Miami Real Estate Attorney Blog

Has Miami's Real Estate Market Hit Bottom? Is It Time to Buy Now?

Wed, 01 Feb 2012 10:44:02 -0500

One of the tragedies of the real estate collapse is that fewer Americans own their homes today. Not only that, but the American that's do own their homes today have seen the value of those homes decrease rather dramatically over the span of the past several years.

The United States Census Bureau recently reported that the nation's home ownership rate fell to 66% in the fourth quarter, continuing a seven year drop from the one quarter peak of 69.2% in 2004. At the same time, United States home prices fell 1.3% in November from October and were 3.7% below 2010 levels.

These statistics illustrate that the recent real estate collapse was the worst that this nation has experienced since the Great Depression of 1930's.

Locally, we are seeing mixed signals. On the one hand, 2011 was actually a record year. More properties were sold in 2011 than at any other time in our county's history. And that includes during the height of the real estate boom.

Those sales are bolstered in large part by foreign buyers that see great value in a depressed market such as Miami. International investors, with wads of cash, are buying fantastic properties at bargain prices in Miami.

Additionally, interest rates continue to hover at historic lows that we are not likely to see for another generation.

But all of that does not spell the end of the bust associated with the real estate market. Indeed, inventory is still high, and it is still unknown how much "shadow inventory" the banks actually possess. Foreclosures also continue to rise.

Often, an attorney is needed to navigate these troubled waters. We currently represent lenders, borrowers, buyers, sellers, and developers. This broad array of experience allows us to effectively take a multi-faceted approach to our clients' legal issues. No matter what you or your business's needs may be when it comes to real estate, don't hesitate to contact Alvarez & Barbara, LLP.

Miami's Real Estate Market was Bolstered by Foreign Buyers for a Record 2011 in Terms of Number of Homes Sold

Sun, 22 Jan 2012 22:08:33 -0500

Thanks in large part to international buyers purchasing real estate in Miami-Dade County, 2011 set records for the number of real estate sales for all years on record. Yes, even more than the years associated with the real estate boom, and, in particular, the peak of the boom back in 2005.

A total of 24,929 combined condominiums and homes were sold in Miami-Dade County in 2011, up 46% from 2010 and up 4%when compared to 2005.

Condominium sales surged 54%, to 15,009 in 2011, and home sales rose 36% to 9920. Interestingly enough, some are suggesting that Miami Dade County is on the verge of a real estate boom. Demand is particularly high for properties located in the design District, Brickell, and Miami Beach.

A major reason for the record numbers, and boom, is the fact that international investors, with wads of cash, are buying fantastic properties at bargain prices in Miami-Dade County.

Additionally, interest rates and real estate prices remain at historic lows. Bank-owned properties and short sales, comprising "distressed sales," also helped fuel the real estate market last year. In December, 54 percent of all closed residential sales in Miami-Dade were distressed, compared to 59 percent in December 2010. Unlike a year ago, there are now more short sales closing than bank-owned properties.

Although we're hearing some good news, today's current real estate market, and ongoing foreclosure crisespresents all sorts of issues that must be properly navigated.

Real Estate Round Up - What do Burt Reynolds and OJ Simpson have in Common?

Thu, 19 Jan 2012 17:22:32 -0500

If you answered that they both played football in college, you would be correct. Burt Reynolds played football for FSU, while OJ Simpson had a highly decorated football career that culminated with an induction into the Pro Football Hall of Fame after having won a Heisman Trophy at USC.

But they share something else in common. They have both been hit with foreclosures.

Burt Reynolds faces the prospect of losing his waterfront home in Hobe Sound, Florida after failing to make mortgage payments for almost a year.

OJ Simpson's home in South Miami is now in foreclosure because he was sentenced to jail and has failed to make a payment while he has been incarcerated.

The foreclosures of Burt Reynolds and OJ Simpson simply serve as a reminder that foreclosures have hit both rich and poor alike like an epidemic.

But for those if you facing foreclosure, there is hope. A proper plan could help aleviate the stress involved with the foreclosure, and help navigate out of those rough waters. Often times there are alternatives to foreclosure, but just takes planning to help address each alternative.

As for what will become of OJ Simpson's home after the foreclosure, a local news report suggests that PETA wants to turn his home into a vegetarian museum. PETA may end up working with the bank to purchase the home and help solve OJ Simpson's pending foreclosure. It just serves to illustrate that there are alternatives to foreclosure. It just takes exploring and planning to find them.

