March 22, 2012

A New Seat On The Foreclosure Train

The Herald Tribune reports from Florida. “Residential real estate may still be soft in some places nationally, but not in Sarasota and Manatee counties. ‘It’s as good as it gets,’ said Michael Moulton, a high-end agent with brokerage firm Michael Saunders & Co. in Sarasota.’The well-heeled are down here vacationing. ‘They are feeling that they have to act quickly and can’t wait till the end of the season because their choices might be gone.’”

“The Canadian buyers also are being driven by a currency that is now equal in value to the dollar. ‘It’s like a bloodbath at the online auctions,’ said Shannon Moore, the owner of GreenLionRealty in Port Charlotte. ‘New people are bidding and I don’t know if they know what they’re doing because they’re bidding so high.’”

“Moore said that one of her investor clients, for example, recently paid $130,000 for a house in North Port that would have sold for no more than $110,000 four months ago. She said that more properties also are being taken back by banks if bidders do not offer enough. ‘They just can’t get a crack at it,’ Moore said.”

The Miami Herald. “Home prices in Miami-Dade and Broward counties jumped for the third consecutive month in February despite flat or declining sales volume, as the inventory of listings dwindles, real estate figures show. The bulk of purchases continue to be from buyers who pay with cash, and many of them are international purchasers. Cash sales accounted for 68 percent of all residential sales in Broward in February, 47 percent of single-family and 84 percent of condominium closings. Patricia Delinois, president of the Miami Association of Realtors said the top countries currently for international buyers are Venezuela, Brazil, Argentina, Canada, Colombia, Mexico and France.”

“Inventory in South Florida is clearly declining, as banks modify loans or hold onto properties before putting them on the market. At the same time, owners whose property values have fallen are preferring to rent them out rather than sell them. ‘When you have a lower supply and higher demand, it becomes more of a sellers’ market. In [February] 2008, we had 46,000 properties for sale, and now we have only 13,610 properties for sale,’ Delinois said.”

The Sun Sentinel. “Florida has more delinquent mortgage loans backed by Freddie Mac and Fannie Mae than any other state, according to a new report. The Sunshine State had 292,000 delinquent loans by the government-sponsored agencies as of Dec. 31. Of those, 166,000 have been late on payments for at least a year. Experts say the disparity lies partly in that Florida foreclosures must go through the court system.”

“States delayed action while negotiating the $25 billion foreclosure settlement recently announced with big banks. And Florida cases were held up to clarify paperwork after the “robo-signing” scandal. ‘It’s staggering how much Florida is worse than the rest of the nation,’ said foreclosure attorney Roy Oppenheim of Weston.”

“The average number of days to process a foreclosure in Florida stood at 806 in the fourth quarter of last year, according to the latest data from foreclosure firm RealtyTrac. That’s more than two years and two months on average to process a foreclosure. That’s also more than twice the average time it takes to process a foreclosure nationwide.”

First Coast News. “Home sales on the First Coast are nothing like they were before the housing crisis hit but new home builders are optimistic the future is looking brighter. Chenita Clay is purchasing the 3300 square foot home from Lennar for $313,000. Clay says she decided to buy because of low interest rates and decided to ‘buy new’ because of builder incentives. ‘The closing costs. Taking care of all of the closing costs were huge. Being able to also negotiate the selling price I think that was also a selling factor,’ says Clay.”

“For the first two months of this year 514 permits were issued in Clay, Duval, Nassau and St. John’s Counties. That’s up from 369 or 71% from the same time last year. The last two years have only seen 3000 permits issued annually. Barbara Moore, President of the Northeast Florida Builders Association says a healthy market needs about 8-thousand.”

The Tampa Bay Times. “Tampa Bay’s already-depressed construction industry just crumpled to a new low. January’s dismal tally shows bay area construction employment down 14 percent year over year and a startling 55 percent from the market’s peak of 95,300 jobs in June 2006.”

‘Don Bartley, a cabinet maker who handles jobs from north Tampa to south Sarasota, said he isn’t surprised. Almost all his work now is warranty and remodels, with very little new construction. He blames the ongoing glut of cheaper foreclosures on the market. ‘There’s just too many foreclosures still going on,’ he said.”

