Palm Beach County Florida Real Estate Information

Home price trend…Florida job prospects…

2012-01-31T13:17:00.001-05:00

CNN: Unanticipated home price declines in November.

NEW YORK (CNNMoney) -- Home prices posted a steep, month-over-month drop in November, falling 1.3%, according to the latest S&P/Case-Shiller 20-city report. Prices fell in 19 of the 20 cities the index covers.

Prices are down 3.7% from a year ago, and off 32.8% since they peaked in the summer of 2006. The index is currently only 0.6% above its March, 2011 low. "Despite continued low interest rates and better real GDP growth in the fourth quarter, home prices continue to fall," said David Blitzer, spokesman for S&P.

The drop in home prices was more than housing bear Peter Morici, professor at the University of Maryland Smith School of Business, anticipated. He had forecast a 0.8% drop. "We've had more robust sales activity in the housing market lately," he said.

Morici thinks recent home price weakness stems at least partially from the fact that more sellers have accepted the weak market conditions and are putting their homes up for sale. Retirees and other home owners had postponed sales, trying to wait out the decline. "Sooner or later, you have to get rid of that house," he said.

Most difficult place to find another job? Florida!

NEW YORK (CNNMoney) -- If you lose your job in Florida, chances are you won't find another one any time soon.

The Sunshine State has the highest rate of long-term unemployment in the nation. Some 53% of jobless Floridians were out of work for more than six months in 2011, according to Brookings' Hamilton Project, which crunched Census data

"During the boom, the Florida economy was going gangbusters," said Sean Snaith, economics professor at the University of Central Florida. "We lost hundreds of thousands of jobs."

Although the market is starting to loosen up, there are four jobseekers for every open position in Florida, said Mason Jackson, chief executive of the WorkForce One career center in Fort Lauderdale. Businesses are still hesitant to hire because of continued uncertainty in the economy. "If we filled every job we could find, 75% would still be unemployed," Jackson said.

The housing market continues to weigh on the Florida economy and its job market. More than one in five borrowers are behind in payments, while 44% of homeowners owe more than their property is worth.

This prevents homeowners from moving away to look for work, said Tony Villamil, dean of St. Thomas University's School of Business in Miami.

"They are locked in their homes," he said.

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To any home owners reading this: If selling your home may be a consideration in the next 36 months, we should discuss the information contained in the two news releases, above, and the other housing and economic factors that may have an impact on your present and future real estate plans.

Call me directly at 561-602-1258

Thanks for reading…Steve Jackson

––For Every Two Homes Available for Sale, There Is One “In The Shadows”––

2012-01-25T18:51:00.001-05:00

CoreLogic® (NYSE: CLGX), a leading provider of information, analytics and business services, reported today that the current residential shadow inventory as of October 2011 remained at 1.6 million units, representing a supply of 5 months. This was down from October 2010, when shadow inventory stood at 1.9 million units, or 7-months’ supply, but approximately the same level as reported in July 2011. Currently, the flow of new seriously delinquent loans into the shadow inventory has been offset by the roughly equal flow of distressed (short and real estate owned) sales.

CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of distressed properties not currently listed on multiple listing services (MLSs) that are seriously delinquent (90 days or more), in foreclosure and real estate owned (REO) by lenders. Transition rates of “delinquency to foreclosure” and “foreclosure to REO” are used to identify the currently distressed non-listed properties most likely to become REO properties. Properties that are not yet delinquent but may become delinquent in the future are not included in the estimate of the current shadow inventory. Shadow inventory is typically not included in the official metrics of unsold inventory.

Data Highlights:

As of October 2011, shadow inventory remained at 1.6 million units, or 5-months’ supply and represented half of the 3 million properties currently seriously delinquent, in foreclosure or in REO.
Of the 1.6 million properties currently in the shadow inventory (Figures 1 and 2), 770,000 units are seriously delinquent (2.5-months’ supply), 430,000 are in some stage of foreclosure (1.4-months’ supply) and 370,000 are already in REO (1.2-months’ supply).
Florida, California and Illinois account for more than a third of the shadow inventory. The top six states, which would also include New York, Texas and New Jersey, account for half of the shadow inventory.
The shadow inventory is approximately four times higher than its low point (380,000 properties) at the peak of the housing bubble in mid-2006. A healthy housing market should have less than one-month’s supply of shadow inventory, which would be an easily absorbed stock of distressed assets with little or no discernable impact on house prices, unless the inventory was geographically concentrated.
Despite 3 million distressed sales since January 2009, a period when home prices were declining at their fastest rate, the shadow inventory in October 2011 is at the same level as January 2009.
Because shadow inventory is often concentrated in suburban and exurban submarkets, where distressed sales compete with new construction sales, it is one of the reasons why new home sales continue to be weak. In normal times, new home sales account for 12 percent of all sales, but they are currently running at 7 percent of all sales.
Based on current estimates of the visible inventory (both distressed and non-distressed), the shadow inventory is approximately half of all visible inventory listings. For every two homes available for sale, there is one home in the “shadows”

“The shadow inventory overhang is a large impediment to the improvement in the housing market because it puts downward pressure on home prices, which hurts home sales and building activity while encouraging strategic defaults,” said Mark Fleming, chief economist for CoreLogic.

The full report can be found at http://www.corelogic.com/ShadowInventoryOct2011.

I do follow CoreLogic reporting every month…however, there are other, credible, estimated of the shadow inventory of 3-4 times what CoreLogic reports. And this is what is going to keep our values from increasing any time soon.

Thanks for reading…Steve Jackson

Call me directly at 561-602-1258

What if the Federal deficit was your household debt?

2012-01-20T07:01:00.001-05:00

Will the Govt. force you to declare bankruptcy as a result of a short sale?

2012-01-13T18:02:00.001-05:00

Short sales are becoming more common, banks are becoming more accommodating, and the process has shortened up quite a bit…but that could change if the tax break that currently does not force homeowners who do short sales to claim the forgiven debt on their tax returns is not extended.

On December 31st, 2012, the Mortgage Debt Relief Act, also called the Mortgage Forgiveness Debt Relief Act, will expire if changes are not made to the legislation. When this happens, the “deficiency”, or difference between what your bank ‘nets’ on your short sale and what you owed, if forgiven, once again, will be viewed as taxable income.

This will make short sales far less attractive to nearly every distressed property owner. And it could slow down the short sale market long before the end of this year, because “short sales take a while to get approved. If there isn’t an extension of this legislation by June or July, there probably won’t be as much incentive to do short sales in the latter months of 2012 as short sales with some lender can exceed six months from start to finish.

Additional fallout could take the form of more strategic defaults once short sales are no longer an option, warn analysts. If homeowners stand to lose money in the form of additional taxes on the “forgiven” debts on their homes, they may simply opt to walk away from the property at some point. Of course, in the case of strategic defaults – or other forms of foreclosure as well – lenders can pursue the delinquent borrowers for the difference between the amount that they owed on the property when they stopped paying and the amount the lender was able to make when the property was sold. These debts are often difficult to collect, but some lenders opt to wait years before pursuing them in the hopes that former homeowners to get back on their feet and once again have some assets to go after.

Some banks sell the debts to third-party collections companies. Even if this part of the debt is ultimately written off, it can create tax problems years down the road for homeowners because when the debt is written off it may be considered income to the homeowner.

We are hoping that the Mortgage Debt Relief Act will be extended long before it expires on December 31 of this year. If the legislation is not extended, many homeowners may be forced to declare bankruptcy in order to avoid paying income taxes on their “forgiven” debts.

If you are in a position where you think a short sale may be an option for you, please give me a call sooner rather than later.

Thanks…Steve Jackson

561-602-1258 – Direct

email: ShortSale@thejacksonteam.com

Foreclosure/Short Sale…1099 differences

2012-01-12T05:42:00.001-05:00

The following is from a great blog post entitled; IRS Form 1099-A, 1099-C and the Cancellation of Debt in Foreclosure on The Accounting Consortium blog:

Okay, so misinformation and confusion about the tax implications of foreclosure arising from the cancellation of debt seems to be piling up. In particular, folks seem most confused by the receipt of Form 1099-A from lenders who have taken property back in foreclosure.

First, remember the basic principle: Cancellation of debt MAY result in taxable ordinary income.

Second, because a foreclosure is viewed as a “sale of property,” if you let real estate go in foreclosure and it results in a cancellation of debt, then that foreclosure may be a taxable event.

There are three exceptions:

1. First, if the property lost in foreclosure is a principal residence-literally the home in which you live-then the cancellation of the debt (“COD”) generally won’t be taxable. This is a result of the Mortgage Forgiveness Debt Relief Act of 2007.

2. Second, if your are “insolvent” at the time that the debt is cancelled (not at the time of the foreclosure, but more on this below) then you will not be taxed. Insolvency is a simple balance sheet test: If your liabilities exceed your assets, you are insolvent. Don’t over think it. You will have to submit IRS Form 982 with the tax return in the applicable year in order to demonstrate that insolvency.

3. Third, if the debt is cancelled as a result of a bankruptcy filing, then there is also no tax. (This is one of the reasons I call bankruptcy “the ultimate mortgage modification tool.”)

So what about this Form 1099-A business? Form 1099-A is the form that the lender sends you (and the IRS) that documents that the lender has accepted real property in partial satisfaction of a secured debt. It does not create the tax liability. It is not documentary evidence of cancellation of debt. It is a tax neutral document.

The document that causes the problem is the IRS Form 1099-C. This is the one that tells you that the bank has cancelled the debt. It has two effects: First, it can be used as evidence in a later lawsuit by the lender to refute an allegation that the debt is still due and owing. It is not proof; it is just evidence, or as lawyers like to say, it is “probative but not dispositive.” Second, it will likely give rise to the possibility of a taxable event precisely because it constitutes a statement by the lender that the debt has actually been cancelled. (The above exceptions still apply, but how you need to deal with the problem will change.)

Remember: Foreclosure doesn’t ‘per se’ cancel the debt; it merely satisfies that part of the total debt which is equal to the value of the property.

Here’s the down and dirty of it: You are not likely to receive a Form 1099-C from a foreclosing lender on a recourse obligation because they want to hold out the possibility of recovering a deficiency for as long as they can. (Assuming, of course that the anti-deficiency laws allow it…But that’s a whole different topic that I won’t get into here.)

So since only part of the debt is paid by the foreclosure, and since you’ve only received a 1099-A, without that 1099-C, the claim stays alive until it dies by some other means. Prudent tax pros generally counsel that it is wise to provide some sort of estimated liability if the property has been lost to foreclosure, and you still haven’t received her 1099-C. I tend to disagree with that somewhat, because there is no COD tax until the debt is actually cancelled, and the debt isn’t cancelled until the lender or the law says it is. Estimating the liability based on an assumption that recourse debt will be cancelled eventually may create a need to amend the return later if the lender comes after you. Of course, if the debt is unambiguously non-recourse, meaning that no deficiency is possible, then it makes sense to go the estimate route because the debt is now cancelled by operation of law.

Last, an issue related to this is the difference in bankruptcy dischargeability status between a mortgage debt owed to a lender, and an income tax debt owed to the government. They are not treated the same in bankruptcy: If you owe the bank and you file, then the debt is immediately dischargeable. But if you wait until you have filed the tax return and income tax on the COD (cancellation of debt) is actually assessed, then it is no longer as easily discharged in bankruptcy. Because back income taxes are not dischargeable until two years after the tax return was last due and ten months (approximately…it’s actually 280 days) after the tax is “assessed,” if you wait to file bankruptcy until after you have filed your tax return, you have converted an immediately dischargeable mortgage deficiency owed to a bank into a tax debt owed to the government that you will have to live with through that waiting period before you can dump it in bankruptcy… Capiche?

Because these problems involve the interplay between basic contract law, mortgage and anti-deficiency laws (all of which are state law issues), and federal tax law, these can be gnarly problems to sort out. Unfortunately, not many attorneys understand them, and not a whole lot of tax pros either. This is because no one’s ever lost money on a real estate investment before now. Well, that’s not really true of course, but we are seeing things that are changing history, and testing the limits of most general practitioners. If you think you may have a tax problem arising from a past or pending foreclosure, make sure you seek professional advice from someone who understands the issues. It will vary from state to state, due to the differences in anti-deficiency legislation.

If you would like to schedule a confidential meeting to explore your foreclosure avoidance options, please call me directly at 561-602-1258 or email me at: SSinfo@thejacksonteam.com

Thanks for reading…Steve Jackson

2 month payroll tax reduction=30 years of increased mortgage payments!

2012-01-03T13:00:00.001-05:00

The temporary extension of the payroll tax (and extended unemployment benefits) is being funded with fees from new Fannie and Freddie mortgages. BUT…these fees are not 1 time fees…these fees are not just for 2 months…these fees are not for 10 years (as mistakenly understood by the media)…these fees are for THE LIFE OF THE LOAN! 30 years if one keeps the mortgage!.

How in the world does this make sense? Add costs to an integral part of the WEAKEST part of our economy…add costs to the segment of our economy that almost all agree will have to spearhead any real recovery! And, with all of the political grandstanding about “getting the govt. out of mortgages”,..they have now tied the financing of this bill to ongoing underwriting of mortgages by Fannie and Freddie.

And now that the politicians have dipped into the Fannie/Freddie new loan pocketbook, I shudder to think of what they’ll try to fund through new loan fees to home buyers going forward.

Voice your opinion of this tactic when you exercise your right to vote!

Thanks for letting me vent…Steve Jackson

2012

2012-01-02T10:02:00.001-05:00

To help you celebrate and reflect here is a collection of quotes to start the new year.

Year’s end is neither an end nor a beginning but a going on, with all the wisdom that experience can instill in us. -Hal Borland

In the New Year, may your right hand always be stretched out in friendship, but never in want. -Irish toast

Your Merry Christmas may depend on what others do for you … but your Happy New Year depends on what you do for others. -Author unknown

Your success and happiness lies in you. Resolve to keep happy, and your joy and you shall form an invincible host against difficulties. Helen Keller

We will open the book. Its pages are blank. We are going to put words on them ourselves. The book is called Opportunity and its first chapter is New Year’s Day. Edith Lovejoy Pierce

One resolution I have made, and try always to keep, is this: To rise above the little things. John Burroughs

We spend January 1 walking through our lives, room by room, drawing up a list of work to be done, cracks to be patched. Maybe this year, to balance the list, we ought to walk through the rooms of our lives…not looking for flaws, but for potential. Ellen Goodman

Be always at war with your vices, at peace with your neighbors, and let each new year find you a better man. Benjamin Franklin

May the best of this year be the worst of next. Unknown

Resolve to make at least one person happy every day, and then in ten years you may have made three thousand, six hundred and fifty persons happy, or brightened a small town by your contribution to the fund of general enjoyment. Sydney Smith

Tax advantages of home ownership

2012-01-02T09:52:00.001-05:00

There are many advantages to owning a home. For instance, it offers the pride of ownership, provides an overall sense of accomplishment, and is a place where you and your family will build many lasting memories. Also, real estate opens the door to many tax benefits as well. Let’s discover some of the following ways that owning a home generates tax advantages.

Mortgage Interest & Points: If mortgage debt is $1,000,000 or less, married couples filing jointly can deduct the full amount of their interest. Otherwise, those filing separately can write off up to $500,000 worth. This also includes second homes or adjacent land to your main residence. Points on either a home purchase or refinance can also be deducted, but these must be amortized for the latter.
Property Tax Deductions: All state and local taxes regardless of how many properties you own can be deducted, up to the alternative minimum tax required by law. Funds that are held in escrow accounts can only be written off once the taxes are paid.
Private Mortgage Insurance (PMI): A portion of PMI can also be deducted if household income is less than $109,000 per year or $54,500 for those filing separately.
Interest On Home Equity Loans: As long as you have the necessary equity in your home to secure the required debt, you can write off the interest on a loan of up to $100,000 for those who are married filing jointly, or $50,000 when submitted separately.
Working From Home: That’s right! Even those who use a portion of their home for work purposes are able to deduct a percentage of the home’s depreciation, utility/maintenance costs and insurance. This is one you definitely want to review with your tax professional to make sure you are getting the maximum available to you.
Home Improvement Interest: This is a tricky one, as you can write off the interest on any capital improvements made to your home, which will increase value and/or prolong the life of your home. This includes certain types of restorations or additions made to the home with no cap on the investment. However, you will not be able to deduct minor patching or cosmetics made to the home.
Capital Gains/Selling Costs: As long as you have lived in your primary residence for at least 2 of the last 5 years, you are permitted to sell your property for up to $500,000 of profit for married couples filing jointly, or $250,000 for singles with absolutely no tax penalties. However, if you end up selling for an amount above either threshold, you can subtract the amount of closing/selling costs that you incurred from your total gain. Those who fall outside of the 2 out of 5 year limitation may be granted an exception given certain unique circumstances such as health problems, relocating for work or other such occurrences.

When deciding whether to rent or buy, it pays to consider the tax benefits of homeownership and to discuss these with your tax professional. Especially for those who are entertaining the thought of buying instead of renting, it is very important to consider the long-term impact that owning real estate can have on your overall financial future. There are advantages whether you are buying for yourself or investing in properties for additional income. Contact us today to discuss what your best options are.

2011-12-24T05:30:00.002-05:00

Drawn by me...for you

Merry Christmas…Happy Holidays!

NAR…”OOPS”!

2011-12-21T13:02:00.001-05:00

I think it's time to tell everyone what I have known for a long time now...What the acronym NAR actually stands for. I know that they would like you to believe that it is 'National Association of Realtors', but the real truth, revealed to all recently is that NAR stands for: 'Numbers Aren't Real'!

The NAR US Housing Home Sales Figures were artificially inflated by at least 11% per year for the period of 2007-2010. Nice work NAR! They said there were a few "errors' in data collection and interpretation". And I think that it goes back to BEFORE 2007...why did they only go back and revise to that year? “Sales were weaker than people thought (or were lead to believe by NAR reports),” said chagrined NAR spokesman Walter Malony. Data firm CoreLogic accused the NAR of over-counting home sales back in May of this year. At the time, the organization insisted that any issues with their numbers would be “relatively minor.” Unfortunately, NAR economist Lawrence Yun has revised that prediction to say that the changes in reporting will be “meaningful,” adding that “this means the housing market’s downturn was deeper than what was initially thought”.

Being in the business every day for a long time now, I began to see a slowdown in the 1st half of 2006 and an 'accelleration' in price and volume declines right at the beginning of 2007. My analysis shows that the air started to come out of the bubble, at least in Palm Beach County, right at the end of 2005. I could go in to their methodology and poke a thousand holes in it...but I'd bore everyone but myself.

The readers who regularly read my blog posts will know that I don't "toe the line" when it comes to the NAR/FAR, etc. Coincidentally, a blog post I wrote just about 5 weeks ago, http://winstontrails.blogspot.com/2011/11/if-they-keep-predicting-market.html skewers the NAR for their inept (intentionally misleading) comments.

Below are the charts that reflect the adjustments.

So...what does this all mean? Why now? And what is the effect of this revision?

Well, I think the "why now" question can be answered by NAR being called out on their numbers by CoreLogic a few months ago.

But the "what does this all mean" question has many possible answers depending upon the angle it is being viewed from. My obvious, but cynical, view is that the NAR and administration can now more easily report "improvments" in home sales. The new sales figures will be compared to the re-benchmarked historical sales and will paint a rosy housing and economic picture going forward. And if the reporters (TV and print) continue to just repeat data rather than dig in to the meaning of the data, the re-benchmarked (lower) figures will fade into distant memory...and the 'improving home sales numbers' will be evidence of our 'robust and recovering' economy.

Lastly, what does this effect? This question is better answered by a formally trained economist, but I have to believe that these numbers somehow impact GDP in a negative sense, retroactively.

If you've read this far, I commend you! Seriously though, if you are considering your options, whether it be selling or purchasing real estate, call me. You don't want to take the chance of ending up getting advice and consulting with an NAR drone who is taught to memorize "objection handling dialogs' and sales tactics.

My direct line is 561-602-1258 or

As always…thanks for reading,

Steve Jackson

Loan Modification...who really benefits?

2011-12-11T16:40:00.002-05:00

Over the past 3 years, banks have been given trillions of dollars from Congress (otherwise known as the US taxpayers) to motivate them to modify their home loans as the housing bubble collapsed. However, very few people have actually had their loans permanently adjusted, and instead, banks have been pursuing foreclosures at enormous rates.

Our opinion is that when it comes to loan mods, the homeowner who needs to be wary. On the surface, having the ability to lower ones payments an underwater mortgage certainly looks like a great deal, but we also know that the banks are on the edge of collapse due to the fact that the states and the courts are showing many of these entities do not have the proper documentation and ownership to actually foreclose on property.

The issue at hand is ownership of title, and rightful ownership of the actual note. When banks made their original loans to home buyers, they had the simple contract of title and note. However, when they sold the note to investments banks, who then separated the note from the title, and bundled these obligations with hundreds of others to create the RMBS, they simply put the title into a dummy holding company called MERS, and there was no longer a true and legal chain of ownership of the lien.

