A different way to sell real estate
For www.miamiforrussian.com
EUGENE, Ore. – Oct. 28, 2011 – The Austin Family Business Program recognized Oregon-based Hybrid Real Estate for pioneering an “entrepreneurial shift in (the) real estate industry.” The company’s business model strives to keep costs low so agents can earn more than their peers at traditional brokerages.
Much of the cost savings is attributed to the firm’s two “customer care centers,” which take the place of a large real estate office staffed by a receptionist. Agents do all of their work from their home offices or cars, but they can meet clients at one of the customer care centers, which have conference tables.
The company also promotes free or low-cost technology. It also makes its own real estate signs and hires experienced agents who don’t need basic training.
Among other things, the company’s agents have web pages for each property, take advantage of virtual tours, and use Dropbox to upload and share documents.
“(Technology) has to help sell your listings, or it has to help you grow your business in some way – and if it doesn’t do those things, then it probably isn’t really going to help you,” says Hybrid Real Estate co-founder Bryan Ranstad.
Source: Loan Safe (10/24/11) Ferreras, Alex
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
MIAMI FOR RUSSIAN is the BLOG of www.MiamiForRussian.com. www.MiamiForRussian.com is a Russian specific website tailored to help Russian-speaking individuals looking to buy or sell real estate in Miami and South Florida. Это интерактивный вебсайт, специально разработанный для русско-язычных клиентов, интересующихся в получении подробной информации о возможностях приобретения недвижимости в Майами и Южной Флориде. 305-562-5864, irina@miamiforrussian.com
Friday, October 28, 2011
Bargains abound: What are buyers waiting for?
Bargains abound: What are buyers waiting for?
For www.miamiforrussian.com
NEW YORK – Oct. 28, 2011 – With low home prices and ultra-low interest rates, the housing market now offers “perhaps the best deals of a generation,” notes a recent article by Bloomberg Businessweek.
Since the housing boom of 2006, home prices have fallen about 31 percent. Also, mortgage rates have been hovering at record lows for the past few weeks – in the 4 percent range or even lower on 30-year fixed-rate mortgages, according to Freddie Mac’s mortgage market survey.
“It’s hard to see the possibility of losing on a home purchase right now, with these mortgage rates,” says economist Dean Baker. “Prices may go lower, but not by much.”
The article notes the following scenario: Buying a $300,000 home with a 4 percent mortgage rate and a 20 percent down payment would mean a $1,145 monthly payment. The Mortgage Bankers Association recently predicted that home prices may fall another 3.5 percent by mid-2012, but mortgage rates will increase by a half-point. Under that same loan scenario, a home would sell for $289,000 while the monthly mortgage bill would be $1,171 – only a $26 difference.
For those who can qualify for a mortgage, “playing the waiting game” won’t result in much gain, Nariman Behravesh, chief economist at IHS in Englewood, Colo., told Bloomberg Businessweek.
Source: “Crazy Home Deals Await the Creditworthy,” Bloomberg Businessweek (Oct. 24, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
For www.miamiforrussian.com
NEW YORK – Oct. 28, 2011 – With low home prices and ultra-low interest rates, the housing market now offers “perhaps the best deals of a generation,” notes a recent article by Bloomberg Businessweek.
Since the housing boom of 2006, home prices have fallen about 31 percent. Also, mortgage rates have been hovering at record lows for the past few weeks – in the 4 percent range or even lower on 30-year fixed-rate mortgages, according to Freddie Mac’s mortgage market survey.
“It’s hard to see the possibility of losing on a home purchase right now, with these mortgage rates,” says economist Dean Baker. “Prices may go lower, but not by much.”
The article notes the following scenario: Buying a $300,000 home with a 4 percent mortgage rate and a 20 percent down payment would mean a $1,145 monthly payment. The Mortgage Bankers Association recently predicted that home prices may fall another 3.5 percent by mid-2012, but mortgage rates will increase by a half-point. Under that same loan scenario, a home would sell for $289,000 while the monthly mortgage bill would be $1,171 – only a $26 difference.
For those who can qualify for a mortgage, “playing the waiting game” won’t result in much gain, Nariman Behravesh, chief economist at IHS in Englewood, Colo., told Bloomberg Businessweek.
Source: “Crazy Home Deals Await the Creditworthy,” Bloomberg Businessweek (Oct. 24, 2011)
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Thursday, October 27, 2011
Why to invest into Miami
Why to invest into Miami
Especially for www.miamiforrussian.com
Especially for www.miamiforrussian.com
По сравнению с любыми другими пунктами назначения туристического направления мегаполис Майями способен предложить максимальную совокупность факторов для жизни и отдыха, а с точки зрения недвижимости ни один город в мире не предлагает такое количество типов коммерческой и жилой недвижимости, способной удовлетворить запросы любого клиента.
Значительное снижение цен на недвижимость США вызвало небывалую активность со стороны иностранных инвесторов. И не зря. Данный период является наиболее благоприятным для осуществления выгодных сделок. Действительно, цены на американском рынке недвижимости за последние полтора года значительно снизились. Причиной тому поразивший страну ипотечный кризис. Теперь же правительство нашло выход из сложившейся ситуации: ипотечным должникам оказывается государственная помощь. Свою роль в снижении цен сыграло и падение доллара по отношению к евро и рублю: теперь многие иностранные инвесторы смогут купить более дорогие объекты за те же деньги.
На примере Российских граждан: США – это пятое место выбора после Болгарии, Финляндии, Германии и Испании. Из нашего опыта российских покупателей интересовало два вопроса: когда покупать и в каком штате страны. На первый вопрос ответ один - сейчас и сразу, ответ на второй вопрос – наиболее интересна недвижимость штата Флорида (лидер по сделкам: Маями), где цены теперь будут только расти.
