December 19, 2013

Operating On A Herd Mentality

WMFE reports on Florida. “The rebound of Orlando’s housing market is expected to continue in 2014 but at a slower rate. Florida realtors say that’s a good thing. Florida Realtors Chief Economist John Tuccillo estimates nearly half of sales are cash sales, about the same as the rest of the state. He says that indicates strong investor presence but not another bubble. ‘I think we should purge the word bubble from our vocabulary at the moment. This is a very different world from what we had just before the crash. Just before the crash the market was operating on a herd mentality. People felt they had to get into the market or else they would really lose out on something,’ he said.”

The Orlando Sentinel. “Home prices edged up slightly in the core Orlando area from November to December, but the market showed other signs of softening, according to a report by the Orlando Regional Realtor Association. ‘We’re seeing fewer investor and institutional buyers in the Orlando market due to the dramatic gains in median prices we’ve experienced,’ said Steve Merchant, chairman of the association.”

“Starting next month, about 130,000 Orlando-area homeowners with ‘underwater’ mortgages are likely to face a new tax bill if they sell their house, modify their mortgage or lose their home in foreclosure. A 2007 federal law that waived income taxes on unpaid mortgage debt is almost certain to expire Dec. 31. In Metro Orlando, more than a third of the houses with mortgages — about 130,000 — were financially underwater in the third quarter, according to Zillow.”

“Orlando homeowner Julius Ludwin, 82, is a few months behind on mortgage payments and trying to work out a mortgage modification with Wells Fargo. Dependent mainly on Social Security for income, Ludwin said he would be unable to pay any taxes on unpaid debt if he gets the loan modification he’s seeking. ‘We can’t pay any taxes. We have no money,’ he said. ‘They’ll have to try to do something about that. I thought it was supposed to be easier now to get by.’”

From Bloomberg. “Isabel Santamaria thought she finally caught a break in her effort to save her Florida home from foreclosure after nine frustrating months: She reached Bank of America Corp.’s Office of the CEO and President. What the mother of two autistic children didn’t know is that her case would find its way to contractors, including Urban Lending Solutions in Broomfield, Colorado. Bank of America hired the firm to clear a backlog of complaints about a federal program designed to prevent foreclosures.”

“Santamaria and her husband bought their four-bedroom Palm Bay home in 2008 for $167,000 and spent $60,000 to renovate it, she said. They applied for HAMP in October 2009 after Echeverria’s hours as a driver fell. The bank rejected the application because their mortgage costs were too low in relation to their income to qualify for the program. The couple applied again in January 2010, sending their application to an Urban Lending office in Pittsburgh, after their children were diagnosed with autism, Santamaria said. Last month, Bank of America sent her a foreclosure warning, Santamaria said. ‘They tell the outsiders a completely different story from what’s really going on,’ said Santamaria.”

“To soothe homeowners frustrated by delays, employees had a monthly allotment of $25 and $50 gift cards they could give customers, said three of the former workers. The joke among staff: It was just enough money to buy moving boxes. ”

The Florida Times Union. “While Northeast Florida Association of Realtors’ monthly report shows some continued improvement in the housing market, there are mixed signals as well. The number of closed sales in November was lower than November 2012. That’s the first year-to-year drop in several years. And while prices have also dropped since summer, homes are selling faster and for more than they were a year ago.”

“‘Perhaps people are being more flexible in what they’re selling their property for,’ said Carol Zingone, president of NEFAR. ‘I’ve got people who are already in Seattle, so they had to make a concession on the selling price. They have to move on.’”

“Zingone said she was told by one lender that, starting Jan. 1, there will be a maximum borrower’s debt-to-income ratio of 43 percent. In other words, on an income of $50,000 a year, a borrower’s debt can’t exceed $21,500. ‘People used to slide through with 46, 47, 48 percent,’ she said. ‘That could really have an effect on some of the marginal buyers.’”

From WJHG. “For another month, Florida ranks number one for foreclosure rates. Eight of the top 10 cities with the highest foreclosure rates are in Florida, legislation that took effect in July has slowed the process. Upwards of 20,000 foreclosures a month but there are still around 275,000 that need to be processed. Anthony DiMarco with The Florida Bankers Association says the court process delays a foreclosure from beginning to end. ‘Here it’s taking 800, 900 days when you go through the court system,’ said DiMarco.”

“‘It doesn’t surprise me just because again the number of foreclosures that still need to get through the system, they’ve just been sitting there,’ said John Sebree with Florida Realtors Association.”

Bits Bucket for December 19, 2013

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