Miami Real Estate Attorney Blog

Foreclosure Filings Are Decreasing

Tue, 15 May 2012 16:23:28 -0500

In what surely is a sign of change in South Florida, foreclosure filings decreased by more than half at the end of 2011 compared to 2010. However, the decrease is somewhat deceptive because the results are in part due to the average length of time it takes to process a foreclosure in Florida. Specifically, Florida's foreclosure process is third in the nation, behind only New York and New Jersey.

For the last ten years, Miami-Dade has found itself in the midst of one the largest residential development booms in all of Florida. As such, it should come to no one's surprise that 1 in every 85 homes file for foreclosure. Rounding out South Florida is Broward and Palm Beach County, which see approximately 1 in every 98 and 105 homes file for foreclosure, respectively.

Palm Beach County saw the largest change out of the big three in South Florida, with its filings falling off by more than half. Miami saw the smallest decrease at 8.24 percent compare to last year, followed by Broward at 33.94.

Again, these numbers are deceptive. We must still take into account the overall volume of foreclosure filings. And the numbers are staggering. It is true that related foreclosure filings dropped 57 percent in 2011 compared to 2010; however, if we compare the 2011 numbers in Miami-Dade to those in 2006, foreclosure filings are still astronomically higher - 133 percent higher to be exact.

The same holds true for both Broward and Palm Beach. Compared to 2006, Broward foreclosure filings are up 108 percent, with Palm Beach surprisingly up 190 percent since 2006. Just another prime example of how deceiving the numbers are considering Palm Beach was looking like the real winner of the three.

Even though the market seems to be shifting in a positive direction, properties on the brink of foreclosure still make up more than 50% of available properties across South Florida. This makes it the perfect time to determine whether you need a real estate attorney, or just need to talk to some one to assess your legal rights.

Home Prices Could Rise by as Much as 4%

Mon, 14 May 2012 12:49:58 -0500

Many new homeowners across America have benefitted exponentially from low sale prices and mortgage rates. However, that all may change soon if you're a potential buyer.

The USA Today is reporting that average home prices in the U.S. will rise almost 4% a year for the next five years. Markets, such as Miami, FL, may see an increase in sale prices at the end of the summer before finally leveling off.

In predicting this rise, many of the leading home price indexes, which measure the U.S. residential market and track changes in the value of residential real estate, point to several different factors. Among them are investors, good affordability, low inventories, and the fact that conventional mortgage payments now account for just 12% of median family incomes versus a historic norm of 20%.

Florida, having more cities than any other state, has show the strongest signs of recovery. This is especially true for cities such as Orlando and to absolutely nobody's surprise, Miami . According to Realtor.com, prices of homes in Miami are up 20%, in some areas, and inventories down in excess of 40%.

Indeed, home values in South Florida rose 1.1 percent year-over-year in March, to $141,300, after reaching bottom in late 2011. Only Phoenix had a higher year-over-year increase at 2.8%. Moreover, Miami ranked among just five cities in the nation to show an increase in annualized housing prices in February, up 0.6?percent from January, and up 0.8 percent year-over-year.

However, and while we are seeing a slow recovery take hold, the real estate market is still far from a full recovery. Prices continue to remain low. And many banks have not yet started to push their shadow inventory into the market. So a full recovery can still be years away.

Deficiency Judgments in Foreclosures

Fri, 11 May 2012 16:48:45 -0500

In a time where people are losing their homes to foreclosure daily, what can possibly add more insult to injury? The answer - deficiency judgments.

A deficiency judgment is a money judgment entered against former homeowners who lost their property to foreclosure. The amount of the judgment is the difference between what was owed on the loan and the price the home sold for on the sale date.

In the majority of these scenarios, homeowners are left paying thousands of dollars due to the nature of the current-underwater market. This judgment follows the homeowner for up to twenty years, if not longer. Florida, a state that allows deficiency judgments, has had the most foreclosures since 2007. Making deficiency judgments an issue that hits really close to home.

In other words, if pushing you to attain an unaffordable mortgage during the go-go heyday of the real estate housing market was not enough many banks today are pushing for deficiency judgment. Many banks are today chasing depleted borrowers to pay for the deficiency to improve the bank's bottom line, while further pushing the borrower to the brink of economic collapse.

What about unpaid homeowner's association dues? Unfortunately, they are also subject to deficiency judgments, which allows condo associations to go after former owners for unpaid fees.

Another potential problem is that many of the banks are selling these deficiency judgments to investors who are in turn pouring the judgments into hedge funds and selling them off as securities, or selling them to collection firms who ramp up their collection efforts. And the collection agency may have this judgment for at least 20 years. Which means that the collection agency would be within their right to use all legal tactics necessary to collect.

Until the economy rebounds, we will continue to see courts around the country enter deficiency judgments against homeowners. And even if these same homeowners are fortunate enough to find themselves in new homes, some might not be able to pay off the judgment.

