ORANGE CITY, Fla. – June 8, 2009 – Scrambling to stay current with his mortgage, Craig Vale feared he was surely headed into foreclosure this year. Then the unemployed print-shop-equipment operator heard about a new program for financially troubled homeowners.
Last week, Vale, 59, and his wife, Bobbie, cleared the final hurdle to a “trial loan modification” that will cut their interest rate, lower their monthly payment and give the Orange City couple a fighting chance to save their home.
“My wife lost her job after she became disabled; then I got laid off,” he said. “We were still scraping by, but the handwriting was on the wall. Then we heard about this program that seemed exactly for people like us who had never been late on their mortgage. And it gave us some hope.”
Tens of thousands of people nationwide have tapped the federal Making Home Affordable initiative, the Obama administration said last week. The program, enacted in March, aims to help the millions of people current on their mortgages but struggling with payments and those delinquent on their loans.
Less than three months after its launch, more than 120,000 homeowners have received loan modifications and a few thousand more have gotten refinancings through the program, the Treasury Department reported. The early results are in stark contrast to last year’s ill-fated Hope for Homeowners program, which fell flat after it was beset by red tape and eligibility complications. It drew fewer than 100 applications nationwide after several months.
The new Making Home Affordable program still has a long way to go before it has measurable effect on the nation’s flood of foreclosures. Still, those on the front line of the crisis say it is the most promising initiative so far.
“There’s no comparison to other programs,” said Rosa Miro, a housing counselor with Consumer Credit Counseling of Central Florida who worked with the Vales. “I was never able to put even one client in any of those programs. This one at least gives people a real opportunity to recover.”
What the new program does differently, among other things, is throw some serious money – $75 billion – at the problem to provide financial incentives for all involved.
Financial incentives In addition to getting more favorable terms, homeowners who qualify for the program and stay current with their loan will get as much as $1,000 a year taken directly off their mortgage principal over five years. Lenders and mortgage servicers will also get $1,000 for processing an application to modify or refinance a loan, plus another $1,000 if they approve the application.
That’s a big change from the past, when loan servicers got nothing for modification work but cash incentives from lenders for doing a foreclosure.
One of the big improvements, homeowner advocates say, was the passage only weeks ago of a federal law that shields mortgage servicers from lawsuits by angry investors in mortgage-backed securities.
The potential for litigation from investors has long been viewed as discouraging mortgage servicers from working with distressed homeowners trying to obtain relief. Simply put, servicers didn’t want to risk being sued if, by modifying people’s loans, they reduced the potential payoff of mortgages bundled and sold as investments.
The shield law and other such measures are gradually changing lenders’ and servicers’ attitudes toward working with troubled homeowners, said Jeff Perdue, president of Orlando Home Mortgage, a brokerage that works mostly with the new program’s refinance guidelines.
“We finally have something we can really work with,” he said. “It’s not a watershed by any means, but it is revolutionary compared to Hope for Homeowners. At least it’s making a dent.”
Foreclosures still soar Still unclear is how much of a dent the program is making in the pile of foreclosures. Treasury officials would not release data on how many homeowners have applied, so the program’s approval rate is unknown.
In addition to the more than 120,000 loan modifications processed in the first three months, 3,650 homeowners have refinanced their mortgages through Making Home Affordable – a relatively meager total given the number of homeowners in distress. More than 2.4 million new foreclosures are expected by year’s end, according to an estimate by the Center for Responsible Lending, a consumer-watchdog and research group. And that estimate could wind up being low, because a record 12 percent of the 45 million mortgages in the country were delinquent during the first quarter, according to the Mortgage Bankers Association.
Against that backdrop, even the Making Home Affordable program has been pretty slow out of the gate, said Barry Zigas, housing director for the Consumer Federation of America, the nation’s largest consumer-advocacy group.
“I really haven’t seen much of a result from it yet,” he said. “I do understand that most of the biggest servicers have signed up, but this is still moving forward at a slow pace. They have a lot of applications in the pipeline, but foreclosures are still up.”
‘A number of hurdles’ The new initiative has also encountered some of the same problems as the old ones: homeowners getting the runaround at corporate call centers, confusion about program eligibility, uninformed customer-service reps, and mortgage servicers that won’t help borrowers until they’re behind on their loan payments.
