South Florida’s Real Estate Market Coming To An End

The year has ended and everyone is giving his or her two cents about where the real estate market is headed and this includes South Florida. Most of these analysts agree that the market is not over yet in South Florida but it is coming to an end.

South Florida real estate is beginning to show signs of a recover in that the price declines are now more level even though prices have not started improving. Moody’s Analytics forecasts that south Florida real estate will remain about the same in 2011 due to “angst” due to unemployment and that a recovery will not be seen until the “second half of 2012” when housing prices on exiting homes after “tumble another 16 percent or so”. A Miami housing consultant, Lewis Goodkin, believes this is true even though a few analysts think the condo market will improve faster.

Many of the analysts are focused mainly on the condo market explaining condo sales is one reason that South Florida’s housing market is seeing a gain in momentum. As reported by the Miami Association of Realtors “condo sales soared” in the month of November 2010. With these types of sales, the real estate market may be back sooner than most analysts believe. the president of Esslinger-Wooten-Maxwell Realty, Ron Shuffield thinks that the foreclosure freeze temporarily stalled market recovery in the this area, but trusts that the market will start to “return to normalcy” in 2011 instead of 2012. “I get enthused when I look at where we were two years ago and where we are today,” he stated. “It’s been a lot of pain…but these cycles don’t last forever.”


International Home Buyers

International buyers with permanent homes in other countries besides the United States such as recent immigrants and temporary visa holders purchase seven percent of the market or $66 billion of the United States residential property in the year that ended on March 2010 according to the National Association of Realtors.

The US housing market is very attractive to international buyers due to the high foreclosure rates, oversupply of housing, real estate prices and the weak dollar which in comparison to other currencies.

When you look at other currencies, Europeans have a huge advantage. The Euro is 25 percent than the United States dollar. Canadian also have a currency advantage which is now equal to the US dollar which makes it the best time for Canadians to buy homes in the US.

At this time, 23 percent of international purchases in the United States are Canadians. This is the largest portion of international buyers, which is up eleven percent from three years ago. In Phoenix, this is the first time on record that Canadian buyers outnumbered Californians according to a study by Information Market.

Bank of America Faces Class Action Suit

On Monday, December 27, 2010, a lawsuit was filed with plaintiffs in St. Louis, Connecticut, claiming Bank of America broke faith with the United States Treasure and let down borrowers that were in foreclosure. This is due to the banks refusal to participate in foreclosure prevention programs after accepting $25 in billion in Troubled Asset Relief Program. This lawsuit is close to others brought against Bank of America by the attorney generals in Nevada and Arizona a week prior. Plaintiffs in the lawsuits claim that “by accepting TARP money, Bank of America agreed to participate in at least one TARP-authorized program to minimize foreclosures.”  In addition, agreed through contract with the United States Treasure to comply with the Home Affordable Modification Program regulations to “perform loan modifications and other foreclosure prevention services.” The plaintiffs charge that Bank of America has done neither.

The lawsuit alleges that due to Bank of America not servicing the majority of the loans it holds, the financial incentives against modifications stopped services from dedicating time or good-faith effort to loan modifications and foreclosure prevention. “Bank of America has serially strung out, delayed and otherwise hindered the modification processes it contractually undertook to facilitate when it accepted billions of dollars from the United States,” the complaint charged. Both injunction and damages are being sought by the participants.

Bank of America announced a complete payback of TARP money on December 9, 2009. It has reported the lowest completion rates on loan modifications of any lender and has constantly “streamlined” the time frame and modification process in an endeavor to maintain a good public image and good rapport with consumers. Nevertheless, Bank of America has complained on record – along with a few others – that the processes required by HAMP place an excess of strain on lenders, which requires them to “collect too much paperwork” and not giving enough responsibility to borrowers for timely submission and accuracy of forms, they file.

Lending Companies or Santa Claus?

Many of the large mortgage companies are stating they will not evict homeowners that are in default during the two weeks around Christmas.

Freddie Mac and Fannie Mae, the two government-controlled mortgage lenders, are freezing all foreclosure evictions on the loans they own or back starting on December 20 until January 4th.

Evictions are the last step of the foreclosure process. Once the home is sold at a foreclosure auction or when the banks take over the possession of the home, homeowners must vacant the property or they will face eviction notices.

Anthony Renzi the executive vice president of single-family portfolio management at Freddie Mac, stated, “If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays.”

Those looking to buy a new home are terrified to buy. In many cases, the large private banks normally observe a freeze during the holidays but things have changed this year due to moratoriums that are in place because of the robo-signing scandal.

The freeze began to allow banks time to discover if they violated any legal procedures involved in the foreclosure process as well as correct and refile any documents that are questionable they find.

Rick Simon, a spokesman for Bank of America stated this made attending to this year’s circumstances a little uncomfortable but it would still view its usual holiday policy. He went on to say, “Bank of America’s practice in recent years [is to hold off on] foreclosure sales or evictions from late December through New Year’s Day on loans held in our investment portfolio or that are owned by investors who give the bank delegated authority.”

Bank of America will on the other hand, continue the process of foreclosure for any loans it services which are held by investors that do not participate in the freeze and for all properties that are vacant.

A spokesman for Chase Mortgage, a division of J.P. Morgan Chase stated its robo-signing-connected moratorium makes an additional holiday freeze debatable and that it will still be several weeks before it starts to evict borrowers again.

Wells Fargo’s holiday freeze will run for the same two-week period as Fannie’s and Freddie’s and will like Bank of America’s include all loans it holds in its portfolio. For the other loans it services, it will follow the guidelines from investors as well as from the states where the properties are located.

Bank repossession is around 100,000 a month for many banks and the temporary freeze could affect several homeowners in default.