Simon Says: ” Sub-prime Lender Meltdown, Foreclosures Everywhere– What’s Really Happening Here on the Westside?”

Several evenings ago I walked past a group of men near a local coffee shop at 9th Street and Wilshire in Santa Monica, talking excitedly about the sub-prime mortgage industry “meltdown.” One of the gentlemen was sure it meant a significant increase in foreclosures. And another man said that he was looking forward to finding some great deals on houses he was going to purchase. The way they were talking I began to get the impression that Los Angeles was about to be littered with homeowners down on their luck, losing their homes to the bank.

All of the geniuses who had sat out the “ridiculous” rise in property values over the past six years, were about to be finally proven correct. Dozens of presumably well-heeled yuppies were about to find themselves in the bread line with the other homeless in Palisades Park. Disillusioned men and women would be looking out over the sunset, somberly enjoying their meals courtesy of the local food bank. Their eyes gazing out over the glittering Pacific Ocean towards Malibu, dreaming of the day they could get their home back.

Well, that’s not going to happen and here’s why. Currently, only about .5% of sub-prime borrowers are foreclosing on their homes nationwide, while about 13% are late on payments. That is just one in 200 sub-prime homeowners who are actually in foreclosure. The fact that more than one in ten is late on their payments is testimony to the reason why they were sub-prime borrowers in the first place. While many of these people aren’t too good at balancing their checkbooks, there are many things a homeowner can do to resist foreclosing.

The number of homeowners who purchased properties on the Westside of Los Angeles with sub-prime mortgages is estimated to be under 5%. My personal mortgage broker has been in business for the past 15 years. He has only done one loan with New Century, the largest sub-prime lender to close it’s doors.

Our housing inventory in Santa Monica is very low. Only 197 houses and condos are currently for sale. Let’s say there are 15,000 homeowner residences in Santa Monica and 5% of them are owned by sub-prime borrowers. If they were all in default at the national rate of .5%, then we would have about four new homes for sale. If that number tripled, we would have about twelve new homes for sale. We are certainly not entering a time of crisis.

Real estate values like mortgage defaults is a geographic issue. Los Angeles has a foreclosure rate of only .1% above the nationwide average. This April, Los Angeles had the lowest foreclosure rate of the top five metropolitan areas in the nation, only 1 out of every 997 households is in foreclosure. In Florida this March, the rate was 1 out of every 278 households.

There are things that can kill real estate values: war, natural disasters, economic calamity and the concurrent closing of law firms, hospitals and biotechnology and entertainment industry companies. However, for now, a couple dozen sub-prime lenders that feed on the financially disenfranchised is not going to have any effect on our local real estate market.

Simon Salloom is a local REALTOR with Coldwell Banker Residential Brokerage. To comment on this article and learn more about Santa Monica Real Estate click here.

Florida Homeowner Negative Equity Nightmare ? costly mistakes led to bankruptcy and closure of

A surprisingly high percentage of homeowners in Florida who bought their property in 2006 and 2007 are now paying negative equity in their homes by the excessively high prices when they bought their homes. Negative equity means your mortgage exceeds and devours any ownership interest in property you have purchased. Scary scenario for homeowners, and indeed daunting.

The rich owners of houses in Palm Beach County were hardest hit are states withthe greatest loss in the top 20% equity. Others who have lived comfortably from headings in capital are now the brakes on the banks always get nervous when the global economy and emerging parts of unprecedented uncertainty and panic in filing for bankruptcy. Number of over a million foreclosures nationally.

Those who bought homes during the peak of the market and those problem areas with the highest decrease in their values at home – such as Florida, California,Nevada and Arizona – are more likely to suffer negative equity in their homes.

Some statistical homes speculate on a purchase house, bought in 2006, nearly 40 percent are now in negative equity house. For those who bought homes in 2007 to some estimates up to 30 percent home equity negative.

One goes to see, timing is everything in real estate. Purchase at the wrong time can be disastrous, as we sell prematurelyIn a short sale to pay your debts. Sophisticated investors do not buy into all the hype, neither he listens to the media is pumped through the marketing of the multinationals that want us to believe against reality.

