Miami Real Estate Attorney Blog

The Federal Reserve recently announced details of its plan to revive the housing market. The plan is called "Operation Twist."

As a result of said announcement by the Fed, the average rates on conventional 30 year fixed mortgages fell to 4.01%. Rates on 15 year mortgages fell to 3.28%.

Operation Twist may lower these mortgage rates even further since the Fed's stated objective of Operation Twist is to push long term rates down further. Especially since mortgage rates tend to track the yield on 10 year Treasury notes.

But low rates have done little to boost homes rates or refinancing to date. Indeed, recent reports are rather gloomy regarding sales to date. Moreover, banks are apparently ramping up their foreclosure efforts and pushing more homeowners into foreclosure.

All of this suggests a very difficult real estate market. Accordingly, struggling homeowners should contact our office to meet with one of our Miami foreclosure defense attorneys today. Those who are in danger of losing their home to a foreclosure should examine the situation, with the aid of one of our attorneys, in greater detail.

Homeowners have many alternatives available to them to fight a foreclosure or even shrinking home equity. But homeowners must be armed with as much information as possible to decide what is best for them regarding the ongoing foreclosure crises.

Bank of America is leading a renewed charge into pushing more homeowners in to foreclosure.

The first step in any foreclosure is to receive an initial default notice. The number of homes across the country that received an initial default notice increased 33% in August from July. It was the largest monthly increase since the housing bubble crashed back in August 2007. In places like Tallahassee, Florida, the spike was most evidence in that an additional 81% of homeowners received default notices.

A closer look at those numbers reveals that the largest increase of foreclosure claims came from Bank of America. By taking action on its foreclosure pipeline, Bank of America claims it is setting the stage for a industry wide housing market recovery.

However, many are claiming that Bank of America is increasing its foreclosure work while failing to clean up the shoddy paperwork practices that resulted in a moratorium in foreclosures last year.

Additionally, Bank of America recently entered into an $8.5 billion settlement with a group of large investors who claimed the bank had sold them poor quality investments based on faulty mortgages. Clearing the backlog of foreclosures and defaulted loans is a key part of the terms of the settlement.

Bank of America has to reduce the number of risky mortgage loans and also find 3rd party companies that can help speed up the process. That includes helping homeowners modify their loans or moving defaulted parties into foreclosures and pushing for foreclosure sales.

The current real estate market, and ongoing foreclosure, and housing, crises, presents all sorts of issues that must be properly navigated by a struggling homeowner. Our Miami foreclosure defense lawyers have assisted many homeowners in buying enough time to reach the solution that is right for them. There are many alternatives to foreclosure, and often times it just takes proper planning to properly navigate against the potential pitfalls. Help is often available to those who seek it.

Homeowners today have seen their equity shrink to the lowest percentage since the 1940's.

Average home equity plunged from more than 61% at the start of 2001 to 38% earlier this year. While that drop does not come as a surprise, it comes as home prices in many major cities, such as Miami, have reached their lowest levels since 2002.

And we are not out of the woods yet. Many experts would not be surprised if property values decline another 10% to 25% in the next 5 years.

Indeed, a backlog of foreclosures are poised to hit the market which means prices may still be depressed. Given the high number of both unsold properties, and foreclosures still in inventory, home builders are dissuaded from starting new construction projects.

Also, the housing recovery is also being dampened by high unemployment coupled with stricter lending practices by many of the nation's leading banks.

Struggling homeowners should contact our office to meet with one of our Miami foreclosure defense attorneys today. Those who are in danger of losing their home to a foreclosure should examine the situation, with the aid of one of our attorneys, in greater detail.

Homeowners have many alternatives available to them to fight a foreclosure or even shrinking home equity. But homeowners must be armed with as much information as possible to decide what is best for them regarding the ongoing foreclosure crises.

March through August are typically the peak buying months in the United States.

But this year, Americans purchased fewer new homes than at any point in history since the records began to be maintained. And the sales of previously occupied homes were not much better. Combined, total sales this spring and summer were the weakest on record dating back to 1963.

Those figures highlight just how poorly the housing market is currently doing, and suggests that a full housing recovery is still years away.

Not even historically low home prices coupled with historically low mortgage rates are enticing people to purchase a home. Even in a buyer's market, no one is buying.

Indeed, the economy is barely growing and national unemployment rate continues to remain extremely high. As such, many people see a home purchase has too big of a risk.

Others simply can't afford the 20% down payment that many lenders are requiring, or simply don't want to deal with the hassle of the extensive paperwork that lenders today also require.

Many experts do not expect sales and prices to make a healthy recovery until at least 2015.

