Prosperity Appeared To Have Arrived In Florida
The Herald Tribune reports from Florida. “Florida is gliding quietly into a new and potentially painful part of the boom-bust cycle, where stacked-up “deficiency judgments” for unpaid condo fees and unsatisfied mortgages could come back to haunt past owners. Many of them thought they had escaped further costs when they handed their home over to their lender. With a few exceptions, like personal jewelry, this judge’s order can be used to confiscate almost anything of value — including wages or the cash in a checking account.”
“For the previous owners, who thought they were done with an ‘investment property’ except for the bad credit rating, the garnishment can come as a rude shock. Homestead’s Mary and Luis Renfigo found out the hard way how heavy a deficiency judgment can be. Earlier this year, Mary Renfigo got a phone call from the bank where the couple had their checking account, saying it had been legally frozen. A warning letter from the bank a few days earlier went unread.”
“The couple had $2,300 in the bank, but all of it got swept up in the writ of garnishment. And that did not come close to covering what they now owed. With interest stacking up on the unpaid balance, the debt was $4,300. ‘They said, ‘We are going to put everything together, and you are going to pay in full or we won’t let you short sell,’ Renfigo said. ‘We sold a car that weekend. That is how we paid it.’”
“‘You can even sue at the end and get more time, so there is all the time in the world to collect on these things,’ said Darren Soto, an Orlando attorney and state legislator. ‘Yet there is this pervasive rumor that you can somehow walk away from your house and never have to worry about it again. And it is simply not true.’”
The News Press. “David Cruz Jr. got what he believed was a great offer in a foreclosure lawsuit filed against him by giant mortgage lender Fannie Mae. If Cruz deeded the modest Fort Myers investment house back to Fannie Mae, the government-backed company would release him from the loan’s $123,750 note: the obligation underlying his mortgage. He deeded the house back to Fannie Mae, but court records show he didn’t get what he bargained for.”
“Now, experts say, he and thousands of others in Florida who took the same deal from Fannie are at risk of being stalked by a so-called ‘zombie note:’ debt that appears dead and gone but still can come back to life. Xiomara Cruz, David Cruz’s attorney and ex-wife, said she’s looked at court records from around the state and likely thousands of people were treated in the same way.”
“‘He doesn’t want the property back,’ Xiomara Cruz said. ‘It’s not about that.’”
The Daily Record. “Middle District Chief Bankruptcy Judge Paul Glenn said Tuesday that filings could reach about 64,000 this year, down from the record 66,618 last year. That would be a drop of 3-4 percent, but the final number would still be higher than in previous years. ‘It’s a difficult financial time,’ Glenn said after the annual meeting of the Jacksonville Bankruptcy Bar Association.”
“Bankruptcy attorneys attributed last year’s record filings to fallout from the 2007-09 recession and the credit crisis, resulting in double-digit unemployment and a financial spiral for consumers and businesses, especially real estate developers, contractors and investors. Glenn said he watches statistics and reports for the Middle District so he can anticipate the court’s needs. Some of those reports, especially those covering real estate, continue to show problems in the Florida markets.”
“For example, he cited a RealtyTrac summary of properties across the country in foreclosure at the end of 2010 that showed nine of the top 30 markets were in the Middle District. Also, the district contained three of the 10 job markets considered by one online tracker as the most difficult for job seekers, including Jacksonville. ‘It’s an interesting time,’ said Glenn.”
The Sun Sentinel. “In boom times, like many other cities in South Florida, Lauderdale Lakes spent liberally, opening four new parks, a new pool and a combined library and cultural center. But the 50-year-old city, right in the middle of Broward County, didn’t react fast enough when the bottom fell out of the housing market and tax revenues plummeted.”
“Now Lauderdale Lakes has a $9 million deficit and is struggling to survive — pleading with Broward County for a bailout, cutting staff and salaries and taking police officers off the street. In some ways, it may be the canary in the coal mine, showing the tough choices that lie ahead for other South Florida municipalities that have outspent their ability to pay. Like in Hollywood, Lauderdale Lakes’ manager is blamed for bungling the city’s finances. Anita Fain Taylor was fired last month.”