Are We Seeing the Start of a Real Estate Rebound?

Fri, 27 Apr 2012 15:31:57 -0500

There was a time, not so long ago, when a buyer could offer pennies on the dollar for a dream home in South Florida. It was not rare for a potential buyer to offer up to 25% or more below the asking price. After all, the market was congested with available homes and the economy was in a deplorable state. However, times are changing and making an unreasonable offer can actually hurt, instead of help a buyers chances of securing their dream home.

Across the United States, including South Florida, more and more homes are being purchased at higher than normal rates leaving very little inventory for realty agents to work with. A potential buyer who comes in and makes a very low offer often finds him or herself being left off the radar when being compared to other, more serious buyers.

In other words, a buyer no longs holds the power, sellers do. A seller is likely to come back more aggressive if he or she receives a low-ball offer compare to an offer that is reasonable or closer to the asking price.

Home values in South Florida rose 1.1 percent year-over-year in March, to $141,300, after reaching bottom in late 2011. Only Phoenix had a higher year-over-year increase at 2.8%. Moreover, Miami ranked among just five cities in the nation to show an increase in annualized housing prices in February, up 0.6 percent from January, and up 0.8 percent year-over-year.

Consequently, a low-ball offer may still work in some communities were one can find stockpiles of inventory, but these are far and few between in places such as Chicago, Miami, Washington D.C., etc. For example, some out of town buyers still appear to be under the impression that all Florida real estate remains depressed. They insist on submitting offers that make no sense in today's environment.

As such, a buyer who is serious about purchasing a home must ask themselves whether the risks out weigh the potential reward. Put simply, if the property has potential to be your dream home, don't be cheap or you will risk losing the home altogether.

Distressed Properties Still Dominate the Market.

With that said, however, the real estate market is still far from a full recovery. Prices continue to remain low compared with prices just five years ago. In Miami, prices fell 50 percent from the peak, and are just up 2 percent since reaching a low in April 2011

Prices may not return to the price points seen just a few years ago for some time still. So now is a good time to buy a property. Especially when you consider that interest rates continue to remain at historically low interest rates.

Therefore, while the market is moving in a positive direction, it will be some time before it can attain a healthy state.

The reason being is that distressed properties still make up more than 50 percent of sales. That is down, however, from more than 60 percent a year ago. Distressed properties are keeping a lid on properties, and they will continue to do so for some time.

The Latest Twist in the Foreclosure Crises Has Bank of America Suing .... Bank of America!

Sun, 15 Apr 2012 22:12:19 -0500

To add to the tragic comedy that is the housing and mortgage market in the United States, it turns out that several news outlets recently reported that that Bank of America, on several occasions, has sued itself in foreclosure proceedings.

It is not as far-fetched as one would think. The problem lies with the robo-signing crisis, which, among other things, was a result of bank employees cutting corners when processing paperwork. Now lenders, borrowers, and the judicial court system are finding themselves severely backlogged in the foreclosure process. This has allowed cases to go through the system with the same bank being on opposing sides of the foreclosure.

This happens when a bank services the first mortgage on behalf of an investor while contemporaneously owning the second mortgage. The law requires the bank to name themselves as a defendant in order to dispose of the junior interest. Adding insult to injury, the bank will have to hire a lawyer to file the foreclosure suit and another lawyer to defend the suit.

Financial institutions, such as Bank of America, and Wells Fargo, will continue to see these scenarios pop up again so long as the foreclosure crisis continues. With no end in sight, we are left imagining what it must be like to contact opposing counsel, who happens to be only a cubicle or office space away.

Is It Time To Buy A Home In Today's Real Estate Market?

Thu, 08 Mar 2012 13:00:39 -0500

Housing is one of the great investments right now. Today's market presents wonderful opportunities for many. Interest rates continue to remain at historic lows. Housing prices also continue to remain at very affordable levels.

Indeed, legendary investor Warren Buffett recently stated that if he had a way to manage them he would buy several hundred thousand single-family homes and rent them out. Consequently, there are many investors that are buying homes in today's market as an investment and subsequently renting them.

But for the many that wish to purchase a home and actually live in it, the question becomes is today's market the perfect time to buy.

There is certainly the valid argument that those individuals could wait to see if home prices continue to fall. Indeed, many experts suggest that home prices will continue to decline through at least this calendar year, and possibly in next year as well.

However, you cannot time the housing market anymore than you can time the stock market. True, the housing market moves far more slowly, but that works to its benefits, as prices don't rise and fall on daily news or even major events.

Another factor to consider are thehistorically low interest rates. By all accounts, interest rates should remain pretty consistent through at least the end of the year, and possibly into the early part of next year.

Therefore, the combination of low prices coupled with historically low interest rates makes it a very attractive time to be a home purchaser for both investors and as someone who is looking to buy a home for his family.