As time went on, some courts began to realize that the original banks, or the servicing agents who were simply collecting monthly mortgage payments, did not have the legal right or proper paperwork to foreclose on someones property.

So now, as a last ditch effort to compile the proper paperwork to satisfy the courts, banks are now suddenly offering loan modifications so that homeowners will by default, re-affirm the loan and justify a chain of ownership to the banks they did not have at the time of the foreclosure proceedings. Another important back-door trick of the banks is that they offer these "trial" loam mods, requesting all manner of financial documentation. And to get a loan modification, the homeowner needs to show income and assets enough to sustain payment on the lower payment. So most homeowner will go to great lengths to find and disclose and affirm assets and income that the bank may not have known about otherwise. Now, the banks know what assets to go after when they terminate the "trial" modification and foreclose instead.

In an article by Bruce Krasting on one of my favorite blogs, Zerohedge, he makes this assessment of the modification offers to homeowners:

One possible response would be to get all troubled borrowers to reaffirm their debt, the second is to get the trouble borrowers back to paying something on the mortgage, even if it were a fraction of what was formerly owed on a monthly basis. A loan modification would achieve both results. When a borrower signs up for a loan mod they sign new papers. A portion of this process will re-establish any loan balance that is due. The language in the mod could have new foreclosure terms that eliminate the banker’s problem with past tainted documentation. Once a borrower makes a few months of new lowered payments they are, in effect, confirming their acceptance of the new terms.

Most Mods go bust in six months or are cancelled for any number of reasons by the lender. So on the surface it would seem little is accomplished from the lenders perspective. But we think the lenders motivation for doing a loan mod is not to get a borrower to a monthly payment that they could realistically pay, but rather the motivation is to circumvent the foreclosure trap the lenders are in. A mod could legally resolve the problems.

To us, it appears to be a strong possibility that the banks and institutions that desire to foreclose on property are offering these modifications NOT as a means to help homeowners, but rather as a way to create new paperwork that will stand up in court, as well as uncovering assets and income that the banks may not have known existed, allowing the banks to foreclose and move on.

That being said, we have heard of homeowners that have received advantageous, permanent, modifications and are happy, keeping up with their payments, and keeping their home.

As we always recommend, any tie your bank want documents from you or wants you to sign anything, contact a well educated and experienced real estate attorney.

You can also call us to discuss your options and the relative benefits/drawback to each...

or call me on my direct line at 561-602-1258

Thanks for reading...Steve

And we thought 2012 was going to be the year…

2011-12-11T09:52:00.004-05:00

From a Forbes.com article written December 8th, 2011:Morgan Brennan, Forbes Staff

Cities Where Home Prices Are Falling Dangerously

The folks at Local Market Monitor, a Cary, NC-based real estate research company, compiled a list of the cities that suffered relatively big home price hits this year with more projected through the next 12 months. LMM sifted through market data for more than 300 Metropolitan Statistical Areas (MSAs) and Metropolitan Divisions (MSADs), as defined by the U.S. Office of Management and Budget. The company, which releases quarterly housing market reports, crunched home prices from October 2010 through September 2011 and calculated price projections through September of next year. For its projections, LMM took into account job growth and unemployment rates, population growth, sales and rental prices, and something called “Equilibrium Home Price,” which is a gauge of where the average home price should realistically lie based on economic data versus where it actually is…

Every one of the 13 markets that made our list suffers from a glut of foreclosures. “Foreclosures are continuing to weigh down home prices in hard-hit foreclosure markets as the average sales prices of foreclosure-related sales drop,” explains Daren Blomquist of RealtyTrac, an Irvine, CA-based foreclosure listing site…

A foreclosure–studded state where home prices continue to get hammered is Florida. Orlando and Jacksonville lost 11% and 9% of their home values this year, with 9.4% and 7.7% losses predicted in months to come. The Metropolitan Division that includes West Palm Beach (West Palm Beach-Boca Raton-Boynton Beach, FL), Home Price Drop from Oct. 2010 to Sept. 2011: -8.5%, Projected Home Price Drop through 2012: -8.7%, also landed on our list.

Ingo Winzer, founder and president of Local Market Monitor, says two things are driving the dive in Sunshine State markets: too much inventory and not enough jobs. Construction backstopped a sizeable chunk of Florida’s local economies, as developers built spec homes for an anticipated deluge of Baby Boomer snowbirds that, thanks to the current economy, have yet to retire. “First, a lot of homes were built, maybe more than should have been built, and second, while population growth in Florida will eventually sop up those properties, right now there’s no work so we have large numbers of homes sitting empty…causing prices (to continue to) fall,” he says.

As I consult with sellers, we go through the following exercise to determine whether to sell now or wait: If we take the average value in the report, $211,000, factor in the projected decline, then factor in a hoped-for annual appreciation of 3.5% from then on, for a seller to just break even with what they would get with a sale today, they will have to wait until the end of 2016! So…if there is a need/desire to sell in the next 3 years…don’t wait and hope, now is the time.

If you are one of the “should I stay or should I go” owners…lets meet at my office (or your home) and see what decision is best for you.
Call me at 561 –602-1258 or

Merry Christmas From Aunt Fannie and Uncle Freddie

2011-12-06T12:17:00.001-05:00

Fannie Mae and Freddie Mac are suspending evictions of foreclosed properties from Dec. 19 through Jan. 2, 2012.

The government-sponsored enterprises are the first institutions this holiday season to announce their annual moratoriums, which is a common practice in the housing sector to provide families a greater measure of certainty during the holidays.

During this period, legal and administrative proceedings for evictions may continue, but families living in foreclosed properties will be permitted to remain in the home.

The suspensions apply only to eviction lockouts related to REO properties owned by Fannie Mae and Freddie Mac and will not affect other pre- or post-foreclosure processes.

“The holidays are meant for families to spend time together, especially if they’ve gone through the stress of financial challenges and foreclosure,” said Terry Edwards, executive vice president of credit portfolio management at Fannie Mae, in a statement.

“No family should have to give up their home during this holiday season," he said.

Report: We Live in One of the Best Markets for Investment in Rental Property

2011-12-02T10:46:00.001-05:00

DALLAS, Sept. 13, 2011 /PRNewswire/ -- THIRD QUARTER 2011 UPDATE -- HomeVestors of America, Inc., known as the "We Buy Ugly Houses®" company, and Local Market Monitor, Inc., a leading forecaster of real estate markets, today released the Third Quarter 2011 update of the "HomeVestors-Local Market Monitor Best Markets to Invest in Rental Property"…The ranking is intended to help inform real estate investors of current rental property investment opportunities based on their potential future relative returns. The ranking is updated quarterly.

The ranking forecasts the expected performance of rental properties, specifically single-family homes maintained as rental properties. The ranking is calculated based on three-year forecasts of home prices (reflecting underlying home-price appreciation potential) and gross rents (as a proxy for potential investor cash flow).

Ingo Winzer, president and founder of Local Market Monitor, Inc., said: "A sharper than expected fall in recent home prices, which are down almost 5% in the last year, has led us to lower expectations for future prices. At the same time, however, higher inflation and slow but steady job growth should boost future rents. The desirability of investing in rental properties is therefore positive.

"The Future Relative Returns for large markets suggest that Las Vegas and Detroit are still very risky, highly speculative markets that could have a big payoff only if the local economy rebounds faster than we expect. The most interesting markets are in Florida and Arizona, where home prices have still not bottomed out but rents will eventually be supported by renewed population growth; investors in these markets must take a long-term view but will be rewarded if they can tolerate high vacancies for a few years."

David Hicks, co-president of HomeVestors of America, Inc., added: "What we're seeing in the marketplace reinforces the results of the latest ranking. Our franchises in West Palm Beach, Atlanta, Phoenix, Dallas, Fort Worth and Tucson all report a marked increase in investor interest in rental property opportunities. Investors are recognizing the potential for homes in these markets to produce above-average financial returns."

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We have been consulting with potential investors quite a bit lately. At certain price-points we have been finding many properties returning 10%+ cash-on-cash returns…that’s without accounting for tax benefits and the potential (albeit long-term) for appreciation.

If you’d like to discuss how to diversify some investments out of low-paying CD’s or volatile equities…call me on my direct line at 561 602 1258 or send an email.

Thanks for reading…Steve Jackson

Explanation of how our corrupt central banking system works

2011-12-01T06:15:00.001-05:00

A Thanksgiving message to our readers

2011-11-23T15:09:00.001-05:00

2011-11-23T12:34:00.001-05:00

Click above to see the latest housing trends newsletter

FHA going the way of Lehman?

2011-11-17T07:37:00.001-05:00

I heard this morning that the Federal Housing Authority (FHA), the government agency that insures residential real estate loans, has lost nearly all its cash reserves to cover losses. Since last year, these reserves have fallen from $4.7 billion to $2.6 billion.

Federal law requires it to maintain a reserve of 2% of the $1.2 trillion of loans it currently has outstanding. Reserves will fall from 0.5% to 0.24% by 2012. Independent analysts say that the agency is underestimating loan losses by at least $50 billion.

That means the FHA will need a bail out next year, and therein lies the problem. In its current gridlocked mode, it is highly unlikely that congress will approve the multibillion dollar refunding of a controversial federal agency. The “let the chips fall where they may” crowd seem to have the upper hand. The FHA currently insures one third of US mortgages, up 560% since 2006, largely through the demise of its private competitors. No insurance means no loans. For you and I that means lower home prices.

The FHA specializes in loans with less than 5% down. With home prices in a six year nosedive, more than half of these are now underwater. With $30 billion in liquid capital and $1.2 trillion in outstanding guarantees, it now has a 43:1 leverage ratio. Sound familiar? The shorthand for this is that the FHA is basically a government version of Lehman Brothers just waiting to happen.

This is a big concern here. locally, as a large percentage of the first-time buyers are FHA buyers. the under $200k market market is currently very healthy, but these under $200k homes are being purchased either all cash by investors or FHA by 1st time buyers…even some of the higher price buyers are using FHA loans as they are happy to have to have only a 3.5% down payment coupled with historically low rates…take away FHA? That would have a tremendously negative effect here in Palm Beach County.

2011-11-11T06:47:00.001-05:00

If they keep predicting a market bottom…eventually they’ll all be right!

2011-11-09T04:24:00.001-05:00

Just to say it at the outset of this post…why don’t any of the reporters, be it newspaper, online outlets or television, ever do any research and ask any tough questions when they continue to interview and quote the “experts” regarding housing?

Case in point: Here is a headline of an article/interview of Zillow chief economist, Stan Humphries, 18 months ago:

As Housing Market Nears Bottom, Pent-Up Supply Waits

And here is the prediction directly from the article: We forecast that the nation will hit a bottom in home values in the third quarter of this year, (which would have beenJuly-Sept 2010) but that there will be negligible appreciation in home values for three to five years after we’ve reached bottom…

Case-Shiller, an oft quoted research firm has this on-the-money prediction from an interview from November 30th 2009:

U.S. home prices are unlikely to fall much further in the next year even after a “discouraging” report on values in September, said Karl Case, the co-creator of the S&P/Case-Shiller Index.

“If I were betting even odds, I’d bet that we don’t have much further decline, but that we bounce along the bottom,” Case, a retired professor of economics at Wellesley College, said today in a Bloomberg Television interview…

And then here is a quote from an interview Shiller did less than 60 days ago: SHILLER: “House Prices Probably Won’t Hit Bottom For Years”

And the icing on the cake has been our own chief economist(s) of the National Association of Realtors:

04/2006: We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations.”, NAR

07/2006: “Right now we are on course for a soft-landing in housing.”, NAR

10/2006: “The worst is behind us, as far as a market correction. This is likely the trough for sales. When consumers recognize that home sales are stabilizing, we’ll see the buyers who’ve been on the sidelines get back into the market.”, NAR.

12/2006: “At least the bottom appears to have already occurred. It looks like figures will be improving.”, NAR.

01/2007: “It appears we have established a bottom” David Lereah, NAR Chief Economist.

07/2007: “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.”, NAR

11/2007: “I don’t anticipate any further major sales declines,” Yun said. However, the NAR didn’t anticipate the sales declines of the past two years, and it’s been predicting a bottom nearly every month since early 2006. (from Marketwatch)

02/2008: Reuters reports that “The NAR’s chief economist, Lawrence Yun, said the market is ‘scratching the bottom,’ with sales holding at a deflated rate of around 5 million units for the past several months.”

02/2008, There is no chance of a large price decline in Rockford, Lawrence Yun told a crowd of more than 400 at Cliffbreakers, 700 W. Riverside Blvd. There is not a price bubble in Rockford., BusinessRockford.com (see July, 2009 news report below)

07/2008: There are signs of pent up demand . I think we are very near to the end of the housing downturn, Yun said.

12/2008: I would not have done anything different. But I was a public spokesman writing about housing having a good future. Ex-NAR Chief Economist Lareah.

04/2009: “We are close to the bottom, says Lawrence Yun, chief economist for the National Association of Realtors. Once home sales begin to rise that could boost home buying confidence and get others off the sidelines.”

04/2009: The “worst may be over” in parts of the West, said Lawrence Yun, NAR Chief Economist.

07/2009: Follow up from 2/08 quote above: BusinessRockford.com – The local housing market showed few signs of rebounding in the first half of 2009, with sales of single-family homes and condominiums falling nearly 20 percent and median sale prices falling in all but two of the Rock River Valley’s largest municipalities... In Rockford, the median prices of the 61104 ZIP code are down 52.3 percent from the first six months of 2008, dropping from $64,950 to just $31,000.

Now, more than ever, it is so important to work with an agent that will consult, diagnose and recommend solutions based upon a multitude of factors…with the MOST important one being; what is in YOUR best interest.

In the past several years, I have ‘converted’ many buyers into renters, but also, some renters into buyers, because that's what we decided, together was the best option for them. I have also dissuaded many sellers from becoming landlords by default and putting tenants in their homes while waiting for “prices to go up’ because they didn’t want to “give their house away”. On the flip side of that coin, I just had a conversation with a prospective client yesterday and we decided AGAINST selling, as the cash-flow the home would generate, along with the tax benefits of renting outweighed the prospect of home value declines…their time horizon was sufficiently long to mitigate the risk when compared to the monthly cash flow.

If you would like to discuss all of the factors that you should be considering, whether it be on the selling or buying side, please call me at 561-602-1258

Thanks for reading,

Steve

The 'Art' of pricing in a declining market...

2011-11-08T12:39:00.001-05:00

Back in the good old days of real estate, pricing a property was fairly straight forward; Determine if your clients top priority was time or price, analyze what similar homes have been selling for, graph out appreciation rate and absorption rate, and pick you pricing point. But it is all different today. Pricing your property right is always important, but in a declining like we have here in Palm Beach County, a proper pricing strategy is going to be the single most important factor in whether you will be able to sell. During a pre-listing interview I tell prospective sellers that a good portion of the their contribution to getting their home sold will be done on the day we decide on an initial listing price. (The other 2 components that sellers have control of and responsibility for are condition and accessibility.)

Here are 3 reasons why pricing your property right from the start is more crucial now than it has ever been:
Time: Odds are that, if you really want or need to sell, that your home will eventually sell. And when it sells, it will probably be at the property’s market value at the time of the sale. Pricing correctly from the outset significantly increases the chance for a faster sale with less inconveniences and a greater financial return. A newly-listed home will generate an initial surge of activity. This activity peaks in the third week after listing. By overpricing you deter interest in your home when activity is usually at its peak.

More importantly, overpricing in a 'declining' market will put a seller in the unenviable position of 'chasing the market down' when it comes to price adjustments.

Competition: Buyers educate themselves by viewing many homes online BEFORE they even talk to an agent or step foot into a home, so they will know, up front, what is a fair price in the current market. In actuality, the FIRST showing with a buyer happens online...if that goes well, then you have a good chance that they will schedule an appointment with their agent to actually walk through your home. If your home is not competitive in price with those they have seen in their research, it will not even make the showing list and will probably not sell. Buyers typically look at home within a $10,000-$15,000 price range. If your home is not priced within the correct range, it very likely will not be exposed to its potential or to the maximum amount of targeted buyers.

Reputation: Overpricing, especially in a market like this- where competition for buyers is at a historical peak, causes most homes to remain on the market too long. Buyers, aware of a long exposure period, are often hesitant to make an offer because they fear "something is wrong" with the house. After too many months on the market, the only buyers who will see your property are those that are new to the market, and your property will be labeled as “overpriced.” Buyers and their agents always look for “days on market” when searching the Multiple Listing Service (MLS) listings. Day-old bread, leftovers, and overstocks are always discounted. The longer your home is on the market, the lower the price you will eventually be offered.

The Bottom Line: No matter how much you may appreciate your home and its particular special features, the buyers ultimately set the price by what they are willing to pay for the property. Overpricing in today’s market, either by you or by an agent willing to suggest a higher price in order to obtain the listing (what we ethical agents refer to is when an agent is said to be "buying a listing") , begins a chain of events that often works against you. This market is bad enough, and you most certainly do not need anything else hampering your efforts to sell. In a down market, if you are willing to price at or just below the level where homes like yours have recently sold, you will be able to sell your house. The flip side of this reality is that if you are unable or unwilling to price your home at or below current market value, you may just be better off not putting it on the market at all.

Seriously discuss the pricing issue with your agent...objectively review recent sales as well as current on-the-market properties. Try to view all of the information from a buyers perspective, you'll end up getting more money in the end...

2011-10-26T10:41:00.002-04:00

One of the best blogs I have the pleasure of reading is: Of Two Minds by the blogger Charles Hugh Smith. His post today falls right in line, and more eloquently expounds on, my earlier post regarding the new ‘underwater' re-fi plan announced Tuesday. Read it in its entirety, below.

Obama's Re-Fi Plan: The Perfection of Debt-Serfdom

How better to corral restive underwater debt-serfs than to herd them into accepting a new, "better" set of lifelong servitude shackles?
President Obama is taking credit for a new government plan to "save homeowners." That is of course pure propaganda to mask the plan's true goal: the perfection of debt-serfdom. The basic thrust of the plan is straightforward: encourage "underwater" homeowners whose mortgages exceed the value of their homes to re-finance at lower rates.
The stated incentive (i.e. the PR pitch) is to lower homeowners' monthly payments via lower interest rates.
This is the Federal Reserve's entire game plan in a nutshell: don't write off any debt, as that would reveal the banking sector's insolvency, but play extend-and-pretend with crushing debtloads by lowering the cost of servicing the debt.
The key purpose of this "plan" is to leave the principle owed to banks on their books at full value while ensnaring the hapless debt-serf (the "homeowner") into permanent servitude to the banks.
If the net worth of your home is a negative number, then what exactly do you own? You have the right to occupy the shelter, and you own the debt. So how is this any different from a lease? There is no equity, and no equity being built: there is a monthly payment in return for the right to occupy the dwelling.
The difference is the leaseholder can move at the end of the lease with no debt obligations. The underwater "homeowner" debt-serf is trapped by his/her mortgage into what amounts to lifetime servitude to the holders of the mortgage.
All the plan does is perfect this debt-serfdom. In a truly capitalist, transparent, free-market economy in which assets were always marked to market, then mortgages that are grossly misaligned with the market value of the house would be written down and the mortgage holders forced to book the loss.
Over-leveraged lenders, i.e. the "too big to fail" banks which dominate the U.S. mortgage market, would see their capital reduced to zero by the writedowns. They would be declared insolvent and liquidated. Their shareholders and bondholders would book losses.
But these losses are unacceptable in our crony-capitalist/cartel-capitalist Status Quo, so the "solution" to systemic insolvency is to manipulate the debt-serfs to keep paying, and thus keep the unicorn-and-pixies valuations of real estate on the banks' books at full value. (also…it moves the responsibility for any of these refinanced loans that default on to the backs of Fannie and Freddie …the US taxpayer)italics mine
This is the same game that Japan's lenders and Central State have played for two decades, and it remains the heart of their failed policies and decaying economy. In Japan, lenders papered over their bad debts with all sorts of back-door machinations: they extended new loans to debtors so the debtors could continue to make interest payments, they created zombie accounts filled with delinquent loans that were still kept on the books at full value, they wrote new loans at near-zero rates so interest payments were lowered, and so on--the same ploys and games being played by the Federal Reserve, the Federal government's housing lenders (Fannie and Freddie) and the banks.
The propaganda machine is running at full throttle, of course, with the usual parade of toadies and lackeys trotted out to say what a great and wonderful thing this plan is for poor homeowners. But industry analyst Ken Rosen inadvertently revealed the real motivation for the plan: to keep underwater homeowners from "walking away" in so-called "strategic defaults." underwater homeowners thrown lifeline by Obama (Mercury News).
Why is strategic default anathema to the Status Quo? Because the abandoned house will eventually have to be sold on the market, and at that point its true value revealed. The mortgage holder will then be forced to book a stupendous loss, and the inflated-paper "asset" on the books vanishes.
The Big Lie here is implicit: "your house will someday come back in value, so hang in there, debt-serf." No, it won't. The bubble has popped, and the mania has left town. Housing will retrace to pre-bubble valuations circa 1996-98.
As usual, the Plan is all about managing perceptions and political theater: we're here to help the little guy, the struggling homeowner; we are in charge, we have a plan, we're competent, this will fix the housing market.
Too bad they're all lies. Perception management is not the same as actually solving the underlying problem, yet perception management is the Status Quo's response to every problem.
The perfection of debt-serfdom is now complete. First, make student loans "necessary" for the "good life" and then make that debt permanent and unbreakable. In other words, institutionalize debt-serfdom and lifelong servitude to the financial sector.
The re-fi "plan" herds potentially rebellious mortgage debt-serfs into new corrals, with the incentive of slightly lower interest rates. The lifetime of servitude to financial Overlords remains firmly in place. That's the "plan."