Florida Legislators Ponder Changes to Florida's Foreclosure Laws

Sun, 08 Jan 2012 21:58:44 -0500

Florida's annual legislative session is about to get under way. Florida's legislators are about to contemplate many significant issues this legislative session. Chief among them includes re-districting and gambling.

But the ongoing foreclosures crises in Florida will also be front and center. Several laws have been introduced that could impact the method and manner in which banks foreclose on properties in Florida, and especially here in South Florida.

One of the issues being addressed this legislative session involves deficiency judgments in foreclosures.

For instance, lenders are often entitled to judgments against the homeowner to make up the difference between the mortgage debt and the amount recovered at the foreclosure auction. Those judgments against the homeowners are good 20 years.

This pending bill tries to strike a balance between homeowners and lenders. It tries to create a way for lenders and homeowners to satisfy a deficiency judgment in exchange for homeowners doing certain things.

The bill states that homeowners in default on homestead purchased from 1/1/04 to 12/31/08, may receive a waiver of deficiency and up to $1,000 in moving expenses if they settle their foreclosure actions with a non-monetary judgment and vacate the property within three months of the judgment or judicial sale, whichever is later.

The state fund would be used to give lenders incentive to settle by helping them recoup some of their losses where properties are worth less than the mortgage balance.

Miami Leads Florida's Housing Comeback

Sun, 11 Dec 2011 22:34:02 -0500

Miami's real estate market is heading into 2012 showing signs of revival.

Over the past few months, our firm has seen sales trending up, listing inventories falling, the supply of lender-related properties stabilizing, as well as multiple offers being placed on homes in some neighborhoods. Additionally, foreign buyers, especially those in Central and South America, continue to come to South Florida to snatch up bargains.

As we look behind the numbers, we see that Miami, in particular, has gone from ground zero for the subprime mortgage crash to having a healthy inventory of properties that is only half the size from a year ago. Today, Miami is only reporting one foreclosure for every 407 home, compared to the national rate of one per every 213. Condo sales have also increased 79% in the first five months of the year. That increase in condo sales, again, is fueled in large part due to foreign buyers buying property in South Florida.

These numbers point to a mini-recovery in Florida, and especially in Miami. Indeed, while prices for continued to drop in Broward and Palm Beach county, they are not in Miami. In October, for instance, Miami-Dade County actually squeezed out a price increase for home sales.

While all of this points to a revival of sorts to Miami's real estate market, the recovery is still rather tenuous. Banks have pulled back the filing of foreclosure actions due to the ongoing robo-signing scandal. Additionally, unemployment remains high. And for their to be a true correction, and recovery, unemployment needs to be lowered.

On the other hand, there are many alternatives to a foreclosure. Many homeowners are exploring those options. It is best to be pro-active in this real estate market.

Govt Places Pressure on JP Morgan, and Others, to Do More to Help Struggling Homeowners

Thu, 08 Dec 2011 07:04:00 -0500

JPMorgan Chase is coming under increased pressure from the Federal Government for not doing enough to help struggling homeowners permanently lower their mortgage payments as part of the government's foreclosure prevention program.

JP Mortgage Chase is not alone in receiving this criticism. The Government recently also criticized Bank of America, Wells Fargo, and Ocwen, for not doing enough to help struggling homeowners.

As part of the Government's criticism of these four banks - Bank of America, Wells Fargo, Ocwen, and JP Mortgage Chase - the Government began withholding financial incentives of up to $1,000 per modification.

The Government launched several programs back in 2009 with the intended purpose of helping struggling homeowners keep their homes. The intent of the plan was to lower the homeowner's monthly payments.

In a loan modification, for example, homeowners start with a lower monthly payment on a trial basis. But the Government's loan modification program has struggled to convert those that started the trial modification into a permanent loan modification.

Homeowners have complained that the program is a bureaucratic mess, and nightmare. Many say they were disqualified after banks lost their documents and failed to return their phone calls.

On the other hand, banks have blamed homeowners for failing to submit needed paperwork. They often cite incomplete paperwork and delays in getting the necessary paperwork.

More than 1.7 million troubled homeowners received trial modifications over the past two years. But as of October, more than half of them -- about 880,000 people -- have dropped out of the program entirely.

If you are frustrated with the process, and facing potential foreclosure, we're here to help. Contact us today to discuss your potential options.

The Foreclosure Crisis Continues to Haunt South Florida's Real Estate Market

Sun, 27 Nov 2011 19:18:39 -0500

If the current foreclosure crisis were a football game, we would be in half time right now. Based in large part on new data that was recently released it appears as though the foreclosure crisis is only about halfway over.