Флорида – один из тех штатов, где стоимость квадратного метра за последние полтора года снизились больше всего. Многие объекты недвижимости упали в цене на 50%. Сейчас, по данным ведущих аналитических агентств США, объем продаж домов на вторичном рынке повысились на 3,1%. Цены начинают стабилизироваться.
Но Флорида интересна иностранному покупателю не только из-за цен.
1. Штат мечты. О городе Майами знает едва ли не каждый наш соотечественник. Штат Флорида, где и расположен этот город, – регион с развитой индустрией туризма, и не только международного. Сами американцы любят ее пляжи и регулярно приезжают сюда на отдых, приобретают вторые дома для отдыха с перспективой проживания после выходы на пенсию чтобы насладиться бесконечной полосой пляжа, прекрасным климатом и богатой дикой природой (Ежегодно около 100 тысяч американцев переезжают сюда).
2. Майами – любимое место молодежи всех стран. Здесь очень высокий уровень образования. University of Miami – самый престижный частный университет. Также город идеален для любителей водных видов спорта и гольфа. Его смело можно назвать одним из центров мирового туризма и развлечений. Для многих туризм сочетается с покупкой недвижимости.
3. Беспорное преимущество географического субтропического месторасположения и климатические условия – среднегодовая температура 23 градуса.
4. «Майами» – это сложившийся десятилетиями бренд
5. Недвижимость здесь может служить как корпоративной резиденцией для приема высокопоставленных гостей, так и летним загородным домом для отдыха с семьей для менеджеров высшего, а теперь – ввиду снижения цен – и среднего звена.
6. Неограниченный выбор. Сейчас в штате Флорида предлагается огромный выбор различных объектов недвижимости самого разного типа. Вы можете купить дом в Майами на острове с причалом для яхты либо квартиру в многоэтажном доме на берегу океана с собственным бассейном и пляжем. В ходе текущего кризиса, когда количество предложений на рынке жилья выросло, этот выбор логичным образом увеличился. Тем не менее типичной покупкой для иностранного гражданина, в частности россиянина, является квартира в жилом комплексе, так называемый кондоминиум (кондо). Это объясняется просто: иностранному покупателю не приходится переживать о купленной квартире, ведь обо всем заботится управляющая компания. Поэтому владельцу не нужно постоянно присутствовать в Майами. Более того, такая квартира легко сдается в аренду из-за постоянного интереса туристов к региону. Годовая доходность при этом составит примерно 8% от суммы сделки. Сейчас становятся актуальными нестандартные покупки. Земля или дома с участками в гольф-сообществах, охраняемых коттеджных поселках со своим гольф-полем.
7. Близость к экзотическим курортам карибских остравов. Утра-современный порт Майями – это мировая столица круизов (4 миллиона пассажиров ежегодно).
8. Цены на услуги и товары первой необходимости в США намного ниже европейских, кроме того – это еще и единственный круглогодичный курорт одной из крупнейших стран мира.
9. В США в настоящее время существует ряд программ, позволяющих иностранным гражданам получить статус постоянного жителя (резидента). Некоторые из них: получение статуса резидента (грин карты) через иммиграционную программу EB-5 и неиммиграционную визу бизнесмена L-1.
Приобретая недвижимость в Майами в данный момент, вы имеете уникальную возможность купить ее на стадии коррекции цены и переходе ее в стадию роста. Это связано с тем, что многие объекты Майами уникальны и явно недооценены по сравнению с объектами западного побережья США и инностранными аналогами.
Для формирования полной картины ситуации на рынке прилагаю ссылку на два отчета от Miami Association of Realtors:
· 2011 Profile of International Home Buyers in Florida
· 2011 Profile of International Home Buying Activity
С уважением,
Ирина
IRINA KIM SANG
Go Big or Stay Home
| Realtor Associate | Languages: Russian & English| Coldwell Banker Residential Real Estate-Pinecrest | 12155 South Dixie Highway| Miami, Florida, 33156 | OFFICE: 305-253-2800|CELL: 305-562-5864| irina@miamiforrussian.com | www.MiamiforRussian.com |
Wednesday, October 19, 2011
Creating a referral strategy
Especially for www.miamiforrussian.com
Creating a referral strategy
WASHINGTON – Oct. 18, 2011 – Real estate agents who want to generate business from referrals need to establish and deploy a strategy. Rather than depending on mailings with calendars, football schedules and the like, agents should spend more time making phone calls or personal visits and request referrals.
Most people make referrals based on trust and friendship, so agents should share their goals and vision to emphasize their passion and enthusiasm. Of course, clients are also more willing to suggest referrals if an agent gave them top-notch service in the past.
Although some agents want their businesses to be 100 percent referral-based, that approach to business is too narrow and exclusive to be successful. Agents will receive a lot of referrals when the market is hot; but when the number of potential buyers and sellers shrinks, referral volume dries up.
Agents who concentrate only on generating referrals usually have more buyer leads than seller leads, which is why top-producing agents seek a more balanced approach and depend on other lead sources as well.
Source: Realty Times (10/14/11) Zeller, Dirk
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Creating a referral strategy
WASHINGTON – Oct. 18, 2011 – Real estate agents who want to generate business from referrals need to establish and deploy a strategy. Rather than depending on mailings with calendars, football schedules and the like, agents should spend more time making phone calls or personal visits and request referrals.
Most people make referrals based on trust and friendship, so agents should share their goals and vision to emphasize their passion and enthusiasm. Of course, clients are also more willing to suggest referrals if an agent gave them top-notch service in the past.
Although some agents want their businesses to be 100 percent referral-based, that approach to business is too narrow and exclusive to be successful. Agents will receive a lot of referrals when the market is hot; but when the number of potential buyers and sellers shrinks, referral volume dries up.