Earning 1/2% on your money? Is that good enough?

2011-10-26T05:46:00.001-04:00

Would it help if you got a 10% annual return, or more, on the money that is sitting in a CD or IRA? Well, in a certain segment of today's real estate market, with the proper due diligence, you should easily be able to do that.

As a result of the housing bust, we are looking at an entire generation of renters going forward.

Did You know?

The proportion of U.S. households that own homes is at its lowest point since 1998. When the housing bubble burst four years ago, 31.6% of households were renters. Now, its at 33.6% and rising. Since the housing downturn nearly 3 million households have become renters. At least 3 million more are expected by 2015, according to census data analyzed by Harvard's Joint Center for Housing Studies and The Associated Press.

All told, nearly 38 million households are RENTERS. And you can get a nice return, even before accounting for tax benefits and possible future appreciation, from providing housing for just a few of those renters.

College costs are going through the roof...but, how would you like to have someone else fund your childs college education? One strategy that I recommend to my clients is to buy one rental property for each child as close to when they are born as possible (or before). If you buy the right property you can have it paid off by the tenants in 18 years...there's your kids college fund...and more!

If you are not happy with your IRA returns or the CD rates...maybe it's time to look at a well-thought-out property purchase...we can even show you how to buy rental properties inside of your IRA.

Call my direct line at 561-602-1258

Thanks for reading,

Steve Jackson

The Administration is playing the HARP again

2011-10-24T23:00:00.002-04:00

Today, in Las Vegas (appropriate place to announce this new gamble of taxpayer money), the President announced a reworked HARP (home affordable refinance program) that will allow for quicker/easier refinancing of underwater mortgages...no longer will HARP be encumbered by the measly 125% of market value...all restrictions are off!

Here are some of the details as reported earlier today:

The changes announced Monday are intended to benefit homeowners who have continued to make mortgage payments, even as home values have sunk, but lack at least 20% equity to refinance and take advantage of today's low interest rates. The revisions could also help some owners who are underwater, owing more than their homes are worth.
To be eligible, homeowners must have a mortgage sold to Fannie Mae or Freddie Mac on or before May 31, 2009. They also must be current in their payments and without any late payments in the past six months.
Freddie and Fannie have also agreed to eliminate some fees on loans that run 20 years or less and lower them on longer-term mortgages. The exact amount won't be known for several weeks.
In some cases, borrowers will also no longer need a new appraisal on the home, which should reduce refinance costs.
DeMarco says the changes will not only help borrowers but will also lower risk to Freddie and Fannie because fewer borrowers will eventually default. (they actually think that refinancing a 50% underwater loan to save a few points off of an interest rate will have any measurable effect on default rates? they need to talk to the average person on that one). Freddie and Fannie own or guarantee almost half of all U.S. home loans and were taken over by the government in 2008 to prevent their collapse.

So...lets say you bought a $300,000 home here back in 2005. Financed 100% of it,as was all the rage back then...your payments of P and I are about $1800. Fast forward to today...that $300,000 home is now worth about $150k...you are upside-down $150,000. BUT, they'll refinance you at about 4.11% today...a payment of about $1450. Now, a $350.month savings is nothing to sneeze at...but is it enough to keep you writing those checks every month while still $150K upside down?

And here is the kicker: DeMarco says lender resistance is less likely now than in the past because there's less risk that lenders will be asked by Freddie and Fannie to take back loans that go sour if the mortgage-finance giants find that lenders made mistakes when they made the loans. So...what this means is that all of those millions of underwater loans with faulty paperwork (transfers/falsified affidavits and signatures etc) under risk for a buy-back call from Fannie and Freddie can now be wiped clean and fresh with a new refinance loan package that Fannie and Freddie will now give their blessings to and fully assume responsibility for (because it was re-financed and re-written to their new guidelines). Sooo...all those 'future defaulting loans' will now be fully on the backs of the taxpayers! Another back-door bank bailout.

As I have posted before...there are much better ideas for fixing this housing problem...I posted my own about 18 months ago...

But...it'll buy a lot of votes before anything hits the fan!

Is a SLARP next (student loan affordable refinance program)?

And that's just MY jaded view of it...

Thanks for reading,

Steve

Have a loan with BofA? NOW IS THE TIME TO DO A SHORT SALE!

2011-10-22T16:43:00.001-04:00

If you have a loan with BofA and owe more on your loan than your home is worth…DO NOT WAIT…CALL ME TODAY

(you’ll see why below)

Below is a partial screen-shot of an email that I recently received from Bank of America.

They are offering a MINIMUM of $5,000 paid to you, the short sale seller, at closing…and possibly as much as $20,000!

BUT…we only have about 6 weeks to get started.

Really, no kidding…if you have a Bank of America (Countrywide too) loan and are upside down…this is a great opportunity.

My direct # is 561-602-1258…if you reach my voicemail, leave me a message…or you can also send me a text to that number.

Thanks for reading…Steve Jackson

Think buying a bank-owned home is a good deal? Not so fast!

2011-10-20T09:56:00.001-04:00

We have always counseled our clients that when buying a bank-owned home there are many pitfalls and caveats...but this Massachusetts court decision casts a very dark shadow on foreclosure sales:

I see many buyers and investors flock to foreclosures because they think that's where the best deals are...but considering the above risk as well as the fact that some of the overall best deals are NOT bank-owned properties..we suggest that our clients consider other options that meet their investment/lifestyle criteria.

Please feel free to call me on my direct line at 561-602-1258 if you have any questions about the above court decision or would like to discuss your investment goals.

Thanks for reading...Steve

Foreclosure filings down 70% year over year…but all is not as it seems!

2011-10-14T07:11:00.001-04:00

Excerpts from a report in today's Palm Beach Post:

In an unexpected bit of fallout from the real estate crash, lenders are filing far fewer foreclosures.

Alas, that's not because the economic picture is improving but because the housing market is flooded with repossessed homes, and banks and courts are inundated with default proceedings.

Foreclosure filings in Palm Beach County plunged 70 percent in July, August and September compared to the same three months a year ago, research firm RealtyTrac says in a report to be released today.

In normal times, a sharp decline in foreclosure filings would be cause for celebration. But these aren't normal times.

Nearly 2 million Floridians owe more than their homes are worth, and the state's unemployment rate has been stuck above 10 percent for more than two years.

Foreclosure experts say several factors have lenders taking back fewer homes. One is simple supply and demand; banks typically sell properties they repossess, and they know that putting more homes on the market will hurt values.

"The banks don't have a motivation to push these through quickly," said Tom Ice, a foreclosure attorney in Royal Palm Beach. "There's a lot of expense involved in owning the houses. And they understand that flooding the market with properties is going to push down the resale value of their own properties."

John Tuccillo, chief economist for the Florida Realtors, agrees.

"Banks are in business to make as much money as they can, or to lose as little money as they can," he said. "It's a bad business decision to flood the market."

Once a lender takes back a home, it pays the costs of owning the property, including insurance premiums, homeowner association fees and maintenance. So banks seemingly have decided that it makes sense to leave a deadbeat borrower in the home.

"There is an economic benefit to them of leaving the homeowner in the property," Ice said.

Another factor: Legal controversies surrounding foreclosures have caused banks to slow their court filings. Palm Beach County Clerk Sharon Bock pointed to the "robosigning" debacle and to the difficulties lenders have faced in proving ownership of foreclosed homes.

"The banks just simply are holding back," Bock said. "They have many more loans in default than they're putting through into foreclosure."

RealtyTrac's Daren Blomquist agreed that legal concerns have created what he called an "artificial slowing."

"Trying to adjust to the huge volume of foreclosures in 2010, lenders were resorting to questionable (illegal) procedures," Blomquist said. "To make sure they don't get into trouble again, they have to take longer and can't process as many as they used to."

Yet another reason: Lenders have begun to push short sales as an alternative to foreclosure. In a short sale, a homeowner owes more than the home is worth and finds a buyer willing to buy the property. The bank agrees to forgive the difference between the loan amount and the sale amount.

While lenders have been notoriously slow to approve short sales, two major banks have begun to encourage short sales by giving homeowners as much as $20,000 at closing.

"Bank of America and Chase have rolled out more aggressive incentive programs for short sales," said Damian Turco, an attorney in Palm Beach Gardens. "Lenders are recognizing that it's a better business decision to avoid foreclosure."

While banks take a hit on a short sale, they're likely to incur an even bigger loss on a foreclosure.

"Lenders are getting smarter," Tuccillo said. "I talk to a lot of people who say the process is getting more rational."

Bank Risk Managers: Home Prices Won't Recover Until 2020

2011-10-09T13:46:00.001-04:00

An interview of bank risk managers by Julie Crawshaw this past week on Moneynews.com revealed the sentiment that home prices are unlikely to recover before 2020 and mortgage defaults will persist for years.

The Professional Risk Managers’ International Association latest quarterly survey of bank risk professionals done for Fair Isaac Corporation shows that bankers expect delinquencies on consumer loans to rise, underwriting standards to become stricter, and the housing sector to continue struggling far into the future.
“Housing has been an enormous drag on the economy for over three years as U.S. households lost trillions of dollars in equity,” said Dr. Andrew Jennings, chief analytics officer at FICO and head of FICO Labs.

“While the housing sector will almost certainly gain strength during the next nine years, many bankers clearly believe prices will remain depressed for half a generation." "This puts the devastation of the housing crash into perspective.”

Among bankers surveyed, 49 percent said that recovery would not occur until 2020 and 73 percent believed mortgage defaults would remain elevated for at least five more years.

Furthermore, 46 percent of respondents expected mortgage delinquencies to increase over the next six months, and only 15 percent of respondents believed mortgage delinquencies will decline during that period. Only 15 percent of respondents expect mortgage delinquencies to decline during that period.

Housing prices nationwide could keep falling and might not bottom out for years, says Yale Professor and housing expert Robert Shiller.

In February, Shiller said housing prices could still fall 10 percent to 25 percent in real terms before hitting bottom. He recently told Yahoo’s The Daily Ticker he's standing by the prediction, adding that the economic big picture is looking worse. "I think the economic situation looks more precarious now," says Shiller, one of the authors of the S&P Case-Shiller Home Price Index, which was down 4.1 percent year-on-year in July although up from previous months earlier this year.

My comments: These type of stories always intrigue me for the sheer fact of how superficial and incomplete reporting has become. The sentiment is interesting and accurate, on the surface. However, one of the most important details; What is the risk managers definition of “recovery”, was omitted. Does recovery” mean that prices will regain the highs of 2005? Does it mean simply that 2020 is when they think prices will stop declining and resume a historical rate of modest appreciation?

And housing is inherently local in nature…while some markets may not “recover” until well after 2020…some have already neared a bottom.

Here in Palm Beach County, with about 50% of all homes with mortgages already in a negative equity position (under water) and a non-existent job recovery, wed are going to have continued mortgage defaults and distressed sales (short sales and bank-owned sales)…which will, in turn, continue the cycle of increasing the percentage of properties in a negative equity position and increasing the probability of further defaults.

I can guarantee, unless we have serious inflation, that 2020 will NOT bring back the good old days of 2005…and inflation may not even accomplish it without serious and stable job growth.

Thanks for reading…Steve Jackson

Strategic default OK for Mortgage Bankers Association…but not for you?

2011-10-04T04:52:00.001-04:00

The article below is from a recent post on the Mortgage-Mod_Monster blog:

Again we read the guilt trip that the mortgage industry places on distressed homeowners when dealing with their distressed mortgage. But it’s OK and even advisable for the corporations to walk away from their obligations. I’ve written about this before, but when the Mortgage Banker’s Association double deals, this is just too juicy to not publicize.

Freely quoting from Mandelman’s post: “The CEO of the powerful Mortgage Bankers Association, John Courson, has said that underwater borrowers should keep paying on their mortgage loans and ‘should not walk away from lawful debts’. In an interview this past year, Courson appeared genuinely concerned adding: ‘What about the message they will send to their family and their kids and their friends?’

Just last year, you pointed out that defaults hurt neighborhoods by lowering property values, so borrowers would do less harm to our society were they just to repay what they owe. You know… like the responsible homeowners.

This past week, the Co-Star Group, Inc., indicated that it had agreed to buy the MBA’s 10-story headquarters building in DC for $41.3 million. The only problem is that $41.3 million comes up a skosh shy of the $75 million first mortgage on the building that the MBA took out from PNC Financial Group way back in 2007, when they purchased the property for $79 million.

The very same MBA also defaulted on their payments and secured a forbearance agreement, prior to the short sale. Nicely done, Johnny-O.

What kind of message are YOU now sending to Your family, Your children, and Your friends by walking away from Your lawful $75 million debt? Are they being morally harmed by your decision to stick the bank with close to $25 million? And why aren’t You simply paying Your mortgage as agreed, Mr. Courson?

Again, advice to the distressed homeowner: Answer the emotional question first – do you want to keep your house? or walk away with the least damage and purchase another home in two years? Then consider the financial questions. Do you have steady, although significantly reduced employment that you can count on for the foreseeable future? Do you believe your property recover any lost value in 5 to nine years?

Currently, the best answer to solving a distressed mortgage is the REST Report. The REST Report calculates Net Present Value and enables a distressed mortgage owner to negotiate an unbiased mortgage modification with court support if the mortgage servicer chooses to ignore the calculations and pursue foreclosure…

If you don’t believe your property can recover value in 5 to nine years, give the keys back to the bank…It even now has a name, compliments of firms like the Mortgage Banker’s Association. It’s called a ‘strategic default’. Do not even consider for one minute any ethical responsibility to anyone but yourself. Your bank cares not one whit for your well-being. You owe them, or anyone else, not one red cent.

Ocwen rolls out a new loan modification for underwater borrowers

2011-09-30T04:13:00.001-04:00

Finally a lender gets a brain! Locally based Ocwen recently revealed a plan that incorporates many of the components of a loan mod/refinance that I suggested over a year ago: Reduce the loan amount to today's value, write off the ‘underwater portion’ over a number of years if the owners stays current on all mortgage obligation aspects, and if/when the home is sold, Ocwen will recoup some of the regained equity…Brilliant! The other big added benefit to the lender is that they get to draw up new loan documents without all of the defects that are being challenged in court right now…and I wouldn’t be surprised if they slip in some new restrictive language to the now docs too!

For all of you with an underwater Ocwen loan…CALL THEM TODAY to see if you can qualify, then call me and let me know the details of the process/qualification/final terms so I can spread the news.

Below are excerpts from the article that was in the Palm Beach post.

The company is rolling out a new loan modification plan for underwater borrowers that lowers the amount owed on the loan - thus reducing the monthly payment - but asks for a share in the appreciated value when the house is either sold or refinanced.

The kickback to the lender may deter people who can afford to make their payments from defaulting, while giving an incentive to either the lender or investor to modify the loan.

"We think this answers some of the critics who say that by reducing principal, you are rewarding imprudent borrowing behavior," said Ocwen Executive Vice President Paul Koches. "What we see is unprecedented delinquencies, and we're doing our best to resolve them."

Offered in 33 states, including Florida, the plan is available only on loans where it will earn more for either the lender or investor than if the home went into foreclosure.

Called a shared appreciation modification, it's fairly simple on its face.

A home's principal amount is reduced to 95 percent of the current market value. That portion is forgiven in equal amounts over a three-year period as long as the owner stays current on the loan.

When the house is later either sold or refinanced, the homeowner must give the lender 25 percent of the appreciated value of the home.

For example, say the principal balance on a loan is $125,000, but the current value of the home is only $100,000. Ocwen's plan would reduce the balance to $95,000, putting $30,000 in a non-interest-bearing account that will be forgiven over a three-year period.

If the house is later sold for $120,000 - marking an appreciation of $20,000 - the homeowner would get to keep $15,000, while $5,000 would go to the lender. If the home doesn't appreciate, then the sale occurs as it normally would.

Ocwen, which has about 245 employees in its West Palm Beach office, estimates about 53,000 homeowners nationwide will be eligible for the principal reduction program.

The company specializes in servicing the nation's riskiest home loans and has a portfolio of about 460,000 loans. Ocwen's recent acquisition of Litton Loan Servicing will add 250,000 loans to its portfolio.

A test of the new loan modification program that was launched last year found that of borrowers offered the plan, 79 percent accepted it. The default rate has been about 2.6 percent.

"You have folks breaking their necks to make payments on a home where there is no hope in their lifetime of it regaining equity," Koches said. "A homeowner in a negative equity situation is one-and-a-half to two times more likely to go into delinquency."

In Palm Beach County, nearly 43 percent of homes with mortgages were underwater during the first quarter of 2011, according to real estate analysis firm CoreLogic.

Most home loan modifications result in an interest rate reduction, which can do little in the long run for homeowners who owe more on their loan than their home is worth, said Kathleen Day, spokeswoman for the Center for Responsible Lending.

"We've felt for a long time that unless you do principal write-downs, you really aren't getting at the problem," Day said. "It's in everyone's best interest to keep a credit worthy person in their home."

Thanks for reading…Steve Jackson

Best of Lake Worth awarded to The Jackson Realty Group

2011-09-22T09:50:00.000-04:00

Press Release

FOR IMMEDIATE RELEASE

Jackson Realty Group Receives 2011 Best of Lake Worth Award

U.S. Commerce Association’s Award Plaque Honors the Achievement of The Jackson Realty Group of Lake Worth, Florida

NEW YORK, NY, September 15, 2011 -- Jackson Realty Group has been selected for the 2011 Best of Lake Worth Award in the Real Estate category by the U.S. Commerce Association (USCA).

The USCA "Best of Local Business" Award Program recognizes outstanding local businesses throughout the country. Each year, the USCA identifies companies that they believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and community.

Various sources of information were gathered and analyzed to choose the winners in each category. The 2011 USCA Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the USCA and data provided by third parties.

About U.S. Commerce Association (USCA)

The USCA was established to recognize the best of local businesses in their community. Our organization works exclusively with local business owners, trade groups, professional associations, chambers of commerce and other business advertising and marketing groups. Our mission is to be an advocate for small and medium size businesses and business entrepreneurs across America.

SOURCE: U.S. Commerce Association

CONTACT:

U.S. Commerce Association

Email: PublicRelations@uscaaward.com

URL: http://www.uscaaward.com

###

Palm Beach County Real Estate...the good, the bad and the ugly

2011-09-21T13:58:00.002-04:00

As reported today by the Florida Association of Realtors, in the Palm Beach Post, sales of existing homes in Florida increased 4 percent in August from July, but were down slightly in Palm Beach County during the same time period.

A report released this morning by the Florida Realtors shows 961 homes changed hands in August in Palm Beach County, a 1 percent decrease from July, but a 21 percent hike from August 2010. (I don't know where they get their figures from...looks totally inaccurate to me. My MLS report shows 2411 homes actually sold..as in the sale closed...in Palm Beach County in August of 2011) Palm Beach County tax records...which are sometimes behind in recording sales, show 2251 sales in August...which most likely includes sales than just residential homes/condos/townhomes)

Statewide, sales increased 15 percent in August from August 2010. Median prices statewide remained mostly unchanged in August from July at $137,500, but were down 16 percent from last year.

Palm Beach County's median price for a single family home in August was $196,900, down nearly 5 percent from July, and 14 percent from August 2010.

Sales are up...prices are down; In my opinion, this is going to be the story in the foreseeable future as banks work to process short sales faster and also work to get homes into foreclosure faster. With short sales and foreclosures it is a vicious cycle of downward pricing pressure.

Here are the current figures from Palm Beach County: (if we use the PB Post/Fl Assn of Realtors sales figures)

340 Foreclosures/Bank Owned homes were SOLD in August 2011... That equates to 35% of all homes sold in August were Foreclosures/Bank Owned
411 Short sales were SOLD in August 2011...That equates to 43% of all homes sold in August were Short Sales

That would translate to 78% of all Palm Beach County homes sales in August, 2011 being distressed sales which would be a TOTAL DISASTER...I think the PB Post (and FAR) is wrong.

Using the figures I derive from MLS reports as well as Palm Beach County tax records, I come up with a 31% distressed sale ratio...much more accurate I feel...but still almost 1 out of every 3 sales is distressed...that will continue to drag values down.

Thanks for reading...Steve Jackson

10 million more foreclosures in the pipeline

2011-09-20T19:13:00.001-04:00

In August, the Obama administration asked the housing industry for ideas on how to more efficiently sell or unload this overhang, and the Senate heard testimony from various housing players Tuesday.

Roughly 10.4 million mortgages, or one in five homes with a mortgage will likely default if Congress refuses to implement new policy changes to prevent and sell more foreclosures, according to analyst Laurie Goodman from Amherst Securities Group.

