Bank Foreclosures Information

Sales of existing residences, including bank owned home properties and condominiums, went up in Florida during the March 2011 period compared with one year ago. According to realtors, the March increase marks the fourth month in a row that sales of existing condos and houses in the region have gone up year-over-year.

The rise in sales of Boynton Beach bank owned properties and existing condos in other key areas of the state was largely attributed to the high number of investors taking advantage of bargain-priced real estate currently available in the Florida market. For March 2011, 18,522 existing homes were sold in the whole region, representing a 12% rise from March 2010 when 16,540 houses were sold, according to a report issued by Florida Realtors.

Aside from Florida bank owned homes, condominiums also enjoyed a strong March in terms of sales, with figures jumping by 24% compared with March 2010. A total of 17 metropolitan statistical regions in the state recorded increases in existing condo and housing sales during the month. Realtors reported that elevated buying activities during the month were largely due to the availability of heavily-discounted properties and the fact that interest rates have remained at historic lows despite inching up a bit in the past few weeks.

However, median selling prices of a bank owned home and other types of existing dwellings continue to tumble in the region. In March 2011, the median selling rate for existing houses was at $126,300, down by 7% from the $136,000 median price recorded in March 2010. According to the National Association of Realtors, median selling rates have plummeted in most areas of the U.S. during the month, mainly because of the huge amount of discounted foreclosures and short sales that are being sold in the market.

Prices of existing condominiums offered at foreclosure auctions and at other sales markets also declined, with the March 2011 price pegged at $84,300, down by 11% from the March 2010 median rate of $94,800. Total units sold were 9,703 for the month, declining by 24% from the 7,830 condo units that were sold one year ago. The drop in prices was mirrored at the national level, realtors also reported.

The price of a bank owned home and existing condos in the whole country is expected to continue to decline for most of 2011. However, realtors are optimistic that sales will continue to rise, particularly in the coming months as the national economy continues to stabilize and the job market improves.

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Buying repo homes for sale in affluent neighborhoods in Lee County and in other areas of Southwest Florida can be profitable for investors who can afford to wait until prices return to their previous levels before selling.

Based on data from the association, a total of 1,628 foreclosure actions were posted in the area in October. The number marked a decrease of 40 percent from the record high 2,665 posted in October last year, but the foreclosures are now including homes in high-end neighborhoods.

Realtor Brett Ellis affirmed the spread of foreclosures into high-end areas by saying that he is increasingly seeing home foreclosures for sale priced in the high-end range.

Higher-cost homes in Lehigh Acres are priced above $100,000 while high-end homes in Fort Myers are in the price range of $200,000.

Real estate investor Kerry Collier said she has purchased a high-end foreclosed house in Estero for $285,000 and expects higher-cost houses initially priced above $300,000 to go down in price over the next few weeks.

According to Collier, who also owns a real estate brokerage and an online FSBO enterprise, the Multiple Listing Service shows a lot of high-end foreclosed homes.

Meanwhile, Brad Hunter, head of residential market research firm Metrostudy, said that despite real estate vacancies and continuing foreclosures in parts of Southwest Florida, new homes are actually being built in Lee County. He said that single-family housing starts in subdivisions increased to 194 units in the third quarter, compared to the previous period and vacant homes increased to 728 units, compared to 703 in the previous period.

Over the past 12 months, home builders have been concentrating on cutting down their housing inventories, but now they have started building again in anticipation of demand for new homes and to replenish their inventories.

However, Metrostudy executive Hunter said that builders of new homes will face competition from more home foreclosures for sale that will enter the Southwest market in the coming months. He added that unemployment and the default of prime loans will push up foreclosure numbers.

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State economists said that they expect Florida’s economic recovery to start six months later than what they had originally anticipated. They made their revisions after reports that unemployment and the number of bank repo homes in Florida rose in the first six months of this year.

Market data showed that foreclosure filings from January to June were made on 268,064 bank foreclosure homes, earning Florida the second spot in the state foreclosure rate ranking. For the first six months of 2009, Florida’s foreclosure activity rose by 7 percent compared with the last half of 2008 and 42 percent higher than the first six months of 2008.

Meanwhile, the economists at the Florida Legislature’s Office of Economic and Demographic Research predicted that the state’s unemployment rate will rise by 11 percent or almost 1 million jobless people by the end of 2011.

Office of Economic and Demographic Research head Amy Baker said that the economists were hoping that some changes at the national level would be able to benefit Florida. However, she said that initiatives such as economic stimulus and assistance to the credit market have failed to make some impact. This development may force state officials to raise taxes or reduced some services.

According to Dave Denslow, an economist at the University if Florida, to balance the budget based on the revised state forecast, Florida officials need to generate an additional amount of $2 billion.

The state’s current budget was reinforced by $5 billion in government stimulus fund and $2.2 billion in new taxes and fees.
Meanwhile, adding to Florida’s woes is the rise in demand for social service programs, particularly Medicaid which is provided to people who cannot afford the healthcare system.

Senate economic-improvement committee chairman Don Gaetz said that an increase in unemployment rate and the number of bank owned foreclosure homes indicated the lack of business activity which is crucial in the economic recovery. He added that when people are unemployed, they need Medicaid, food stamps and housing assistance which could burden the state financially.

Florida’s unemployment rate in June was higher by 11.5 percent, while one out 33 homeowners in the state received filing for distressed foreclosure homes.

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Members of the Florida Minority Community Reinvestment Coalition will stage a protest against the minority lending practices of the Bank of America which they believed contributed to its high bank foreclosure property rate. Coalition President Al Pina is set to stage a hunger strike to protest what he believed to be a lack of transparency by the Bank of America on low-income minorities.

