South Florida Home Prices To Hit Bottom in 2012
Six years after the housing collapse here in South Florida there is a predicted light at the end of the tunnel. Time goes by very fast. It seems like just yesterday we were watching home prices fall by over 50% in many parts of South Florida- in Palm Beach County, Broward County and Miami Dade County and up to St Lucie County along the Treasure Coast.
Here we are six years later and prices are beginning to stabilize. That is a long free fall! Moody’s Analytics projects that in the next 10 to 15 months we will see the bottom of the fall.
It is not going to be some housing boom especially not the likes of what we have seen in 2003, 2004 and to the middle of 2005 when the prices peaked.
This is all about median also. So bear that in mind. That means there are areas that will see a faster rise and others a slower upswing. There are condos on the waterfront in South Beach in Miami that already have risen by 25% but yet down the street into North Miami Beach off the waterfront sellers can not give their condos away. So it is all relative to your exact market.
Here in Wellington the prices for most properties and subdivisions are beginning to stabilize. Near 60% of all our sales are ALL CASH closings. The lower end properties sell to first time homebuyers or investors. The equestrian high end has always sold to those serious about moving their horses here to our great climate.
But there are areas all around us that are not fairing as well.
Some of the banks are not as positive in the outlook because they say there are still too many foreclosures in the courts and too many people behind in their payments and too many bank owned properties that still have yet to be put on the market.
Unemployment rates, toughter lending rules, harder to get a mortage regulations and more fees on mortgages will slow down the process of recovery as well.
New home construction is starting again so if you are in the market for a new home now may be a good time to buy one.
Rates are still low. Interest rates for mortgages are still at record lows so if you can get a mortgage now is a great time to do so.
Sellers who are not doing short sales and who are not in foreclosure will have the upper hand and some leverage as me move into 2012. Most likely we will continue to see bidding wars on non stressed properties. This is good news for sellers who don’t want to wait until all their equity lost decides to come back.
There are over 371,000 open foreclosure cases in the state of Florida. Palm Beach, Broward and Miami/Dade counties have about 100,000 of those cases.
So we are not in a free fall any longer but still have a long ways to go to get out of this mess.
I just read a featured post about an attorney who is not going to be negotiating any more short sales in his office. There were many supportive comments but there were many that were quite disturbing. The post was a ‘members only’ post so I can not refer to it however I will go over what is most alarming to me.
More than one commenter stated that they don’t like to do short sales because they rarely close. Some even said they don’t want to take short sale listings because they don’t close. I don’t know the ratio of who’s comments were those who list short sales compared to those who had buyers for short sales.
My big question is: WHY are your short sales NOT closing? What is your closing ratio for your short sales closing? If it is not over 90% than you are right – you should not be listing short sales not because they are not closing but rather you are not closing them for some reason.
What is the reason you are NOT closing your short sales?
We should not be gambling with people’s homes.
IF the seller is going to get foreclosed on next week- you don’t LIST the short sale!
The odds are in your favor if you know how to negotiate a short sale that you will get your short sales closed. If you are not getting your short sales closed then you need to take a good negotiating course. We list and negotiate and sell our short sale listings. In over 20 years of negotiating short sales we have over a 90% approved short sale ratio. That is after dozens and dozens of short sales. The same goes for Broker Bryant and many others that do short sales.
Yes, they can be tough.
But don’t take listings if you run out of breathe before you get to the finish line. That is not fair to your sellers, the homeowners and it is also not fair to the buyers waiting for the approval and it is not fair to yourself.
Has your loan modification or Wellington Short Sale been turned down? Did the reason why make your eyes glaze over? Did you perhaps NOT even get a reason? Did the reason even make sense?
We know homeowners who are put on trial modifications only to get turned down on the permanent loan modification. If you are making your trial payments on time each month why would your permanent modification be turned down?
There are some reasons although they most likely won’t make you feel any better. Some of do like to know the reasons things don’t work out the way we had hoped they would. These reasons may not make you feel any better or maybe they are just excuses by your lender, however there are a few things you may not even know about your loan.