New home foreclosures recently increased while the number of borrowers falling behind on their payments decreased slightly. Not surprisingly, borrowers with subprime adjustable mortgages saw the biggest jump in foreclosures recently.

Almost 5% of all subprime loans recently entered into the foreclosure pipeline, up from 3.6% in the second quarter. One of the main reasons for that increased foreclosure spike was the expiration of the foreclosure moratorium placed on a number of states. In other words, many states were recently given the go ahead to file new foreclosure actions against borrowers who have fallen behind on their payments.

Additionally, another reason for the recent spike in foreclosure activity is that many of the borrowers who have fallen behind were not approved for a loan modification or other program to help save their home.

On the other hand, the pace of new foreclosures for all loans for this time last year was actually down. Simply put, there were less foreclosures filed at the same point this year than there were compared with last year at this point in time.

Overall, the pace of new foreclosures for all loans was up by almost 11% in the third quarter from 9% in the prior three-month period. That's down from 1.3% in the same period a year ago.

As for the overall health of the nation's current real estate market, a lot still depends on the economy of the whole. The economy is still not producing jobs fast enough to aid the nation's housing market.

Additionally, continued improvement in home sales and home prices will depend heavily on the volume of foreclosed homes in the housing market. Recent housing data suggests that many lenders have barely made a dent in the overall inventory of foreclosed homes.

As such, there is no question that this is a buyer's market. Indeed, South Florida's real estate market has picked up some steam recently due in large to foreigners investing in South Florida.

Growing Number of Underwater Homes in Miami are Causing Many to Walk Away from their Homes

Sun, 20 Nov 2011 22:57:15 -0500

Almost half of all single-family homes with a mortgage in South Florida are currently under water. An underwater home loan is one where the loan balance is greater than the fair market value causing the homeowner to be upside down on the mortgage.

The State of Nevada leads the country in underwater homes, and Las Vegas leads the country. The State of Florida ranks third in the country, and Jacksonville, Tampa and Ocala have the highest percentage of underwater homes in the state.

Since the housing market peaked in 2006, thousands of homeowners have seen their home equity disappear while home prices decreased more than 50%. Because of the decline in home prices, coupled with the loss of home equity, many homeowners have stopped paying their mortgages and simply turned the home over to the bank.

When facing an underwater mortgage, as well as higher property taxes and home insurance, walking away from your home could be extremely tempting to homeowners.

However, walking away from your home does not come without consequences, and often times those consequences are negative.

It is imperative that you understand both the pros and cons associated with walking away from your home. The negative implications could haunt you for years. But the positive ramifications may set you free financially.

There are also often times many alternatives available to you in an effort to avoid foreclosures. Indeed, one such potential option may be to explore the government's newly enacted and revised re-finance program, i.e. HARP.

Time is Now to Challenge Your Foreclosure Thanks to a new Government Program Aimed at Fighting Robo-Signing and Fraud

Mon, 07 Nov 2011 15:53:13 -0500

If you feel as though your home was improperly foreclosed in either 2009 or 2010, then there may be recourse for you yet.

The Federal Reserve Board recently announced that homeowners who believe that robo signing and other such issues hurt them during the foreclosure process can complain directly to the Federal Reserve for potential recourse.

The Office of the Comptroller of the Currency is beginning a multifaceted independent review of foreclosure actions. Their review will apply to homeowners that went through the foreclosure process and will involve some of the largest banks and mortgage service on in the country. They include GMAC mortgage, HSBC Finance Corporation, SunTrust mortgage, and EMC Mortgage Corporation, among others. The major banks, including Bank of America, Chase, Citibank, Wells Fargo, GMAC, and EMC, will have to fund these independent reviews to evaluate whether borrowers suffered financial injury through error, misrepresentation, fraud, or other deficiencies in the foreclosure process.

If the homeowner was injured during the foreclosure process, then the homeowner could get some kind of remedy for the misrepresentations that took place during the foreclosure process.

The major mortgage services began sending out letters to eligible homeowners recently to explain the process. A homeowner's request for review must be received by April 30, 2012.

So could a homeowner get there home back? Probably not. In all likelihood, that home has probably already been sold. But each case will be reviewed on a case-by-case basis. And if an appropriate remedy is the return of an unsold home to a homeowner, then it is certainly possible. But more realistically, the likely remedy will probably be some form of compensation.

