Latest Foreclosure Opportunities

25939 SW 132 PL

$77,900

This home offers over 1,600 sq ft of interior living space, 4 bedrooms with 2 bathrooms, and a huge yard with room for a patio and or pool. Just listed; it will not last…

10 day limit for response on short sales implemented

Will new U. S. Treasury guidlines lift dark cloud over short sales and help spur our current housing market?

Mention the words short sale to many a realtor or potential buyer and watch how their demeanor and expression instantly changes to one of frustration, and bewilderment.

I processed my first short sale at the beginning of 2008 without the aid of a mitigation company, dealing with the bank, seller, and a buyers agent  myself… by no means would I attempt this today; knowing what I know about short sales and how the banks have become bogged down with thousands of files and the work involved in getting a short sale approved.  Still, a short sale is in my opinion the most viable solution and alternative to a foreclosure after a loan modification has failed and in a market where buyers are looking for bargains a definite alternative to the multiple offer scenario that ultimately occurs when a foreclosure does hit the market.

Thanks to new guidelines implemented as part of the Home Affordable Modification Program, this may all become a thing of the past.

Now as with most things political and government-run the first hurdle is understanding how it all works,  you can read the all 43 pages here: Introduction of Home Affordable Foreclosure Alternatives – Short Sale and Died in Lieu of Foreclosure

However, you can thank the Miami Heralds Jan 13, 2010 business section and Paul Owers for the following guidelines and key provisions:

• The lender must respond to short sale offers within 10 business days.
• The seller won’t have to pay back any amount of mortgage debt.
• The seller is entitled to a relocation incentive of $1,500 which will be deducted from the proceeds at closing
• The lender will be paid $1,000 for allowing up to $3,000 to be distributed to less -senior lien holders
• The lender can’t require a reduction in the agreed upon real estate commission as a condition of approving the short sale

Short Sales the Simple Truths Revealed

Being a Realtor for over 10 years in the South Florida market I have seen the market go through several highs and lows; but truth be told this most recent market is certainly one for the books… after experiencing gains in property values that doubled and tripled in less than a year in most areas the after shocks of such a boom have now caused property values to drop to levels not seen since 2002 and before.  Some analysts believe we have not reached the bottom of the market; Earlier this week, Fiserv, a financial information and analysis firm, forecast that Miami average home values will plunge another 30 percent by June 2010, on top of price declines of 48 percent since peaking in 2006. Prices are forecast to fall another 26 percent in Fort Lauderdale.

All this being said then what do you do if you are a homeowner faced with dropping property values, a job loss or job relocation, or any reason that may require the selling of your home in this current market?  Well if you purchased prior to this most recent boom, or avoided the lure of refinancing to dip into the equity you once had chances are you will probably still be ok. Sure you will probably not walk away from the closing table with a double-digit return on your purchase, but you will be able to walk away with something.

What if  your are not so lucky and are faced with having to sell your home that is now worth considerably less than what you owe on it?

• you can walk away, try not to look back and let the home go into foreclosure (but deal with the consequences)
• you can try to modify your loan and work out a way to stay
• you can list your home for sale at a price set by your believed value or total amount still owed on loan regardless of the actual current value and hope that a cash buyer will fall in love with it and pay your full asking price .
• Or you can try to Short Sale your home

I am not here to say that a Short Sale is the right thing to do… as a matter of fact I always suggest that before a seller decides to take the route of a short sale he investigate and ask his attorney, accountant, or Short Sale mitigation company any questions he may have and make sure he understands what they mean by the responses.  I intentionally leave myself out as the Realtor because my job is to make sure once you have decided to Short Sale your home that it is priced correctly, that you provided all the required documents for the lender, that we get an offer as quickly as possible, and most importantly once we have an offer make sure that everyone understands what PATIENCE really means.

First-Time Homebuyer Program

Did you know that the city of Miami offers a program to aid first time home buyers purchase the home of their choice?  With prices at a low not seen in years here in Miami; now is the time to act for qualified first time home buyers.

The City’s First Time Homebuyer program provides zero percent (0%) deferred loans to first-time homebuyers purchasing a property in the City of Miami. The buyer selects their own eligible property to purchase and meets with one of the participating lenders to be pre-qualified for a mortgage loan. The City of Miami underwrites the loan based on the first mortgage lender’s commitment. The City only accepts applications from participating lenders and they are processed on a first-come, first-ready, first-serve basis. Please refer to their Frequently Asked Questions section for more information.

The City of Miami is currently accepting applications for the First-Time Homebuyer Program

Fannie Mae issues FHA approval for downtown Miami condos

Amidst the ongoing saga of the lending issues we are currently facing there is a glimmer of hope for would be buyers in many of the buildings in the downtown Miami, Brickell and outlying suburbs of Miami.

