had a deal fall through the week before closing because the buyer lost his job,” said Joe Perez, a real estate agent with ERA The Polo Group in Tampa.

People worry about losing their jobs in this economy, worry values will continue to freefall. Primarily, first-time homebuyers and investors are buying. The first group is motivated by a government incentive. The last by the desperation of sellers of distressed properties.

Home prices in the Tampa Bay metro area are more affordable now than they have been over the past 20 years, according to Moody’s Economy.com.

The median home price in the Tampa-St. Petersburg-Clearwater metro area was $139,400 in June, down 22 percent from $178,700 during the same month last year.

A bright spot this week came in a report from the Florida Association of Realtors. Sales of existing homes for the most recent quarter shot up 24 percent in the Tampa-St. Petersburg-Clearwater area compared with a year ago. But prices continued to slide, with the median price falling to $137,000.

Industry watchers say brand-new homeowners are to thank.

First-time homebuyers are taking advantage of the deals, which include an $8,000 government tax credit. Home sales were up 21 percent. There were 2,848 sales of existing homes in June, up from 2,346 a year ago.

But given how affordable homes are now, sales should be much higher, said Chris Lafakis, an economist who covers the Bay area for Moody’s. There are still tens of thousands of for sale signs dotting lawns across the Bay area.

In the first quarter of 2009, Moody’s affordable housing index for the Tampa area was 195.7. That means that a family making a median income of $58,000 could afford to buy a home for nearly double the median home price. (The median home price for the area was $142,000 during the first quarter.)

The area’s affordability index reading has never been higher since Moody’s started tracking the index in 1973.

For perspective, consider the second quarter of 2006, when the index peaked at 94.6. “Affordability has nearly doubled since the peak of the housing market.”

“Given the prices, more people should be buying,” Lafakis said. “Consumers expect home prices to go down more, so many won’t buy.”

Also, Lafakis said, buyers are concerned about the overall economy. Unemployment is expected to keep rising until the second quarter of 2010, when Moody’s expects it to hit 12.9 percent.

Jack Rodriguez, president of the Greater Tampa Association of Realtors, said real estate agents are hopeful that sales are rebounding. Many are swamped with business, especially distressed properties. Those sales are dragging down prices, he said, which translates to bargains for buyers.

“Prices haven’t been this low in a very long time,” he said.

Nancy Otten, a real estate agent with Keller Williams Tampa Properties, said she’s been amazed to find apartment-to-condo conversions for as low as $20,000 a unit.

Deals abound even for more expensive homes, Perez said. He pointed toward a 2,400 square-foot home with a pool in the North Dale neighborhood of Tampa. It’s in excellent condition, and the price is just under $200,000.

A condo on Clearwater Beach (with a water view) is for sale for just under $300,000. Units like it sold for between $700,000 and $800,000 during the housing boom, Perez said.

“I’ve been in this business for 28 years, and some of these prices are lower than when I started,” he said.

Even so, Perez said he’s hearing from worried buyers who don’t want to miss out on good deals but also don’t want to get in over their heads.

“Confidence is a problem, but I think that will go by the wayside if prices start going back up again,” he said. “You’ve gotta take a chance sometime in life.”

Foreclosures rise 7 percent in July from June

fl — Thu, 13 Aug 2009 21:55:00 +0000

WASHINGTON – Aug. 13, 2009 – The number of U.S. households on the verge of losing their homes rose 7 percent from June to July, as the escalating foreclosure crisis continued to outpace government efforts to limit the damage.

Foreclosure filings were up 32 percent from the same month last year, RealtyTrac Inc. said Thursday. More than 360,000 households, or one in every 355 homes, received a foreclosure-related notice, such as a notice of default or trustee’s sale. That’s the highest monthly level since the foreclosure-listing firm began publishing the data more than four years ago.

Banks repossessed more than 87,000 homes in July, up from about 79,000 homes a month earlier.

Nevada had the nation’s highest foreclosure rate for the 31st-straight month, followed by California, Arizona, Florida and Utah. Rounding out the top 10 were Idaho, Georgia, Illinois, Colorado and Oregon. Among cities, Las Vegas had the highest rate, followed by the California cities of Stockton and Modesto.

While there have been numerous recent signs that the ailing U.S. housing market is finally stabilizing after three years of plunging prices, foreclosures remain a big concern. Foreclosures are typically sold at a deep discount, hurting neighbors’ home values.

The mortgage industry has been slow to adapt to the surge in foreclosures. Many lenders have needed government prodding to get up to speed with the Obama administration’s plan to stem foreclosures.

The Treasury Department said last week that banks have extended only 400,000 offers to 2.7 million eligible borrowers who are more than two months behind on their payments. More than 235,000, or 9 percent, those borrowers have enrolled in three-month trials in which their monthly payments are reduced.

“The volume of loans that are in distress simply overwhelms” those efforts, said Rick Sharga, RealtyTrac’s senior vice president for marketing.