Let’s say that you make your mortgage payment to Bank of America. You can no longer handle your payments so you ask Bank Of America to modify your loan and you apply for your loan modification. You are behind in your payments. You are in fact, in foreclosure but you are still living in your home and the judge in your case has not ordered the sale of your home at auction yet. You are nervous and scared. You see your neighbors losing their homes all around you. You are hopeful because you see on the news and in the newspapers that the Federal Making Homes Affordable Program has been helping some folks keep their home and get a loan modification. Every few months you hear about another government program that supposedley will help you stay and keep your home. But each time it is like a lead balloon. Your hopes go up there only to be shot down.
You are no longer making your mortgage payment because your adjustable rate has been applied and your mortgage payment has gone from $1600 a month to $2300 per month. You just can not make these payments. You have been trying for almost 2 years now to get Bank of America to approve your loan modification. You even hired an attorney to help you with your foreclosure defense.
Bank of America turns down your loan modification request. You wonder, how did that happen? Bank of America is one of the large lenders and is participating in the government’s Federal Making Homes Affordable program, the HAFA program and other government programs.
Then you get the news from Bank of America who tell you that the investor is the one that will not allow you to get a loan modification. What in the world is an investor doing making decisions on your loan you wonder? Well, you are not alone in your confusion. Every day we are explaining the whole mortgage note owner thing to buyers agents, real estate agents and homeowners. Every week we run across people in the real estate business who don’t know how the process works or what the ownership piece to all of this is and how it is handled.
When you make your house payments to Bank Of America this does not mean they own that note that you are paying on. They are the servicer. Other words you will hear them called are asset management companies.
The very first thing you need to do before you ask for a loan modification is to find out who actually owns your note. You can do this by calling who you make your mortgage payments to and asking them.
Many of the servicers don’t want to give you that information so you may have to make this request in writing and send it by certified US mail.
If Freddie Mac or Fannie Mae own your note- you have a much better chance at getting your loan modification approved if you qualify. If it is a private group of investors, your chances go way down. Why would this happen?
One in eight homeowners’ loans were sold to investors on Wall Street. What happens is that a bunch of loans are packaged together. These are called mortgage-backed securities. They are then sold off to investors. Homeowners who have mortgage-backed securitized loan are five times more likely to be late on their house payments. Many of these borrowers were given loans they were not qualified for from the beginning. Many of the homeowners getting these loans did not read the fine print and did not realize how high their mortgage payments might go when adjusted.
The rules to allow modifications, short sales and terms of foreclosures and deficiencies are ambiguous at best. Homeowners who are told no by the investor have little recourse.
The federal Making Homes Affordable program lenders who participate in the program must modify all homeowners that qualify. The exception is when the investor has a rule that they do not allow modifications.
The Federal Housing Finance Agency reported to Congress that these securitized mortgages are a “hurdle” to the success of the Making Homes Affordable program. The treasury department has not disclosed why the modifications are denied so there are little to no facts to go on. So don’t depend on the government to help you get your modification.
Does it make any sense for the investors to say no to your loan modification? Well, Bank of America’s response is that the investors need their money. Chase for instance has one situation where the borrowers ( the homeowners) are trying to get their loan modified but Goldman Sachs is the issuer and Deutsche Bank is the trustee. But when you go and talk to these investors and we have on several occasions when doing short sale negotiations for our sellers; the investor passes the buck back to the servicer. For instance, Deutsche Bank says that Chase Bank is solely responsible for the decision to modify a loan or not.
Investors feel that they are treated as the scapegoats. Everything can easily be blamed on them. Since you rarely get to speak to anyone at the investors’ group it is hard to tell who is telling the truth. In this particular situation Chase bank is saying that the investor is not forgiving the past due debt and that makes the payment go up on a loan modification because then Chase Bank would have to put that past due balance along with all the penalties and fees into the loan modification which then may cause the homeowner to not qualify financially for the loan modification.
Servicers have agreements, contracts that they sign with investors. These agreements contain the rules for modifications. These agreements are called Pooling and Servicing Agreements which is known as PSA’s. The PSA is most often what the servicer says is the reason for them not being able to do the loan modification or release the deficiency on a short sale.