At the end of the second quarter, more than 2.7 million long-delinquent loans, others in foreclosure and REO properties sat in the shadow inventory, more than double what it was in the first quarter of 2010. With the market averaging roughly 90,000 loan liquidations per month, it would take 32 months, nearly three years, to move through the overhang…and that number is contingent on NO other loans going into default.

"Many analysts looking at the housing problem mistakenly assume it is limited to loans that are currently non-performing (or 60-plus days past due). Such borrowers have a high probability of eventually losing their homes. However, the problem also includes loans with a compromised pay history; these are re-defaulting at a rapid rate," Goodman told a Senate subcommittee Tuesday.

Most of the proposals included recommendations to sell properties ‘in bulk’ to investors with one of the stipulations being that they be turned into rentals. (italics mine)

Stan Humphries, chief economist for Zillow, said the rental market is currently booming and would be able to handle a mass conversion of foreclosures into rentals. "Investors smell a distinct opportunity in this situation: The chance to buy an asset cheaply and rent it out. In fact, close to one-third of the purchases of existing homes this year have gone to all-cash buyers, the bulk of whom are real estate investors," Humphries said.

This sounds to me like the housing equivalent of ‘cash-for-clunkers’ which resulted in the removal from the market of tens of thousands of good, affordable used cars, as the requirement was to “junk’ the clunker trade-in (the dealers were not allowed to re-sell them)…The same thing will happen with homes; currently, a lot of buyers can’t purchase a great many of the foreclosed homes as they require too much work and/or don’t qualify for an FHA loan. Typically, the buyers in the under $250k market, (where a great percentage of the foreclosed homes sell), are FHA buyers because they DON’T have a lot of cash…so they are not able to ‘buy and rehab’. BUT, that is where cash buyers come in…they buy, rehab to move in condition, and re-sell…quite often to FHA or other low-down-payment buyers and they make a little money doing it…as they should. But if you take away these homes by requiring that they be converted to rentals, how does that help? Well, it helps the big companies, REITS, and investment groups that will get a piece of that sweet deal!

Just read my recent posts regarding the scary legislation working its way through Tallahhssee now…going to make it sooo easy, cheap and fast for the banks to get these homes back…We need everyone to PAY ATTENTION…and thanks for reading!

Steve Jackson

Standard Sales, Short Sales and REO's...

2011-09-19T06:20:00.002-04:00

A short video with a quick explanation of the differences between standard sales, short sales and REO’s.

Foreclosures ramp up: County's 13% jump the trickle before the dam breaks, experts warn

2011-09-15T06:59:00.001-04:00

More Palm Beach County homes received first-time foreclosure notices in August than the previous month, and experts warned Wednesday that the 13 percent increase is just a trickle before the flood.

Statewide, new foreclosure filings were up 10 percent last month from July, according to findings to be released today by the Irvine, Calif.-based company RealtyTrac.

Nationally, initial notices of foreclosure were up 33 percent.

But unlike previous reports that found increases and decreases in foreclosure activity were similar nationwide, there was a marked difference in August between judicial states, where a judge is required to sign off on a home repossession, and non-judicial states.

In the 25 states RealtyTrac considers non-judicial, initial foreclosures leapt 46 percent in August from July, although they were still down 10 percent from August 2010. In judicial states, including Florida, there was only a 21 percent increase in August from July, with a 25 percent drop from last year.

"I've been told by a number of banks' lawyers that they have cases ready to go and are just waiting for approval to file," said Mike Wasylik, a foreclosure defense attorney with the firm Ricardo, Wasylik & Kaniuk, which has an office in Boca Raton. "I've been expecting the dam to break for months now and I think there is still uncertainty about what is going to happen with regulatory actions and pending settlements."

Foreclosures were suspended last fall following questions about the validity of court documents used to take back homes. Activity remained on a simmer through early spring and has jumped around since then as lenders continue to patch up their foreclosure processes.

The nation's largest home lender and servicer, Bank of America, confirmed Wednesday it had ramped up foreclosures in non-judicial states, including Nevada, which saw a 31 percent increase in new filings in August from July. California, also a non-judicial state, saw a 55 percent increase.

"Strong gains like that from July to August demonstrate our progress, clearing more volume to advance to foreclosure once we pass the numerous, improved quality controls we have in place and only after all other options with homeowners have been exhausted," said Jumana Bauwens, a Bank of America spokeswoman. "The industry has not yet returned to normal or necessary foreclosure activity levels, but progress is certainly being made."

Still, lenders face more uncertainty.

Earlier this month, the Federal Housing Finance Agency sued 17 financial firms for selling Fannie Mae and Freddie Mac billions of dollars' worth of risky mortgage-backed securities that turned sour when the market collapsed.

Also, settlement negotiations continue between banks and the nation's attorneys general. The attorneys general joined last year in an effort to investigate the robo-signing scandal, penalize lenders for their paperwork missteps and help struggling borrowers.

"The banks don't know what their exposure is from past problems or that they have resolved the problems to the satisfaction of the attorneys general," said Guy Cecala, chief executive officer and publisher of Inside Mortgage Finance.

But foreclosures have not come to a complete standstill.

Last month, 715 Palm Beach County homes were sold at auction - the final step in a foreclosure - according to Palm Beach County Clerk of Courts data released Wednesday.

Just 31 percent of scheduled auctions were canceled, a decrease from a high of 51 percent in January when banks hurried to delay sales in the wake of the robo-signing scandal.

The Palm Beach County clerk's office tallied 1,126 initial foreclosure filings last month. That's slightly higher than RealtyTrac's 926, but could be a function of when the numbers were gathered.

"We were anticipating another wave of foreclosure filings this year, based on expert forecasts, but so far an influx of new cases has yet to materialize," said Clerk Sharon Bock.

RealtyTrac has lowered its nationwide prediction of total foreclosure filings - initial notices, sale notices and auctions - for 2011 from 3 million to 2.5 million.

"As painful an issue as foreclosure is, it has to get back on track, otherwise we'll slip further and further behind," Cecala said. "The year 2011 will go down as the year that nothing got done."

If you have been reading my blog, you have read about the scary pro-bank bill under review now in Florida…my guess is that the banks are holding back go ing forward here in full force in the hopes that this bill gets passed in the dark of night. Then, the banks can EASILY FORECLOSE AND TAKE POSSESSION OF HOMES. The bill even has a provision that if you defend your foreclosure but the bank eventually does get to foreclose…YOU AND YOUR ATTY HAVE TO PAY THE BANKS LEGAL FEES!

Thanks for reading…Steve Jackson

Canyon of the Souls

2011-09-08T07:14:00.001-04:00

Our sales manager, John Durante, is an accomplished drummer/musician. Just days after the 9-11 tragedy, John and his band wrote this tribute to the victims. Below is the video of John and his band performing that song.

Ruling in Wellington case could further complicate Florida foreclosures

2011-09-07T18:09:00.000-04:00

By Kimberly Miller Palm Beach Post Staff Writer

In a decision that could have staggering implications on foreclosure proceedings statewide, an appeals court ruled Wednesday in favor of a Wellington homeowner whose bank filed documents sworn to by employees with no personal knowledge of the case.

The ruling from the 4th District Court of Appeal reversed in part a 2010 Palm Beach County Circuit Court summary judgment that said the homeowner owed LaSalle Bank $422,677.

That amount was based on an affidavit of indebtedness signed by loan servicer employee Ralph Orsini who pulled the information from a company computer _ a move that appeals court judges said amounts to hearsay.

Orsini did not know who, how, or when the data entries were made into Home Loan Services's computer system," the decision states. "Orsini could state that the data was accurate only insofar as it replicated the numbers derived from the company's computer system."

The ruling means the home, which has been in forelcosure since September 2008, can't go to a foreclosure sale until the bank either gets another summary judgment or goes to trial.

Tom Ice, whose firm Ice Legal represents the homeowner, said Wednesday's decision hits at the essence of the nation's foreclosure robo-signing scandal in which tens of thousands of foreclosure court documents were signed by people swearing that they had personal knowledge of cases when they did not.

While some lenders called the document problem a technicality, foreclosure defense attorneys called it perjury and fraud.

Foreclosures came to a virtual standstill in the fall after the robo-signing revelations were made as banks worked to revamp their processes and re-do paperwork where they could.

Between July 1, 2010, and June 30 of this year, 104,126 foreclosure cases were dismissed in Florida's courts, often by lenders needing to re-file pertinent paperwork.

"Bank officers cannot simply regurgitate what they read off computer printouts," Ice said. "This has been a major battleground in foreclosure cases."

A message left for the bank's legal representative, Orlando-based Butler & Hosch, was not returned Wednesday.

The appeals court ruling was called "rock solid" by Sarasota-based attorney Henry Trawick, an expert on Florida's judicial rules and author of Trawick's Florida Practice and Procedure.

He said a valid affidavit of indebtedness would have to be sworn to by the person who actually entered the information into the computer system. He expects the decision to further snarl Florida's courts.
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"I think a whole lot of summary judgments on these foreclosures are not valid because of this," said Trawick, who is also concerned about how allegedly bogus affidavits will affect getting clear title to homes. "The real problem ahead of us is years to come when all these properties are being sold."

But not everyone is convinced of the magnitude of Wednesday's decision. Palm Beach County Chief Judge Peter Blanc said while it sets precedent for similar cases, it's too early to tell what the implications will be.

Fort Lauderdale attorney Shari Olefson, who represents banks in foreclosure cases, said the ruling doesn't change what's been going on since the robo-signing scandal broke."

The people I've been talking to have set aside affidavits and have to start all over again," she said. "This is pretty consistent with the way things have been going."

In my humble and non-atty opinion, this could be a huge impediment to banks in the short term...until they figure out a way around it or get legislation passed to negate and/or circumvent this decision.

Shadow inventory Armageddon – Foreclosure timeline up to an average of 599 days with 798,000 mortgages having no payment made in over 1 year and no foreclosure process initiated. Shadow inventory grows to over 6,540,000 properties.

2011-09-03T08:23:00.001-04:00

From the insightful blog Dr.Housing Bubble comes this recent post:

The biggest problem facing the housing market is still the large amount of stubborn shadow inventory. The fact that this figure remains elevated is a sign that the banking system after all these years and trillions of dollars in bailouts has yet to figure out a streamlined way to unload properties. The Federal Reserve is trying to grease the wheels with historically low mortgage rates but that has done very little since this does not address the weak economy. At the latest count there are 6.54 million loans that are either delinquent or in the foreclosure process. This figure hasn’t really moved much for the entire year. Properties have been sold from the REO (bank owned) pile but this is the tiny chunk of properties that is covered by the mainstream news and also that appear in public listing services. As we will show in charts later in this article, only examining this piece of the real estate pool is like seeing the tip of an iceberg and thinking there is nothing underneath it submerged in the water.

The stagnant shadow inventory

The latest data shows that the shadow inventory has increased a bit in the last few months:

To break down the figures even further you have 2.48 million loans that are less than 90 days delinquent (3 missed payments), 1.9 million loans that are 90+ days delinquent (more than 3 missed payments), and 2.16 million loans already in the foreclosure process. In total, this adds up to over 6.54 million loans in the distressed pipeline and this is what I would categorize as the shadow inventory. As the chart above highlights, only about 500,000 properties are actually real estate owned and show up for sale in local MLS data (and not all REO show up but a lot do). The cure rates are abysmal on many of the loans and many are underwater to levels that will never cure on these properties. In fact, the latest data shows that the typical foreclosure process timeline is now up to a stunning 599 days!

“(LPS) The July Mortgage Monitor report released by Lender Processing Services, Inc. shows that foreclosure timelines continue their steady upward trend, as a payment has not been made on the average loan in foreclosure in a record 599 days. Of the nearly 1.9 million loans that are 90 or more days delinquent but not yet in foreclosure, 42 percent have not made a payment in more than a year with an average delinquency of 397 days, also a new record. At the same time, first-time foreclosure starts in June were near three-year lows, and first-time delinquencies accounted for only 25 percent of new delinquent inventory.”

Even more disturbing you have 42 percent of the 1.9 million loans that are 90 or more days delinquent not making a payment in more than a year (approximately 798,000 mortgages are going with no mortgage payment for more than a year yet no foreclosure process has been initiated)…

Even though properties are being cleared out via REO sales, this is a small fraction of the pool and it also doesn’t include the fact that tens of thousands of people each month are thrown into the distressed pool because of the economy. This is why you have a tough battle ahead…

The hidden cost of living

There is a good measurement tool over at MIT that is called the Billion Prices Project (BPP). This measure seeks to get a better idea of the real nature of inflation in the economy:

Contrary to what we are being told the cost of living is going up. You have a variety of things happening from producers chopping down ounces or repacking goods giving you less for the same price to energy costs still being high (a gallon of gas here in L.A. County is stilling running over $3.8). You also have health premiums going up all the while people have no growth in household incomes. Yet the MIT data shows year-over-year inflation is now up over 4 percent. This figure is incredibly high when there is no added wage growth (even a 1 percent spike with no wage growth is crushing). You don’t need to be an expert here but just look at your monthly purchases to see this revealed.

The big ticket items like housing have been falling but for most other daily goods the cost has gone up. This is why the bigger issues that will push housing lower are outside of the housing arena (i.e., jobs, healthcare, education, food etc).

In my humble opinion, it becomes a cycle of continually-declining prices; As more REO sales happen, the comparable sales values pull down the rest of the market values, throwing more homeowners into an upside-down position. The further upside down an owner is, the more likely they are to stop throwing good money after bad, even before they hit a financial speed bump.

If you own a home here locally and are nearing “downsizing age” or have another compelling reason to consider selling your home in the near future and you currently are NOT upside-down, do it now. I can’t even count the number of owners I have met with, from 2007 through today, who have uttered the phrase”I’m not going to GIVE my home away!” I can guarantee that all of them would be ecstatic to sell their homes for the “give away” price I advised them of back when we first met.

And the people I meet with today who say “I’m going to wait until the market gets better” will be longing for the summer of ‘11.

If you’re reading this blog because you’re trying to figure out what your best option is…just call me and together we’ll figure it out. 561-602-1258

Thanks for reading,

Steve Jackson

Americans Expectations for a Housing Market Recovery Falters

2011-08-24T03:56:00.001-04:00

As more cities across the nation experience double dips in home prices, 54 percent of adults believe recovery in the housing market will not happen until 2014 or later, according to the survey released today. In a previous survey conducted six months ago, 42 percent of American adults said they thought the market would turn around by 2012 or had already turned around. Now, only 23 percent continue to think this will happen.

FROM PETE FLINT, CEO OF TRULIA

“Most Americans, as our latest survey revealed, overestimated how quickly the housing market would bounce back, but when it does, it will likely be a long and gradual process. Looking at the recent double dips in home prices, I expect the rest of 2011 to be volatile for real estate,” said Pete Flint, co-founder and CEO, Trulia. “On the flip side, mortgage rates won’t stay low forever and even if home prices continue to fall for a bit, now is still a good time to enter the housing market. In my eyes, we have another 18 months until we start to see signs of price stability in the housing market.”

FROM RICK SHARGA, SVP OF REALTYTRAC

"Our survey reflects a growing perception among potential homebuyers that the housing recovery is still a long way off," said Rick Sharga, senior vice president of RealtyTrac. "Demand remains weak, loans are increasingly difficult to qualify for, and the shadow inventory of several million distressed properties is weighing down the market. All of these things need to improve before housing can recover.

It looks to me like most average Americans have a better grasp of the state of the housing market than do most of the housing economists as well as the head of NAR (National Association of Realtors).

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If you’re currently considering purchasing a primary residence or any investment property…call me first and lets see if that is the best move for you right now.

Owners thinking about selling now or in the near future…we certainly should sit down together so you can have a clearer view of your options.

Thanks for reading,

Steve Jackson

561-602-1258

FSBO.com founder hires a real estate agent to sell his home

2011-08-18T06:28:00.001-04:00

FSBO=properties that are For Sale By Owner. Every year, hundreds of thousands of properties are offered for sale, not by real estate agents, but by the owners themselves. Most often, these are property owners who don’t want to pay the real estate agent’s fee. These FSBOs believe that they can do the work of an agent in researching a property’s correct price, staging it, marketing it in the right channels, showing it, negotiating the contract, qualifying the buyer, handling escrow, etc.

But sometimes, FSBOs are just owners who have unrealistic expectations of how easy it is to sell a property — why, just post it on the internet and the buyers will come, that’s all an agent does anyway, they assume. That’s why it was a sweet to hear that Colby Sambrotto, one of the founders of Internet listing site FSBO.com, ended up hiring a real estate agent to sell his $2 million condo.

The sale closed earlier this summer. The agent, Jesse Buckler of Bond New York, reportedly charged a 6% commission.

If you are in real estate or if you follow real estate, you know that this story isn’t that unusual. I’ve even read that Craigslist founder Craig Newmark said at three different conferences that he loves his real estate agent.

Interestingly, it’s been reported that FSBO founder Sambrotto had the listing on the market for months as his own FSBO; however, when Buckler got the listing — this spring, as Wall Streeters got their bonuses and the market for 2-bedrooms heated up — he jumped the sales price by $150,000. At that 7.5% higher price than it was marketed for on the FSBO site, the condo received multiple offers. So it looks like the agent paid for himself and then some!

Are agents really so magical that hiring one is going to generate an extra 7.5% in sales price? Not always, but a full-time, experienced, working agent does have a tremendous advantage over any FSBO seller…from the beginning of a transaction (pricing and staging) to the end (escrow and closing), and in every component in the middle.

Now if you’ve read this far and still want to go FSBO, don’t let me stop you…In fact, we have a program just for sellers who want to do some of the agents work and save thousands in commissions.

Give us a call at 561-432-5202 and ask about our MLS Advantage program.

View all of the Fannie Mae foreclosed homes in Palm Beach County

2011-08-17T17:50:00.001-04:00

Click on the Fannie Mae image and you will be able to see all of the Fannie Mae foreclosures in Palm Beach County.

If you are interested in seeing any of the homes on their list…call us at 561-432-5202 quickly as there typically are limited time periods for viewing/offers.

Dylan Ratigan says what needs to be said

2011-08-10T05:59:00.001-04:00

DylanRatigan.com

Credit Ratings Downgrade for Fannie and Freddie Now?

2011-08-08T12:19:00.002-04:00

In what is shaping up to be an erratic trading day, the Dow has dropped below 3% in early trading after the latest news that Standard and Poor's downgraded the debt of mortgage finance giants Fannie Mae and Freddie Mac.

It was widely expected that S and P's downgrade of U.S. debt would roll downhill to other entities that are closely linked to the federal government. Fannie and Freddie, which were taken over by the government in 2008, fuel home sales by purchasing mortgages from banks.

It's not clear what - if any - effect the downgrade will have on Fannie and Freddie's borrowing costs. And since Treasury yields remain at very low levels, a sharp spike in mortgage rates seems unlikely.

I’ll let you know what effect this is having on mortgage rates as soon as I know!

Here is an update of what effects the Fannie and Freddie downgrade may have:
Not every type of consumer borrowing has a direct tie to the government's credit rating, but there are potential ripple effects for individuals.-- Mortgage and home equity loans--

S and P's downgrade may have several implications for homeowners.

For starters, early Monday S and P downgraded the credit ratings of mortgage giants Fannie Mae and Freddie Mac, which are both backed by the U.S. government. That could mean higher mortgage rates for new borrowers. Freddie and Fannie together own or guarantee about half of all mortgages in the U.S.

Anyone hoping to buy a home in the near future likely has some time before they'll see rates climb. Still they should ask their bank or mortgage broker about the process for locking in a rate. Mortgage rates have been at historic lows in recent months, but fixed-rate mortgages are typically directly tied to the yield on 10-year Treasury bonds. Higher mortgage rates would follow any increase in the Treasury yield. But so far it appears that Treasury yields won't rise simply as a result of the downgrade.

Variable rate mortgages and home equity loans could become more expensive as well.

The high failure rate for adjustable rate mortgages during the housing meltdown means that today the number of new home loans with adjustable rates is minimal -- less than 5 percent of the market, according to Stephen Malpezzi, an economics professor at the University of Wisconsin Business School who follows the housing market.

What's less clear is how many older loans with adjustable rates remain out there, he said. With interest rates low in recent years, many homeowners who held adjustable rate mortgages have refinanced to fixed-rates. For homeowners who still have ARMs, any potential change in their interest rates depends on whether their loan was linked to Treasury rates or some other benchmark, like the prime rate or federal funds rate.

Meanwhile, home equity loans, or HELOCs, are almost always variable rate loans and typically adjust more frequently than first mortgages, sometimes even monthly.

Homeowners with such loans could see shifts in their rates and payments while the markets absorb the downgrade.

One caveat is that many ARMs and most HELOCs are tied to the federal funds rate, which is set by the Federal Reserve, not to Treasuries. That should help insulate borrowers. The Fed, which meets Tuesday, has already said that it plans to keep rates low for "an extended period."

"The Fed is not likely to increase the federal funds rate anytime in the near future, especially if there's another problem with the economy as a result of the whole debt ceiling thing," said Gibran Nicholas, chairman of the Certified Mortgage Planning Specialist Institute.