“There are still a number of hurdles to overcome,” said Richard Scaggs, chief executive officer of Consumer Credit Counseling of Central Florida. “Overall, we do have a much-improved program now, and we’re getting much more buy-in from the servicers. But it is all so new, there are servicers out there who are really overwhelmed with it all.”
These days having a foreclosure on your record seems to be closer to the norm than it ever has before. What once was an unfortunate event that happened relatively infrequently, now has probably happened to you or someone you know. The good news is that its not the end of the world anymore. There are programs that will help you get a second chance at finding housing and restoring your credit at the same time. There are such programs available in Fort Myers, FL. They help individuals who have had a foreclosure in their past by placing them in a rent to own situation. Up to 75% of the rent that they pay is put down towards a down payment and the rest is financed to help the prospective homeowner rebuild their credit. It gives the renters a second chance at homeownership, and helps the community overall, by placing responsible tenants in otherwise vacant properties. On the investment side, the programs offer investors the opportunity to have a passive monthly income by screening and placing tenants in the homes, offering property management services, and ultimately providing the investor with a guaranteed homebuyer at the end of 18 months. Sounds like one of those few opportunities where everyone wins
Southwest Florida has been one of the hardest hit by the foreclosure crisis in recent years, and many are saying that the worst part of the crisis is behind us. If the numbers below are any indication, smart investors are starting to buy up the foreclosure inventory:
Cape Coral: On March 1, 2008, the average homes available per buyer was 12.32. On March 1, 2009, the average homes available per buyer dropped to 3.55
Fort Myers: On March 1, 2008, the average homes available per buyer was 19.99. On March 1, 2009, the average number of homes available per buyer dropped to 5.44
Lehigh Acres: On March 1, 2008, the average number of homes available to buyers was 16.89. On March 1, 2009, the average number of available homes to buyers dropped to 5.08.
As the inventory decreases, demand will grow and so will prices. This makes now the perfect time to invest in Southwest Florida Real estate.
Another way to track market changes is to monitor the “days on market” numbers that are available on the Multiple Listing Service (MLS). When the “days on market” number for a bank owned property starts to decline, this is a great indication that the market is turning around. This is a published number and will be available through the real estate agent that you are using.
The number of offers that a bank gets for a property is another indication of a market that is heating up. If the bank receives multiple offers, especially offers that exceed the asking price, this is a sure sign that investors are more confident in the market and are willing to invest. This information is not as readily available as the “days on market” number, but once you establish a relationship with your realtor, they will most likely share that information with you.
Bottom line: study the market, take note of the trends, and you will be well on your way to success as a real estate investor. Why Southwest Florida? There will always be a demand for homes in beautiful climates. Southwest Florida has beaches, palm trees, sunshine, a low cost of living, no state income tax- people save up their whole lives to be able to live here. This is a golden opportunity to buy new or almost new homes at a fraction of their original cost. The current economic climate will make millions for investors. The value of the dollar keeps falling daily as the government prints more money to bail out businesses and individuals who need relief. At the same time, housing prices are where they were in 2002 nationwide. However, in Lee County Florida, prices have dropped to where they were in 1988! To buy a home now in Southwest Florida would be a shelter from the impending inflation. With the continuous rising prices of goods and services, housing prices have to rise.
How to take the Next Step
Before you buy an investment property it helps to consult someone who is familiar with the area. Do your research and speak with a professional who will guide you through the steps you need to take. You will need to find someone who knows about the legal and tax attributes associated with purchasing a property in the state that you are dealing in. They will keep you informed of the neighborhood demographics.
Getting Started
As a real estate investor you will need to ensure that you will receive funding for your investment property. Make sure your credit score is as good as it can be. Make sure your debt to credit ratio is about 30%. And ask yourself if you really can afford to lose liquidity in the money that you put into the property.
WASHINGTON (AP) – May 1, 2009 – Rates on 30-year mortgages tied a record low this week, spurring refinancing activity as the troubled housing market moves closer to possibly hitting the bottom, Freddie Mac said Thursday.
Average rates on 30-year fixed mortgages, the most popular loan among home buyers, slid to 4.78 percent from 4.8 percent last week, Freddie Mac said. Last year at this time, the average rate on a 30-year mortgage was 6.06 percent.
The all-time low of 4.78 percent was recorded the week of April 2. Freddie Mac’s annual survey dates back to 1971.