But when you talk to other people in the management areas or to the investors they claim that there is nothing in the PSA’s that would prevent the servicer from approving loan modifications, short sales and releases. There is a new study coming out from a law school wherein they state that only 8% of these mortgage-backed securities agreements contain any language that says the servicer is not allowed to do a loan modification for these notes. That means that about 92% of all the NO’s; could actually be YES’s. So why would that even happen?
Law suits! They FEAR the law suits coming. The language in the PSA is in question here, Chase Bank or Bank of America or any other servicer and Deutsche Bank- it says that SERVICER can “waive, modify or vary any term” as long as the servicer makes a “reasonable and prudent determination” that the modification is in the investor’s best interest. Attorneys examining these agreements say there is quite a bit of room for servicers to make these decisions. But the language itself in this agreement is enough for the servicers legal counsel to be concerned with the investor suing them for not acting in the best interest of the investor. They can not, no matter how inhumane this sounds, put the homeowner ahead of the investor. This is about business and if they want business from investors they need to make sure they are looking out for the interests of the investors.
The treasury department has stated that the fear of law suits is the biggest deterrent to getting the servicers to approve loan modifications and short sales. So doing little or simply turning down the loan modifications are the answer many servicers choose. This is not personal and this is not against you, the homeowner. The position of the servicers is to watch their own backs and to protect the assets to which they have been entrusted with, your mortgage-backed security. The Treasury Department says they can relieve some of the pressure of the fear of lawsuits by standardizing requirements for loan modifications and also provide some type of calculation to figure out if the investor will make more money by the loan modification or by the foreclosure.
We need to keep in mind one big thing in all of this and that is that these investors end up being regular people because most of these mortgage-backed securities were bought by pension funds and retirement plans of folks like your grandparents, your parents, your aunts and uncles or even yourselves. You may well be one of the shareholders of the very loan you can not pay.
Florida Property Tax Relief
A proposed constitutional ammendment Tallahassee is underway. Please contact your state legislators to tell them to pass this amendment. This is good for homeowners. Homeowners need a break. Preserve your property rights. Call today.
If this ammendment is passed this is what it will mean to you:
If you are Florida resident and your home is your homesteaded property you will be getting a super exemption. Right now your exemption is $25,000. Depending on the fair market value of your home your exemption will range from 15% to 30%.
So if your home has a market value of $300,000 and you are being taxed for the value of $250,000 you will get a super exemption of $45,000 which will make your taxable amount $205,000.
If you own a home that is valued at $300,000 and you are being taxed at $200,000 your exemption will be $37,500 so your revised taxable value will be $162,500.
If you have lived in your home for a long time with a value of $300,000 but are being taxed at $145,000, your super exemption will be $21,000 for a new taxable value of $124,000. But because that is less than the Save Our Homes benefit of $105,000 the exemption would not apply in your case.
If you are a snowbird who paid $45,000 for a condo but that condo is now worth less than $25,000 you are not going to get the exemption. The property is less than the exemption. If the property value rises over 7% then you will get a snowbird exemption.
If you have lived in your home for a long time and your home is valued at $1 Million but taxed at $700,000 you will get a super exemption of $67,500 and then your new taxable amount will be $632,500. But you will not get the super exemption because your Save Our Homes exemption would exceed the super exemption. Your Save Our Homes exemption is $250,000 in your case.
You can not get both the Save Our Homes exemption and the Super exemption. Your Save Our Homes exemption is deducted from the Super Exemption. If your Save Our Homes Exemption exceeds the Super exemption you don’t get to take the super exemption. If it does not exceed, then you get to subtract the Save Our Homes exemption from the Super Exemption.
The reason for this is because Florida does not want to punish new homeownership. Those who have lived in their homes for a long time will not be punished either. They were careful to make sure the exemptions would help both existing and new home owners. The other thing they did not want to happen is for longtime homeowners to sell their homes to buy a new one with a better exemption. This is an equal exemption.