“As you may have read, there was some recent bad news about foreclosures in the Tampa Bay area. In February, total foreclosure activity was up 64 percent compared to the same month last year and up 38 percent just since January. However bad RealtyTrac’s numbers were for the Tampa Bay area, they were much worse for Hernando compared to February of 2011.”

“How come foreclosures are down in many other counties and the rate of new filings here is far higher than in the rest of Florida? Because if builders all over the state built too many homes, they built way too many here. Because of an earlier, even larger wave of foreclosures we know how this will play out: distressed properties on the market driving down prices, stifling new construction, crippling the labor market and cutting property tax revenue.”

“Wherever we actually are on the foreclosure train, I think we can agree it’s time for a new seat.’”

The News Journal. “Flagler County has the worst foreclosure ratio in the state for the second time in three months. Bankers and real estate agents think the increase signals an attempt by lenders to ease the large accumulation of homes in delinquency. Jimmy Millhollin, broker and co-owner of RE/MAX Flagstaff in Palm Coast, said he’s noticed a recent increase in lis pendens, or new default notices, in Flagler County. The overall foreclosure ratio now shouldn’t be detrimental to the housing market if it continues, he said. But, the 132 initial filings is still too high, he said. Before the housing bubble of the mid-2000s, there were typically 50 a month. ‘But certainly if they dump everything at one time that would be devastating,’ he said.”

“Bruce Page, CEO of Intracoastal Bank in Palm Coast, said getting foreclosures processed and then out into the market is a necessity, even if it can be painful. ‘It’s just like everything in life. You have to deal with the problems. If you just push them to the side they only get bigger, and that’s what we’ve seen. That’s one of the reasons we’ve seen such lingering in this economic recovery, because we haven’t dealt with our problem,’ Page said.”

“A list presented by defense attorneys on behalf of defendants in the massive flipping fraud case shows Craig Whitehead helped flipping king Craig Adams and his associates get at least 20 loans from Washington Mutual during his tenure at the bank from 2002 through 2004.”

“According to Adams, who testified earlier in the trial, loan officers — and particularly Whitehead — were critical to his flipping fraud scheme. ‘I personally selected several loan officers at different institutions so they could help me inflate income and assets high enough so borrowers could get loans,’ Adams said.”

“In a tape recording obtained by wearing a wire for the FBI, Adams also is heard telling former title agent Lisa Rotolo that loan officers would simply fill out loan applications for customers without bothering to get accurate information from the borrowers themselves. ‘Did you ever fill out a loan application?’ Adams asked Rotolo. ‘I think I might have filled out one once.’”

Palm Beach Post. “The Obama administration’s landmark refinance plan for severely underwater homeowners became fully operational Monday after automated federal loan processing systems were updated during the weekend. But nearly five months after the program’s debut, and following what many hoped was the last hurdle to a wholesale start, mortgage brokers said wary lenders are still hesitant to refinance loans other than their own.”

“In Palm Beach County, about 43.5 percent of homeowners with mortgages were underwater at the end of last year. Boca Raton real estate attorney Marlyn Wiener said banks are uncomfortable with HARP because ‘it goes against the fundamental rules of good lending.’”

From CNBC. “Commercial lenders and the Obama administration seem determined to draw in any borrowers who haven’t yet refinanced their home loan. This month, Fannie Mae and Freddie Mac, the agencies that insure many mortgages, are rolling out automated underwriting in the latest version of the program for borrowers with no more than 20 percent equity, the Home Affordable Refinance Program, HARP.”

“The old rules required the property to be worth at least $75,000 for every $100,000 borrowed. The new version, dubbed ‘HARP 2.0′ by the public, offers something close to a ‘no-doc’ loan — employed borrowers don’t need to produce tax statements. They also don’t need a new appraisal, because this time there’s no ceiling on what lenders call LTV, loan to value.”

“Sound familiar? ‘We’re going to provide refinancing with no documentation against property that hasn’t been appraised. Isn’t this the very way we got into trouble?’ asks Keith Gumbinger, VP at, a mortgage information website.”

Bits Bucket for March 22, 2012

Post off-topic ideas, links, and Craigslist finds here.