“Only six years ago, the city appeared in good shape. In 2005, as property values climbed, Lauderdale Lakes collected more in revenues but spent considerably more as well to attract new businesses, beautify parks and neighborhoods, dredge canals, resurface streets and upgrade sidewalks, bus shelters, and storm water drainage systems. Prosperity appeared to have arrived, and the city adopted the hopeful vision theme: ‘Going for the Gold.’”
“At the time, Fain Taylor told the Sun Sentinel the city was banking on the higher values of redeveloped property to prevent a repetition of 2003, when Lauderdale Lakes was forced to borrow $1.3 million from savings, raise taxes, lay off staff and trim expenses.
“”The city is considering a lease-back program, where it mortgages its equity in city property and uses that money to pay down the debt. It’s also looking to reorganize departments and contract out some city services. ‘It’s going to be harsh. It’s going to be hard on the people of Lauderdale Lakes,’ Broward County Commissioner Dale Holness, who represents Lauderdale Lakes, told city officials.”
The Pensacola News Journal. “Budge Huskey has been CEO of Coldwell Banker Real Estate since June 2010. Huskey is past president of the Greater Orlando Realtor Association and is a director of the National Association of Realtors and Florida Association of Realtors. Q: Do you see any need for renewing the First Time Home Buyers Tax Credit that stimulated the housing market last year? Or is that a minefield?”
“A: I do think that’s a minefield. There are some who would love to see another tax initiative for first-time home buyers, but the Realtor community is not asking for it. I think the time for that type of artificial stimulus is over. While we don’t want anything in terms of an artificial stimulus, we also don’t want any more impediments for home buyers.”
“We can’t have an economic recovery without a housing recovery. And a true housing recovery requires a stabilization of prices. We don’t want to do anything in the way of lending regulations, which are already extremely tight, that would keep the qualified buyer from purchasing a home.”
“Q: Given your argument that the housing market is at affordable levels now, are you seeing much investor activity as a result of bargain prices?”
“A: There are some markets around the country where investor activity is so significant that there is actually a shortage of houses on the market.”
The Seminole Chronicle. “According to the Orlando Regional Realtor Association, 11,480 homes are for sale in the Orlando area. This is one of the lowest inventories of active properties since the peak of the market in 2005, and homes in Winter Springs and Oviedo are among the scarcest.”
“‘We’re dealing with one of the most unusual markets I’ve ever seen; but the home situation, for the temporary time, has gotten better,’ said Gary Balanoff, the Broker and Owner of REMAX Select in Oviedo. ‘The prices have rebounded a little bit. Sellers are getting offers on their property because there is less to compete with.’”
“Local realtors explained that there are several reasons why the home inventory has suddenly dipped, but among the most significant is the decrease in foreclosed homes being released onto the market. ‘Foreclosures have shut down. While that may seem like a good thing, because people aren’t losing their homes, it’s not an accurate market of what’s actually out there. There’s a huge inventory of shadow properties out there, but the banks haven’t been able to finish off the paperwork,’ Balanoff said. ‘That’s dampened the total inventory.’”
“Foreclosure filings continued to sink in most of Southwest Florida during May, with only small signs that processing delays were ebbing and some banks were pushing inventory into the marketplace. In Manatee, Sarasota and Charlotte counties, 994 foreclosure actions were filed last month, down 1.6 percent from April and 56 percent from a year ago.”
“‘Processing delays continue to mask the true face of the foreclosure situation,’ said James J. Saccacio, RealtyTrac’s CEO. ‘Activity spiked in May for various stages of the foreclosure process in some states, a pattern that has occurred in several states over the past few months. That is ‘evidence that lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory,’ Saccacio said.”
“‘The real telling sign will be what happens in June, July and August, when sales typically fall and foreclosure filings are expected to rise,’ said Brian Helgemo, an agent with Five Star Realty of Charlotte County.”
“The inventory of unsold bank-owned REOs increased in April and May, even as new REO activity slowed in both of those months,’ Saccacio said. ‘That points to continued weak demand from buyers, making it tough for lenders to unload their REO inventory. Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month.’”