The best part of the ammendment is that the tax appraisers can not increase assessed values no matter whether it is owned by a non Florida resident or a homesteaded resident for more than 7% per year. Snowbirds will not be taxed at the appraised increases of 10% per year that is the current rate of increase when prices increase but they will be topped out at 7% at the most if the property value goes up by 7% per year or more.
If this ammendment passes the legislature it will go to the voters. Cities and counties of course are not happy about this ammendment because that will mean less revenue for them. I have never understood why cities and counties don’t privatize more of their projects and services. That is the best way to cut out expenses and lower everyone’s taxes.
This comes down to being a private property rights issue. As Realtors® we promise by joining the NAR to uphold and defend private property rights. Make 2012 the year that you take action for private property rights. Pay attention to your state legislators and your local and county rules. Be involved. Get educated about private property rights. Get ready to defend property rights.
Having a fair tax system enhances the free transferability of property. Cities and counties will make up for the losses of income through taxation through economic growth and people spending their money in their locales.
What is a Wellington Short Sale?
Many people are in the situation of not being able to make their mortgage payments.
Wellington Short Sale Agents Get Another Approved Short Sale!
Getting your Wellington short sale to acceptance and then closing is our primary objective once we have an offer on your home or in the case of the HAFA program, an acceptance prior to an offer in some cases.
But this does not usually come easily from most lenders. If your lender is telling you something opposite of what we are telling you- please call us to tell us. The contradictions are really out of this world sometimes. Our sellers here all kinds of lies and accusations from negotiators at the banks who are not doing their jobs so they try to throw others under the bus in order to save their own behinds.
Nestor had to fight all morning with a negotiator who refused to give us an extension on the closing date even though it was in this negotiator’s responsibility to get it to us. When a buyer is getting an FHA loan his lender needs 45 days to close. End of story, no exceptions. Think about this; the same lender that is supposed to approve the short sale is the same lender doing the loan in this situation. So here we go again, the left hand does not know anything about the right hand!!!
We finally got the approval letter today!!! YEAH!!!! Oh Wait.. do you remember the post we wrote a couple of years ago… Don’t do the HAPPY DANCE just yet!!! You have to read the approval letter first!!
The approval letter did not have 45 days to close on it. Nestor was right back at the negotiator with the error and request for the revised approval letter. After some emails back and forth, we finally got her to understand that the time to close was an error on her part. She did not give us the first approval letter until 8 days after she got the approval from the investor on the file. Well 45 days minus 8 days does not equal 45 days!
She did not want to do anymore work on the file, we could sense that in her emails to Nestor. Upon closer reading of the Wellington short sale approval letter the negotiator had left out of the approval letter the deficiency waiver language of which had been previously agreed upon with a cash contribution from our seller. That was another fight. Nestor finally got the right approval letter in his hand and we are moving forward to closing another Wellington Short Sale!
Bank Of America Extends Florida Cash Incentive For Short Sales
Bank of America has a program to help short sales move along that is being piloted here in Florida. If your loan is being serviced by Bank Of America you had until November 30th to apply for up to $20,000 cash incentive to you, the homeowner at the successful closing of a short sale on your home. The incentive program is $5000 to $20,000.
This cash incentive is based on the amount of money you owe on your mortgage and you do not have to be late on your payments in order to begin the process of seeing if you qualify for the cash incentive.
Bank of America has extended the deadline to apply for the Florida Short Sale cash incentive to December 12, 2011. So you still have another week or so to get your request into Bank Of America. Call us because we can help you get this process going for your short sale.
In order to qualify for this program you CAN NOT have an offer on your property. We initiate the short sale and make the request. You must close on your short sale by August 12, 2012. You must also be eligible for either the HAFA program or the Bank of America Proprietary program.
The eligible short sellers will also be granted deficiency waivers in this program.
The following are NOT ELIGIBLE for this program:
ONLY FLORIDA Properties are ELIGIBLE.
Contact Nestor Gasset or Katerina Gasset at 561-753-0135 right now to get your file moving so you can see if you qualify for the short sale relocation assistance.