I hate to see all the foreclosures in Florida and families losing their homes. But we feel confident well have shown some restraint when “everyone” went nuts buying homes beyond their means, as he swallowed the lies Estatetold them to “only increase the property value in Florida.” The opposite is the way it is, and “all” is creeping to their exorbitant lifestyles that have received almost pushed into bankruptcy and enforcement.

Goes to show that success in real estate, often recognizable by its ability not to be determined, and go against the tide.

http://www.equitylinesite.com/2009/12/florida-homeowner-negative-equity-nightmare-costly-mistakes-led-to-bankruptcy-and-closure-of/

Elders are Paying the Highest Price for the Foreclosure Crisis

It is the elders and the seniors who have no future before them, who are paying the highest price for this foreclosure crisis. Florida, Nevada and California have always been favourite destinations for these retirees. Today these states are the worst hit by the housing crisis.

Many who had planned to move into retirement neighbourhoods after selling their houses have had to shelve their plans because of the loss such moves involve. Many of the seniors were so confident that they would always be able to rely on increasing equity of their property that they did the gross mistake of not saving for a rainy day. Today in the twilight of their lives they have no cushion on which to fall back upon. 36% of the workers aged above 55 say that the value of their savings and investments (not including the worth of their primary home and specific benefit plans) is below ,000 as per the findings of Employee Benefit Research Institute.

Dean Wegner is an official credit counselor and specializes in mortgages in Phoenix. He commented that the situation is terrible. He elaborated, “I’ve got a lot of seniors who have just been nailed. They don’t have retirement savings, and they’ve exhausted their equity. They’re upside down (owing more on their mortgage than their homes are worth), they can’t refinance and they’re on a fixed income. They’re scared to death. You can hear it in their voices. It’s a sad situation.”

30% of all the borrowers who are delinquent on their mortgages or are in foreclosure are over 50 years as per the findings of AARP. It noted that of the 684,000 above 50 borrowers who were facing trouble with their mortgages 50,000 were already in foreclosure.

Seniors have had to bear a disproportionate share of the sub-prime mortgages. Loans were forced on many with dubitable credit scores. The elderly are 17 times more likely to be holding sub-prime mortgages that have led them into foreclosure than other Americans holding prime loans. For those borrowers who were below 50 the comparable multiple is nearly 13.

Most of these seniors who do not have any savings except for the house they live in had entirely banked on the idea that the price of property could not fall but would go on increasing. Dean Baker from Center for Economic Policy and Research said that the elders “have saved up very little outside of their home and banked on home prices rising. No one talked about them falling, so they were heavily leveraged. This whole group is going to be hugely dependent on Social Security, and people don’t fully appreciate the magnitude of the problem.”

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Fort Lauderdale Foreclosures ? Helping Your Neighborhood Resist Devaluation

Foreclosures are not only devastating for the property owner but for the neighborhood as well. In the current economic crunch, it’s typical for some people to experience dire financial straits and lose their home to foreclosure. In Florida alone, there are several distressed homes including Fort Lauderdale foreclosures. There are, fortunately, ways that can help your neighborhood avoid devaluation, which is the common mass effect of the foreclosure plague.

Effect of foreclosure to nearby homes 

A single Fort Lauderdale foreclosure may not do much damage but it’s uncommon to see such neighborhood. Communities plagued with distressed and abandoned homes see themselves also yielding to home devaluation. By the time homeowners of these communities plan to sell their properties, they find themselves paying more and recovering less. 

Curb appeal is an important aspect in real estate. Once buyers notice the neighborhood lined with abandoned homes, they’ll most likely step back and skip on to the next. The reality is, Fort Lauderdale foreclosures, for instance if you’re living in the city, can pull down your home’s value as well as those around you. 

How you can help 

If you’re neighborhood is on the brink of experiencing a foreclosure plight, you must remember to help one another. The first thing you and your neighbors can do is to contact an agent and know which bank holds the distressed property. The longer it takes for the foreclosure process to finish the quicker it will for your home values to plunge. These homes are rarely maintained by the bank, but you and your neighbors can surely pressure them into doing so by continuously dropping them a line. 

The two results you can expect is: a.) The bank will do some action; and b.) Nothing at all. The latter is most likely to happen, and if so, you can contact Fort Lauderdale’s building department and prompt them to you help your vulnerable neighborhood, and even levy the lenders into action. This agency recognizes the effects of blighted homes in the city and more likely to take the reins on the maintenance as much as possible. 