Pina pointed out that the banking institution has a high bank foreclosure property rate, high interest rates for credit card and failed to increase available credit for struggling businesses. All these, Pina said, while the bank is accepting federal bailout funds.

The coalition believed that the lending practices of the Bank of America violated the Community Reinvestment Act of 1977. The law was passed to stop banks from practicing redlining, which means denying loans to borrowers in underserved areas.

A representative of the bank disputed charges of the coalition, pointing out that Bank of America has been the recipient of outstanding Community Reinvestment Act ratings for six consecutive terms.

However, Pina claimed that Bank of America is one of the three major banks in Florida that refuses to accept and follow the rules of transparency. The other two banks are Wachovia and Washington Mutual which were acquired by Wells Fargo and Chase Bank, respectively.

The coalition is convincing minority customers in the state to stay away from the Bank of America and instead, patronize Wells Fargo. In line with this, the coalition launched the Wells Fargo YES-Bank of America No campaign.

Bank of America Florida’s Mike Fields said that the bank is aware of the needs of low-income and minority communities in the state and nationwide. In fact, the bank started delivering its $750 billion investment and community development lending goal in 2005, Fields said.

Meanwhile, Pina pointed out that transparency and accessibility are the biggest problems with Bank of America. He said that some major banks have allowed the coalition to monitor their minority lending practices to prevent high bank foreclosure property rate.

Furthermore, Pina claimed that Bank of America’s sub-prime mortgages, which are the root cause of bank foreclosure property crisis that the housing market is experiencing right now, is worse than Wells Fargo. He said that 65 percent of mortgage loans issued by the bank to Florida minorities in 2005 to 2006 were sub-prime.

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If you are planning to buy a unit from foreclosed homes for sales or if you are thinking of refinancing your mortgage to make your monthly payments more affordable, do them now to take advantage of low mortgage rates, according to mortgage brokers and lenders.

Brokers and lenders said mortgage rates can fall and rise in short intervals. They noted that in August last year, the rate for a fixed-rate 30-year mortgage loan was approximately 6.75 percent. The current rate of 4.75 percent can rise in the next weeks or months.

Timothy Dwyer, chief executive of mortgage provider Entitle Direct, said that the current 4.75 percent rate would allow a borrower to take out a $400,000 loan with a $2,086 monthly payment. If a prospective buyer waits for the price of a house to get down to $325,000 while the rate rises and reaches 6.75 percent, his monthly payment would be $2,100.

In Southwest Florida, homeowners are now refinancing their loans at 4.75 percent. Many of them are taking advantage of programs to protect their homes from being added to inventories of foreclosed homes for sales.

Leslie Prosser, a 34-year-old employee of the Collier County Education Association, said she and her partner were able to refinance the $138,000 loan they took out to buy a three-bedroom house in Estero.

The couple’s original mortgage rate of 6.75 percent was reduced to the current rate of 4.75 percent. Now, their monthly payment is down by about $200. Prosser advised homeowners to first talk with a mortgage counselor to learn how they can prevent their houses from becoming foreclosed homes for sales.

A report from the Mortgage Bankers Association released this week showed that more than 69 percent of all home loan applications nationwide were from loan refinancing applicants.

David Hall, head of the First Community Bank of Southwest Florida, said there are two major reasons why some loan refinancing applications are not processed quickly: low home values and mortgage-backed securities.

Hall explained that refinancing applications are not processed when the loan amount is higher than the market price of the house, which has declined because of the low prices of foreclosed homes for sales. In other cases, banks refuse to lend at current low rates because they could find themselves paying more for their investment loans than what they are earning from the mortgage loans.

Additionally, Hall said that institutions that buy mortgage loans from banks are now strict with loan documentations. They are now making sure that borrowers are employed in stable positions and are earning enough money to be able to pay loans and not put their houses at risk of becoming foreclosed homes for sales.

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RealtyTrac, which compiles and monitors the foreclosure market in the United States, released a report showing that Central Florida foreclosures increased three times in the span of one year, from 2007 to 2008.

Hardest hit cities are Deltona and Kissimmee where six of their neighborhoods are experiencing high rates of Central Florida foreclosures.

According to industry experts, areas most affected by Central Florida foreclosures are communities that have affordable housing market.

Florida foreclosures took a beating in January 2009 with 10,007 units falling victims to the crisis and pre-foreclosure filings reaching 43,070. It is predicted that Florida foreclosures could rise by 100 percent this year, making critics doubt whether President Barack Obama’s foreclosure prevention plan would succeed in its goal to help as much as 9 million American homeowners remain in their properties.

Meanwhile, Florida Governor Charlie Crist explained his plan to reduce taxes to allow distressed homeowners pay for mortgages.

Florida has the highest number of default mortgages, with one out of five mortgage loans in default in 2008.

On the other hand, the Bank of America will offer $2.5 million grants to help stem the tide of Florida foreclosures.

The $2.5 million grant will be coursed through the Alliance for Stabilizing Our Communities, a coalition led by the National Council of La Raza, National Urban League and the National Coalition for Asian Pacific American Community Development.

The alliance, which was established to help multicultural borrowers facing the threat of losing their properties to foreclosures, will find the best possible solutions for the housing problems, particularly how to control the growing number of distressed homes.

The grant that the Bank of America would provide will fund the hiring of additional counselors, conduct of counselor training, production of multi-language outreach educational materials for at-risk homeowners and resource guide materials to educate and prepare communities on potential foreclosure challenges.

The alliance will host 49 property retention fairs in various cities, including Fort Lauderdale in Florida, to offer over 11,000 distressed homeowners onsite counseling by nonprofit organizations approved by the Housing and Urban Development.

Bank of America will post retention associates at various fairs to partner with alliance nonprofit organizations to review mortgages and determine several foreclosure-prevention options such as refinancing and loan modifications.

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