Some eye-opening stats...

According to a CNNmoney.com report today, nationally, 1 in 4 mortgages is currently “under water”. That comes to almost 11 Million homes where the owner owes more than the home is worth.

The majority of underwater mortgages are heavily concentrated in five states that have particularly suffered from the housing bust: Nevada, at 65%; Arizona, at 48%; Florida, at 45%; Michigan, at 37%; and California, at 35%.

For us in Florida, that is a very scary number…45% of all homeowners owe more than their homes current market value! Add to that continued job losses and the potential number of defaults/foreclosures is tremendous.

Hopefully, the expanded and extended homebuyer tax credit will keep a finger in the dyke long enough to give sellers who are not yet under water who want/need to sell to a chance to get out. But looking forward, as the tax credit expires, and if the Fed follows through on its plans to scale back its purchases of mortgage-backed securities (MBS), which will signal the end of these historically low interest rates, I sincerely believe that we will see a resumption of the decline in home values here in South Florida.

Sellers and those thinking of selling take heed…your window of opportunity is the next 6 months…

Windsor, Grande Estates

A Windsor on a nice lakefront lot with a pool has just gone under contract. The home was originally listed at $495k back in July and was reduced to its current price of $465k in August. The home is not being marketed as a short sale.

The sellers are the original owners. The home was purchased in May of '02 for $381k.

Another short sale offer falls through

A short sale Kensington with a 2 story guest house, that was under contract, has just come back on the market. The home was under contract back in September, then again in October.

The home has been on the market now for a total of 229 days.

I am sure this is tough on the seller to have 2 buyers back out, walk away or be turned down, but this is the state of short sales today. I have found that it is usually because the banks are so slow in making and/or reporting ANY progress on a file to the parties involved that many buyers just move on...The banks are either understaffed, innefficient, unmotivated or stalling until the President gives them some more of our tax dollars. It should be clear that it is a fiscally more prudent decision to short sell an occupied home than to try to forclose on and sell a home that may become vacant  and be vacant for months. One can only hope...

Santa Fe price reduction

A Santa Fe that was placed on the market 68 days ago at $365k just reduced the asking price to $360k...This home was on the market as far back as April of 2008 asking $427k but was subsequently rented for a year in August 2008.

The home is not being marketed as a short sale...the sellers are the original owners who purchased the home in December 2000 for $219k.

Tuscon...sold

A very nice Tuscon on the lake with a pool has just sold for $385,000.  This was NOT a short sale and took a bit over five months to sell.

Interestingly, the sellers purchased the home in June of 2008 for $409,900 but put down a nice chunk of change...hence, even though they probably netted $50,000+ less than they paid, it was not a short sale...just a loss to the seller.

The non-short-sale sales may be averaging about 5% or more above what an identical short sale would sell for. Buyers are willing to pay that premium to avoid the uncertainty and drawn out process of a short sale. If you're thinking of selling and are lucky enough to not be in a short sale situation, now appears to be a good time for you. With the extension and expansion of the tax credt, coupled with the currently low mortgage rates, it may be the right time to take the money and "rent" (not run).

Yuma price reduction

A Yuma that was listed at $400k on June 30th has just reduced their asking price to $359k. Although the sellers purchased the home in July of '05 for $580,000 the home is NOT being marketed as a short sale.

Santa Fe...on the market again

A Santa Fe that had been on the market for 1 year at $425,000 was just newly relisted at $399,000.The sellers purchased this home in October of '07 for $415,000. The home is not being marketed as a short sale.

This short video could mean money in your pocket...

Finamore foreclosure sold!

The bank-owned Phoenix that went on the market 32 days ago at $279,900 had just the result I thought it would...it had mutiple offers...the bank called for "highest and best" and it sold for well over asking price and with the best terms: $327,512 cash.

Generally the banks have been following this strategy lately in marketing their inventory: Price agressively...obtain multiple offers in a short time...create a biding war...sell it fast, above asking and with a contract that contains a good combination of price and terms. Todays sellers may want to consider this strategy.

Grande Estates, under contract

A Windsor that went on the market at $405,000 on October 28th, is under contract. The home was being marketed as a corporate relocation.

Expanded 1st time buyer $8000 tax credit headed to President Obamas desk for signature

It's not just for 1st time buyers any more...call me for the details

561.432.5202

New Govt. plan to delay, not cure, the foreclosure problem...

Fannie Mae to rent out homes instead of foreclosing

WASHINGTON (AP) — Thousands of borrowers on the verge of foreclosure will soon have the option of renting their homes from Fannie Mae, under a policy announced Thursday.

The government-controlled company, through its "Deed for Lease" program, will allow borrowers to transfer ownership to Fannie Mae and sign a one-year lease, with month-to-month extensions after that.