Short Sales are Dominating South Florida's Real Estate Market While Lenders Roll Out Incentives that could pay Homeowners up to $20,000

Tue, 01 Nov 2011 15:25:37 -0500

Short sales are dominating South Florida's market. From April to June of this year there were 5,940 short sales in Palm Beach, Broward and Miami-Dade County. That is an increase of 15% from the first quarter.

It should also come as no surprise that these short sales are coming at a significant discount. The discount is often times at least 30% lower than non-foreclosed properties.

However, the short sale process can often times be a maddening one that takes a lot of time. Indeed, it takes on average 501 days to complete a short sale in South Florida.

It is in large part due to that delay that South Florida was not listed on Realty Trac's top 10 markets for buying short sales.

But banks are realizing the benefit of short sales. Consequently, many banks are launching programs to pay homeowners thousands of dollars to help with moving costs if they agree to sell for less than they owe on the property.

Bank of American just launched a pilot program in Florida that could pay homeowners up to $20,000 for short selling their homes instead of letting them fall into foreclosure. Chase and Wells Fargo have also announced a similar plan.

While banks often times hand homeowners a few thousand dollars if they leave the properties in good shape after foreclosure. That plan is called "cash for keys". Additionally, homeowners are also entitled to $3,000 of government money if they complete short sales through the Home Affordable Foreclosure Alternative (HAFA) program.

Banks are also now offering incentives above and beyond those. As such, the banks are offering money in an effort to push through short sales and avoid the lengthy and often times costly foreclosure process.

We're Still Far Away from a Full Housing Recovery While South Florida Exhibits the Best and Worst of Today's Housing Market

Thu, 27 Oct 2011 14:23:24 -0500

Since President Obama took office, the City of Weston has seen a 15.1% increase in home values. That makes the City of Weston the top performing housing market in the nation since February 2009 to August 2011.

On the other hand, and just 50 miles south of Weston, the City of Homestead earns the mark as having the worst performing housing market in that time span. The City of Homestead has seen home prices drop 48.8% since February 2009.

South Florida's real estate market has been recently aided with the influx of foreign purchasers. But South Florida's real estate market still has a long way to go before it fully recovers. The disparate treatment in cities separate by just 50 miles is indicative of the up and down nature of our real estate market.

Recently, renewed efforts to shore up the housing market has included a new program designed to help homeowners re-finance their homes. The re-vamped HARP is designed to allow people who owe significantly more on their mortgages than their properties are worth to re-finance their home.

Meanwhile, the banks are continuing to churn through the high volume of foreclosures on their ledger with no end in sight. This shadow inventory of homes will hinder the full recovery of the housing market for years. Until the shadow inventory of homes is fully diluted, South Florida's housing market will not return to a healthy thriving market.

Re-Financing Your Home Just Got Easier With the Unveiling of a New Program Intended to Help Millions of Struggling Homeowners

Tue, 25 Oct 2011 10:06:48 -0500

Relief may be coming in the form of a new government program intended to aid millions of struggling homeowners.

The new program is intended to revive the government's Home Affordable Refinance Program (HARP) program. The HARP program was intended to help spur re-financing for many homeowners so they could take advantage of the historically low interest rates and potentially save hundreds of dollars a month.

The HARP program, however, has not worked as it was initially intended. Many stumbling blocks have prevented the program in reaching many homeowners in some of the hardest hit regions of the country. One of the biggest involved the requirement surrounding home equity.

But the new changes to HARP should hopefully change that and make it easier for millions to re-finance their mortgages.

For instance, to become eligible for the new HARP, a homeowner must have a mortgage sold to Fannie Mae or Freddie Mac on or before May 31, 2009. The homeowner must also be current in their payments and without any late payments in the past six months. Additionally, some fees were also eliminated on loans that run 20 years or less and lowered on longer term mortgages. In some cases, the homeowner will also no longer need a new appraisal on the home, which should reduce the refinance costs.

Additionally, and of significance, there is no limit on how deeply underwater someone can be as long as they re-finance into a 30 year fixed mortgage.

The new changes should not only benefit many homeowners, but should also help financial institutions become fewer homeowners will eventually default.

But one of the biggest factors that will drive the success of this new program will be interest rates. Today interest rates are hovering at historically low levels. For instance, the average rate for a 30 year mortgage today is 4.2%. If interest rates rise, however, this program may not be as attractive to many.

Navigating these waters can be difficult, but we are experienced in handling real estate matters. Many alternatives exist to struggling homeowners. At Alvarez & Barbara, LLP, we are prepared to help you with your real estate needs. Contact us today.