As of June 1st, 2009 Fannie Mae updated their website to reflect the condo developments in Florida that are now approved for financing.  Below is a list of some of the newly FHA approved buildings.

• 50 Biscayne
• 500 Brickell (East and West)
• 900 Biscayne
• Artech Residences at Aventura
• Brickell on the River South Tower
• Colonade at Dadeland (South East and South West)
• Everglades on the Bay (North and South)
• Icon Brickell
• Infinity at Brickell
• Quantum on the Bay
• The Ivy

See the full list of Florida approved condominiums

If you do not see your building or would like to find out if a particular building is FHA approved

Thanks go to MiamiCondoInvestments.com for this article.

Is the glass half full or half empty for the downtown Miami condo market?

I have been worked up most of today from an article I read on the front page of my local newspaper this morning titled “Condo dwellers finding empty buildings“.  The article is a very well written story about downtown Miami and the new condo buildings dotting the downtown skyline.  The problem I have with the article is that we already know the majority of the condominium units in these buildings remain unsold after the original buyers either walked away from the purchases or have been unable to get financing.  (This is something that has been talked about on tv, newspapers, and on the web many times over already.) What this article negates to mention however, is that many of the developers of these buildings are now  renting the vacant units to tenants, and now that prices have come down in most of these same buildings we are actually seeing contracts being signed and closed.  In my office alone I know of at least 14 sales in 3 seperate buildings in the Brickell area of downtown in the past month.

Now for my sense of consternation: How can one article posted on June 11, 2009 say “Downtown Miami condos filling up fast” and just 11 days later print another article saying or implying almost the complete opposite?

We need to understand that some people believe everything that they read.  If you print one thing and a few days later print the complete opposite all you are going to do is create more confusion to an already confusing subject matter. Confused yet???

Yes there are still vacant units, more in some buildings than in others but this is steadily changing.  As people start to move in to the downtown area we will start to see a downtown with vibrancy, and with life after dark not just from 9:00 to 5:00.  Once we see this new life in downtown more people will want to be closer to our urban core turning rented units into owner occupied units, and renters into owners.  This will not happen in a year or two but it will happen, and when it does these first residents will be considered the pioneers and these first buyers will have made a great investment.

I guess that both articles are speaking the truth just depends from which point of view you see it.  ”Is the glass half full, or half empty?”  So why not do an article where you talk about both subjects and where you can talk about what all of this is doing to the downtown area; put it all out there and let us decide which way we want to see things.

What is the Difference between a Short Sale and a Foreclosure, and how will it affect me?

This is an all to common question being asked today.  To keep things as simple and short as possible, I am not going to go into the details of these transactions; rather I am only going to give you my way of explaining these terms when someone asks me this very question.

• A short sale is when a homeowner is trying to sell for less than the amount owed on the loan, this type of transaction requires bank approval and there are certain guidelines and pre-requisites a bank will ask for prior to s short sale approval.
• A foreclosure is when the lender takes over the property.  A court ordered sale is required prior to the foreclosure and at this sale if no buyer comes forward who is willing to pay the minimum bid for the property, then the lender takes possesion and the property is foreclosed on.

The following breakdown is courtesy of Brian Bomba from the Brian Bomba Group out of Chicago Illanois