The program will "eliminate some of the uncertainty of foreclosure, keeps families and tenants in their homes during a transitional period, and helps to stabilize neighborhoods and communities," Jay Ryan, a Fannie Mae vice president, said in a statement.

However, the effort is likely to affect a relatively small number of homeowners. In the first half of the year, Fannie Mae took back about 1,200 properties through this process, known as a deed-in-lieu of foreclosure. That pales in comparison to the 57,000 foreclosed properties the company repossessed in the period.

While neither option is particularly attractive for the homeowner, a deed-in-lieu does less harm to the borrower's credit record.

The rental program is designed to help homeowners who don't qualify for a loan modification under the Obama administration's plan, but still want to remain in their homes. Fannie Mae is not planning to market the homes for sale during the one-year rental period.

Fannie Mae has hired an outside company, which officials declined to identify, to manage the properties.(where's the transparency...Fannie is owned by the taxpayers for all intents and purposes)

To qualify, homeowners have to live in the home as their primary residence and prove that they can afford the market rent, which would be determined by the management company. The rent can't be more than 31% of their pretax income.

Short sale negotiation inside info...

I thought my readers may find it interesting to hear a little bit about some of the "behind-the-scenes" information regarding negotiating a short sale...Every day we are dealing with lenders and are involved with negotiations on short sales. A recent hurdle has been the negotiations with 2nd lien holders (2nd mortgages/home equity liens). We thought that the following may be of interest to a lot of folks currently contemplating how or even IF they should do a short sale....

These days many 2nd mortgage companies are now asking for 10% of their principal balance in order to release their lien. Prior to these recent changes, ALL 1st mortgage holders allowed a maximum of $1,000 to 2nd mortgages, period. Once 2nd mortgage holders started demanding 10%, it made obtaining approvals from both mortgages quite challenging. After all, 10% is quite a large number! And most 1st mortgages will only allow a maximum of $1,000 right?

Well luckily for our sellers, SOME 1st mortgage holders have paid attention to the changing trends and have started to change their policies to match. Now, more and more 1st mortgage holders are allowing a payoff of up to 10% to 2nd mortgages to avoid any complications. And for us short sale specialists, this is helpful to successfully navigating a short sale for our sellers! One of the lenders that have started to be more open to this policy change is ASC.

Keep in mind, not all 1st mortgage holders are doing this, and it is on a case-by-case basis, but, they are at least open to it and some will approve 10% to be paid to 2nd mortgage holders.

Grande Estates, under contract

A Biltmore that has been on the market for 153 days has just gone under contract. The home was originally marketed at $414,900 but was priced at $359,900 at the time of contract. This home was NOT marketed as a short sale.

The home previously sold for $380,000 in February of 2004.

Grande Estates sale...

A Buckingham on Houlton just closed...the selling price was reported to be $316,500. The home was on the market  for only 42 days and was listed at $387,692. This was NOT a short sale, but the sellers paid $395,000 for the home in May of 2004.


As I've been saying...homes that are NOT short sales, in good condition, where the seller is in tune with the market prices, are selling very quickly! And this should keep up as the inventory remains low, the 1st time homebuyer tax credit appears to be headed for an extension, and the number of short sales does not seem to be taking a breather.

Senate Clears Homebuyer Tax Credit Extension to Pass This Week

After two weeks of delay, the Senate, last night, cleared the way to pass a seven month extension and expansion of the tax credit for homebuyers... making it virtually certain that the legislation will reach President Obama for his signature this week.

The homebuyer tax credit, due to expire in 28 days, would be extended through April 30 of next year. First-time buyers who are in process of making a purchase would not need to worry about qualifying for the $8,000 credit if they close after the November 30 deadline.

For the first time, the legislation cleared last night makes move-up buyers as well as first-time buyers would be eligible for a credit. The $8,000 maximum first-timer credit will continue and will now available to couples with income up to $225,000, a nearly $55,000 increase above the level in existing law. A new $6,500 maximum credit would also be available to move-up homeowners who have lived in their current residence for five of the prior eight years... it is virtually certain that the President will sign the legislative package, which contains an expansion of unemployment benefits as well as the tax changes.

Kensington sale

A Kensington with a 2 story guest house (instead of the 3rd garage), that had been on the market for 634 days was reported sold. The property was listed at $525,000 at the time of contract and was sold for $455,000.

Back in October of 2007 the home was listed for $674,900. The sellers were the originall owners and purchased the property in March of 2002 for $328,000.

Grande Estates, Buckingham sale

A Buckingham on Houlton Cir was just reported sold. The selling price was $325,000...reported to be a cash purchase. The sale was a short sale.

The property was on the market for 189 days.

The sellers purchased the home in May of 2003 for $349,000.