You and your neighbors can also help the properties yourselves by doing some little help. While it’s dangerous to be spotted on a bank-owned property without permission, there are ways to surreptitiously maintain distressed houses. During the dead of night, for instance, you can activate your sprinklers and make sure that their lawn also gets some water. 

Another way is to tell your friends or relatives about the Fort Lauderdale foreclosure in your neighborhood. They might be interested in checking out the property if they’re looking for an investment or a place to move in. You’ll be doing your neighborhood a major favor if you’re successful at getting the property off the market. 

Mark Michael Ferrer 
Fort Lauderdale Foreclosures

Florida Will Bounce Back!

The volume of homes and condo sales in Florida has just jumped up this spring, according to figures released by the Florida Association of Realtors. There is more good news – the increase was not because of price drops – the median price of a condo crept up slightly in the one month period!

Florida has seen its share of real estate boom and bust cycles and a group of Florida businessmen were reminded of this in Orlando as Florida still struggles with the nation-wide foreclosure crisis.

Florida’s Chief Financial Officer, Alex Sink, called for unity when she recently addressed a group of Florida businessmen and told them that Florida businesses and the government need to hold hands instead of being on opposite sides of the table.

Florida’s historic ability to weather realty storms is partly due to its unique combination of natural beauty and incomparable climate; half of the USA wants to live in this fair state! At the moment the tough part for home owners in Florida as well as nation-wide, has been trying to hang in there!

With the curve on an upward turn, now is the time for investors to start looking. This upward turn is indicated by a 20% increase in sales for April 2008 over March 2008 sales. In a sea of grim figures both nation-wide and locally, this is a much needed turn of the tide.

For those home-owners who may be lamenting the lower prices we have seen nationwide, remember if you bought your house five years ago, it still shows a profit; the drop in Florida is reflecting the recent large price increase bubble. This has now burst!

Certain desirable areas such as Florida will pick up first and if you are considering a second home, it is wise to start looking now. Looking is not the same as buying, but it does mean that you can familiarize yourself with the current market prices and therefore be more aware of a good buy.

Whether you are buying out of your local area or within it, it is invaluable to have a local real estate agent who knows your every wish to be working for you. Realtors will often get to work and see a great bargain listed on their screens long before you even get a whisper of it yourself. A quick phone call to you and a viewing is arranged.

Bargains go quickly, so it is always advisable to have your finances pre-approved and a down payment in your hot little hand. If the seller sees that you are prepared and can close a quick sale, they will not be tempted to weigh other offers.

This advice also applies to first time buyers who seem to recognize the enduring qualities of Florida. Thirty-eight per cent of all homes sold in Florida last year were to first time buyers and most of them were between the ages of twenty five and thirty four years old.

This is an ideal time to buy if you are planning to get one foot on the property ladder. As a first time buyer you may be waiting for the very bottom of the dip – but so is everyone else! It is the seasoned cash buyers who will be able to jump fast enough for those deals. If you plan to stay in the area and you negotiate a mortgage at a fixed rate that you can easily afford, the time is is soon so start looking around.

Two key words in the last sentence were ‘fixed rate’. You should choose a mortgage type that will guarantee no increase in the monthly repayments. This is a fixed rate mortgage.

Another key point was ‘one that you can easily afford’. It is tempting to choose the best castle that you can afford, but what if one of you looses their job? Choose a little cottage that you can keep in a crisis, it will still increase in price at the same rate as the castle.

Finally get yourself a discerning real estate agent who will filter through the undesirable homes and inform you immediately when a bargain shows up. Then you must jump – with your financing already pre-arranged (your realtor can also guide you in this) you could be moving into your first home!

Is the Florida Real Estate Market Over?

On Saturday, September 30, 2007, The Wall Street Journal carried a blaring headline that read:

Is Florida Over?

The article was directed towards the Florida real estate market and addressed the idea that the market in the Sunshine State has gone bust. Before the question of whether Florida is over can be answered, a person really does need to understand the realities of the Florida real estate market over the course of the past year.

