It’s Now A Liability In Florida
The Tampa Tribune reports from Florida. “If anything can tell the story of Florida’s housing boom and bust it’s this: In early 2007, Floridians were drawing nearly 20 percent of their total incomes from home-equity loans and credit lines. Property values rose so high, so fast, people couldn’t resist treating their homes like piggy banks. In Tampa, these ‘home-equity extractions’ made up 14 percent of people’s total incomes — nearly double the national average. And that’s nothing compared with Miami, where it made up 26 percent of their incomes, according to Moody’s Analytics.”
“Pool builders such as Dan Johnson couldn’t believe how loose banks were with home-equity loans and credit lines. ‘Even at the time, I said, ‘What are these guys doing?’ That’s crazy. They just couldn’t loan money fast enough,’ Johnson said.”
“But then the housing bust took hold, and today nearly half of Florida homeowners are underwater on their mortgages, or owe more than their homes are worth, according to a recent study by the CoreLogic real estate. The lack of an easy source of cash means Florida will recover from the recession very slowly, said Sean Snaith, an economist with the University of Central Florida.”
“‘Now, no longer is (the home) this little honey pot; it’s now a liability,’ Snaith said.”
From TC Palm. “During the past 10 years, a staggering 53,500 properties on the Treasure Coast have succumbed to foreclosure. In 2003, Jensen Beach resident Nicole West purchased a $330,000 home through mortgage lender Option One with a monthly adjustable-rate payment of $1,900. Two years later, West and her husband requested to refinance the loan at a fixed-rate with American Home Mortgage, which had taken over Option One. West claims during the closing, the terms of her original good faith estimate were suddenly and arbitrarily changed increasing her monthly mortgage payments to $3,100.”
“The family lived on a shoestring budget to make payments, but in January 2007, West’s husband was laid off from his 10-year executive career at Gateway computers. They could no longer afford the mortgage, she said. The couple asked American Home to modify the loan terms in February 2007. She was stunned when a foreclosure notice from Deutsche Bank, a trustee for Soundview Home Loan Trust, was served at the home in March.”
“Finally, West alleges she was told she qualified for a forbearance agreement, but the terms would require a $13,000 down payment to be wired by Western Union. Mortgage payments would then resume again in July for $4,700. ‘That was literally everything we had in savings. And they knew it and they took it all,’ said West.”
“West, like others in legal limbo, is in the depths of litigating her foreclosure. She still lives in the home with her family.”
“Vero Beach resident and breast cancer survivor Diann Russano lost her job in human resources two years ago. When her husband also got laid off, the couple immediately contacted JPMorgan Chase & Co. for a mortgage modification on their primary home. The couple, who have survived on unemployment and retirement savings, also own a small rental home and never missed a mortgage payment.”
“‘I’ve probably sent (Chase) 10 packages since 2009 and we finally got denied in December 2010,’ Russano said. ‘But after my husband found a job, we applied again because our income changed.’”
“Russano and her husband, who spent their $200,000 retirement savings on living expenses and the mortgages, said they have now given up on ever getting a modification from Chase. ‘They know they’re making that 7 percent interest on our mortgage,”‘ Russano said. ‘That’s probably the main reason they don’t want to modify it.’”
The Naples News. “At Granada Lakes Villas in East Naples, the resort-style pools are closed and the clubhouse is padlocked. It has been that way since April 2009. A half-dozen lawsuits have been filed in Collier Circuit Court involving Granada Lakes Villas, the condominium association, the developer and individual condo owners. The developer – Metro-Dade Investments Co. based in Miami – refuses to give owners access to the pools or the clubhouse.”
“The water in the pools is murky, with algae floating on top. The spa is filled with wooden planks. Potted plants are dead and there are no signs of life on the pool deck, other than a few birds. The sales office is closed and the community, with 248 condos, is plagued by foreclosures. ‘You’ll see tons and tons of foreclosures. Banks lost a lot of money on this place,’ said Douglas Rankin, a Naples attorney.”
“With the mess, prices have dropped more dramatically at Granada Lakes than in other communities similarly hit by the housing crisis. Some condos have sold for less than $20,000. At one time, they went for more than $200,000 with upgrades.”
“Paolo Ferrari, president of the Granada Lakes Condo Association, bought four condos in the community as an investment. None of his units were remodeled, so they don’t have mold or other defects caused by the unlicensed contractor. The condos, however, are in buildings where there were renovations done. Ferrari has sued to get his money back, contending the problems in other condos and his buildings make it impossible for him to resell his units for a fair price.”
The Sun Sentinel. “Highlands sits in the 33064 ZIP code, whose median home value plunged by 36.5 percent in February, the largest decline in Palm Beach and Broward counties, according to Zillow. From 2005, when the housing boom ended, to last year, prices in 33064 plummeted by 68.6 percent, the worst showing in Broward County, according to MDA DataQuick. More than 12 percent of the homes in Highlands and Cresthaven are in foreclosure, the highest rate in Pompano Beach, according to city officials.”