Agents who concentrate only on generating referrals usually have more buyer leads than seller leads, which is why top-producing agents seek a more balanced approach and depend on other lead sources as well.
Source: Realty Times (10/14/11) Zeller, Dirk
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688
Frequent users less wary of Facebook
Especially for www.miamiforrussian.com
Frequent users less wary of Facebook
SEATTLE – Oct. 18, 2011 – The more you use Facebook, the less likely you are to be concerned about privacy invasion.
That’s the core finding of a USA TODAY/Gallup Poll telephone survey last week of more than 2,000 adults.
“I really don’t care if people know about the stuff I like,” says Danny Jackson, 46, of Maine, who uses Facebook several times a day to check in with friends and to play FrontierVille, a popular Facebook-based game.
Only 26 percent of respondents who use Facebook at least daily said they were “very concerned” about privacy, compared with 35 percent who use the social network at least once a week, and 39 percent who use Facebook less often.
Even so, Facebook’s next-generation services have put the popular social network, which claims 800 million users, in the privacy hot seat. The company has begun testing “Timeline,” a way to digitally map members’ entire online lives. It is also testing “Open Graph” applications that automatically share notices about websites visited and content accessed.
Civil rights groups, privacy advocates and several politicians have asked the Federal Trade Commission to investigate Facebook’s tracking technologies.
Still, only 34 percent of poll respondents who use Facebook less than once a week were aware of the new features. Not surprisingly, 87 percent of those polled who use Facebook daily said they noticed the new features.
Facebook spokesman Andrew Noyes says the company tracks members only with their permission and has done much to “offer people transparency, choice and control over how their data is shared.”
But some technologists worry about Facebook, Google, Apple, Microsoft and others racing to develop businesses based on amassing vast amounts of data about what people do on their PCs and mobile devices.
“It’s kind of a gold rush mentality, and (tracking) data is becoming the holy grail,” says Craig Spiezle, executive director of the non-profit Online Trust Alliance.
Some avid Facebook users, such as Alex Martin, a student at Texas A&M University, are taking it upon themselves to preserve privacy. Martin closely monitors photos and comments posted about him by friends.
© Copyright 2011 USA TODAY, a division of Gannett Co. Inc., Byron Acohido
Frequent users less wary of Facebook
SEATTLE – Oct. 18, 2011 – The more you use Facebook, the less likely you are to be concerned about privacy invasion.
That’s the core finding of a USA TODAY/Gallup Poll telephone survey last week of more than 2,000 adults.
“I really don’t care if people know about the stuff I like,” says Danny Jackson, 46, of Maine, who uses Facebook several times a day to check in with friends and to play FrontierVille, a popular Facebook-based game.
Only 26 percent of respondents who use Facebook at least daily said they were “very concerned” about privacy, compared with 35 percent who use the social network at least once a week, and 39 percent who use Facebook less often.
Even so, Facebook’s next-generation services have put the popular social network, which claims 800 million users, in the privacy hot seat. The company has begun testing “Timeline,” a way to digitally map members’ entire online lives. It is also testing “Open Graph” applications that automatically share notices about websites visited and content accessed.
Civil rights groups, privacy advocates and several politicians have asked the Federal Trade Commission to investigate Facebook’s tracking technologies.
Still, only 34 percent of poll respondents who use Facebook less than once a week were aware of the new features. Not surprisingly, 87 percent of those polled who use Facebook daily said they noticed the new features.
Facebook spokesman Andrew Noyes says the company tracks members only with their permission and has done much to “offer people transparency, choice and control over how their data is shared.”
But some technologists worry about Facebook, Google, Apple, Microsoft and others racing to develop businesses based on amassing vast amounts of data about what people do on their PCs and mobile devices.
“It’s kind of a gold rush mentality, and (tracking) data is becoming the holy grail,” says Craig Spiezle, executive director of the non-profit Online Trust Alliance.
Some avid Facebook users, such as Alex Martin, a student at Texas A&M University, are taking it upon themselves to preserve privacy. Martin closely monitors photos and comments posted about him by friends.
© Copyright 2011 USA TODAY, a division of Gannett Co. Inc., Byron Acohido
‘Shadow inventory’ of homes could slow recovery
Especially for www.miamiforrussian.com
‘Shadow inventory’ of homes could slow recovery
MIAMI – Oct. 17, 2011 – Officially, there are 3.5 million homes for sale nationwide. But there are millions more lurking in the shadows – hidden neatly away on banks’ balance sheets, stalled in foreclosure court proceedings, or simply occupied by nonpaying owners as lenders wait months or years before taking action.
The housing market’s ballooning shadow inventory – buoyed by a yearlong foreclosure slowdown – stands as its most menacing problem, threatening to stifle recovery for several years.
And South Florida, with some 200,000 homes either already owned by lenders or headed for foreclosure, has one of the nation’s largest collections of unseen inventory. The number of shadow homes dwarfs the 30,000 or so that are listed on the active market. Even as prices have shown signs of stability this year, an impending wave of foreclosures threatens to keep real estate values deflated in South Florida and across the country.
“A lot of people don’t understand how much inventory is set to come online in the next 18 to 24 months,” said Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach. “When you compare what the Realtors show is inventory to what’s out there, you realize we have a long way to go.”
A Miami Herald analysis of four years of foreclosure data and thousands of property records found record-high levels of shadow inventory in several housing markets across the nation.
Though these shadow properties are routinely left out of monthly reports by real estate trade groups, their influence on home values has grown sharply in recent years.
In the supply-and-demand real estate market, the national supply of homes is officially listed at about 3.5 million, or nine months’ worth of homes (home sales are on track to reach about five million this year). But once shadow inventory is added, that supply more than doubles, to at least 7.5 million. A healthy housing market has about six months’ supply of properties, which would be about 2.4 million.