Thanks for reading,
Steve

Go to the correct site to get your credit report

2011-07-29T08:04:00.001-04:00

There are lots of ads for sites that say they can give you your credit report, but be cautious; there is only one that truely gives you your reports for free...from all 3 credit bureaus. You can get a free copy of your credit report once a year, from annualcreditreport.com. A good way to keep tabs on your credit is NOT to pull all 3 reports at one time-once a year, but to pull a free credit report every 4 months from 1 of the credit bureaus...and keep rotating. This way you'll be able to see a credit report for free 3 times a year.

Be aware...this doesn't include your credit score, which is what people look at to decide whether or not to loan you money or charge you a huge deposit.

If you want to find out your actual credit score, try quizzle.com or creditsesame.com. Both are legit services, and they're both completely free. BUT...They use your credit history to try to sell you financial products like mortgages, credit cards, etc. though, so be wary.

View the webcams for: Boca Inlet, Boynton Inlet, Palm Beach Inlet, Jupiter Inlet

2011-07-22T18:06:00.004-04:00

I thought these were cool...just click on the image above...hope you enjoy them!

Thanks for stopping by our blog.

The ultimate inside job!

2011-07-18T07:06:00.001-04:00

This is a must watch 3 minute video...

Keep paying your mortgage and you get a prize!

2011-07-12T07:23:00.003-04:00

A mortgage insurance company, PMI Group, (basically an insurance company that pays lenders if a homeowner defaults on a home loan)...is going to pay some homeowners handsomely if they keep current on their mortgage!

Monday, July 11th, 2011, 9:11 am

Private mortgage insurer PMI Group (PMI: 1.34 -11.26%) says it will offer cash incentives to some homeowners in negative equity to help prevent mortgage defaults.

PMI subsidiary, Homeowner Reward is working with Loan Value Group, to administer the pilot program, called Responsible Homeowner Reward.

The program launched Monday and will start in select real estate markets where falling house prices left borrowers owing significantly more on their mortgage than what the property is worth.

Participation in RH Reward is voluntary and there is no cost to the homeowner, according to PMI. The cash will come after a lengthy period of keeping the mortgage current, generally from 36 to 60 months. According to PMI, the reward will be between 10 to 30% of the unpaid principal balance.

The Loan Value Group works "to positively influence consumer behavior on behalf of residential mortgage owners and servicers," according to its website.,,

"We continue to seek creative and effective loss mitigation strategies," said Chris Hovey, PMI vice president of servicing operations and loss management. "PMI is especially supportive of homeownership retention efforts in states that are facing unprecedented housing challenges."

If you are upside down on your mortgage and have mortgage insurance with the PMI group...I suggest giving them a call...be proactive and ask to be enrolled in this new program.

Winning Monopoly strategy

2011-07-06T04:34:00.019-04:00

Click on the board to learn about
Steve's inside tip on how to shift
the odds in your favor when playing
Monopoly!

July 4th, 2011

2011-07-03T10:51:00.001-04:00

I am well aware of the toil, and blood, and treasure, that it will cost us to maintain this declaration, and support and defend these states. Yet, through all the gloom, I can see the rays of light and glory; I can see that the end is more than worth all the means, and that posterity will triumph.

John Adams, letter to Abigail Adams, July 3, 1776

Mortgages that are delinquent 90 or more days outnumber current bank owned foreclosure sales by a ratio of 50 to 1

2011-07-01T15:28:00.001-04:00

According to LPS, (Lender Processing Services) mortgage monitor report for May , the number of properties delinquent 90 or more days (or in foreclosure) outnumber foreclosure sales 50 to 1!

More than one-third of homeowners who have had a foreclosure suit filed by their lender haven't made a payment in more than two years, according to LPS.

"Negative equity also remains a concern, with nearly 30% of current loans in a negative equity position," according to LPS. "The equity impact on new seriously delinquent loans is significant, with loans significantly underwater defaulting up to 10 times as much as loans with equity."

So…what does this mortgage industry report tell us? Well, it is the counterbalance to all of the so-called ‘experts’ reporting that foreclosures are down. That’s a nice sound bite…but doesn’t report the entire story.

The deleterious effect that vacant homes and foreclosure sales have on home values is not soon to be over.

If you may have to (or want to) sell your home in the next 2-3 years…do it sooner than later. If you are currently in the market to buy a home…make sure that you are buying for the right reasons, in the right place, and at the right price.

We'll buy your house? Really? Or just a 'get my foot in the door' ploy?

2011-06-30T18:04:00.004-04:00

I have started to see this being promoted recently by mail and on the radio.

"If we don't sell your house in ___days...WE'LL BUY IT!"

Sounds great...especially in this market. Worth checking out? That's what the agent is hoping you'll think. Get their phone to ring...but they'll most likely never discuss the details over the phone..."much to complicated and need to see your home to see if it qualifies"...get the foot in the door. But there is NEVER a free lunch; there is always a cost associated.

But, particularly in this type of market, it would be "good business" if the agent NEVER bought any homes, or if they did, that they were purchased at such a drastic discount that the seller could do better selling the home themselves.

I have gone to several seminars where they promoted this (tactic/gimmick) and it starts out sounding something like this:
" Mr./Mrs. homeowner, a big dilemma when making your move is deciding whether to buy 1st or sell 1st. Either way is risky as you could end up with 2 homes (or no home). Our unique/innovative/etc., Guaranteed Sale Program solves this dilemma...you get our personal guarantee that if we don't sell your home in 90/120/180 days, we will buy it at a price acceptable to you. Now, WE take all the risk from you and you can immediately place a confident offer on another home".

The hidden details usually follow some or all of these general guidelines:

Must purchase one of the agents listings...or at least buy a 'full commission' home with them
Seller must still pay a full commission on the 'guaranteed' sale
Quite often an 'upfront' fee or guaranteed sale program fee of anywhere from $295 to fees in the thousands
"Agreed upon" price well below appraisal/market value...could be as low as the 80% range, then subtract commissions, fees, closing costs etc.
Original list price 5% below comparables
Seller is REQUIRED to continually lower the asking price during the 90 day (or whatever the guarantee period is)...for example: 100% for 1st 30 days, 90% day 30-60, 80% day 60-90, at which point they have reached their 'guarantee' point (but minus a full commission, etc.)
Sign the listing agreement first...then the guaranteed purchase details come later
May be a maximum allowable program price
Restrictions on home condition
Use the language "I'll buy it for 'list' price", but fail to say that the 'list' price is the 80% ENDING list price

If they'll buy it for the full price that they agree to list it for...then that's putting their money where their dog and pony show is.

Think about these few points:

With as difficult as it is to get a mortgage now, COULD your agent actually perform on their guarantee? Ask to speak with their mortgage lender...do your due diligence as with any other buyer.
If they don't need a mortgage and have a few $million sitting around to buy homes that don't sell in 90 days, why are they a real estate agent?
Are they "flipping" the purchase option to an investor? Are they going to list the home for the investor once they buy it?
Can they assign the guaranteed sale price (as in a wholesaler)?

Good, solid, cutting-edge marketing, a detailed understanding of the local and national economic factors affecting home values, subdivision level market knowledge, ability to analyze trends...trust and mutual respect...THIS is what is needed today... NOT some 'bait and switch' marketing promotion.

And soon...I'll comment on the 'pick your own commission' promo!

Thanks for reading

Read our blog…be the first to know!

2011-06-29T12:22:00.001-04:00

Give me a call today if you are interested in this pre-approved short sale...it is not on the market yet, but will be soon.

It is in great shape and is an excellent value. So if you want the first opportunity to view this home,

call me right away: 561-602-1258

NAR's Yun has just entered...The Twilight Zone

2011-06-21T13:24:00.001-04:00

Today, the stock market surged on DECLINING home sales...the 'market' expected the Natl Assn of Realtors report to come in at 4.8M, instead it came in at 4.81M and everyone is ecstatic!

Last months sales were originally reported at 5.05M...but revised downward to 5.0M- (a common tactic...and watch, the 4.81 will get 'revised down' at some point).

And the NAR chief economist, Lawerence Yun, had the following (laughable) reasoning for the decline:...temporary factors held back the market in May... “Spiking gasoline prices along with widespread severe weather hurt house shopping in April, leading to soft figures for actual closings in May,” he said. “Current housing market activity indicates a very slow pace of broader economic activity, but recent reversals in oil prices are likely to mitigate the impact going forward. The pace of sales activity in the second half of the year is expected to be stronger than the first half, and will be much stronger than the second half of last year.”

I have to tell you...most of the time I am embarrassed to be a paying member of NAR. Spiking gasoline prices? Isn't that pathetic? You mean to tell me that Mr. and Mrs. potential homebuyer, just about to sign on the dotted line, decided that they couldn't afford a house because gas rose by forty cents? Let's figure this out; suppose that the average mileage is 18 MPG, the average miles driven per year is 15,000...that would be 834 gallons a year...at 40 cents a gallon hike that is an extra $374 per year, or an $31 per month, or an extra $7.75 per week! If $31 a month is turning buyers into non-buyers...they should not have been thinking about buying in the first place!

When are we going to get some truth out of the NAR PR machine? No wonder agents are regarded on par with the stereotypical used-car salesman...it is well deserved!

Happy Fathers Day

2011-06-19T07:11:00.001-04:00

To a child…LOVE is spelled TIME.

Click on the photo above…it will take you to see a touching and insightful 2 minute video about what is most important to your kids.

Blessings to all of the Fathers out there.

The great depression has nothing on us!

2011-06-17T09:02:00.000-04:00

Officially we now have the worst housing crash since the Great Depression (and certainly in the history of this country). From 1929 to 1932, new home sales fell 80 percent . During that time the economy imploded thanks to Wall Street speculation and massive debt leverage. During that period the Dow Jones Industrial Average fell 89 percent. Now compare this to our current situation. New home sales from their 2005 peak have now fallen by 82 percent! However the Dow Jones is only off by 13 percent from the peak reached in 2007. The big difference in this crisis is that we had a Federal Reserve that bailed out the 'to-big-to-fail banks under the guise of saving the housing market. Looking at what has happened since QE1 (and then, QE 2) it is easy to see that the DJIA was the beneficiary (along with foreign and domestic banking and other well connected interests) of those trillions. The housing market, now in what the so-called 'experts' deem a double-dip...although, here in Palm Beach County the first dip never stopped. Going on five years of the local housing bust I hope people are now begining to understand the term; crony capitalism. Hope Now, HAMP, HARP, foreclosure moratoriums, investigations, indictments, etc. were all just a cover (and continue to be a cover) for a bigger taxpayer-paid bailout scheme...and most of us were not included.

Home price plunge coming - Shiller - Jun. 9, 2011

2011-06-10T07:00:00.001-04:00

NEW YORK (CNNMoney) -- In an off-hand remark before cameras and microphones, economist and housing market guru Robert Shiller opined earlier this year that he would not be shocked if there was another 10% to 25% in the nation's home price plunge -- and he's not backing down from that statement.

At a S&P Housing Summit in New York, Shiller on Thursday reiterated his fears of falling home prices. It's not a forecast, he said, just a comment on his understanding of housing market trends.

He explained that speculative markets, like stocks or commodities, act like random walks. They go up and down all the time. Housing market direction tends to be more consistent.

"I worry that this is a real and continuing downturn, like in Japan," Shiller said. "It had a boom in the 1980s that peaked in 1991. Prices declined in the major cities for 15 straight years after that."

The U.S. housing market is hard to predict because the boom and bust it went through was unique. Shiller has studied historical price data back to the 1890s and found nothing like it.

"This is the biggest housing boom and bust in U.S. history," he said. "The bubble was unique. "That makes it impossible for statisticians to forecast because they deal with things that repeat themselves. You see a pattern and expect it to repeat."

It's even different from the Great Depression, when the home price plunge was at about the same rate. The big difference, however, was that prices of nearly everything else cratered in the 1930s as well -- which has not been true during the housing bust.

Home price plunge coming - Shiller - Jun. 9, 2011

Florida home values and 'negative equity'

2011-06-08T10:16:00.003-04:00

CoreLogic, a leading provider of information, analytics and business services, recently released negative equity data showing that 10.9 million, or 22.7 percent, of all residential properties with a mortgage were in negative equity at the end of the first quarter of 2011, down slightly from 11.1 million, or 23.1 percent, in the fourth quarter. An additional 2.4 million borrowers had less than five percent equity, referred to as near-negative equity, in the first quarter. Together, negative equity and near-negative equity mortgages accounted for 27.7 percent of all residential properties with a mortgage nationwide. In the fourth quarter, these two categories stood at 27.9 percent.

Negative equity, often referred to as "underwater" or "upside down," means that borrowers owe more on their mortgages than their homes are worth.

In Florida, 50.2% of all homes with a mortgage are in a negative-equity position (upside-down)...or within a few months of being upside-down.

And the following stat is even scarier: Out of 4.4 million mortgaged homes in Florida, the AVERAGE loan-to-value is 89%! That means the AVERAGE is less than a year away from being in a negative equity situation...

Something else to think about; A very large number of purchasers in our area have used or are utilizing FHA loans for the purchase a home. I have blogged and talked about this for the past year and a half...these loans require only a 3.5% down payment...it's kind of like buying a new car; as soon as you drive it off of the lot you can't sell it for what you just paid for it.

All of those FHA buyers from as recently as 6 months ago are now upside-down, and I venture to guess that they are not yet counted in the above 'negative-equity' figures.

Looking forward, there are about 2.2 million homes in Florida currently with $0 equity...if/when these homeowners hit some kind of economic snag or get into the situation where their homes need a major repair like a $20,000 roof...what do you think is going to happen? My experience has been that owners in that position tend to follow the saying "Don't throw good money after bad".

So, what does this mean to you as a homeowner, buyer or seller?

As a homeowner, it means that out of the homes that you can see from your front door, over half of them have a mortgage that is larger than the value of the home, and this factor has been an accurate predictor of future default. Default leads to foreclosures or short sales...which lead to reduced values: where does this cycle end?

If you are currently on the market as a seller, you want to have a serious discussion with your agent about how to be the NEXT home to sell. In a declining market, the longer you wait, the less your home is worth.

If you are thinking about selling, now will be better than later.

If you are in the market as a buyer...be certain that the agent that you are working with is able to analyze your situation accurately and advise you on the best course of action...IF you should be buying or renting, where, what type of loan, what type of property, what terms, what to offer, what contingencies to include...and much more. In this market, you don't want to get stuck working with a salesman/door opener...it could cost you dearly.

If you'd like to talk about the best course of action for your situation, give me a call on my direct line at 561-602-1258.

Thanks for reading,

Steve Jackson

South Florida real estate prices at new post-bust low

2011-05-31T18:02:00.000-04:00

South Florida real estate prices at new post-bust low

South Florida home prices hit their lowest level since the real estate crash in March, a crushing drop that reflected the nationwide trend and one that had economists declaring recent market gains artificial.

Prices for Palm Beach, Broward and Miami-Dade counties were down 6 percent from the previous year and a staggering 51 percent from their peak in December 2006, according to the Standard & Poor's/Case-Shiller price index, which was released Tuesday.

"The rebound in prices seen in 2009 and 2010 was largely due to the first-time home buyers tax credit," said David Blitzer, chairman of the index committee at S&P Indeces. "Excluding the results of that policy, there has been no recovery or even stabilization in home prices during or after the recent recession."

In South Florida, prices increased in 2009 between July and November. They ticked up again in 2010 between May and August. Both time periods conincide with deadlines to earn the tax credit.

Prices have consistently fallen since then, which to Case-Shiller economists signals a double-dip in the market.

"It's not good news," said Maureen Maitland, vice president for S&P Indeces. "It's basically confirming what a lot of people were worried about last year and that is that the tax incentive was a temporary stimulus."

But median sale prices have bumped around under $200,000. In April, Palm Beach County's price for a single-family home was $198,000, down 17 percent from the same time in 2010.

Many economists think prices nationally will drop at least an additional 5 percent by year's end. They aren't likely to stop falling until the glut of foreclosures for sale is reduced, employers start hiring in greater force and buyers regain confidence that a home purchase is a wise investment.

This is what we have been advising our sellers and prospective sellers for over 2 years now...what we advise is that you want to be THE NEXT home to sell in a declining market. Don't think it is like to old days of 'we'll price it a bit high and wait' for a buyer.

Memorial Day 2011

2011-05-28T19:42:00.001-04:00

"Your silent tents of green
We deck with fragrant flowers;
Yours has the suffering been,
The memory shall be ours."

- Henry Wadsworth Longfellow -

Is now the time to buy income producing property in our area? Know what you're in for first.

2011-05-19T12:22:00.001-04:00

If you’re planning to purchase an REO property in Florida for rental income, be sure to find out what rights you have as a landlord, as well as what laws there are to protect tenants. When buying a foreclosed home to rent out, the first thing you’ll want to do is find out if the home is currently occupied. If it is, the current tenant will have rights, and you’ll need to find out what they are. Rights to remove tenants are different when a home is foreclosed on than they are when the owner voluntarily sells the home.

Start with the federal laws. Those will usually trump most state laws, unless the state laws are more in favor of protecting the tenants. When you buy a foreclosed home that is occupied, make sure you understand how the occupants are protected under The Helping Families Save Their Homes Act of 2009 (specifically: Protecting Tenants In Foreclosure Act). If the current tenants were not the owners who were foreclosed on (or family members of the owners), you’ll need to give them 90 days notice of eviction if they were renting month-to-month. However, if they signed a lease, then you will have to allow them to stay until the end of their lease. An exception to this is if you are planning to live there yourself, in which case, you just need to give the tenants 90 days notice of eviction.

Once you’ve figured out what to do about the current renters, it’s up to you to decide whether to sign a new lease with those same renters or find new renters. In either case, you will have certain responsibilities as a landlord, and those will vary by state. Here are some things to keep in mind if you’re planning to become a landlord in the state of Florida:

In Florida, landlords don’t need to give a reason to evict, but they do need to provide notice. As a landlord in Florida, you will have to comply with local building, housing, and health codes and return your tenant’s security deposit or transfer it to the new owner.

You should learn about any exceptions to the landlord/tenant rights and restrictions in Florida. For example, tenants in the military or tenants who are victims of domestic violence are allowed to break their leases, as long as they go through the proper legal channels. Click here to learn more about the details of tenant laws protecting victims of domestic violence in Florida.

As the new owner of an REO property in Florida, you and your tenants have a right to utility services, and under Florida law, you nor your tenants can be charged for unpaid utilities from a previous owner or tenant.

If you have problems with a tenant paying the rent, you’ll have to file suit in the county court in order to begin the eviction process. The tenant has five days to respond to the suit, and if he doesn’t or if the judge rules in favor of you, the landlord, then the county court clerk will issue a “Writ of Possession” to the sheriff. At this point, the tenant will be forced to vacate the premises within 24 hours.

You, as the new property owner, are responsible for the maintenance and upkeep of the property. Be sure to respond within a suitable amount of time and address any legitimate issues appropriately. In fact, be proactive when you first take ownership and ask the tenants if everything is working properly. For more information about maintenance responsibilities and rights to inspect, Click Here to read about the Landlord Right of Entry Laws in Florida.

Of course, there is a lot more information out there to be learned. Make sure you are diligent about learning your rights and your tenants’ rights at the federal, state, and local levels. Renting out a property can be a great investment, but you have to know the property and laws before you really know what you’re getting yourself into as a landlord and an investor.

Links to More Information about Federal and Florida Rental Laws:

Summary of Landlord/Tenant Laws

National Low Income Housing Coalitions’ Renters in Foreclosure Toolkit

Article about Tenants Rights in Residential Foreclosures in Florida

Local Tenant Rights, Laws, and Protections in Florida from HUD.gov

After you have read and digested all of the above information and if you are still thinking that this may be the time to invest in some income producing property, send me an email or call me (561-602-1258) to get my free Income Property Evaluation Cheat Sheet.

As always...thanks for reading my blog.

Steve

Palm Beach County mortgage delinquencies. 90+ days late

2011-05-17T02:12:00.000-04:00

16 of every 100 Palm Beach County mortgage holders is at least 90 days late! Theoretically, the figure is higher than 16 of every 100 homes as a fair number of homes in Palm Beach County are owned outright...with no mortgage (I'll have to do some research to find out that %).

Couple that with the 44% of Palm Beach County mortgages that are currently under water and think about how many of the 90+ days late individuals will actually catch up/get current on their loans...and what is their incentive to actually do that if they are upside down? After 90 days of a mortgage delinquency the credit has already taken a major hit...so the best option for the majority in this situation may very well be a short sale...keep a foreclosure off the credit record, and possibly side-step a deficiency judgment.

Courtesy of one of my favorite blog reads: Dr. Housing Bubble

2011-05-15T13:18:00.002-04:00

Multiple sets of indicators are clearly showing that the housing market is entering a second winter. Home prices are inching closer to cycle lows and indicators of housing distress are rampant throughout the country. Home prices during the troubling five years of 1928 through 1933 saw a decline of 25.9 percent nationwide and this was during the Great Depression. The latest Case-Shiller data shows that home prices in the 20 City and 10 City composite measures are down by 32 percent from their 2006 peak. This is now nominally the worst housing correction since the Great Depression. The continuing correction in housing is economically challenging middle class households in ways vastly different from those during the Great Depression. What is troubling about the new cycle lows is that the liquidity injected into the banking system by the Federal Reserve simply delayed the inevitable while diverting precious resources to a broken financial system. The painful lesson of the new reality is that household income, the gas in the engine, is simply too low to support prices even at today’s new lower levels.