Issue	Foreclosure	Short Sale
Future Fannie Mae Loan – Primary Residence (effective May 21, 2008)	A homeowner who loses a home to foreclosure is ineligible for a Fannie Mae backed mortgage for a period of 5 years.	A homeowner who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed mortgage after 2 years
Future Fannie Mae Loan – Non Primary (effective May 21, 2008)	An Investor who allows a property to go to foreclosure is ineligible for a Fannie Mae backed investment mortgage for a period of 7 years	An investor who successfully negotiates and closes a short sale will be eligible for a Fannie Mae backed investment mortgage after 2 years.
Future Loan with any Mortgage Company	On any future loan application, a prospective borrower will have to answer YES to question C in Section VII of the standard 1003 that asks “Have you had property foreclosed upon or given title or deed in lieu thereof of the last 7 years?”  This will affect future rates.	There is no similar declaration or question regarding a short sale.
Credit Score	Score may be lowered anywhere from 250 to over 300 points.  Typically will affect score for over 3 years.	Only late payments on mortgage will be reported as paid or negotiated.  This will lower the score as little as 50 points, if all other payments are being made.  A short sale’s affect can be 12 to 18 months.
Credit History	Foreclosure will remain as a public record on a persons credit history for 10 years or more.	Short sale is not reported on a credit history.  There is no specific reporting item for “short sale.”
Security Clearances	Foreclosure is the most challenging issue against a security clearance outside of a conviction of a serious misdemeanor or felony.  If a client has a foreclosure and is a police officer, in the military, in the CIS, Security, or any other position that requires a security clearance will be revoked and position could be terminated.	A Short Sale, on its own,does not challenge most security clearances.
Current Employment	Employers have the right and are actively checking the credit regularly of all employees who are in sensitive positions. A foreclosure, in many cases, can be grounds for immediate reassignment or termination	A Short Sale is not reported on a credit report and is therefore, not a challenge to employment.
Future Employment	Many employers are requiring credit checks on all job applicants.  A foreclosure is one of the most detrimental credit items an applicant can have and in most cases, will challenge employment.	A short sale is not reported on a credit report and is therefore not a challenge to employment.
Deficiency Judgment	In 100% of foreclosures (except in those states where there is no deficiency), the bank has the right to pursue a deficiency judgment.	In some successful short sales, it is possible to convince the lender to give up the right pursue deficiency judgment against the homeowner.
Deficiency Judgment (amount)	In a foreclosure, the home will have to go through an REO process if it does not sell at auction.  In most cases, this will result in a lower sales price and longer time to sell in a declining market. This will result in ahigher possible deficiency judgment	In a properly managed short sale, the home is sold at a price that should be close to market value and, in almost all cases, will be better than an REO sale resulting in a lower deficiency.

Real Estate Investing back to basics Part 1

Think back to just a few years ago when the real estate market was booming, and talk at most watering holes centered around someones real estate investment and how much money they made on their venture.  Waiters, homemakers, doctors, and lawyers were all jumping on the investing wagon.  Today unfortunately many of those same “investors” are struggling to hold on to multiple properties or have chosen to sell at a loss or worse just walk away  never looking back.  One of the key factors that many of these investors forgot about was to: “buy low and sell high.”  Now I am not saying that if you bought during the peak of the market you made a mistake; many people also made lots and lots of money flipping buying property, and on speculation buying.

Before I continue, I need to clear one thing up.  In the above paragraph I used the words investment and speculation seemingly for the same meaning… IT IS NOT!!!  “An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return.” (from Graham and Dodd’s Security Analysis) Speculation is the engagement in business transactions involving considerable risk but offering the chance of large gains, esp. trading in commodities, stocks, etc., in the hope of profit from changes in the market price. (Dictionary reference)

Seasoned investors however have once again started  purchasing investment property.  Unfazed by the financial industries upheaval, or by the constant negative press over real estate as a whole; seasoned investors know that the market has been going through a period of correction which had been long over due.  This is a necessity for every market to go through.  This cycle of ebb and flow or expand and contract allows the market to collect itself, catch up, and then eventually grow again.  These investors have positioned themselves in line with the stage of the markets economic repositioning thru careful analysis of market studies. which will allow for possible positive cash-flow and or a reasonable rate of return on investment.  It is this and not the thinking of whether or not we have reached the bottom of the market that is driving these savvy buyers back into the real estate market.  We are already seeing an increase in rental rates in the downtown Miami and Brickell sector of Miami.  Compared to the beginning of the year when developers were offering all sorts of incentives to attract tenants into the empty buildings up and down the Biscayne corridor of downtown Miami.

Keep in mind when thinking of investing in real estate: “real estate should be considered a long term investment one with the ability to provide a constant flow of income regardless of the economy”.

The Ugly Truth About Loan Modifications

As of late a lot of talk is going around about home owners trying to modify their loans, and how frustrating it is.  Not being a mortgage broker I can only listen to their frustration.  All of this got me to thinking… “what exactly are loan modifications, and how do they work”?  What I found are four different types of modifications: Tack it on the back, Recasting, Debt Foregiveness, and Payment or Rate Reduction.

The following is  from The Chicago 77 written by Brad Walbrun  for the complete story click here

Tack it on the back A common one is for people who are behind in their mortgage payments right now, to take the past due and put it on the end of the loan. Let’s say somebody has a $200,000 mortgage, and is behind three payments at $1500 each. If there was a temporary reason the homeowner got behind, like a job loss, and now they are making income again, the bank can put the past due at the end of the loan and give the homeowner a fresh start.

