Miami Real Estate Attorney Blog

All signs point to a continued recovery in the housing market.

Recent statistics show that home prices statewide rose 5 percent in January. The median price for existing homes across Florida last month was $129,000, compared with $122,500 a year ago.

Although sales declined statewide, pending deals have increased in every month since May and the number of homes for sale statewide has fallen by 34 percent from a year earlier.

Here, in South Florida, home prices continue to trend upward, offering hope of a housing recovery even while many say a bottom may still be a year away.

Some still expect a flood of bank owned properties to hit the market. But when that does, there is a growing school of thought that such a development will be a favorable one for a housing market that is appears to be bouncing back. The reason being is there is actually a shortage of available properties in many areas throughout South Florida. And if the property is priced right, it will not be on the market very long. Many are taking advantage of the record low interest rates, and other such favorable factors, and jump from the rental market into home ownership.

Today's market presents all sorts of unique opportunities for both buyers and sellers. It also presents wonderful opportunities for those with homes that are underwater as today's market is a short sale driven market. It may be time to consult with a real estate attorney to assess your options.

Continue reading "South Florida Home Prices Increased in January" »

A mortgage settlement over the mishandling of millions of foreclosures was recently reached following 16 months of complex negotiations between 50 attorneys general and five major banks amid allegations of robo-signing and other abuses further fueling the foreclosure crises.

Under the terms of the settlement, those who have lost their homes or have fallen underwater on their loans could receive a $2,000 check, a $20,000 mortgage reduction or a lower interest payment.

But while everyone involved in procuring this deal should be applauded for their effort, the deal falls short. The deal is saddled with glaring limitations which will make it difficult to reach the millions of homeowners currently struggling.

For starters, the numbers simply tell us that this deal won't reach that many people which means this settlement will be felt by just few fortunate individuals. Specifically, borrowers around the country owe more than $700 billion more on their homes than the homes are worth, yet the settlement offers only $26 billion in fines and relief to homeowners.

Additionally, approximately one million homeowners will have their mortgage debt reduced or loans refinanced at a lower interest rate, and up to 750,000 other borrowers who became victims of abuses in the foreclosure process could receive an average of $1,500 to $2,000. On the other hand, many estimate that some 11 million U.S. homeowners are underwater -- they owe more on their homes than the homes are worth. Some 4 million are in foreclosure or seriously delinquent.

So to repeat, a mere cursory look at the numbers reveals that the deal won't be as far reaching or helpful to the great majority of struggling homeowners.

But the deal has other limitations as well. The settlement is limited to five big banks that own the mortgages directly. Those include Bank of America, JP Morgan Chase, Wells Fargo, Citigroup and Ally.

It excludes private investors, other banks and -- most important -- mortgages backed by federal agencies known as Fannie Mae and Freddie Mac, as well as the FHA. These agencies, which are subject to controls from the executive and Congress, account for about 56 percent of all existing loans.

This settlement fails to satisfy the need for accountability by those responsible for the housing collapse. If the only punishment is a slap on the wrist, the mortgage industry will have learned nothing from this epic debacle.

Continue reading "Mortgage Deal Fails to Make an Impact to Help Struggling Homeowners" »

The real estate boom has come and gone. Today's market, driven by short sales, looks much different than it did five years ago, during the peak of the boom.

The real estate boom was created in large part thanks to banks and mortgage companies that competed fast and hard to attract borrowers. Gone were the days of requiring borrowers to have good credit and cash down payments. That traditional model was replaced by aggressive, accommodating and very creative banks and mortgage lenders. These aggressive institutions created new loan programs revolving around "stated income" or "no income verification" loans, as well as 100% financing, and adjustable rate loans with introductory, ultra low "teaser" interest rates.

The thought process, at the time, was that no one would lose money on investing on people's homes. After all, and at the time, the country was experiencing record growth in the real estate sector. It was not uncommon to realize double digit growth/profits in as little as several months. In other words, how could any of the parties to the transaction get hurt with the double digit level of appreciation that the market was enjoying at the time. The speculative boom was in full force.

Well, today we know that the madness came to a screeching stop, and it crashed the nation's economy with it.

But the collapse of the real estate market has also brought fresh opportunities to the savvy investor or purchaser.

Short sales now dominate the market. Where many purchasers had purchased real estate with no money down, it is not surprising that many of them find themselves in a precarious position today. They are upside down in their loan, owing more to their mortgage lender than their property is worth.

If those borrowers are fortunate enough to find a purchaser who can qualify for a traditional, fully documented mortgage loan under the new, and tighter, lending guidelines, then they need to push for a short sale approval.

A short sale is a transaction the proceeds of the sale will not be sufficient to cover the outstanding debt and closing costs.

However, the short sale process can often times be a maddening one that takes a lot of time. Indeed, it takes on average 501 days to complete a short sale in South Florida. And you will often times need to retain the services of a short sale specialist to held navigate this issue.

Continue reading "Short Sales 101" »

One of the tragedies of the real estate collapse is that fewer Americans own their homes today. Not only that, but the American that's do own their homes today have seen the value of those homes decrease rather dramatically over the span of the past several years.

The United States Census Bureau recently reported that the nation's home ownership rate fell to 66% in the fourth quarter, continuing a seven year drop from the one quarter peak of 69.2% in 2004. At the same time, United States home prices fell 1.3% in November from October and were 3.7% below 2010 levels.

These statistics illustrate that the recent real estate collapse was the worst that this nation has experienced since the Great Depression of 1930's.

Locally, we are seeing mixed signals. On the one hand, 2011 was actually a record year. More properties were sold in 2011 than at any other time in our county's history. And that includes during the height of the real estate boom.

Those sales are bolstered in large part by foreign buyers that see great value in a depressed market such as Miami. International investors, with wads of cash, are buying fantastic properties at bargain prices in Miami.

Additionally, interest rates continue to hover at historic lows that we are not likely to see for another generation.

But all of that does not spell the end of the bust associated with the real estate market. Indeed, inventory is still high, and it is still unknown how much "shadow inventory" the banks actually possess. Foreclosures also continue to rise.

Often, an attorney is needed to navigate these troubled waters. We currently represent lenders, borrowers, buyers, sellers, and developers. This broad array of experience allows us to effectively take a multi-faceted approach to our clients' legal issues. No matter what you or your business's needs may be when it comes to real estate, don't hesitate to contact Alvarez & Barbara, LLP.

Continue reading "Has Miami's Real Estate Market Hit Bottom? Is It Time to Buy Now?" »