“In the 1950s, Miami-based General Development Corp., one of the companies founded by the Mackle brothers, sold one-bedroom Highlands homes for $4,950. Later, two- and three-bedroom models with screen porches and carports went for roughly $10,000. Buyers put about $400 down, and their monthly payments were $68. During the most recent housing boom, values soared, escalating into the $250,000 range, with some peaking at more than $300,000.”
“Sellers loved it, of course. But Jeff Torrey, president of the civic association, was concerned. ‘I told my wife, ‘What’s going to happen here if somebody loses a job or gets sick?’ Torrey recalled as he toured the neighborhood in his white Toyota Tundra. ‘You watch. In a few years, there will be more foreclosures than you can shake a stick at.’ And that was before I knew anything about those crummy loans.’”
“Painters, plumbers and other blue collar workers took out interest-only adjustable-rate mortgages and other risky loans to afford the high-priced Highlands homes. When interest rates reset, their monthly payments skyrocketed, and a wave of foreclosures ensued. Many of those homes are vacant. Other properties in the neighborhood aren’t being maintained by owners or renters. Now values are falling closer to those prices of yesteryear, with some of the homes selling for $40,000.”
“One house on Northeast 49th Street is typical of many in the community. It’s been vacant for months. Sandspurs and knee-high weeds grow on the lawn. The mailbox door dangles, and the front bedroom window has a hole in it. A neighbor desperate for someone to move there approached a newspaper photographer one day recently and asked if she were buying the home and fixing it up.”
From Highlands Today. “Foreclosures in Highlands County appear to be following the state trend, showing a significant drop from 108 in April 2010 to just 48 in April 2011. Appearances can often be deceiving. ‘Right now I’ve got about 1,500 still pending that haven’t gone through a judgment,’ said Clerk of Courts Bob Germaine. ‘Once they go to judgment then we’ll sell the property. What we’re hearing is there is another flood of foreclosures coming.’”
The News Journal. “Six years ago, Maria Squeteri-Lanier was living the high life. As a Realtor, she was earning six figures, selling expensive homes with ease. She could practically reach out her hand and touch a swarm of prospective homebuyers. That all changed when the housing bubble began losing air in late 2006, and proceeded to collapse over the next two years, leaving homeowners stuck with expensive homes nobody else could afford. Foreclosures became the new norm.”
“The lives of Realtors such as Squeteri-Lanier were also upended. Most today know colleagues whose own homes have gone into foreclosure. ‘Everything stopped. It was a very scary time to live,’ Squeteri-Lanier said. ‘All of our savings were gone.’”
“Lorie Natzel never thought she’d stop selling homes, as she did from 1992 to 2008. But when a broker at Weichert Realtors-Hallmark Properties in Ormond Beach asked her if she wanted to become a sales manager and oversee 32 agents, she took the opportunity. ‘It was a monthly check I could depend on rather than the unknown,’ Natzel said. ‘That was probably the biggest reason to make the change.’”
“One Realtor she works with recently took a part-time job at a Lowe’s Home Improvement store, but is keeping his real estate agent’s license active, hopeful that the home sales market will rebound. The home of another Realtor Natzel knows recently went into foreclosure. Troy Speed, a Realtor who runs her own company in Port Orange, knows a colleague who left the business to work as a door-checker at Sam’s Club.”
“Squeteri-Lanier decided to stick with real estate even during the worst of the downturn. She said business is finally starting to improve. And during the downturn, a time that was overwhelmed by the negative, she said she did learn one positive trait. ‘It’s really taught me to save more money,’ she said. ‘There was a point in time when you’re making six figures and you’re a baller. You think this is never going to end.’”
The Miami Herald. “Another vacant season winds to an end for the grand hotel formerly known as Trump. It’s empty. As empty, perhaps, as the Trump brand that was used to lure investors into a condominium-hotel scheme that would collapse before a single guest signed the register. More than 100 investors bought into the 248-room project in 2005 and early 2006, putting 20 percent down for units priced between $500,000 to $3 million.”
“Lawyer Joseph E. Altschul, who represents purchasers holding stakes in some 50 units, said his clients had bought into that Donald Trump allure. And they paid, he said, about $200 more per square foot over comparable condo-hotel projects along the beach for that magical Trump name. Preconstruction brochures assured buyers that ‘Mr. Trump is committed to personal and direct involvement in everything that this name represents.’”
“Not so much, as it turned out. Two years ago, when the project fell into foreclosure, Trump told the Sun-Sentinel, ‘We have nothing to do with the building. We had a licensing deal, and we terminated the licensing deal a long time ago.’”
“Altschul said his clients were shocked to learn that the famous name used to jack up the prices on investment packages for a luxury hotel project was just another cheesy Trump marketing deal. ‘Trump International’ carried no more meaning then the logo fixed on Trump shirts, Trump suits, Trump ties, Trump chocolate bars (’Each bar is packaged in a beautiful and luxurious gold, silver, or copper casing’) Trump crystal, steaks, vodka, lamps, bottled water, mattresses. And, of course, ‘Donald Trump by Donald Trump,’ which turns out to be a fragrance. Spray it on for ‘citrus notes with hints of mint, cucumber and black basil.’ And the subtle whisper of mendacity.”