Recasting If somebody had an adjustable rate mortgage (ARM) that went up after 2, 3, or 5 years, and the payment jumped up, the lender can “re-cast” the ARM for a longer period to keep the payment the same. Let’s say somebody had 5.5% on an ARM, and on the adjustment date it went up to 7.5%. Depending on the loan size, the difference can be hundreds of dollars monthly. This can obviously cause some hardship for the homeowner, especially if they are making less now than before, like much of the country is experiencing. What the bank might do in this case is either “fix” the rate for another 2 or 3 years so the payment stays the same, or just convert it into a fixed rate at the same rate. These types of modifications are almost always contingent on the homeowner having good payment history prior to the adjustment.

Debt forgiveness A third type is debt forgiveness or principal reduction. This is common in short sale scenarios. Let’s say somebody owned a house that was once valued at $300,000. They had 90% LTV financing for a loan amount of $270,000. And now they have to sell the house because of job relocation or because their income level has changed and they need to downsize. But the problem is that the house that was once worth $300,000 can now sell for only $240,000 (a 20% drop from peak value is not uncommon these days). The bank knows that if they have to foreclose on the house, it would sell at auction for much less than the $240,000, so they agree to accept a smaller payoff because it is a smaller loss. Short sales are also common for somebody facing foreclosure for the same reason-the bank is taking the lesser of two evils. If a $300,000 house goes into auction, it may sell for $170,000 or $200,000, but if the homeowner sells it, it will go for much higher, and the bank will save thousands in principal and legal fees.

Payment or rate reduction One last type is payment reduction or rate reduction. Again, if somebody is struggling, but the lender believes they could stay current with a lower rate or smaller payment, they might agree to it because it is the lesser of two evils. They are making less on the loan, but it beats foreclosure. If somebody is making less income now, the bank may agree to lower the payments to help the homeowner stay current. Another way to lower the payment is to stretch out the note for 40 or 50 years. Many banks will do this in lieu of lowering the interest rate because then they can lower the payments to help the homeowner and still make the same interest. In a settlement with the State of Illinois, mortgage giant Countrywide had to re-cast all of its stated loans that their retail branches originated to do the new payments on full documentation, and give homeowners payments they could actually afford. There were people who got 2 or 3% over 40 or 50 years because of this.

Downtown Miami condos filling up fast

62% of the residential units completedin Downtown Miami since 2003 are occupied, and the closing rate is accelerating despite obstacles to financing, according to a Residential Closings & occupancy Study conducted by independent research firm Goodkin Consulting/Focus Real Estate Advisors in partnership with the Miami Downtown Development Authority (DDA).

The study assessed occupancy & closing rates for 73 condo buildings and seven rental apartment buildings that have come on line in the Downtown Miami area since 2003. Combined units total 22,959 residential units.

Findings from the Study include:

• Condominium inventory & discounted trading prices will continue to enhance the attractiveness and affordability of the urban lifestyle in the downtown area.
• Of the 21,616 new condominium units completed, 13,337 have closed and 98.6% of the closed units are occupied.
• Average monthly sales of new units during the past three months increased over the three months prior, with a 12-month average of approximately 70 recorded closings per month.
• The average monthly sales and leasing activity of new units has been averaging approximately 350 units per month.
• During the four year period from 2004 through 2007, an average of more than 2,000 condo units were absorbed annually; in 2008, more than 4,200 units were sold, despite the collapsedhosing market and general economic recession.
• Of the total inventory of residential properties for sale in Miami-Dade County last month, 26% are located in Downtown Miami.
• Historically, more than 70% of Downtown Miami residents were renters. So the balanced 50/50 mix between owners and renters in new Downtown condominiums indicates a steady increase in home ownership among area residents.

About the Author:The Miami Downtown Development Authority (DDA) is committed to improving the quality of life for businesses, employees, residents, and visiters in downtown Miami.  The organization is governed by a 15-member board comprised of three public appointees and 12 downtown property owners, residents and/or workers.  For more information about the Miami DDA and Downtown Miami, visit www.MiamiDDA.com Posted: Thu, 11 Jun 2009 Category: Press Release

All of this information is certainly a bright spot amid all of the negative press the real estate industry has been receiving, and yes much of this activity is due in part largely because of the drastic reductions in price developers have made to sell units and  the attractive rental rates one can find now in the area.

Yes there is still much more needed but as more and more people migrate back to the urban core of Miami-Dade  the quicker the needed change will come.

For a detailed view of Downtown Miamis’ Master Plan & other Relevant Studies

• Media & Entertainment District Overview
• Downtown Master Plan Executive Summary
• Southeast Overtown / Park West Community Redevelopment Plan
• Omni Community Redevelopment Plan
• Miami Downtown Transportation Master Plan
• Initial Streetcar Corridor Feasibility Study
• City of Miami Parks and Public Spaces Master Plan
• Proposed Museum Park Plan & Study