The wave of homes set to hit the market in the coming years consists of discounted distressed properties, which tend to drag down neighborhood values.
Economists insist that the housing industry will not normalize and recover until most of the foreclosures work their way through the system – a process that will likely last several more years.
Shadow inventory can be broken into three categories:
• Properties lenders have repossessed, but have not put up for sale. These homes are referred to as real estate owned, or REOs.
• Properties caught up in the clogged foreclosure process.
• Properties that are severely delinquent in loan payments – almost certainly headed for foreclosure – but have not yet entered the process.
Calculating the size of the shadow market has proven difficult, and estimates range from 1.6 million to seven million homes. The Herald analysis, using data from several mortgage research firms, real estate trade group figures and public records, found the following shadow inventory in South Florida:
• 40,000 houses already owned by lenders but not yet for sale.
• 124,000 units whose owners have received an initial foreclosure notice, or notice of default, but have not yet been foreclosed upon.
• 37,000 properties whose owners are 90 days or more behind on their payments but have not yet been served with a foreclosure notice.
For hard-hit housing markets like South Florida, Sacramento, Las Vegas and Cleveland, The Herald culled thousands of property records for lender-owned homes, and checked whether those homes were being listed on the open market. In a large number of cases, they were not.
Tale of one home
Bank of America has owned the small two-bedroom at 1711 NW 80th Street in Miami-Dade County since August 2008, when it repossessed the home from the estate of Lucile Moore (who died in 2007 after nearly 30 years in the house). Three years later, the property is not listed for sale on the open market, and is part of the bank’s growing collection of unlisted properties. Bank of America did not respond to a request to comment about this property.
In the aftermath of the largest home repossession campaign in history, mortgage lenders are holding properties off the market as a matter of strategy. Flooding the fragile housing market with an additional 500,000 to 1.1 million homes – many of them deteriorating and selling at deep discounts – would cause already weak prices to fall further.
Mortgage lenders have shown no indication they are planning to ramp up foreclosure sales, and a growing number of vacant homes have idled on banks’ balance sheets for several years.
According to data firm CoreLogic, which has one of the more conservative estimates of shadow inventory, the current mortgage debt outstanding in the shadow inventory is about $336 billion. Liquidating REO homes through the sales process usually leads to significant write-downs on bank balance sheets. Wary of seeing such large losses appear in earnest on their books, lenders have been reluctant to deal with bad loans head-on, said Ira Rheingold, executive director of the National Association of Consumer Advocates.
“They’re afraid,” he said. “They don’t want to take those paper losses. Their books show that they have these assets that are worth X amount of money. But those values are not real.”
In Maricopa County, Ariz., public records show that Bank of America owns about 1,300 properties, clustered in cities like Phoenix and Mesa. Most of those homes are not being marketed for sale on the lender’s designated website for bank-owned properties, where only 440 Phoenix-area homes are for sale. In many parts of the country, the federal government is the largest institutional property owner, as government-run Fannie Mae, Freddie Mac and the Federal Housing Administration hold about 250,000 homes.
While at least 100,000 of those are not yet on the market, a review of public records in several states showed that Fannie and Freddie were more likely than other lenders to quickly liquidate foreclosed homes.
“We don’t have a shadow inventory because our inventory consists of homes that are on the market and homes that we’re bringing to market,” said Fannie Mae spokesperson Andrew Wilson. “Our goal is to sell as quickly as possible.”
The outlook for shadow inventory has worsened considerably over the last year because of lender paperwork problems that have gummed up the foreclosure system.
A year ago, major mortgage servicers discovered that employees were systematically cutting corners in the foreclosure process, often signing thousands of false or incomplete legal documents each day.
As details of the “robo-signing” scandal began to spread, lenders hit the brakes on all foreclosures, setting off a yearlong slowdown that continues today.
Banks are struggling to prove that they have legal standing to foreclose, and it now takes them an average of nearly two years to repossess a property, according to data firm Lender Processing Services. In Florida and 22 other states where foreclosures are handled in court, the timeline is even longer.
More than a million foreclosures that were supposed to be completed this year have been pushed into the future, prolonging the housing crisis, real estate research firm RealtyTrac found.
In August 2010, before the foreclosure slowdown, banks repossessed more than 12,000 homes in Florida. In August 2011, there were only 5,000 repossessions.
Nationwide, there are some 2.2 million homes stuck somewhere in the foreclosure process, and many of those cases have completely stalled.
“I’ve got dozens of foreclosure cases in my office that started in 2008 and are still open, with lenders doing absolutely nothing to move these cases forward,” said Miami foreclosure defense attorney Dennis Donet.
South Florida security guard Lebert Cosley, 65, has spent nearly four years fighting a foreclosure on his two-bedroom condo in Lauderdale Lakes. As the bank stalled the case while it searched for critical documents, Cosley’s condo association decided to foreclose on him earlier this year, a practice that has become more common recently.
Living rent-free
Lenders are also waiting longer before taking action against homeowners who have stopped paying their mortgages.
Nearly two million homeowners who haven’t paid their mortgage in three months or more have not received a foreclosure filing. About 800,000 of those have not made a mortgage payment in more than a year, according to LPS.
While some of the holdup can be attributed to foreclosure prevention efforts – mortgage modifications, for example – several banks are using delay as a financial strategy, said RealtyTrac spokesman Daren Blomquist.
Lenders are basically letting delinquent homeowners stay in their homes as a lesser-of-two-evils option. Foreclosing more quickly would mean more empty homes and additional maintenance costs for banks to shoulder. Lenders, already dealing with a mountain of paperwork challenges for homes currently in foreclosure, would only be adding to their documentation woes by speeding up new filings.
“There are more distressed properties than their foreclosure departments can probably handle,” Blomquist said. “Because the foreclosure pipeline is so full, the lenders have delayed foreclosing on those properties.”