In a healthy six-month buying season, about 400,000 new homes would sell. However, this year approximately 168,000 new homes were sold from March through August. And that is less than the approximately 180,000 that were sold for that same period last year.

Our firm is prepared to assist you in navigating the difficult real estate climate that currently exists here in South Florida. Whether you are buying or selling a home, or if you are facing a foreclosure, or short sale, please call our office to discuss your potential options.

Following the greatest housing crash since the Great Depression, home lending standards have tightened to their strictest levels in decades.

Tight home loan credit is affecting everything from home sales to household finances. Many borrowers are struggling to qualify for loans to buy homes. Others can't take advantage of some of the lowest interest rates in 50 years because they don't have enough equity in their homes to refinance.

Those who can get loans typically need higher credit scores and bigger down payments than they would have in recent years. They face more demands to prove their incomes, verify assets, show steady employment and explain things such as new credit cards and small bank account deposits.

Even then, they may not qualify for the lowest interest rates.

Sometimes, even borrowers with seemingly pristine finances are struggling to close home loans.

Plus, nearly all borrowers are facing more documentation requests. In other words, the era of "no docs" is over.

Except for a few years leading up to the real estate crash -- when some borrowers got loans while providing little if any documentation of their assets and income -- borrowers have long had to supply two years of tax returns, pay stubs and financial statements when applying for home loans.

Now, lenders want tax records to come directly from the IRS, as well as from borrowers. The IRS releases the records after applicants sign forms giving it permission to do so. Instead of two months of bank statements and pay stubs, lenders may want them for each pay period until the loan closes.

Higher standards do appear to be reducing loan defaults, which means fewer foreclosures in the future.

Fewer than 1.3% of loans originated in 2009 that were resold to Freddie Mac and Fannie Mae went into default after 18 months, government data show. That's down from more than 22% default rates for 2007 loans and about 3% default rates in 2002.

Yet, many argue that the tight standards are a drag on the economy.

Contact us today to discuss your real estate needs.

Florida's Third District Court of Appeal recently handed developers a loss that some are describing as cataclysmic in the ongoing battle regarding deposit recovery disputes.

Since the real estate market went bust back in 2007, developers and pre-construction contract purchasers of condominiums (many of which were never built) have flooded South Florida's court system with lawsuits. Many of the lawsuits focus on the purchaser's effort to have their deposit returned. In most cases, those deposits were either 10 or 20 percent of the purchase price.

Many of those cases often settle out of court. But the Third District Court of Appeal's recent decision handed a significant victory to purchasers, and a significant blow to developers.

The case centers on the interpretation of a Florida Statute. Specifically, Florida Statute Section 718.202. That statute states that the deposit shall be kept in separate escrow accounts. In other words, one account needs to be established for the 10 percent deposit to be spent on construction, and a second account needs to be set up for the 10 percent deposit to be held in escrow.

Before the Third District Court of Appeal made its ruling, a federal judge in Miami concluded that a purchaser had the right to rescind it sales contract if the developer failed to hold separate escrows.

After that federal court decision was decided, Florida's legislature quickly cobbled together a revised version of Fla. Stat. 718.202 in an effort "clarify" existing law. That clarification was done in an effort to negate the potential impact of that federal ruling on existing disputes between developers and buyers.

However, the Third District Court of Appeal's recent ruling cites to that federal ruling in support of its ruling that purchaser can rescind the sales contract. In so ruling, the Third District Court of Appeal stated that "[n]otwithstanding the Florida Legislature's apparent intention that the 2010 amendment and new section be applied retroactively, we conclude that this would impermissibly impair each buyer's pre-amendment contract rights."

This ruling is a very significant ruling, and a ruling that alters the current landscape of pending deposit recovery cases. Of course, if the developer did in fact place the funds in two separate accounts, as required by Florida Statute, and this recent case, then the developer should be in a position to shield off attacks from purchasers.

However, one of the more interesting discussion points in this case is that the Third District Court of Appeal did not give any credence to an advisory opinion issued by the State of Florida providing guidance for developers with respect to this issue.

That advisory opinion suggests that separate accounting records was sufficient to comply with the statute at issue.

So it is likely that most, if not all, developers relied on that advisory opinion. And if they did, then this recent case from the Third District Court of Appeal concludes that such reliance was misguided. Indeed, this ruling from the Third District Court of Appeal could greatly alter the landscape of these ongoing disputes in favor of purchasers, and against developers.

Consequently, if the developer failed to comply with F.S. Sec. 718.202, by failing to establish separate escrow accounts, then purchasers have a strong argument to potentially secure the recovery of their deposit.