Many were early to call a bottom in the housing market last year. It all varied on what data you were looking at. It was true that the home buyer tax credits and the Federal Reserve pushing mortgage rates lower created an artificial stimulus that did revive the market briefly. You should ask yourself what these actions covered. The home buyer tax credits and the Fed intervening made home buying cheaper only because an artificial floor was temporarily placed. Home prices for many years have not been dictated by the market in the sense of an open transparent market where sellers and buyers compete for goods in a somewhat balanced system. Home prices have so many artificial carrots and glistening bells and whistles that the real price is hard to ascertain. Imagine the government stepping in and offering a giant tax credit for buying SUVs. It is logical to assume that at least initially, sales will increase as the real price of the vehicle is pushed lower. Yet in the end market prices have to reflect more steady measures. As the tax credit evaporated and the Federal Reserve’s mortgage buying spree ended, the reality was American households simply do not have the income to support current prices. You can see the recent up and down here:

Home prices have been falling steadily since the summer of 2010. The fact that we still have close to 7,000,000 homes in the shadow inventory tells us that we still have a long way to go before any normal housing market is restored. This by far is the worst housing collapse ever and it is still ongoing. This isn’t some closed chapter in our history books. We are still experiencing the actual correction. You can see from the above charts and gather a sense of how deep this correction is. Or maybe this chart can help:

The adjustment in the housing market is still fluid and dynamic. I recall reading an article in the summer of 2009 showing some prescient insight into the market. In the article this chart was produced:

“(Moody’s) A number of indicators of housing have bottomed, and there are tantalizing signs that the descent in house prices is at least moderating. When all is said and done, this housing correction, easily the worst on record for the U.S., will see the national Case-Shiller® house price index fall nearly 40% from its 2006 peak. The correction will be not only deep but also lengthy, with the U.S. price index bottoming in the second quarter of 2010. The national price level will not regain its 2006 high until 2020, a peak-to-peak housing cycle of 14 years. Regions will vary substantially, however, with areas that saw prices rise most taking the longest to return.”

What is interesting is that the market did hit a bottom early in 2010. Yet what wasn’t accounted for was the double-dip in the housing market which is what we are now clearly in. The enormous backlog of shadow inventory will keep a steady stream of lower priced properties for years to come. I also find it interesting that the above chart is able to predict 12 years out and that California will see peak levels again in 2023. Frankly, I think projections going out more than 3 years for housing prices in this current market is similar to flipping a coin since all we can say with certainty is that home prices cannot go up with no significant income changes. People keep asking about certain financial ratios about when it would make sense to buy. Unfortunately we now live in a much more challenging financial world. The metrics now have to change completely. We are used to paying very little for food and fuel in relation to total household income. Other countries are used to paying more:

As we all know the cost of food is and has been going up yet income has remained stagnant or has dropped. The amount that can be spent on housing by default decreases. The Fed has essentially focused on the borrowing side of the equation by trying to lower rates to adjust to this new lower income world. Ironically this artificial intervention by the Federal Reserve has harmed most Americans while favoring investment banks around the country who really are the only sector who benefit from inflated housing costs. Lower home prices are actually beneficial to the one-third that rent. The one-third that own but have no mortgage are likely to not change their spending habits. It is the two-third that own and have a mortgage that are largely in play. If people purchase carefully and actually treat a home as a place to live, then if prices dipped another 20 percent it would not matter. The narrative that home prices need support is largely a banking propaganda piece trying to keep inflated balance sheets propped up.

As more and more disposable income is taken up by items outside of housing the amount of money Americans can finance for purchasing a home dwindles. This is why the demand for lower priced homes is healthy while markets where jumbo loans are needed are basically groveling at the feet of the government for more subsidies to keep prices inflated. Why would these supposedly rich areas need subsidies? What is it to the rich family to pay a little more from their healthy income to a house payment? The answer is that these markets are largely giant shell games where cars are leased and jumbo mortgages reign supreme. No doubt there are very wealthy enclaves with real solid incomes but you have other areas like Culver City or Pasadena where much of the economy is a paper tiger. You have households making $100,000 to $150,000 a year living as if they made $300,000 and above.

What can we learn from the Great Depression housing market and the one we are currently living in? First, many of the safety nets absent from the Great Depression like giant handouts to banks, food stamps, unemployment insurance, the FDIC, and stronger government intervention have made things look much better. Yet this is like a storm ravaging your property and you being happy that you have insurance. Sure, the place is covered but someone is still going to pay for the cost. I have few qualms about unemployment insurance or even food assistance since these keep people from absolute destitute situations and in terms of costs, are relatively low. For example $64 billion was paid out in 2010 to 40,000,000 families through food assistance. This money is spent back into the economy immediately. To put this in perspective look at the absolute failure of the home buyer tax credit:

“(WSJ) The credit wasn’t great for taxpayers, either. IRS says it paid $26 billion in home buyer credits in 2009 and 2010, enough to cover the maximum $8,000 credit for more than 3 million buyers. (It says at least $513 million went for fraudulent claims. Some claimants hadn’t bought houses. Some filed twice. Some were under age 18 or incarcerated.)”

Let us not forget about the multi-trillion dollar elephant in the room regarding the bailouts to the unworthy and financially broken financial system. The fact that most Americans have their wealth in housing and this was turned into a speculative casino by Wall Street is incredibly irresponsible. The reality of the new home price lows should tell you really who the bailouts were targeted for.

In the end home prices will continue to decline simply because no income growth has shown up in over a decade. Even if we do see income growth, we have to measure this with other rising costs like food and fuel. In the end, you can’t eat your house and maybe this is why the American Dream is now being redefined.

Dr. Housing Bubble is always a very informative and interseting read...you can subscribe to his blog by clicking this link.

Zillow says...we were only kidding, did we say 2011?

2011-05-10T15:48:00.002-04:00

Miami-Fort Lauderdale Metro Zillow Home Value Index

Press Releases

First Quarter Home Value Declines Match Worst of Housing Recession; Bottom Unlikely to Appear Before 2012

Home Values Show Sharpest Quarterly Decline Since 2008; Negative Equity Rises to 28.4% According to Q1 2011 Zillow® Real Estate Market Reports

Key facts:

- U.S. home values posted their largest quarter-over-quarter decline since Q42008, falling 3 percent. Home values have fallen 29.5 percent from their peak in June 2006.

- Negative equity reached a new high with 28.4 percent of all single-family homes with mortgages underwater, up from 27 percent in Q4 2010, due to accelerating home value declines. Actually, in Florida, 48+% of all homes with a mortgage are underwater...and to top that off, about 1 in 5 are 90 or more days delinquent of their mortgages.

- New data reveals bottom in home values unlikely to appear in 2011. Zillow has revised its forecast and now predicts a bottom in 2012 at the earliest.

Happy Mothers Day

2011-05-08T07:19:00.001-04:00

Short sales, foreclosures and credit scores

2011-05-01T06:19:00.000-04:00

Below, taken directly from an article recently published on the FICO® Banking Analytics Blog

Research looks at how mortgage delinquencies affect scores;

How much impact does a short sale have on FICO® Scores? How about a foreclosure? Since I frequently hear these questions from clients and others, I thought I’d share new FICO® research that sheds light on this very subject.

The FICO® study simulated various types of mortgage delinquencies on three representative credit bureau profiles of consumers scoring 680, 720 and 780, respectively. I say “representative profiles” because we focused on consumers whose credit characteristics (e.g., utilization, delinquency history, age of file) were typical of the three score points considered. All consumers had an active currently-paid-as-agreed mortgage on file.

Results are shown below. The first chart shows the impact on the score for each stage of delinquency, and the second shows how long it takes the score to fully “recover” after the fact.

All in all, we saw:

•The magnitude of FICO® Score impact is highly dependent on the starting score.
•There's no significant difference in score impact between short sale/deed-in-lieu/settlement and foreclosure.
•While a score may begin to improve sooner, it could take up to 7-10 years to fully recover, assuming all other obligations are paid as agreed.
•In general, the higher starting score, the longer it takes for the score to fully recover.
•Even if there’s minimal difference in score impact between moderate and severe delinquencies, there may be significant difference in time required for the score to fully recover.

This study provides good benchmarks of score impact from mortgage delinquencies. However, it is important to note that research was done only on select consumer credit profiles. Given the wide range of credit profiles that exist, results may vary beyond what's in the charts above.

My comments/analysis, below:

If you were to look solely at the score comparisons of a short sale and foreclosure in the chart above, you might say that there is no advantage to a short sale over a foreclosure...however, I believe the above article and accompanying charts assumed that for the short sale, (as well as the foreclosure), the mortgage payments had been more than 90 days delinquent. But, that does not have to be the case. We have had great success in assisting clients with short sales who have never missed a mortgage payment or have missed just 1 or 2...thus, one could surmise that this type of short sale would have much less of a delterious affect on ones credit score.

A short sale undertaken early enough allows the borrower to mitigate a lot of damage e.g. not having to miss mortgage payments. Short sales can and are closed without missed payments... in a majority of cases the borrower's default need only be 'imminent'. I believe it is the 'days late' on the mortgage history that is the prime factor in the degradation of the FICO® score.

This article/chart does not reflect what is the impact of the typical language added by a short sale (i.e. 'settled in full for less than the full amount') WHERE THE BORROWER CLOSES THE SHORT SALE WITHOUT MISSING A PAYMENT? A foreclosure by comparison (and by definitiion) will always have many missed payments.

Also, FICO® score is not the only consideration when comparing foreclosures and short sales. You can qualify for home loan financing within 2-3 years after a short sale. It can be up to7 years after a foreclosure. In addition, the current standard residential loan application asks whether you have EVER had a foreclosure. It does not (yet) ask about short sales. So if you had a foreclosure, 15 years from now, you would have to say "yes" to that question, or risk a claim for loan fraud.

Then there are job considerations when affects of a short sale are compared to the affects of a foreclosure that this article does not mention. If you have to pass a security clearance for your job, a foreclosure may prevent the issuance of the clearance. In this case a short sale is a better choice.

If you are in default on your mortgage or at risk for imminent default I recommend contacting a competent attorney who truly specializes in defending and protecting howeowners in default.

Give me a call on my direct line at 561-602-1258 if you'd like to discuss your situation and options.

Thanks,

Steve

John gives us his latest tip

2011-04-28T07:39:00.001-04:00

Just click on the video to watch John's most recent tip...

2011-04-24T08:23:00.001-04:00

Do you have a Freddie or a Fannie?

2011-04-19T18:18:00.001-04:00

Each GSE as well as each lender has their own rules and guidelines regarding if and how they will proceed with a short sale.

If you are “upside-down” on your home and want to start exploring your options, one of the first things you’ll need to do is to check if you have a GSE loan.

I have provided 2 links below to help you out.

Freddie: https://ww3.freddiemac.com/corporate/

Fannie: http://www.fanniemae.com/loanlookup/

If you’d like to discuss your situation and possible options confidentially, please call me on my direct line at 561-602-1258.

If you’re upside-down, don’t wait…find out who has your loan…then call me.

Thanks for reading…Steve

Florida 'rocket docket' court told to respond to ACLU claims « HousingWire

2011-04-19T16:26:00.001-04:00

Tuesday, April 19th, 2011, 11:51 am

A Florida appellate court issued an order Tuesday, requiring the state's 20th Judicial Circuit to respond within 20 days to claims of ignoring court rules and rushing foreclosure cases through its system.

In April, the American Civil Liberties Union filed a petition with Florida's 2nd District Court of Appeals attempting to block the 20th Judicial Circuit from accelerating foreclosures through its so-called "rocket docket."

Beginning in July, the docket was used in all five counties in the southwestern Florida circuit: Lee, Collier, Charlotte, Hendry and Glades. Judges began pushing foreclosures through the system in order to work though a 40,000 case backlog.

According to sworn affidavits from foreclosure defense attorneys, court judges allegedly ignored court rules requiring additional paperwork from lenders and denied homeowners a say in court if they were delinquent on their loan.

A spokesperson for the 20th Judicial Court was not immediately available for comment.

The appellate court order sent Tuesday to Chief Judge Keith Cary does not act as a stay on the court. An employee in the appellate court's clerk office said the 20th Judicial Court will continue to operate as the ACLU case is heard.

Write to Jon Prior.

I am glad something is finally being done about the “Rocket Docket”. I have several friends who are foreclosure defense attorneys here in Palm Beach County and I have heard over and over that the judges would rush them through a hearing, never even looking at the paperwork submitted by the bank or objected to by the homeowners attorney.

Just because the courts are busy is no justification for foregoing due process and proper legal documentation.

The banks are now landlords?

2011-04-06T08:27:00.001-04:00

Maybe this is just an anomoly...or perhaps it's the start of a trend. But yesterday, a rental unit came on the market, it is a foreclosed-on property, and the owner is listed as a bank!! So are the banks now going to hold on to their foreclosed inventory in the hopes of selling later for more money?

Think about this: would YOU want a big bank as your landlord? What do you think will happen when you try to get a broken air conditioner fixed? When we call up for our short sale negotiations and get disconnected (by mistake?) 4 times in a row or have our clients paperwork lost time after time...probably won't be the most responsive of landlords.

See the redacted MLS listing below: click on it to get a better view

Foreclosure Backlog Stands at Thirty Times Monthly Foreclosure Sales Volume

2011-04-04T04:20:00.001-04:00

The ‘shadow’ market is not in the shadows any more…it’s becoming plainly visible…and the numbers are staggering. According to a report released recently by Lender Processing Services, “foreclosure inventory levels are at 30 times monthly foreclosure sales volume.” As a result of this massive backlog, we can expect more downward pressure on home values. The statistics on the homes not yet owned by the banks but are currently IN the foreclosure process are also staggering, with LPS reporting that the average loan currently in foreclosure has been delinquent for 537 days, and 30 percent of loans in foreclosure have not made payments in more than two years.

In part, due to slower processing times on foreclosures, it is unlikely that this backlog will disperse any time soon. In fact, although total loan delinquency has fallen nearly two percentage points over last year and foreclosure starts are down 14 percent from last year(partly due to the robosigning fiasco)…with the “non-current inventory” logging in at nearly 7 million, the backlog is likely here to stay.

Many analysts have been predicting that 2011 will be the beginning of a recovery for many sectors of the real estate market…but sadly, I are not on that bandwagon for us here in South Florida. Too much distressed inventory to work through…too many sellers that are NOT upside-down waiting for any evidence of stabilization to put their homes up for sale. Economics 101: Supply and Demand. There’s still an imbalance and will be for the foreseeable future. With this foreclosure backlog that we’ve been talking about for a looong time, we are quite pessimistic about the direction of local home prices.

And, what of the talk of the tightening of lending standards even further. Making 30% down the norm…increasing FHA down payments…interest rates going up…eliminating the mortgage interest tax deduction…does anyone really believe that these will HELP the housing market?

I, too, am a homeowner here in Palm Beach County…I’d love to be able to march in step with all of the so-called analysts/experts and say that the sun is getting ready to shine on our home values once again…but none of the evidence points to that.

However, there are still occasions where it makes sense for someone to buy; up to a certain price-point, thanks to low interest rates and 3.5% down-payment loans, it is less expensive to buy than to rent. And for buyers with a long enough time horizon there are some crazy good deals out there. Also, right now is a great time for investors as the cash-on-cash return is excellent for a big segment of the under $150k market. But when we, at The Jackson Realty Group, work with a buyer…we have them convince US (not the other way around) that now is the right time for them to buy. It’s not right for everyone right now. As a matter of fact, I find myself often recommending that renting is the best option for many clients who thought that they wanted to buy…but that’s what we do…we counsel and consult, we’re not salespeople trying to overcome objections!

For sellers (or those thinking about selling) we are saying “you want to be the NEXT home to sell”…in a market expected to continue its decline, it is expensive to wait.

If you’d like to discuss with me what your best options are at this point, either as a buyer or a seller, please call me on my direct line at 561-602-1258.

Thanks for reading,

Steve Jackson

Thinking of just “walking away” from your house?

2011-03-30T14:09:00.001-04:00

DON’T DO IT!

A recent study estimates that 36% of Americans think walking away is a viable option when they owe more on their home than what it is worth. But few are aware of the severe financial consequences of these actions, and even fewer know the options available to avoid these consequences.

If you are at the crossroads of deciding whether or not to walk away (or “strategically default,”) you will find that there is nothing strategic about foreclosure, especially when there are options that can help you to avoid it.

Destroying your credit is NOT “Strategic”! Walking away from your mortgage can be incredibly dangerous and damaging to your financial future.

In a “strategic default,” homeowners simply choose to walk away from their mortgages—in other words, move out, stop paying and just “”let the bank take it”. Generally, this is done when a homeowner owes more on the home than it’s worth or is “underwater.” Most homeowners do not understand that walking away will expose them to foreclosure, which carries credit issues, current and future employment challenges, issues with security clearances, and the potential for non-stop debt collections.

In a Florida foreclosure, generally, the bank gets the home back at a courthouse auction…actually held as an online auction here in Palm Beach County. At some point in the future, the bank will re-sell the foreclosed property. The difference between what the bank finally ‘nets’ after the sale and what you owed (penalties/interest/legal fees/taxes/hoa fees, etc. added) is the deficiency. The bank can then get a judgment for this amount and attempt to collect, either directly, by giving it to the collection arm of the bank or, they sell it to a collection agency. And these collections efforts can haunt you for 20 years!

One of the first things we strongly recommend to anyone we speak with who is faced with a foreclosure action by their lender is for them to contact an expert foreclosure defense attorney…Be forewarned: Many Lenders have persuaded borrowers to represent themselves when facing foreclosure. Remember, the Lender’s first priority is collecting payments, not to gain a full understanding of your financial hardship. Don’t wait too long to seek help. Foreclosure Defense results are often best achieved with borrowers who seek help as soon as there is a problem.

Also, you don’t have to abandon your home…Borrowers need to understand that they are the legal titleholder to the home until a Judge declares otherwise. Although the Lender may hold a Mortgage Note, this does not mean that they can tell you to leave your home when you miss mortgage payments. Do not take the word of your Lender; seek counsel to advise you of your rights to remain in the property while searching for alternatives to foreclosure.

What about bankruptcy? Although bankruptcy can be a valuable tool when faced with an immediate sale of the property, it will rarely save your home from foreclosure. Many times, bankruptcy should be used as a last resort and only in combination with other large debts (i.e. immense credit card debt).

Do Not Ignore paperwork sent to you by the bank…Upon missing payments, most Lenders will send various documents and require a response. Many times these documents are discarded or there is no response. Save everything your lender has mailed or delivered to you and bring it to your attorney.

A foreclosure will be seen on your credit report for years…it will most likely impact you when trying to rent a home, trying to buy (or lease) anything on credit, applying for jobs, applying for various security clearances, and more!

You have options…one of the best ones right now is a Short Sale. This is where the lender agrees to let you sell the home for less than the amount owed.

We have recently been utilizing a little-known strategy that can: 1) speed up the process, 2) relieve the seller of deficiencies, 3) is FREE to the seller, 4) Get the seller a $3000 ‘relocation’ payment from the lender! You can click right HERE to see if you may qualify to work with us using this strategy.

Now, remember, I am NOT an attorney and this article is NOT intended to be legal advice…for that, please contact a competent legal professional.

But if you’d like to discuss your situation, see how we can help you out of a jam, and see how we’ve helped many, many people in your same predicament…call me on my private line right now: 561-602-1258

And thanks for reading my blog!

Steve Jackson

Freddie Mac on YouTube?

2011-03-25T18:40:00.004-04:00

Freddie Mac has just made available, on YouTube, a series of videos called:
Get The Facts On Foreclosure.

In their own brief description on the channel, they say: "Welcome to our series, Get the Facts on Foreclosure, to help you separate fact from fiction."

The videos are done in a down-to-earth manner...not some government looking guy in a suit sitting behind a desk.

However, in my opinion, the FIRST words of the FIRST Freddie video should have been, "if you are in default on your mortgage, before you talk to us and give us any information, GO SEE A GOOD FORECLOSURE DEFENSE ATTORNEY." - but no lender is going to give you that advice.

I don't want to sound too cynical, but, remember, your lender is NOT on your side! They are trying to collect on a debt when you speak with them...they even say that at the outset of each call. They may try to "work something out" with you, but their goal is to maximize their return.

Having dealt with them many, many times during short sale negotiations...their good intentions and advice expressed in these videos should be taken with a grain of salt (or two)...but I applaud them for their efforts, none the less.

Nearly 20% of Florida homes are vacant - Mar. 18, 2011

2011-03-19T10:09:00.001-04:00

NEW YORK (CNNMoney) -- It's not always easy to feel sorry for sunny Florida. But they just got hit with another blow.