First of all, over the course of the past year, more people have moved out of Florida than into the Sunshine State. However, despite the fact that more people are heading out of Florida than in, there is not anything like Florida flight occurring at this point in time.

Second, there have been a record number of home foreclosures in Florida in recent times. However, while there has been a significant increase in the number of foreclosures being filed across Florida, Florida is not the leading state when it comes to these types of mortgage problems.

Finally, homeowners insurance rates in Florida have skyrocketed in many parts of the state over the course of the past several years. This is due in part to the natural disasters that have plagued Florida for the past fifteen years.

Although The Wall Street Journal article referenced a moment ago does paint a pretty grim picture for the future of Florida real estate, the fact is many experts believe that there is definite light at the end of the tunnel.

The fact that Florida property prices are dropping at the present time does create a buyer’s market. While this is not a positive development for sellers, investors and individuals interested in moving up in the residential market should consider taking advantage of the recent market trends.

Sellers can take heart in some developments in Florida as well that will impact the real estate market. First of all, the Governor is leading an effort to bring down property tax rates in the state to provide some relief to homeowners. (This should also positively impact the ability of a person to obtain a better sales price on a property should they decide to sell.)

In addition, the Governor and other governmental leaders in Florida are working to develop a meaningful program of providing homeowners insurance relief. Once again, this is also expected to benefit homeowners on many levels including making real estate more salable in the more immediate future.

The fact is that there are a number of factors pertaining to the marketplace that likely will stabilize the residential, retail and commercial markets across the Sunshine State in the not too distant future. In other words, for buyers and sellers alike, being involved in the Florida real estate market will again be a positive experience.

Florida Mortgage Qualifying is Eazy with FHA Mortgage loans,

FHA mortgage insurance requires a Florida borrower to demonstrate a good repayment history of all debts.  This history serves as the most useful guide in determining a Florida mortgage applicant’s willingness to repay credit obligations and serves as a model in predicting his/her future actions.

When analyzing a Florida mortgage applicant’s credit report, it is important to focus upon the general pattern of credit behavior rather than isolated unexpected temporary occurrences of late payments.  Often times, Florida mortgage applicants will experience a period of financial difficulty in the past and does not necessarily translate into an unacceptable risk.  Reasonable past explanations of the derogatory credit and evidence of offsetting factors (such as a new job or promotion with greater stability and pay, for example) will be necessary.  All recent derogatory credit within the past 2 years must be explained, in writing, by the borrower.

The following is a brief synopsis of the credit underwriting guidelines for FHA mortgage loans:

Lack of credit history: If a Florida mortgage applicant does not have a minimum of 3 trade lines on their credit report, alternative forms of credit may be used.  This would include items such as 12 months canceled rent checks, or verification of rent from a management company, letter from an electric, cell phone, cable, auto insurance payment history or  utility bills, etc, providing proof of a 12 month on time payment history. Included credit obligations: Any installment loans such as student loans, car loans, or other debts with less than 10 months remaining does not need to be included when qualifying for a Florida FHA mortgage loan.  However, consideration is given to a large debt of over 0 a month, regardless of the number of months remaining.  Furthermore, if payments on auto leases with less than 10 months must be included in the qualifying ratios.  The minimum payment on all revolving accounts (i.e. credit cards) is also factored in.  If the borrower has an open revolving account without a balance, per open account should be included when qualifying. Any loan where the Florida mortgage applicant  has co-signed for another party is included with their debts unless the borrower can prove that the other party has made the payments on their own for a minimum of 12 months. Chapter 7 Bankruptcy: Florida FHA mortgage lenders require a minimum of 2 years since the discharge of the Florida bankruptcy.  An explanation of the Florida bankruptcy will be required.  Furthermore, the Florida mortgage applicant should have re-established credit proceeding the bankruptcy with no late payments. Chapter 13 Bankruptcy: Florida FHA mortgage lenders will consider a borrower still paying on a Chapter 13 bankruptcy if the payments to the court have been made for a minimum of 1 year in a satisfactory manner (as verified with the courts) and with the approval of the court trustee. Federal Debts: A mortgage applicant is not eligible for a FHA loan if he/she is delinquent or in default on any federal debt (such as a HUD or VA mortgage, student loans, SBA loans or a tax lien against his/her property).  Florida mortgage applicants  can become eligible by bringing any delinquent accounts current, making satisfactory repayment arrangements with the creditor (generally a 3 month minimum history will be required), or paying the account in full. Judgments: Judgments must be paid or have 12 months of arranged payment history Collection Accounts: Collections do not need to be paid (LOX) needed Foreclosure: A Florida mortgage applicant who has had a property foreclosed upon, or who has given a deed-in-lieu of foreclosure within the previous 3 years, is generally not eligible for a Florida FHA mortgage loan.  However, if it was the result of extenuating circumstances beyond the borrower’s control (such as the death of a spouse, loss of employment, or serious long-term illness, etc.) and the borrower has since re-established good credit, an exception may be granted.  However, extenuating circumstances do not include the inability to sell a house when transferring from one area to another. Non-purchasing Spouse: If a married mortgage applicant is purchasing a property by himself/herself, the credit obligations of the spouse must be included with the application and will be factored in with the borrower’s credit obligations and used to determine the financial capacity of the borrower.  Furthermore, the non-purchasing spouse may be required to sign a security instrument or documentation relinquishing all rights to the property.