South Florida Home Prices Increased in January

Sun, 26 Feb 2012 19:56:42 -0500

All signs point to a continued recovery in the housing market.

Recent statistics show that home prices statewide rose 5 percent in January. The median price for existing homes across Florida last month was $129,000, compared with $122,500 a year ago.

Although sales declined statewide, pending deals have increased in every month since May and the number of homes for sale statewide has fallen by 34 percent from a year earlier.

Here, in South Florida, home prices continue to trend upward, offering hope of a housing recovery even while many say a bottom may still be a year away.

Some still expect a flood of bank owned properties to hit the market. But when that does, there is a growing school of thought that such a development will be a favorable one for a housing market that is appears to be bouncing back. The reason being is there is actually a shortage of available properties in many areas throughout South Florida. And if the property is priced right, it will not be on the market very long. Many are taking advantage of the record low interest rates, and other such favorable factors, and jump from the rental market into home ownership.

Today's market presents all sorts of unique opportunities for both buyers and sellers. It also presents wonderful opportunities for those with homes that are underwater as today's market is a short sale driven market. It may be time to consult with a real estate attorney to assess your options.

Mortgage Deal Fails to Make an Impact to Help Struggling Homeowners

Mon, 20 Feb 2012 22:21:55 -0500

A mortgage settlement over the mishandling of millions of foreclosures was recently reached following 16 months of complex negotiations between 50 attorneys general and five major banks amid allegations of robo-signing and other abuses further fueling the foreclosure crises.

Under the terms of the settlement, those who have lost their homes or have fallen underwater on their loans could receive a $2,000 check, a $20,000 mortgage reduction or a lower interest payment.

But while everyone involved in procuring this deal should be applauded for their effort, the deal falls short. The deal is saddled with glaring limitations which will make it difficult to reach the millions of homeowners currently struggling.

For starters, the numbers simply tell us that this deal won't reach that many people which means this settlement will be felt by just few fortunate individuals. Specifically, borrowers around the country owe more than $700 billion more on their homes than the homes are worth, yet the settlement offers only $26 billion in fines and relief to homeowners.

Additionally, approximately one million homeowners will have their mortgage debt reduced or loans refinanced at a lower interest rate, and up to 750,000 other borrowers who became victims of abuses in the foreclosure process could receive an average of $1,500 to $2,000. On the other hand, many estimate that some 11 million U.S. homeowners are underwater -- they owe more on their homes than the homes are worth. Some 4 million are in foreclosure or seriously delinquent.

So to repeat, a mere cursory look at the numbers reveals that the deal won't be as far reaching or helpful to the great majority of struggling homeowners.

But the deal has other limitations as well. The settlement is limited to five big banks that own the mortgages directly. Those include Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally.

It excludes private investors, other banks and -- most important -- mortgages backed by federal agencies known as Fannie Mae and Freddie Mac, as well as the FHA. These agencies, which are subject to controls from the executive and Congress, account for about 56 percent of all existing loans.

This settlement fails to satisfy the need for accountability by those responsible for the housing collapse. If the only punishment is a slap on the wrist, the mortgage industry will have learned nothing from this epic debacle.

Short Sales 101

Sun, 12 Feb 2012 22:51:42 -0500

The real estate boom has come and gone. Today's market, driven by short sales, looks much different than it did five years ago, during the peak of the boom.

The real estate boom was created in large part thanks to banks and mortgage companies that competed fast and hard to attract borrowers. Gone were the days of requiring borrowers to have good credit and cash down payments. That traditional model was replaced by aggressive, accommodating and very creative banks and mortgage lenders. These aggressive institutions created new loan programs revolving around "stated income" or "no income verification" loans, as well as 100% financing, and adjustable rate loans with introductory, ultra low "teaser" interest rates.

The thought process, at the time, was that no one would lose money on investing on people's homes. After all, and at the time, the country was experiencing record growth in the real estate sector. It was not uncommon to realize double digit growth/profits in as little as several months. In other words, how could any of the parties to the transaction get hurt with the double digit level of appreciation that the market was enjoying at the time. The speculative boom was in full force.

Well, today we know that the madness came to a screeching stop, and it crashed the nation's economy with it.

But the collapse of the real estate market has also brought fresh opportunities to the savvy investor or purchaser.

Short sales now dominate the market. Where many purchasers had purchased real estate with no money down, it is not surprising that many of them find themselves in a precarious position today. They are upside down in their loan, owing more to their mortgage lender than their property is worth.

If those borrowers are fortunate enough to find a purchaser who can qualify for a traditional, fully documented mortgage loan under the new, and tighter, lending guidelines, then they need to push for a short sale approval.

A short sale is a transaction the proceeds of the sale will not be sufficient to cover the outstanding debt and closing costs.

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. And you will often times need to retain the services of a short sale specialist to held navigate this issue.

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.