The Foreclosure Report

'Foreclosures Are Back' In Florida

The Herald Tribune has this on Florida defaults. "After three years of happy times and quick sales, real estate foreclosure is back. The U.S. real estate market has cooled, and foreclosure rates are notching upward and are almost certain to head higher. The distress isn't limited to Joe Six-Pack. Many pros and semi-pros are starting to wish they owned fewer homes than they do, especially if they bought recently."

"In May, there were 1,441 homes listed in North Port, but only 80, or 5.5 percent, sold, says Dave Hofer, who keeps statistics on the area. In Port Charlotte things were worse: 1,543 listings and 72 sales, or 4.6 percent."

"Down in Venice, George Huhn, a commercial real estate broker with an investor following, helped a couple of banks by taking over problem loans in 2001-02. Now, banks are starting to call him again, asking him to relieve them of problem first mortgages they held onto, before they become foreclosure actions."

"Banks do it for two reasons. 'No.1, for reasons of negative publicity and image, the banks don't want to be involved in foreclosure actions,' he said. Secondly, during the boom years, some lenders all but disbanded the departments performing the difficult work of foreclosure. 'Now they are looking at some hard choices, and what they are electing to do is outsource, and that is where we come in,' Huhn said."

"Even the pros and semi-pros in the Sarasota Real Estate Investors Association are feeling some distress these days. At one recent meeting, investor Peter Magnuson acknowledged the issue in a pep talk to the 75 or so members present. 'There's a little bit of blood in the streets,' Magnuson said. 'I think that is the people who overcommitted themselves and are looking for a way to unwind what they got into.'"

"'People who bought these pre-construction deals hoping to make big money on them and now they're stuck with them and it is eating them out of house and home,' he said."

From the South Florida Business Journal. "With interest rates and insurance premiums rising sharply while housing prices level off, some local real estate industry experts expect a surge of foreclosures, perhaps beginning as soon as this summer."

"'I expect we will see minimum increases [foreclosure filings] of 25 percent year-over-year, starting the second half of this year and it would last for several years,' said Rhonda Light, who monitors foreclosure filings at courthouses in South Florida's counties."

"Daniel Herz, a Plantation-based adviser to borrowers and lenders offers an additional warning: 'Until last year, with the rising home prices, if you got in trouble you could bail out by selling your house. Now, there is a glut of homes on the market.'"

"The pace of restructurings is rising rapidly this year for so-called 'hard money' or equity-based borrowers in South Florida, Herz said. Those borrowers either don't qualify for bank loans or want loans more quickly than banks can provide them."

"If they can put significant equity into a home or commercial property, usually at least 35 percent, Herz helps them get loans from individuals. 'I am getting more calls from borrowers who are behind in payments and their brokers, asking for help in finding a refinancing,' Herz said, adding that, because of the large amounts of equity involved, he is finding some new lenders in some cases."

"Many homeowners who made low down payments, often under 5 percent, and are facing their first big ARM increases will not be able to restructure loans, he said, and might have no alternative to foreclosure."

posted by Ben Jones @ 10:20 AM