Additionally, banks are not selling homes fast enough to justify more aggressive foreclosure filings. Even at the currently slowed pace, national foreclosure starts are three times higher than foreclosure sales, meaning properties are being loaded onto the conveyor belt much faster than they are being taken off. In South Florida, where sales are up this year, the ratio of new foreclosures to REO sales is closer to one-to-one.
“It’s kind of like a pig in a python,” Blomquist said. “As you start to see more foreclosure sales, and that inventory is cleared out, then you’ll begin to see more new filings.”
But as lenders hold off on foreclosures as a matter of strategy, struggling homeowners are strategically gaming the system as well. So-called “strategic defaults” have grown in popularity.
Chae duPont, a Miami foreclosure defense attorney, said a growing number of her clients are opting to voluntarily default on underwater mortgages if they are unable to get a satisfactory loan modification.
“They’re making a decision to continue living in the property for 18 to 36 months and then they negotiate a short sale,” she said. “It’s not an easy decision, but sometimes it’s the only thing that makes financial sense.”
Beverly Birge of Cooper City said many financial advisors told her to strategically default on her three-bedroom home in 2009 as her mortgage payments started going up right before she was to retire from her job as a teacher. Instead, she spent two years trying to do a mortgage modification, a process she said was hampered by lost documents and misinformation. The bank later agreed to accept a short sale, and Birge, 70, has been trying to sell the home since August.
“We haven’t paid [the mortgage] since about April or May,” she said. “Instead, we’ve taken that money and put it in a savings account, so that we will be able to rent when this is all over.”
Alternatives
Nationwide, 2.5 million homeowners are 30 to 60 days behind on payments, a sign that the stagnant economy and tepid housing market continue to push more people into the foreclosure pipeline.
Given the grim outlook, lenders have begun to consider new alternatives to foreclosure. Short sales have increased this year, and real estate agents say the once-onerous process of selling a home for less than what’s owed on it has become more streamlined.
Banks are also cutting deals with homeowners who agree to hand over the keys to a house, rather than go through a legal battle. In some cases, lenders are forking over wads of cash to convince troubled borrowers to leave their homes amicably.
“We have been making enhanced financial relocation offers – primarily in states where the foreclosure timelines are extended,” said Jason D. Menke, spokesman for Wells Fargo. “We’ve been offering as much as $10,000 or $20,000 to borrowers who are willing to do a deed-in-lieu or a short sale.”
Birge said she is expecting to receive a $3,000 check when her short sale is completed.
A group of attorneys general has spent the past year trying to negotiate a settlement with major U.S. banks accused of wrongfully foreclosing on homeowners.
The process has been slow, as the banks have rejected calls for widespread principal reductions and public officials have called for steep penalties. California Attorney General Kamala Harris pulled out of the negotiations last month, saying the proposed agreement was “inadequate.”
McCabe, the Deerfield Beach consultant, said it’s in lenders’ best interest to keep hundreds of thousands of struggling borrowers from entering the foreclosure pipeline, even if it means writing down principal balances for underwater homeowners.
“Unless they agree to do principal reductions coupled with mortgage modifications, these delinquent properties will eventually have to be sold,” he said. “Which means more banks will fold, because they can’t stomach those losses.”
© 2011 The Miami Herald, Toluse Olorunnipa. Distributed by MCT Information Services. Sacramento Bee reporter Rick Daysog contributed to this story. This article includes comments from members of HeraldSource, part of the Public Insight Network.
‘Shadow inventory’ of homes could slow recovery
MIAMI – Oct. 17, 2011 – Officially, there are 3.5 million homes for sale nationwide. But there are millions more lurking in the shadows – hidden neatly away on banks’ balance sheets, stalled in foreclosure court proceedings, or simply occupied by nonpaying owners as lenders wait months or years before taking action.
The housing market’s ballooning shadow inventory – buoyed by a yearlong foreclosure slowdown – stands as its most menacing problem, threatening to stifle recovery for several years.
And South Florida, with some 200,000 homes either already owned by lenders or headed for foreclosure, has one of the nation’s largest collections of unseen inventory. The number of shadow homes dwarfs the 30,000 or so that are listed on the active market. Even as prices have shown signs of stability this year, an impending wave of foreclosures threatens to keep real estate values deflated in South Florida and across the country.
“A lot of people don’t understand how much inventory is set to come online in the next 18 to 24 months,” said Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach. “When you compare what the Realtors show is inventory to what’s out there, you realize we have a long way to go.”
A Miami Herald analysis of four years of foreclosure data and thousands of property records found record-high levels of shadow inventory in several housing markets across the nation.
Though these shadow properties are routinely left out of monthly reports by real estate trade groups, their influence on home values has grown sharply in recent years.
In the supply-and-demand real estate market, the national supply of homes is officially listed at about 3.5 million, or nine months’ worth of homes (home sales are on track to reach about five million this year). But once shadow inventory is added, that supply more than doubles, to at least 7.5 million. A healthy housing market has about six months’ supply of properties, which would be about 2.4 million.
The wave of homes set to hit the market in the coming years consists of discounted distressed properties, which tend to drag down neighborhood values.
Economists insist that the housing industry will not normalize and recover until most of the foreclosures work their way through the system – a process that will likely last several more years.
Shadow inventory can be broken into three categories:
• Properties lenders have repossessed, but have not put up for sale. These homes are referred to as real estate owned, or REOs.
• Properties caught up in the clogged foreclosure process.
• Properties that are severely delinquent in loan payments – almost certainly headed for foreclosure – but have not yet entered the process.
Calculating the size of the shadow market has proven difficult, and estimates range from 1.6 million to seven million homes. The Herald analysis, using data from several mortgage research firms, real estate trade group figures and public records, found the following shadow inventory in South Florida:
• 40,000 houses already owned by lenders but not yet for sale.