What Are the Advantages Offered by Tampa Foreclosure Listings?

One thing about Florida is that if you like sunshine it is a great place to be. The bad thing about the state – or the good thing depending upon how you view it – is that right now with the foreclosure market as tough as it is in the state you can find that the Tampa foreclosure listings are literally overflowing with property that ranges for almost new construction to fairly old.

The state has long been considered as a retirement haven and people from all over the country come to Florida to live out their golden years. As a result many communities have sprung up across the state to accommodate the influx of seniors and near seniors that were coming here.

As the market began to fall off a good portion of the people that were living in these new homes found that the fixed income they were on was no longer able to support them and pay to be able to live in them. As a result a lot of people were forced into allowing the homes that they were living in to fall into foreclosure in Florida. The Tampa foreclosure listings are full of just such style homes.

With some diligent looking it is possible for some of the older homes to be purchased for literally just a few pennies on the dollar, which makes it a great time to purchase a foreclosure in an area that is known as a vacation destination. So if you are looking for a great time to buy a second home or an investment place this is the place and today is definitely the time.

The sun and the sand make a great place for you to look for investments and the Tampa foreclosure listing should give you plenty of things to look at if you are in the market to make a purchase.

Investment Property In Florida

The crash of the housing market has opened the doors for many investors. Florida is one of the hardest hit states for foreclosures and unemployment. The Feds have bought back mortgages and interest rates have steadily dropped. What does this mean for the average investor and how can one find Florida investment properties?

Florida investment property can be found in the thousands at rock bottom prices. The rate of foreclosures in Florida is 1 in every 56 homes. Buying Florida investment properties can allow an investor to buy at a low price and sell or rent at a higher price allowing them to profit from the housing mess. The investor can contact a local realtor to help them find potential properties. Another option is to contact the banks that own the properties and make an offer to purchase the real estate.

Some of the Florida investment property will have damage or work that needs to be done before a person can utilize the property. This should be taken into consideration when making an offer on the property. If there is a considerable amount of damage, then the investor can make a lower offer on the property. Most of the banks do not want to make the repairs on the property and will lower the price to compensate for the work that needs to be done on said property. This can be a real bargain for the right investor.

The investor should work with an experienced realtor in foreclosures or short sales. Having a realtor that is experienced can help the investor save time and money. Investors can also higher a real estate attorney to help with any matters they are not clear on. Florida investment properties can help an investor achieve high returns if the purchase price is low.

There are thousands of Florida investment properties for sale. These prices are the lowest anyone has seen in years. The interest rates on mortgages are at the lowest in years. If the investor does not have the liquidity to purchase the investment property, then obtaining a mortgage at today’s rates would be a wise choice. The current mortgage rate in Florida for a 30-year term is 4.5%. This is a fantastic rate for a borrower. The investor could rent out the property and charge anywhere from a 7% to 10% rate, depending on certain criteria, and still walk away with a substantial gain.

Florida investment properties are a great investment. There is potential to make a decent return on the investment. The investor needs to do their homework on the property to find its true value. A cost comparison should be applied to the Florida investment property. There are many advantages to buying a Florida investment property.