September 24, 2014

Banks Went On Offensive About Delaying Foreclosures

The Sun Sentinel reports from Florida. “Home prices in Broward County increased in August, but sales declined. When the six-year housing meltdown bottomed in late 2011, investors overwhelmed the market, paying cash for fixer-uppers that were resold or rented for robust returns. That led to lightning-quick offers and bidding wars among buyers. Prices and sales shot up, while the supply of homes diminished, creating another mini-boom similar to the one from 2000 to 2005. ‘People were [saying], ‘Here we go again,’ said Jim Heidisch, broker for Campbell and Rosemurgy in Pompano Beach.”

The South Florida Business Journal. “Despite the more than 30,000 new condos proposed or in development in South Florida, the market for existing condos cooled. Miami-Dade County saw median condo and town home prices fall 4.2 percent to $182,000 - a rare reversal, according to the Miami Association of Realtors. The number of sales plummeted 21.4 percent.”

“‘The Miami real estate market continues to normalize as the new construction sector gains momentum and generates strong demand for additional new supply, impacting the existing condominium market,’ Miami Association of Realtors Chairman Liza Mendez said in a news release. ‘Despite declines in sales and condo prices, the performance of the Miami residential market continues to be comparable to what it was in during periods of record sales activity.’”

The Herald Tribune. “While local courts have made headway in clearing out the foreclosure backlog, Sarasota attorney Nancy E. Cason says they still have a long way to go. Cason says it could take another 18 months to process the cases now clogging the 12th Judicial Circuit, which includes Sarasota, Manatee and DeSoto counties. ‘Contrary to popular belief, the foreclosure crisis is far from over in the 12th Judicial Circuit,’ said Cason. ‘At this rate, it will take close to another year and a half, give or take, to clear up the current backlog,’ she said, and only if funding for the new resources is renewed after running out next February.”

“Before the process was sped up, it could take up to three years or longer to move a foreclosure case through the circuit. ‘I am confident those days are over,’ Cason said.”

“Foreclosures showed no sign of easing up in Southwest Florida last month. The Sarasota-Manatee region ranked 19th among the nation’s major metropolitan areas, according to RealtyTrac. Lis pendens filings, the first step in the foreclosure process, jumped 35 percent in August over the month in the two-county region, tracking a statewide trend. After 17 consecutive months of year-over-year decreases, initial foreclosure filings climbed 24 percent statewide from 2013, RealtyTrac said. That kept Florida with the nation’s highest foreclosure rate for the 11th straight month.”

“Money flowing in the court system indirectly from banks is tilting Florida’s judicial system against homeowners who face foreclosure. Judge Diana Lewis told the Sun Sentinel Editorial Board during her re-election bid this summer explained the rocket docket’s pressure this way: ‘We’re under a mandate from the court administration and the Supreme Court to get the older cases out because we might lose funding for that,’ she said.”

“Yet it was maneuvering by banks — including the illegal robo-signing of documents — that helped create the backlog of hundreds of thousands of cases. As Lewis said, ‘The banks then went on the offensive about delaying (foreclosures) and not wanting to take the inventory in. So the court system was obligated to try to do some case management and basically push the cases along.’ She added that, ‘Right now we’re spending the taxpayer dollars’ but ‘we don’t know how long the funding is going to last.’”

The News Press. “August existing-home prices were up, but sales were down in Lee and Collier counties — trends that also showed up in national data. But one real estate agent warned that reports from around the country indicate that the market may be in for a downturn. The falling sales numbers come in part because new-home builders are ramping up production now that the economy’s improving and demand is up, said Naples-based land-use consultant Michael Timmerman. ‘There’s price sensitivity because prices have increased in the last couple of years quite a bit,’ he said, ‘and we’ve got quite a lot of new product that’s not included” from developers putting up new houses.’”

“Denny Grimes of Royal Shell Real Estate, just arriving back in town today from a real estate conference in Austin, Texas, said those trends may be amplified in coming months based on what agents from other markets were saying at the conference. About 75 percent had seen a recent uptick in the inventory of unsold homes, which Grimes said is a leading indicator of trouble ahead because it indicates an increasing difficulty in selling at current prices. If that trend continues, especially in Southwest Florida’s major feeder markets in the Midwest, ‘That may give a seller a cause to say ‘Maybe I’ll wait for the market to get better before I come down’.”

“Much of the decline came from the exodus of investors. Timmerman said investors have pulled back in Southwest Florida as well. Now, with prices on the rise, investors are more cautious — when they do buy, it’s often financed in part by a bank loan. Grimes said his advice to local sellers now is not to tempt fate. ‘If sellers have an option to take good money today, they should take it.’”

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