• 124,000 units whose owners have received an initial foreclosure notice, or notice of default, but have not yet been foreclosed upon.
• 37,000 properties whose owners are 90 days or more behind on their payments but have not yet been served with a foreclosure notice.
For hard-hit housing markets like South Florida, Sacramento, Las Vegas and Cleveland, The Herald culled thousands of property records for lender-owned homes, and checked whether those homes were being listed on the open market. In a large number of cases, they were not.
Tale of one home
Bank of America has owned the small two-bedroom at 1711 NW 80th Street in Miami-Dade County since August 2008, when it repossessed the home from the estate of Lucile Moore (who died in 2007 after nearly 30 years in the house). Three years later, the property is not listed for sale on the open market, and is part of the bank’s growing collection of unlisted properties. Bank of America did not respond to a request to comment about this property.
In the aftermath of the largest home repossession campaign in history, mortgage lenders are holding properties off the market as a matter of strategy. Flooding the fragile housing market with an additional 500,000 to 1.1 million homes – many of them deteriorating and selling at deep discounts – would cause already weak prices to fall further.
Mortgage lenders have shown no indication they are planning to ramp up foreclosure sales, and a growing number of vacant homes have idled on banks’ balance sheets for several years.
According to data firm CoreLogic, which has one of the more conservative estimates of shadow inventory, the current mortgage debt outstanding in the shadow inventory is about $336 billion. Liquidating REO homes through the sales process usually leads to significant write-downs on bank balance sheets. Wary of seeing such large losses appear in earnest on their books, lenders have been reluctant to deal with bad loans head-on, said Ira Rheingold, executive director of the National Association of Consumer Advocates.
“They’re afraid,” he said. “They don’t want to take those paper losses. Their books show that they have these assets that are worth X amount of money. But those values are not real.”
In Maricopa County, Ariz., public records show that Bank of America owns about 1,300 properties, clustered in cities like Phoenix and Mesa. Most of those homes are not being marketed for sale on the lender’s designated website for bank-owned properties, where only 440 Phoenix-area homes are for sale. In many parts of the country, the federal government is the largest institutional property owner, as government-run Fannie Mae, Freddie Mac and the Federal Housing Administration hold about 250,000 homes.
While at least 100,000 of those are not yet on the market, a review of public records in several states showed that Fannie and Freddie were more likely than other lenders to quickly liquidate foreclosed homes.
“We don’t have a shadow inventory because our inventory consists of homes that are on the market and homes that we’re bringing to market,” said Fannie Mae spokesperson Andrew Wilson. “Our goal is to sell as quickly as possible.”
The outlook for shadow inventory has worsened considerably over the last year because of lender paperwork problems that have gummed up the foreclosure system.
A year ago, major mortgage servicers discovered that employees were systematically cutting corners in the foreclosure process, often signing thousands of false or incomplete legal documents each day.
As details of the “robo-signing” scandal began to spread, lenders hit the brakes on all foreclosures, setting off a yearlong slowdown that continues today.
Banks are struggling to prove that they have legal standing to foreclose, and it now takes them an average of nearly two years to repossess a property, according to data firm Lender Processing Services. In Florida and 22 other states where foreclosures are handled in court, the timeline is even longer.
More than a million foreclosures that were supposed to be completed this year have been pushed into the future, prolonging the housing crisis, real estate research firm RealtyTrac found.
In August 2010, before the foreclosure slowdown, banks repossessed more than 12,000 homes in Florida. In August 2011, there were only 5,000 repossessions.
Nationwide, there are some 2.2 million homes stuck somewhere in the foreclosure process, and many of those cases have completely stalled.
“I’ve got dozens of foreclosure cases in my office that started in 2008 and are still open, with lenders doing absolutely nothing to move these cases forward,” said Miami foreclosure defense attorney Dennis Donet.
South Florida security guard Lebert Cosley, 65, has spent nearly four years fighting a foreclosure on his two-bedroom condo in Lauderdale Lakes. As the bank stalled the case while it searched for critical documents, Cosley’s condo association decided to foreclose on him earlier this year, a practice that has become more common recently.
Living rent-free
Lenders are also waiting longer before taking action against homeowners who have stopped paying their mortgages.
Nearly two million homeowners who haven’t paid their mortgage in three months or more have not received a foreclosure filing. About 800,000 of those have not made a mortgage payment in more than a year, according to LPS.
While some of the holdup can be attributed to foreclosure prevention efforts – mortgage modifications, for example – several banks are using delay as a financial strategy, said RealtyTrac spokesman Daren Blomquist.
Lenders are basically letting delinquent homeowners stay in their homes as a lesser-of-two-evils option. Foreclosing more quickly would mean more empty homes and additional maintenance costs for banks to shoulder. Lenders, already dealing with a mountain of paperwork challenges for homes currently in foreclosure, would only be adding to their documentation woes by speeding up new filings.
“There are more distressed properties than their foreclosure departments can probably handle,” Blomquist said. “Because the foreclosure pipeline is so full, the lenders have delayed foreclosing on those properties.”
Additionally, banks are not selling homes fast enough to justify more aggressive foreclosure filings. Even at the currently slowed pace, national foreclosure starts are three times higher than foreclosure sales, meaning properties are being loaded onto the conveyor belt much faster than they are being taken off. In South Florida, where sales are up this year, the ratio of new foreclosures to REO sales is closer to one-to-one.
“It’s kind of like a pig in a python,” Blomquist said. “As you start to see more foreclosure sales, and that inventory is cleared out, then you’ll begin to see more new filings.”
But as lenders hold off on foreclosures as a matter of strategy, struggling homeowners are strategically gaming the system as well. So-called “strategic defaults” have grown in popularity.