Low mortgage rates have led to more refinancing activity since rates first fell dramatically in the winter. Rates slid again after the Federal Reserve said last month it would buy $1.2 trillion in mortgage-backed securities and $300 billion in long-term government debt, which traditionally influences rates on 30-year home loans.
Frank Nothaft, Freddie Mac’s chief economist, said the low rate means that those who refinance a $200,000 loan would save almost $212 in monthly mortgage payments and more than $2,500 per year.
Borrowers who refinanced during this year’s first quarter reduced their mortgage payments by about $2.5 billion over the coming year, and half of borrowers who refinanced lowered their annual interest rate by at least 20 percent, according to Freddie Mac’s quarterly Refinance Report.
With inventories apparently dropping and affordability rising, there are some positive signs, Freddie Mac said.
“The housing market may be edging toward a bottom,” Nothaft said.
Freddie Mac also said the average rate on a 15-year fixed-rate mortgage was 4.48 percent this week, unchanged for the third straight week.
Rates on five-year, adjustable-rate mortgages fell to 4.80 percent from 4.85 percent last week – the lowest since Freddie Mac began tracking it in January 2005.
Average rates on one-year, adjustable-rate mortgages fell to 4.77 percent from 4.82 percent last week.
The rates do not include add-on fees known as points. The nationwide fee averaged 0.7 point last week for every type of mortgage mentioned in Freddie Mac’s survey except for the five-year adjustable rate mortgage, which averaged 0.6 point.
Freddie Mac collects mortgage rates from lenders around the country. Rates can fluctuate significantly
ORLANDO, Fla. – April 23, 2009 – Florida’s existing home sales increased in March, making it the seventh month in a row that sales activity demonstrated gains in the year-to-year comparison, according to the latest housing data released by the Florida Association of Realtors® (FAR). March’s statewide sales also increased over the previous month’s sales level in both the existing home and existing condo markets.
Existing home sales rose 30 percent last month with a total of 13,085 homes sold statewide compared to 10,080 homes sold in March 2008, according to FAR. Statewide existing home sales in March were 32.7 percent higher than February’s statewide sales.
Florida Realtors also reported a 25 percent rise in statewide sales of existing condominiums in March, continuing a trend in recent months for higher statewide sales of both the existing home and existing condo markets compared to year-ago levels. Statewide existing condo sales last month increased 37.2 percent over the total units sold in February.
Fifteen of Florida’s metropolitan statistical areas (MSAs) reported increased existing-home sales in March and 13 MSAs also showed gains in condo sales. It marks the ninth consecutive month that a majority of markets have reported increased sales.
Florida’s median sales price for existing homes last month was $141,300; a year ago, it was $201,700 for a 30 percent decrease. Industry analysts with the National Association of Realtors® (NAR) report there is a significant downward distortion in the current median price due to many discounted sales, including a large number of foreclosures. The median is the midpoint; half the homes sold for more, half for less.
The national median sales price for existing single-family homes in February 2009 was $164,600, down 15 percent from a year earlier, according to NAR. In California, the statewide median resales price was $247,590 in February; in Massachusetts, it was $252,500; in Maryland, it was $253,200; and in New York, it was $210,000.
NAR’s latest housing industry outlook reported that entry-level buyers are seeking bargains, which resulted in sales of distressed properties accounting for 40 to 45 percent of February’s transactions. “Given the downward distortion in price comparisons due to distressed sales, it’s important for owners to keep in mind that this doesn’t equate to a similar loss of value for traditional homes in good condition,” said NAR Chief Economist Lawrence Yun.
In Florida’s year-to-year comparison for condos, 4,388 units sold statewide compared to 3,503 units in March 2008 for a 25 percent increase. The statewide existing condo median sales price last month was $108,700; in March 2008 it was $172,300 for a 37 percent decrease. In the latest data available at press time, NAR reported the national median existing condo price was $172,200 in February 2009.
Interest rates for a 30-year fixed-rate mortgage averaged 5 percent last month, down significantly from the average rate of 5.97 percent in March 2008, according to Freddie Mac. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s large to medium-size markets, the Melbourne-Titusville-Palm Bay MSA reported a total of 539 homes sold in March compared to 445 homes a year ago for a 21 percent increase. The existing home median sales price was $123,700; a year ago, it was $159,000 for a 22 percent decrease. In the year-to-year comparison for the existing condo market, a total of 113 units sold in the MSA last month, up 24 percent compared to 91 condos sold the previous March. The market’s existing condo median price was $123,100; a year ago, it was $164,300 for a 25 percent decrease.