On Thursday, the Census Bureau revealed that 18% -- or 1.6 million -- of the Sunshine State's homes are sitting vacant. That's a rise of more than 63% over the past 10 years.

Having this amount of oversupply on the market will keep home prices depressed and slow any recovery.

The vacancy problem is more dire in Florida than in any other bubble market: In California, only 8% of units were vacant, while Nevada, the state with the nation's highest foreclosure rate, had about 14% sitting empty. Arizona had a vacancy rate of about 16%.

In Florida, the worst-hit county is Collier -- home of Naples -- with a whopping 32% of homes empty. In Sarasota County, 23% of the housing stock sits vacant, while Lee County (Cape Coral) has a 30% vacancy rate. PALM BEACH COUNTY has a vacancy rate of about 18%!

The housing recovery will take years, perhaps many years, to complete, according to Ingo Winzer, a housing market analyst and founder of Local Market Monitor.

Not helping is the the fact that the state's rate of population growth slowed in the second half of the last decade to just 5.7%. Still, the 2000s saw the state population grow overall by nearly 18%, the Census Bureau reported. I

"It will take about eight years just to put the vacancy numbers back into the single digits," said DeKaser.

The inventory overhang has sent home prices plunging. The median price for homes sold in January was just $122,000, according to the Florida Association of Realtors. That was down 7% from 12 months earlier and less than half the price at the peak of the market.

Winzer thinks prices in Florida will drop even more, another 5% in 2011 and 3% in 2012. "Even after that, they're not going to rebound, they'll just sit on the bottom," he said.

Celia Chen, a housing market analyst for Moody's Analytics, is also downbeat in her forecasts for Florida. Not only will prices fall another 11%, she said, but the bottom won't hit until mid-2012, about a year later than the nation as a whole. Some metro areas won't get back to their pre-recession peaks until long after the present owners are old and gray.

She doesn't expect Naples, for example, to come all the way back until the late 2030s. Other Florida metro areas with a 20-year wait or longer include Punta Gorda, Palm Bay and North Port.

"If you're buying in Florida for retirement," said Winzer, "maybe you buy next year when prices will be near the bottom. If you're buying for investment -- don't."

Our "Ninja tactic" to do a short sale!

2011-03-07T18:52:00.000-05:00

Click the photo below and you'll be 1 step closer to finding out about a little-known Govt. program that we use that gets a short sale in Palm Beach County done in weeks...costs our clients nothing...GIVES our clients money at closing...and relieves our clients of any deficiency!!

Click the photo below and we'll see if you qualify:

Some homes we are marketing

2011-03-04T12:32:00.000-05:00

Who wants to pay less for gas?

2011-03-02T17:32:00.000-05:00

If you want to pay as little for your next fill-up as possible...I am here to help you!

Not only do we look out for our clients and friends best interests when it comes to real estate...we also like to share when we find something that can save you money, keep you and your family safer or find out something that may be of interest to all.

Click on the image below to pay the lowest price per gallon possible on your next fill-up:

Click on the photo

If you want to see more of our tips that we send out to our clients and friends...click here

90 Day Guaranteed Sale Program? There’s NO free lunch!

2011-03-01T04:08:00.001-05:00

Once again, I have started to see this being promoted by mail and on the radio.

"If we don't sell your house in 90 days...WE'LL BUY IT!"

I have gone to several seminars where they promoted this (tactic/gimmick) and the client pitch starts out sounding something like this: " Mr./Mrs. homeowner, a big dilemma when making your move is deciding whether to buy 1st or sell 1st. Either way is risky as you could end up with 2 homes (or no home). Our unique/innovative/etc Guaranteed Sale Program solves this dilemma...you get our personal guarantee that if we don't sell your home in 90/120/180 days, we will buy it at a price acceptable to you. Now, WE take all the risk from you and you can immediately place a confident offer on another home". The hidden details usually follow some or all of these general guidelines:

Must purchase one of the agents listings...or at least buy a 'full commission' home with them
Seller must still pay a full commission on the 'guaranteed' sale
Quite often an 'upfront' fee or guaranteed sale program fee of anywhere from $295 to fees in the thousands
"Agreed upon" price well below appraisal/market value...could be as low as the 80% range, then subtract commissions, fees, closing costs etc.
Original list price 5% below comparables
Seller is REQUIRED to continually lower the asking price during the 90 day (or whatever the guarantee period is)...for example: 100% for 1st 30 days, 90% day 30-60, 80% day 60-90, at which point they have reached their 'guarantee' point (but minus a full commission, etc.)
Sign the listing agreement first...then the guaranteed purchase details come later
May be a maximum allowable program price
Restrictions on home condition
Use the language "I'll buy it for 'list' price", but fail to say that the 'list' price is the 80% ENDING list price

If they'll buy it for the full price that they agree to list it for...then that's putting their money where their dog and pony show is.

Think about these few points:

With as difficult as it is to get a mortgage now, COULD your agent actually perform on their guarantee? Ask to speak with their mortgage lender...do your due diligence the same as you would with any other buyer.
If they don't need a mortgage and have a few $$million sitting around to buy homes that don't sell in 90 days, why are they a real estate agent?
Are they "flipping" the purchase option to an investor? Are they going to list the home for the investor once they buy it? Then why don't they get the investor to buy it from you...without the middle-man ans with you getting the higher price?
Can they assign the guaranteed sale price (as in a wholesaler)? Again...you're losing out.

Large housing inventories to be sold at deep discounts in 2011…and other stories

2011-02-22T07:19:00.001-05:00

From recent HousingWire news and other sources: (all italics mine)

Foreclosure filings and completed foreclosures will reach record levels this year, after lenders exhaust alternatives such as mortgage modifications (which have been hugely unsuccessful)…Analysts expect increased losses to residential mortgage-backed securities, as a result, because large inventories of foreclosed homes will be sold at deep discounts…

DBRS projects delinquency trends to continue climbing this year, as negative home equity persists, home prices remain down, unemployment stays high, and many borrowers have trouble refinancing due to tightened underwriting standards.

Analysts said the number of REO properties could double over the next 12 months to 4 million from 2 million, and it will take at least one to two years to sell those homes, further hindering recovery.

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Interesting research from PEW Local Trends that goes into great detail about Strategic Defaults..

What will be surprising to many is the dramatic increase in the number of homeowners willing to walk away from their underwater home. Just 3 years ago when we started reporting on this phenomena similar studies were done that resulted in fewer than 10% of those surveyed deemed strategic defaulting as ‘acceptable’. Now, that number is approaching 40%…

What this will mean going forward is that homes that are not even on the banks radar for potential default/foreclosure will be going back to the bank in record numbers, increasing the already lofty numbers of expected bank-owned properties.

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The mortgage interest tax deduction is being lead to the gallows for a little meeting with the guillotine…better known as the Obama Administration.

The National Association of Realtors is the lone voice in the blood thirsty crowd calling for the tax deduction to live on…

Here are the two sides of the argument:
The Off With Its Head…end the deduction argument: Why should non homeowners owners subsidize homeowners? Why are we punishing people for renting? Why create system that motivates people to buy more home than they otherwise would have? Why should the government incentive people taking on a mortgage thus, debt. (Sounds noble, does it not?….).

The ‘Let it live’ crowd’s argument: Owners are more stable, move less..invest more in communities. Owners spend more on home improvements and the like..thus, putting more money back into their communities.

I can tell you this for certain…regardless if you are red or blue…if the mortgage interest tax deduction, that will be quite a few nails in the housing coffin.

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Looming changes for Fannie and Freddie. The White House outlined last Friday its plans to begin shrinking their support of both of the government sponsored entities (GSEs) Fannie Mae and Freddie Mac. While the process could take several years, the effects will be felt in coming months.

Everything about obtaining a mortgage loan is about to change. Vastly fewer people will have the financial ability to obtain a loan.

It seems that the current administration is attempting to move us away from a homeownership society to a generation of renters…however, if the tax benefits of owning a primary residence are removed, do you think that the tax benefits of investor-owned properties will be left intact? If there are greatly reduced incentives (or even restrictive penalties i.e.. rent control) for investors, whom do you think will own all of the properties that people will need to rent?…It will be local/state or federal agencies that become the new landlords…watch out for this!

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I post these stories and opinions not to alarm but to inform…there is so much ‘spin’ out there from the various interest groups that it is hard to know which way is up or down.

For certain individuals and investors, in very specific circumstances…now is a great time to buy. Conversely, with what I think is going to be happening in the next few years to the housing market, now is also a good time to sell…it is hard to see, but will be clear in retrospect.

Another one bites the dust...

2011-02-20T07:45:00.000-05:00

Century 21 Sunland Realty was the most recent, local, "bricks and mortar" brokerage to close up shop...but a recent story in the Palm Beach Post indicates that the real estate brokerage business is tough all the way around:

Back in the day, BuyOwner ran endless TV commercials with the tag line "Thanks, BuyOwner" ...but in the past few years it became increasingly difficult to sell a home by owner, and the business model (as I have heard) required an up-front payment sometimes upwards of $6,000 regardless of if the home ever sold...they gave you a sign, put you on their website and in a magazine...and you were on your own for all of the rest. Obviously that won't work today.

The for-sale-by-owner market has been almost eliminated in today's ultra difficult market. As an example of how important it is to have professional exposure, advice and guidance; ALL lenders require that they will not even consider any short sale application unless the property sale and marketing is being handled by a licensed real estate agent.

But this post isn't about using a real estate agent...it is about the overwhelming evidence that if you don't or can't quickly adapt to new technologies, business models, consumer demands and market conditions...you're a dinosaur...extinction will soon follow. Many of the big, local offices have closed, combined, merged or moved...who's next?

Being small...nimble...proactive, not reactive...not big-franchise, top-heavy, with layers of approvals necessary for any innovation, has enabled us to thrive even in the most difficult real estate market ever.

Our belief in and commitment to our motto, mantra, and corporate ideology is what has enabled our business to grow...we simply state it as "Personalized...Not Franchised"

Hear it straight from one of our recent clients...

2011-02-16T06:04:00.000-05:00

Why don't I just do nothing and let the bank take it?

2011-02-15T12:49:00.003-05:00

Courtesy of our friend and expert real estate attorney, Richard Zaretsky, comes this article that addresses a question that we get from everyone who is upside down or behind on their mortgage...(thanks Richard)

In the series of questions I get when interviewing a potential client who is upside down on his or her mortgage, one question always asked (especially after I quote my fee) is "What if I decide to do nothing?"

It is a legitimate question and with all the press (and misinformation) that abounds, it is hard for those in need of the facts to separate the reality from the imaginary. For example, The New York Times reported on December 2, 2010 that Florida was a "non-recourse" state (meaning that the lender could not pursue a borrower on the promissory note). That information was corrected but not until December 19th - and of the over 1 million print edition readers that saw the wrong information - how many saw the "correction"? To many readers with Florida properties, walking away and doing nothing for their underwater Florida property became a reality - albeit a false reality the fallout from which many a homeowner has yet to realize.

FALSE INFORMATION - The reality is that in all recourse states (Florida being one) and in many non-recourse states to the extent the mortgage and note do not qualify as a non-recourse obligation, doing nothing has essentially the same outcome.

As I pointed out in several of my articles and interviews (see CNN, Banks Begin to Go After Deficiencies, Foreclosure Consequences) unless the borrower has in writing from the lender that they are releasing the borrower from the further liability of the deficiency, there remains a valuable right to collect that deficiency from the borrower. That "valuable right" is just like a negotiable instrument - it can be sold for consideration (ie: $$$) and the lender does not even have to get a judgment first to be able to sell that right.

IT JUST DOESN'T MAKE SENSE - SO WHY BELIEVE IT?
So many people tell me "the banks are not going after deficiencies - because no one has money to pay them". Get real!!! First, my office has seen, since the first of this year (just 7 weeks), more people saying the bank is trying to collect the balance of the loan than ALL of last year! Why? Let's look at the economics of this deal. An accountant friend of mine created a sizable side business of buying defaulted credit card debt and uncollectable obligations like these deficiency rights. He would typically pay 3 to 10 cents on the dollar. Do you think he just wallpapered his office with these obligations he bought? No way! He had a machine of lawyers and collection companies that pursued these debtors and if necessary, sued them to collect. If he got only 15% of them to pay even a portion of the debt, he was way ahead and made a nice profit. He also had the luxury of waiting - since he had the statute of limitations to first even sue the debtor and then when he got a judgment, he could ride it out for years (20 in Florida). He even would sell the judgments he got so he recouped his attorney fees and filing costs and made a profit - and then the new owner of the judgment would do the nasty things to collect the judgment, like garnishment, attachment of bank accounts, and dragging the debtor to a deposition or court to expose and explain his current finances.

FALSE SECURITY
And a word to those that say they are judgment proof. That may be true, but that won't prevent a lender from being able to file an attachment or garnishment. What then happens is the bank with the account that may indeed be exempt, must freeze the account until a judge decides that the money in the account is exempt from the attachment, or the pay is exempt from the garnishment. In the meantime, the defaulted borrower has checks bouncing all over town! So judgment proof is not aggravation proof.

Now you decide - Is it a good idea to do nothing?

Copyright 2011 Richard P. Zaretsky, Esq.
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Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.
Richard Zaretsky, Esq., RICHARD P. ZARETSKY P.A. ATTORNEYS AT LAW, 1655 PALM BEACH LAKES BLVD, SUITE 900, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 email: RPZ99@Florida-Counsel.com - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW - We assist Brokers and Sellers with Short Sales and Modifications and Consult with Brokers and Sellers Nationwide! Shortsales@Florida-Counsel.com Website http://www.florida-counsel.com/.
See our easy to understand articles at:
TABLE OF CONTENTS - SHORT SALE AND LOAN MODIFICATION ARTICLES

We have a better option...Don't let the process be a unilateral one wherin the bank dictates everything...including how much you eventually owe! Call me directly to see how we can make the outcome shift in your favor with a bi-lateral negotiation. My direct line is 561-602-1258

Thanks for reading,

Steve Jackson

Market bottom? We've got a bit of time.

2011-02-08T09:22:00.002-05:00

Courtest of the Boom-Bust blog is this revealing graphic, below:

As you can see, the most recent update to the graph was the August 2010 data, but the trend is evident...

The graph shows the number of years needed to clear just the 'shadow inventory', indicated at three different levels:

A shadow inventory at 20% of sales
A shadow inventory at 25% of sales
And a shadow inventory at 30% of sales

Shadow inventory can be simply stated as: properties that are either already owned by the banks and have not been put on the market, properties that are in the process of foreclosure and will be owned by the banks at some date in the near future, or homes that owners desire to sell but are delaying putting on the market until prices improve.

The figures for the shadow inventory range from 1 million to over 7 million homes, depending upon the particular slant of who is estimating the data.

What is really most important to the majority of my blog readers is the shadow inventory here in Palm Beach County. And I have to believe that it is substantial.

Just in the 33463 and 33467 zip codes there are currently 1679 properties either already bank owned or scheduled for sale at auction....a very small % of which have made their way back on to the market...the rest are then: shadow inventory

The above number doesn't even consider the thousands of homes that already have a lis pendens filed by the lender for mortgage default.

The graph above displays 'national' estimates...with a 30% shadow inventory, it would taake over 7 years to clear the backlog at the current rate of sales! That would indicate a market bottom somewhere around 2018...With only a 20% shadow inventory, we're still looking at 2016.

Just to put things in perspective...as of today, there are 484 properties on the market in the 33463 zip...but there are 1010 bank owned or scheduled for auction...95% which are NOT on the market yet.

In 33467, there are 659 properties on the market and 569 currently in bank inventory or scheduled for auction.

If you'd like to discuss how to use this information to your benefit, just call me on my direct line: 561-602-1258.

Thanks for reading!

Bank Bailouts Explained

2011-01-29T23:26:00.000-05:00

CEO's of Zillow and Radar Logic discuss the realities of the current market

2011-01-25T09:42:00.002-05:00

Making your mortgage payments to BofA? GOTCHA!

2011-01-25T05:57:00.001-05:00

Bank of America has recently (and quietly) redefined their “grace period”.

When is a grace period not really a grace period? When you have to pay a $6 fee for using it. In a nutshell, you’ll have 6 fewer days of the old grace period to make your payment without being charged additional fees.

Consumers who use the bank's online payment tool, Mortgage Pay, will be subject to a $6 fee if they fund payments using another bank's checking account and the payment falls during the final six days of the traditional 15-day grace period. Consumers who make payments from Bank of America accounts are not subject to the fee.

"Let me get this straight. They tell you that you have a grace period, (then) they say, 'Oops, you only have half of it if you don’t bank with us,'” said Gail Hillebrand, a lawyer for Consumers Union who specializes in banking issues. "That doesn't seem fair. ... This looks like a new ‘gotcha,’ and we have enough of those already."

Some consumers who are being hit with the change didn't apply for a mortgage with Bank of America. Instead, the bank inherited their mortgage later by acquiring it as part of an investment portfolio purchase.

This is just another sneaky tactic form one of the TBTF banks that received billions of taxpayer dollars. basically, it’s either switch your account to a BofA account that has a bunch of garbage fees or pay us garbage fees directly for the privilege of paying us!

Nice.

Shadow inventory threatens housing recovery - Jan. 20, 2011

2011-01-21T05:53:00.001-05:00

NEW YORK (CNNMoney) -- There is a growing glut of foreclosed homes threatening to hit the market over the next couple of years, potentially delaying any recovery.

There were 1.7 million homes either owned by the bank or in some stage of foreclosure at the end of the third quarter of 2010, according to a recent report by Standard & Poor's. It would take 44 months, at the current rate of sales, to sell them off -- a 25% increase from the beginning of 2010. (S&P does not count home loans backed by Fannie Mae and Freddie Mac.)…

next, my commentary…

The paragraph above, in and of itself is troubling…but when you look at the statement within the parentheses, it becomes horrifying! The most recent statistic that I’ve read puts in excess of 65% of all loans are backed by Fannie or Freddie…and this S & P report just decides to leave that out? I have been telling my clients for a year or more that this distressed inventory backlog will continue to drag home values down for several more years…coupled with no real plan or prospects for meaningful job and income growth, and the market looks very, very soft to me.

The following is from the recent Mortgage Bankers Association Delinquency Report, and will be a real eye-opener:

Number of properties that are 30 or more days delinquent or in foreclosure: (A+B loans) 6,870,000 !

Big difference from the widely published news story in CNNMoney…over 5 million more at least 30 days past due or further along in the foreclosure process.

And Numero Uno on the list of states with highest percentage of non-current loans…you guessed it: FLORIDA

Not to beat a dead horse, but if you are thinking of selling, even (especially) if you owe more than your home is worth…lets talk about your options, market direction, etc. Call me directly at 561-602-1258. If I don’t answer, please leave me a message

Florida Attorney General 'Fraudclosure' report...Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases

2011-01-07T06:34:00.003-05:00

Ever heard the term "All hat and no cattle?", that's basically what the AG report is...the 50 state Attorneys General task force on the issue has 'reportedly' already taken the bribe and settled with the big boys (see preceding post, below). This stuff should be the leading story of every news show.

The feeling I get is sort of like being in school...It's not fun to play when the big kids cheat, then take your lunch money.
Florida Attorney General Fraudclosure Report | Unfair, Deceptive and Unconscionable Acts in Foreclosure Cases

Top lenders set for foreclosure settlement: report | Reuters

2011-01-04T12:31:00.003-05:00

And so it has come to pass..even the state Attorneys General are in the pocket of the TBTF financial institutions. The Attorneys General , on behalf of Fannie and Freddie, have ‘settled’ with the five biggest TBTF banks, for ‘future losses’ from the fraudulently written, fraudulently packaged, fraudulently rated and sold loans. Possibly the biggest fraud ever perpetrated will now, effectively, be swept under the rug in exchange for 1 or 2 cents on the dollar…I’d sure love a deal like that!

(Reuters) - The five largest mortgage loan servicers, including Bank of America Corp and JPMorgan Chase & Co, may be the first to settle with 50 state attorneys general who are investigating foreclosure practices, Bloomberg reported, citing Iowa Attorney General Tom Miller…

Ally Financial, Bank of America, Citigroup, JPMorgan and Wells Fargo could not be immediately reached for comment by Reuters outside regular U.S. business hours…
Here’s another report, below, from CnnMoney.com:

Is Fannie bailing out the banks?

Posted by Colin Barr January 3, 2011 10:11 pm
Financial stocks just caught fire. Someone must be getting bailed out, right?
Why yes, say critics of the giant banks. They charge that Monday's rally-stoking mortgage-putback deal between Bank of America (BAC) and Fannie Mae and Freddie Mac is nothing more than a backdoor bailout (QE4?) of the nation's largest lender (emphasis mine). It comes courtesy, they say, of an administration struggling to find a fix for the housing market while quaking at the prospect of another housing-fueled banking meltdown.

Monday's arrangement, according to this view, will keep the banks standing -- but leave taxpayers on the hook for an even bigger tab should a weak economic recovery falter. Sound familiar?…

And you don't need to be a conspiracy theorist to see that austerity talk in Congress means no more upfront support for financial firms. At a time of double-dipping house prices and nearly 10% unemployment, you can see where some people might find themselves devising new ways to prop up BofA and its housing-exposed rivals JPMorgan Chase (JPM), Wells Fargo (WFC) and Citi (C).