Chae duPont, a Miami foreclosure defense attorney, said a growing number of her clients are opting to voluntarily default on underwater mortgages if they are unable to get a satisfactory loan modification.
“They’re making a decision to continue living in the property for 18 to 36 months and then they negotiate a short sale,” she said. “It’s not an easy decision, but sometimes it’s the only thing that makes financial sense.”
Beverly Birge of Cooper City said many financial advisors told her to strategically default on her three-bedroom home in 2009 as her mortgage payments started going up right before she was to retire from her job as a teacher. Instead, she spent two years trying to do a mortgage modification, a process she said was hampered by lost documents and misinformation. The bank later agreed to accept a short sale, and Birge, 70, has been trying to sell the home since August.
“We haven’t paid [the mortgage] since about April or May,” she said. “Instead, we’ve taken that money and put it in a savings account, so that we will be able to rent when this is all over.”
Alternatives
Nationwide, 2.5 million homeowners are 30 to 60 days behind on payments, a sign that the stagnant economy and tepid housing market continue to push more people into the foreclosure pipeline.
Given the grim outlook, lenders have begun to consider new alternatives to foreclosure. Short sales have increased this year, and real estate agents say the once-onerous process of selling a home for less than what’s owed on it has become more streamlined.
Banks are also cutting deals with homeowners who agree to hand over the keys to a house, rather than go through a legal battle. In some cases, lenders are forking over wads of cash to convince troubled borrowers to leave their homes amicably.
“We have been making enhanced financial relocation offers – primarily in states where the foreclosure timelines are extended,” said Jason D. Menke, spokesman for Wells Fargo. “We’ve been offering as much as $10,000 or $20,000 to borrowers who are willing to do a deed-in-lieu or a short sale.”
Birge said she is expecting to receive a $3,000 check when her short sale is completed.
A group of attorneys general has spent the past year trying to negotiate a settlement with major U.S. banks accused of wrongfully foreclosing on homeowners.
The process has been slow, as the banks have rejected calls for widespread principal reductions and public officials have called for steep penalties. California Attorney General Kamala Harris pulled out of the negotiations last month, saying the proposed agreement was “inadequate.”
McCabe, the Deerfield Beach consultant, said it’s in lenders’ best interest to keep hundreds of thousands of struggling borrowers from entering the foreclosure pipeline, even if it means writing down principal balances for underwater homeowners.
“Unless they agree to do principal reductions coupled with mortgage modifications, these delinquent properties will eventually have to be sold,” he said. “Which means more banks will fold, because they can’t stomach those losses.”
© 2011 The Miami Herald, Toluse Olorunnipa. Distributed by MCT Information Services. Sacramento Bee reporter Rick Daysog contributed to this story. This article includes comments from members of HeraldSource, part of the Public Insight Network.
When will REO sales finally reach the peak?
Especially for www.miamiforrussian.com
When will REO sales finally reach the peak?
NEW YORK – Oct. 19, 2011 – Properties repossessed through foreclosure may not peak until 2013, HousingWire reports, quoting several analysts and recent reports.
Foreclosure sales are expected to reach 1.48 million properties in 2013, according to analysts from Bank of America Merrill Lynch.
However, with the surge, “we do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller,” the analysts said.
The increase in foreclosures is expected to mostly change from private banks’ portfolios – which nearly half are from now – to the government’s backlog of properties, with an increase in foreclosures forecasted from Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development’s portfolios. Overall, they are expected to liquidate about 595,000 properties in 2013.
To handle the expected surge, the government continues to consider ideas, including proposals of turning some of the foreclosures into rentals, and a plan from the Federal Housing Finance Agency to refinance more underwater borrowers so they’ll be less likely to walk away from their property.
But some analysts are skeptical that a surge in foreclosures will come without an intervention from the government.
“Do they really think that the government under any administration would let 500,000 homes hit the mark and crash prices all over again, six years after the first crash?” Scott Sambucci, chief analyst at Altos Research, told HousingWire.
Source: “REO Sales May Not Peak Until 2013,” HousingWire (Oct. 17, 2011)
When will REO sales finally reach the peak?
NEW YORK – Oct. 19, 2011 – Properties repossessed through foreclosure may not peak until 2013, HousingWire reports, quoting several analysts and recent reports.
Foreclosure sales are expected to reach 1.48 million properties in 2013, according to analysts from Bank of America Merrill Lynch.
However, with the surge, “we do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller,” the analysts said.
The increase in foreclosures is expected to mostly change from private banks’ portfolios – which nearly half are from now – to the government’s backlog of properties, with an increase in foreclosures forecasted from Fannie Mae, Freddie Mac, and the Department of Housing and Urban Development’s portfolios. Overall, they are expected to liquidate about 595,000 properties in 2013.
To handle the expected surge, the government continues to consider ideas, including proposals of turning some of the foreclosures into rentals, and a plan from the Federal Housing Finance Agency to refinance more underwater borrowers so they’ll be less likely to walk away from their property.
But some analysts are skeptical that a surge in foreclosures will come without an intervention from the government.
“Do they really think that the government under any administration would let 500,000 homes hit the mark and crash prices all over again, six years after the first crash?” Scott Sambucci, chief analyst at Altos Research, told HousingWire.
Source: “REO Sales May Not Peak Until 2013,” HousingWire (Oct. 17, 2011)
Tuesday, October 18, 2011
Top 10 reasons to own rather than rent
Especially for www.miamiforrussian.com
Top 10 reasons to own rather than rent
WOODLAND HILLS, Calif. – Oct. 17, 2011 – In an era of foreclosures, buyers focus on financial reasons for purchasing, but ownership has emotional rewards too. A California condo developer, the Met Warner Center, put together the following list – but it applies from Florida to Alaska.