2009 © FLORIDA ASSOCIATION OF REALTORS
GAINESVILLE, Fla. – April 29, 2009 – Consumer confidence among Floridians surged six points to 71 in April amid indicators of flattening housing prices statewide and news that the economy has not worsened, a new University of Florida survey finds.
“The size of the increase comes as somewhat of a surprise,” said Chris McCarty, director of UF’s Survey Research Center at the Bureau of Economic and Business Research. “We had expected confidence among Florida’s consumers to move up and down in a fairly narrow window.”
“In balance, consumers seem to have absorbed most of the bad news and are at least not seeing things getting much worse,” McCarty says. “Perhaps we really have seen the bottom in terms of Florida consumer confidence, which was back in June of last year.” In that month, consumer confidence sunk to 59, its lowest level in the index’s 25-year history.
All five of the index’s components rose in April. The biggest jump was in perceptions of whether it is a good time to buy big-ticket items, such as cars and appliances, which jumped 15 points to 77.
Perceptions of U.S. economic conditions over the next year climbed nine points to 69, while perceptions of U.S. economic conditions over the next five years rose three points to 82. Perceptions of personal finances a year from now increased five points to 85, while perceptions of personal finances now compared with a year ago rose two points to 44.
Despite these positive signs, there is still enormous uncertainty surrounding the economic recovery, McCarty said.
Massive interventions by the federal government, the Federal Reserve and governments around the world have had obvious effects, McCarty said. At the same time, stock markets around the world have rallied, and some economic pundits characterize it as the beginnings of a recovery, though bad news could still derail the process, McCarty says. If housing prices nationally begin to stabilize, it would help establish the value of some the toxic assets held by banks and indicate how deeply the recession has hurt the global economy.
“Consumers seem to characterize the economy by those events in their personal lives and in the news that are changing the most, whether those be good or bad,” McCarty says.
There has not been much news recently about very large bailouts, nor have there been many notable bankruptcies of very large companies, although there is a strong possibility that General Motors Corp. and Chrysler may end up having to declare bankruptcy, McCarty says. Were that to happen, it would likely cause at least a temporary drop in consumer confidence, even in Florida.
Barring something of that magnitude, consumer confidence may continue to improve as various sectors of the economy begin to recover, McCarty says.
“For Floridians, the next big news will probably be the Florida state budget and the effect it will have on taxpayers who stand to pay more in various fees, and those who depend on state revenue for their employment,” McCarty says. “The effects of this may not be known well into May.”
The research center conducts the Florida Consumer Attitude Survey monthly. Respondents are 18 or older and live in households telephoned randomly. The preliminary index for April was conducted from 406 responses. The index is benchmarked to 1966, so a value of 100 represents the same level of confidence for that year.
© 2009 FLORIDA ASSOCIATION OF REALTORS
TODAYS MUSIC FEST
Blues Traveler, The Smithereens and A200 will perform at the Edison Festival of Light Music Fest from noon to 6 p.m. today. Centenial Park, downtown Fort Myers. Tickets are $20.00 at the gate.
ART ON PINE ISLAND
Event at Matlacha Community Park will feature more tyhan 400 paintings from 10 a.m. to 4 p.m. today and Sunday
JUNIOR RUN PARADE
The Chico's 2009 Edison Festival of Light Run and Parade are Sunday with th run prior to the junior parade, which starts at 2;30 p.m.. The parade starts at First and Handry streets downtown Fort Myers. www.edisonfestival.com
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• 1,983 sq. ft., 2 bath, 3 bdrm 1 1/2 story
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Majestic Golf Community, Central Lehigh
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• 2 bath, 3 bdrm single story
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Majestic Golf Community, Central Lehigh
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• 1,893 sq. ft., 2 bath, 3 bdrm duplex
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Backyard is Majestic Golf Club
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Majestic Golf Community, Central Lehigh
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• 1,893 sq. ft., 2 bath, 3 bdrm duplex
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Majestic Golf Community, Central Lehigh
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Admiral Golf Course, Central Lehigh
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