"This looks to me like a gift from Tim Geithner," said Chris Whalen of Institutional Risk Analytics. "There's politics all over this."…how sharp is Freddie if all it can do is squeeze a $1.28 billion payment out of a giant customer in exchange for relinquishing fraud claims on $117 billion worth of outstanding loans? The very best its million-dollar executives can do is claw back a penny on each bubbly subprime dollar?

…"How Freddie can justify this decision to settle 'all outstanding and potential' claims before any of the private-label putback lawsuits have been resolved is beyond comprehension," says Rebel Cole, a real estate and finance professor at DePaul University in Chicago. "This smells to high heaven and they should be called out."

Nice…

Palm Beach County Bar Association - Residential Mortgage Foreclosure Mediation Program

2011-01-03T04:22:00.001-05:00

Below, from the Palm Beach County Bar Association website, are the details, forms and FAQ’s regarding the Florida State Supreme Court mandated pre-summary judgment mediated meeting between the foreclosed-upon homeowner and their lenders representative…

What is foreclosure?
Foreclosure is a legal process by which the mortgage holder causes the judicial sale of the secured real estate to pay a defaulted loan. The mortgage on real estate acts as collateral for the repayment of the loan so when this loan is in default, the mortgage holder exercises its rights to take the collateral by selling the home.

What is the RMFM Program?
The RMFM Program is the Residential Mortgage Foreclosure Mediation Program that has been ordered by the Florida Supreme Court, and the Fifteenth Judicial Circuit Court. This program mandates that all homestead foreclosure lawsuits filed on or after July 12, 2010, be sent to mediation prior to any final order being issued.

How do I enter the RMFM Program?
All homestead foreclosure suits that are filed on or after July 12, 2010 will be automatically referred to the RMFM Program. The Program Manager will contact you based on information received from the lender. However, if you have been served with a foreclosure suit and/or your contact information has changed, please contact the RMFM Program directly at (866) 900-4254 (toll free)

I am a Homeowner who was served with a foreclosure lawsuit filed before July 12, 2010. Can I participate in the RMFM Program?
You may request a referral to this Program by filing a Borrower’s Request to Participate in the RMFM Program (download copy here). File this request with the Court and mail a copy of the request to the lawyer for the Lender.

Is there a cost to me to participate in the RMFM Program?
There is no cost to homeowners for this program. The Plaintiff (usually the bank) pays the required fees, which include financial counseling and the mediation session. In the event that you choose to have a second mediation session, you will have to pay $100, which is one-half of the fees for this session. The Program anticipates that one mediation session will be sufficient for most cases and this second mediation is optional.

What financial disclosure information will I need to provide to the lender to proceed to mediation?
Most borrowers will need to file the Foreclosure Mediation Financial Worksheet (click here for that document).
Homeowners must sign and then mail, hand-deliver or fax the Release (last page of the financial agreement) to the RMFM program before the Program can schedule mediation.
Mail or hand-deliver to: Palm Beach County Bar Association, RMFM Program, 1601 Belvedere Road, Suite 304E, West Palm Beach, FL 33406.
Fax to: (561) 828-3922
Email with Release as a pdf to mediations@palmbeachbar.org
Borrowers will need to file Fannie Mae Hardship Form 1021 if they are seeking a Short Sale or Deed in Lieu of Foreclosure. (click here for that form)
For short sales, borrowers also need to file a signed purchase contract for the residence or a listing agreement for the sale of the residence, a preliminary HUD -1 form, and written permission from the borrower authorizing the bank or the bank's representative to speak with the real estate agent about the borrower's loan.
For Deeds in Lieu of Foreclosure, a current title search for the residence should also be uploaded.

What is a short sale?
A short sale is a sale for less than you owe on the mortgage loan.

What is a Deed in Lieu of Foreclosure?
A Deed in Lieu of Foreclosure is when you voluntarily execute a deed that transfers the property to the lender in exchange for the lender canceling, in part or in whole, the debt owed on the property.

Do I have the right to consult with an attorney?
Yes. You have the right to consult with an attorney at any time during the mediation process and to bring an attorney with you to the mediation session. You do not have to have an attorney; you may represent yourself. If you cannot afford an attorney, you may call the Legal Aid Society of Palm Beach County and inquire about their pro bono foreclosure assistance program, Monday through Friday, 9:00 a.m. to 5:00 p.m., (561) 655-8944 ext. 325 or (toll free) 800-403-9353 ext. 325. You may also contact the Lawyer Referral Program at the Palm Beach County Bar Association by calling (561) 687-3266 or (561) 451-3256 (Boca/Delray). There is a $30 fee for a half-hour consultation with an attorney through the Lawyer Referral Service.

Do all Borrowers who signed the mortgage need to attend the mediation session?
Yes, all Borrowers must be present at the mediation session. If not all Borrowers can attend, the Borrower not attending should bring a completed Power of Attorney for the other Borrower.

What happens if we cannot settle during the mediation?
The parties can agree to continue to another mediation session. If that session cannot be scheduled for the same day, this session is optional and both parties have to pay one-half of the fee, or $100 each for this additional session. If the parties cannot agree at all, and reach an impasse, then the case is returned to the court.

What happens if I do not attend mediation?
The case is returned to the court.

Link to Frequently Asked Questions About Mediation

Homeowner Forms

Help for Homeowners in Foreclosure – FREE!
presented by the Palm Beach County Bar Association & The Legal Aid Society of Palm Beach CountyFind out how the Residential Mortgage Foreclosure Mediation Program Can Help You
Space is limited. To reserve your seat, call the Palm Beach County Bar Association at (561) 687-2800
or RSVP by email

StreetInsider.com - Schiff: Look Out Below! Home Prices to Fall Additional 20%

2010-12-30T12:09:00.001-05:00

A ‘Happy New Year’ news story from Peter Schiff…one of the earliest predictors of the ‘pop’ of the housing bubble.

December 30, 2010 10:50 AM EST

According to Peter Schiff, the recent drop in home prices is unnerving, but there is still another 20% drop to go before we reach a historical trend line. (emphasis mine)

Schiff notes that some economists anticipate a further correction, but most don't believe that the vicious correction of 2007 and 2008 could return. To counter, Schiff notes that many underestimate how distorted the market had become.

From the start of 1998 through the middle of 2006, arguably at the peak of the market, the Case-Shiller 10-City Index rose an astounding 173% at 19.2% per year. Schiff notes that we now know that the gains had little to do with fundamentals and more to do with "distortionary government policies that mandated loans to marginal borrowers, and set off a national mania for real-estate wealth and a torrent of temporarily easy credit."

One of the co-founders of the Case-Shiller index, Robert Shiller, contends that home prices, from 1900 - 2000, followed a more muted 3.35% average growth rate, which included the Great Depression, post-war eras, and the boom of the 90's.

So, Schiff notes that in 1998, the Case-Shiller index was at 82.7. Following the 3.35% average annual price increase predicted by Shiller lands us at a point of 126.7 in October 2010. However, the Case-Shiller Index came in at 159.0, suggesting an additional 20.3% decline in the index to get it back to more normalized levels.

Schiff continues that no one is making a case that fundamentals have gained traction, and most point to government intervention as an artificial stop to the free fall. Programs like "the home buyer's tax credit, record low mortgage rates, government mortgage-assistance programs, and the increased presence of Fannie Mae, Freddie Mac and the Federal Housing Administration in the mortgage-buying business" have put the kibosh on falling prices for now.

But, contends Schiff, with "bloated inventories, 9.8% unemployment (and much higher REAL unemployment), a dysfunctional mortgage industry and shattered illusions of real-estate riches, does it makes sense that prices should simply fall back to the trend line?" He argues that they will overshoot to the downside.

So what's the outcome? A major market correction in the next year.
Schiff thinks not, rather that there may be potential for an additional 10% dip below the 100-year trendline in the next five years, especially if mortgage rates continue upwards to more historical rates of 6% or more. He notes that that would put the index at 114.02, or about 28.3% below where were at now. Even a 5% dip would put the index at 120.36, about 24.3% below current levels.

Concluding, Schiff comments that, "In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with."

Military Service Members to Receive Foreclosure Protection Through 2011

2010-12-23T15:12:00.001-05:00

Posted by BEREL News Team on Wednesday, December 22nd 2010

Freddie Mac will provide “certain military service members” with foreclosure protection through 2011, the government-controlled GSE announced yesterday. Freddie Mac believes that by delaying foreclosures on homeowners currently serving in the military, many of these individuals may be able to get on track with their payments. To this end, the GSE’s loan servicers will delay the start of foreclosure proceedings for at least nine months on “any service members released from active duty between now and the end of 2011.”

Anthony Renzi, a Freddie Mac spokesman, characterizes the move as a “small act [that] will protect financially troubled service members when they return from active duty by giving them more time to work with their lender to stay in their home.” Freddie Mac is authorized to extend this protection through its original authorization in the Housing and Economic Recovery Act (HERA), passed in 2008, but had to extend the protection before the end of 2010 when its authorization to make such moves runs out. The protection only extends to military members with Freddie-Mac owned loans.

A little Christmas gift for all of our blog readers

2010-12-23T10:04:00.002-05:00

I have put together a report...a quick read...with many interesting stories and details regarding the possible origins of contemporary Christmas traditions. Click on the image and read or download the entire booklet if you like. Feel free to pass it along to others too!

An Advanced Strategy To Stop Harassing Debt Collector Calls

2010-12-21T13:53:00.003-05:00

Many of the short sale sellers we help are in financial distress and are selling their home to avoid foreclosure. In addition, many of them are receiving lots of harassing calls from debt collectors.

These debt collectors seem to think that if you call someone with no extra money, then you can still get them to pay. Here is a little tip on how to stop their phone calls.

Discover how other sellers successfully did a short sale to avoid foreclosure by clicking here.

A friend of mine looks for missing people. The database he uses is also a prominent debt collection database. He told me something interesting. Apparently people are suing debt collectors for breaking Debt Collection Laws all the time. These lawsuits are expensive for them to defend against and easy for the consumer to file. (I can’t agree more. In my opinion, the debt collectors knowingly break the rules all the time.)

To help debt collectors avoid future lawsuits they now have a field in their search that flags people that have filed lawsuits. They know that if they harass these people, then they are much more likely to get a lawsuit from them.

As you can see, they are scared! You can read more info on the law at this link and see for yourself if a debt collector is violating it. If you feel they have violated the law, then find a good lawyer to file suit on your behalf. There are many good lawyers who specialize in helping consumers when a debt collector violates the act.

Just Google “Fair Debt Collections Lawyer.” Many can help you at no cost out of your pocket. They will take your case on a contingency basis and get paid from the money they collect from the debt collector.

Thinking about a short sale? I can help you short sale your property at no cost to you. Send me an e-mail at ShortSaleInfo@thejacksonteam.com. I will contact you for a confidential consultation. When we talk, I will explain how the process works in detail and answer any questions you may have. Or, if you prefer, you can call me at (561) 602-1258

Discover how other sellers successfully completed a short sale and request a free consultation by clicking here.

Thinking about a loan modification? Our Palm Beach County loan modification kit has the instructions you will need to help you get a loan modification approved with your bank. Click here to request a copy.

As always, thanks for reading.

The bigger they are...

2010-12-12T08:23:00.001-05:00

After many years in business as one of the top real estate offices in the area, Century 21 Sunland Realty has closed. They were one of the first tenants in the former Winn Dixie plaza on Hypoluxo and Jog roads, but as of December, they are no longer in business.

This follows the closing of quite a few offices in the area, both large and small...several Re Max offices have closed...Illustrated Properties pulled out of the Lantana and Jog plaza a while ago...and many franchises and independents have 'consolidated' into other offices.

In this market, brokers and agents have had to be nimble and quick to react to changing market conditions and consumer demands and expectations. The old fashioned, corporate business model of - recruit, recruit, recruit - resulted in only large overhead and bragging rights based upon who has the most agents.

We saw the writing on the wall 7 or 8 years ago...opened a small, family-owned office based upon the principle of ultra-personalized service...(not the large "team" concept that started to permeate the business, where clients may never speak to or meet the agent whose name and face is being promoted)...immediate adoption of technological marketing opportunities...(not a drawn-out corporate office approval process), and intimate knowledge of all aspects of the real estate process..."Personalized-Not Franchised" became our doctrine.

There will still be a place for the old fashioned, franchise names...people don't go to Macdonalds to get the best burger available..they go because they are familiar with the name.

$3.3 Trillion and nobody knows

2010-12-08T05:14:00.001-05:00

Now, you and I might lose track of where we spent that $20 bill we had in our pocket...but Mr. Bernake can't seem to remember where he spent (our) $3.3 TRILLION! Courtesy of my friends, Brian and Frank, at Think Big, Work Small

Merry Christmas from the banks…Top lenders to stop foreclosure evictions during holidays

2010-12-01T18:11:00.001-05:00

Fannie Mae and Freddie Mac have announced they will halt foreclosure evictions between Dec. 20 and Jan. 3.

Bank of America too has said it will pause its foreclosure sales and evictions from “late December thorugh New Years Day,” on loans held in its portfolio or loans held by investors who will allow such a moratorium.

Freddie Mac made its announcement Wednesday morning, with Bank of America following suit shortly after.

“If the property is occupied, our foreclosure attorneys will suspend the eviction to provide a greater measure of certainty to families during the holidays,” said Anthony Renzi, Executive Vice President of Single Family Portfolio Management at Freddie Mac.

Bank of America spokesman Rick Simon noted that the lender has already placed a voluntary hold on most foreclosure sales and evictions as reviews its foreclosure process and resubmits affidavits in those states that require judicial foreclosures, such as Florida.

CitiMortgage said yesterday it has no plans to do a foreclosure moratorium this holiday season, (bah-humbug) although it did stop foreclosures sales and foreclosure notifications last year between Dec. 18 and Jan. 17.

This has been done, either formally or informally for the past 2 years so the banks don’t get ‘bad press’. And, as in the past 2 years, it will just mean that when the 1st quarter 2011 foreclosure numbers get reported in April or May, the “experts” will report an ‘unexpected’ rise in foreclosures over the previous quarter.

Real Time real-estate blog | The Palm Beach Post » Blog Archive » Top lenders to stop foreclosure evictions during holidays

A Thanksgiving video for all of our family, friends and clients

2010-11-24T10:48:00.002-05:00

One of the BIG franchises finally admits it...THE COMPANY DOES NOT MATTER!

2010-11-19T18:17:00.000-05:00

Thanks to the NotoriousROB blog for the heads-up on this video. Keep in mind while you watch this that this is a Keller Williams agent recruiting video...

And this is why I opened a small, personalized office long ago...I realized that it was me, my wife and our like-minded agents that our clients were hiring...not some company logo. But it is refreshing to finally see one of the big guys admit what the consumer already knows: It is the AGENTS, not the company. But all of the big franchises say that they have the best agents...etc, etc. But if you've ever gone on an interview as a real estate agent, you would know that there is never a competency test, ethics test or any kind of test for that matter. As a matter of fact, it is usually a 'reverse' interview...with the agent deciding whom THEY want to go work for. It's almost: If you have a license, you have a job.

List with us...we'll buy your house!

2010-11-19T12:10:00.001-05:00

I have started to see this being promoted recently by mail and on the radio.

"If we don't sell your house in ___days...WE'LL BUY IT!"

Must purchase one of the agents listings...or at least buy a 'full commission' home with them
Seller must still pay a full commission on the 'guaranteed' sale
Quite often an 'upfront' fee or guaranteed sale program fee of anywhere from $295 to fees in the thousands
"Agreed upon" price well below appraisal/market value...could be as low as the 80% range, then subtract commissions, fees, closing costs etc.
Original list price 5% below comparables
Seller is REQUIRED to continually lower the asking price during the 90 day (or whatever the guarantee period is)...for example: 100% for 1st 30 days, 90% day 30-60, 80% day 60-90, at which point they have reached their 'guarantee' point (but minus a full commission, etc.)
Sign the listing agreement first...then the guaranteed purchase details come later
May be a maximum allowable program price
Restrictions on home condition
Use the language "I'll buy it for 'list' price", but fail to say that the 'list' price is the 80% ENDING list price

If they'll buy it for the full price that they agree to list it for...then that's putting their money where their dog and pony show is.

Think about these few points:

With as difficult as it is to get a mortgage now, COULD your agent actually perform on their guarantee? Ask to speak with their mortgage lender...do your due diligence as with any other buyer.
If they don't need a mortgage and have a few $million sitting around to buy homes that don't sell in 90 days, why are they a real estate agent?
Are they "flipping" the purchase option to an investor? Are they going to list the home for the investor once they buy it?
Can they assign the guaranteed sale price (as in a wholesaler)?

Palm Beach County Florida Real Estate Information

Home price trend…Florida job prospects…

––For Every Two Homes Available for Sale, There Is One “In The Shadows”––

What if the Federal deficit was your household debt?

Will the Govt. force you to declare bankruptcy as a result of a short sale?

Foreclosure/Short Sale…1099 differences

2 month payroll tax reduction=30 years of increased mortgage payments!

2012

Tax advantages of home ownership

NAR…”OOPS”!

Loan Modification...who really benefits?

And we thought 2012 was going to be the year…

Cities Where Home Prices Are Falling Dangerously

Merry Christmas From Aunt Fannie and Uncle Freddie

Report: We Live in One of the Best Markets for Investment in Rental Property

Explanation of how our corrupt central banking system works

A Thanksgiving message to our readers

FHA going the way of Lehman?

If they keep predicting a market bottom…eventually they’ll all be right!

As Housing Market Nears Bottom, Pent-Up Supply Waits

The 'Art' of pricing in a declining market...

One of the best blogs I have the pleasure of reading is: Of Two Minds by the blogger Charles Hugh Smith. His post today falls right in line, and more eloquently expounds on, my earlier post regarding the new ‘underwater' re-fi plan announced Tuesday. Read it in its entirety, below.

Obama's Re-Fi Plan: The Perfection of Debt-Serfdom

Earning 1/2% on your money? Is that good enough?

The Administration is playing the HARP again

Have a loan with BofA? NOW IS THE TIME TO DO A SHORT SALE!

Think buying a bank-owned home is a good deal? Not so fast!

Foreclosure filings down 70% year over year…but all is not as it seems!

Bank Risk Managers: Home Prices Won't Recover Until 2020

Strategic default OK for Mortgage Bankers Association…but not for you?

Ocwen rolls out a new loan modification for underwater borrowers

Best of Lake Worth awarded to The Jackson Realty Group

Palm Beach County Real Estate...the good, the bad and the ugly

10 million more foreclosures in the pipeline

Standard Sales, Short Sales and REO's...

Foreclosures ramp up: County's 13% jump the trickle before the dam breaks, experts warn

Canyon of the Souls

Ruling in Wellington case could further complicate Florida foreclosures

Shadow inventory Armageddon – Foreclosure timeline up to an average of 599 days with 798,000 mortgages having no payment made in over 1 year and no foreclosure process initiated. Shadow inventory grows to over 6,540,000 properties.

Americans Expectations for a Housing Market Recovery Falters

FSBO.com founder hires a real estate agent to sell his home

View all of the Fannie Mae foreclosed homes in Palm Beach County

Dylan Ratigan says what needs to be said

Credit Ratings Downgrade for Fannie and Freddie Now?

Go to the correct site to get your credit report

View the webcams for: Boca Inlet, Boynton Inlet, Palm Beach Inlet, Jupiter Inlet

The ultimate inside job!

Keep paying your mortgage and you get a prize!

Winning Monopoly strategy

July 4th, 2011

Mortgages that are delinquent 90 or more days outnumber current bank owned foreclosure sales by a ratio of 50 to 1

We'll buy your house? Really? Or just a 'get my foot in the door' ploy?

Read our blog…be the first to know!

NAR's Yun has just entered...The Twilight Zone

Happy Fathers Day

The great depression has nothing on us!

Home price plunge coming - Shiller - Jun. 9, 2011

Florida home values and 'negative equity'

South Florida real estate prices at new post-bust low

Memorial Day 2011

Is now the time to buy income producing property in our area? Know what you're in for first.

Palm Beach County mortgage delinquencies. 90+ days late

Courtesy of one of my favorite blog reads: Dr. Housing Bubble

Zillow says...we were only kidding, did we say 2011?

Miami-Fort Lauderdale Metro Zillow Home Value Index

Boynton Beach Zillow Home Value Index

Delray Beach Zillow Home Value Index

Lake Worth Corridor Zillow Home Value Index

Happy Mothers Day

Short sales, foreclosures and credit scores

John gives us his latest tip

Do you have a Freddie or a Fannie?

Florida 'rocket docket' court told to respond to ACLU claims « HousingWire

The banks are now landlords?

Foreclosure Backlog Stands at Thirty Times Monthly Foreclosure Sales Volume

Thinking of just “walking away” from your house?

Freddie Mac on YouTube?

Nearly 20% of Florida homes are vacant - Mar. 18, 2011

Our "Ninja tactic" to do a short sale!

Some homes we are marketing