Legislation is being Considered that Would Remove Foreclosures from the Judiciary and bypass Judges all together

Sun, 23 Oct 2011 17:44:19 -0500

They are at it again. Our Florida legislators may attempt to tinker with the foreclosure system in the State of Florida to the detriment of all homeowners in the State of Florida. And this after such an effort failed last year.

There is no question that Florida's courts are flooded with foreclosure filings and lawsuits. Our court system needs relief from all the filings.

As such, Florida lawmakers are flirting with plans to take foreclosures out of the judicial system. The proposed bill would allow banks to skip legal proceedings all together and have foreclosures proceed on a non-judicial basis. In other words, Florida's judiciary would no longer have to rule on foreclosure disputes.

While taking foreclosures out of the judicial system may seem like a good idea, it is not.

This controversial piece of legislation would weaken the voices of the many distressed homeowners in Florida by depriving them of their basic due process rights to a hearing, and notice.

That is especially significant given the current climate of alleged foreclosure fraud. The issues stem from a direct result of allegations of robo signing, fraud, documentation errors, issues with process servers, problems servicing loan modifications, and other similar issues, which have prompted many lenders to slow down the foreclosure process.

But without basic due process rights to notice and a hearing many of these suspect practices may have never come to light. And many unsuspecting home owners would have lost their homes unnecessarily so as a result.

Florida has the nation's second highest foreclosure rate, and is one of 20 states that require all foreclosures to go through the court system.

Court action isn't needed in Michigan, Arizona, California and Nevada -- other states with high foreclosure rates. On average, foreclosure proceedings in those states take from 392 days in Arizona to 511 in California.

In Florida it takes 638 days.

Improper Foreclosure Practices Were Known by Fannie Mae as Far Back as 2003

Mon, 10 Oct 2011 16:02:09 -0500

Fannie Mae know about the "robo signing" allegations, as well as other problems with the foreclosure handling, as far back as 2003.

Such allegations are the subject of state attorney generals, including Florida's, across the country, into how lenders and their law firms ignored proper procedures to handle the avalanche of the foreclosure paperwork.

According to recent news reports, an unnamed shareholder warned Fannie Mae of alleged foreclosure abuses in 2003. Fannie Mae responded by hiring a law firm to investigate the claims in 2005. The law firm reported in 2006 that it had found foreclosure attorneys in Florida were routinely filing false pleadings and affidavits.

Presumably, one of the law offices in Florida that was beset with problems was the law offices of David J. Stern. Mr. Stern recently closed his office, but left a mess in the wake of his hastily withdraw on thousands of foreclosure files.

That has included investigations and lawsuits. The investigations have revealed that many in the foreclosure pipeline have cut corners to the detriment of innocent homeowners.

Fraud is widespread in foreclosure cases. It appears to be a systemic problem. Despite this fact, its not easy to spot. It takes an experienced foreclosure defense attorney to spot fraud. But spotting the fraud is not even half the battle. The challenging part is attacking the fraud and establishing the appropriate strategy.

Navigating these waters can be difficult, but we are experienced in handling foreclosure matters. People often think that foreclosure defense basically entails delaying the "inevitable" - a foreclosure. However, many alternatives exist. At Alvarez & Barbara, we don't buy time to delay the inevitable. We buy to time to find a solution that suits each individual client.

Losing Your Home Is Enough To Make You Sick

Tue, 04 Oct 2011 20:51:32 -0500

Research has revealed what many have known for some time. Losing your home is enough to make you sick.

The research reveals that economic well-being and physical well-being are indeed connected. Therefore, it should come as no surprise that the ongoing national foreclosure crisis is having a significant impact on mental health as well as on a wide range of preventable conditions that are susceptible to stress.

The research focused on four states that were hardest hit by the ongoing foreclosure crisis. One of those four states was Florida, which ranks second nationally in the number of foreclosures.

Each state was analyzed by zip code comparing foreclosure rates to reports of emergency room visits and hospital admissions for stress-related conditions from April 2005 through December 2009.

For every 100 foreclosed properties in a community, emergency room and hospital admissions went up 7.2% for hypertension and 8.1% for diabetes among those age 20 to 49.

Suicide attempts also went up significantly, as did vitals and admissions related to anxiety.

Don't let the economy ruin your health. If you feel as though you are the brink of financial disaster, then it is imperative that you find a healthy outlet for that stress before the health problems become serious.

Additionally, if you are struggling in today's market, you certainly have alternatives available to you that could assist you are you shaving your home or avoiding foreclosure. Help is often available to those who seek it.