Top 10 reasons to own rather than rent
1. You own it: With no landlord, you make the decisions.
2. You deduct it: Mortgage interest, property taxes and some costs involved with buying a home can be deducted from federal income taxes.
3. Interest rates: The cost to borrow mortgage money is at an all-time low. If you’re going to buy, this is the time to jump into the market.
4. You invest in it: Rent money is gone forever. Mortgage payments build home equity ownership interests.
5. You save for the future: Home equity is a ready-made savings plan. Sell it and you can make up to $250,000 cash without owing any federal income tax on the profit.
6. You can predict expenses: Unlike rent, a fixed-mortgage payment doesn’t get more expensive over time.
7. You pick it: Choose from different neighborhoods, styles and price ranges.
8. You create it: Decorate, renovate, get a pet or paint the walls whatever color you want – it belongs to you.
9. You live in a neighborhood: You and your neighbors take pride in the local schools, roads and more – and you work together to build a friendly community.
10. You spend money on yourself: When you buy a chandelier or hardwood floor or kitchen cabinet, you’re spending hard-earned money on yourself and building your equity at the same time.
© 2011 Florida Realtors®
Top 10 reasons to own rather than rent
WOODLAND HILLS, Calif. – Oct. 17, 2011 – In an era of foreclosures, buyers focus on financial reasons for purchasing, but ownership has emotional rewards too. A California condo developer, the Met Warner Center, put together the following list – but it applies from Florida to Alaska.
Top 10 reasons to own rather than rent
1. You own it: With no landlord, you make the decisions.
2. You deduct it: Mortgage interest, property taxes and some costs involved with buying a home can be deducted from federal income taxes.
3. Interest rates: The cost to borrow mortgage money is at an all-time low. If you’re going to buy, this is the time to jump into the market.
4. You invest in it: Rent money is gone forever. Mortgage payments build home equity ownership interests.
5. You save for the future: Home equity is a ready-made savings plan. Sell it and you can make up to $250,000 cash without owing any federal income tax on the profit.
6. You can predict expenses: Unlike rent, a fixed-mortgage payment doesn’t get more expensive over time.
7. You pick it: Choose from different neighborhoods, styles and price ranges.
8. You create it: Decorate, renovate, get a pet or paint the walls whatever color you want – it belongs to you.
9. You live in a neighborhood: You and your neighbors take pride in the local schools, roads and more – and you work together to build a friendly community.
10. You spend money on yourself: When you buy a chandelier or hardwood floor or kitchen cabinet, you’re spending hard-earned money on yourself and building your equity at the same time.
© 2011 Florida Realtors®
Sunday, October 16, 2011
Fla.’s home, condo sales and median prices higher in August
Fla.’s home, condo sales and median prices higher in August
ORLANDO, Fla. – Sept. 21, 2011 – Sales activity and median prices for Florida’s existing home and existing condo markets rose in August, according to the latest housing data released by Florida Realtors®. Existing home sales increased 15 percent last month with a total of 16,206 homes sold statewide compared to 14,131 homes sold in August 2010, according to Florida Realtors. The statewide median sales price for existing homes last month was $137,500, up 2 percent from the year-ago figure of $134,900. August’s statewide existing home median price was also slightly higher than it was in July.
“Over the past few months, it appears that home prices have been stabilizing in many local markets across the state,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “This is another positive sign that the housing recovery is gaining strength.”
According to analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in August 2011 was $168,400, down 5.4 percent from a year ago, according to NAR. In California, the August statewide median resales price was $297,060; in Maryland, it was $241,564.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in August; 15 MSAs also had higher existing condo sales.
In Florida’s year-to-year comparison for condos, 7,098 units sold statewide last month compared to 6,041 units in August 2010 for an increase of 17 percent. The statewide existing condo median sales price last month was $91,100; in August 2010 it was $81,500 for a 12 percent increase. According to NAR, the national median existing condo sales price was $167,500 in August 2011.
NAR’s latest industry outlook notes that despite high affordability conditions, sales activity is underperforming, partially as a result of overly restrictive lending standards.
“Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” said NAR Chief Economist Lawrence Yun. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent in August, down from the 4.43 percent average during the same month a year earlier. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
© 2011 Florida Realtors®
www.miamiforrussian.com
ORLANDO, Fla. – Sept. 21, 2011 – Sales activity and median prices for Florida’s existing home and existing condo markets rose in August, according to the latest housing data released by Florida Realtors®. Existing home sales increased 15 percent last month with a total of 16,206 homes sold statewide compared to 14,131 homes sold in August 2010, according to Florida Realtors. The statewide median sales price for existing homes last month was $137,500, up 2 percent from the year-ago figure of $134,900. August’s statewide existing home median price was also slightly higher than it was in July.
“Over the past few months, it appears that home prices have been stabilizing in many local markets across the state,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “This is another positive sign that the housing recovery is gaining strength.”
According to analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in August 2011 was $168,400, down 5.4 percent from a year ago, according to NAR. In California, the August statewide median resales price was $297,060; in Maryland, it was $241,564.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in August; 15 MSAs also had higher existing condo sales.
In Florida’s year-to-year comparison for condos, 7,098 units sold statewide last month compared to 6,041 units in August 2010 for an increase of 17 percent. The statewide existing condo median sales price last month was $91,100; in August 2010 it was $81,500 for a 12 percent increase. According to NAR, the national median existing condo sales price was $167,500 in August 2011.
NAR’s latest industry outlook notes that despite high affordability conditions, sales activity is underperforming, partially as a result of overly restrictive lending standards.
“Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” said NAR Chief Economist Lawrence Yun. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that could stimulate additional economic activity and create jobs.”
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent in August, down from the 4.43 percent average during the same month a year earlier. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
© 2011 Florida Realtors®
www.miamiforrussian.com
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