Miami Real Estate Attorney Blog

Short sales are dominating South Florida's market. From April to June of this year there were 5,940 short sales in Palm Beach, Broward and Miami-Dade County. That is an increase of 15% from the first quarter.

It should also come as no surprise that these short sales are coming at a significant discount. The discount is often times at least 30% lower than non-foreclosed properties.

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.

It is in large part due to that delay that South Florida was not listed on Realty Trac's top 10 markets for buying short sales.

But banks are realizing the benefit of short sales. Consequently, many banks are launching programs to pay homeowners thousands of dollars to help with moving costs if they agree to sell for less than they owe on the property.

Bank of American just launched a pilot program in Florida that could pay homeowners up to $20,000 for short selling their homes instead of letting them fall into foreclosure. Chase and Wells Fargo have also announced a similar plan.

While banks often times hand homeowners a few thousand dollars if they leave the properties in good shape after foreclosure. That plan is called "cash for keys". Additionally, homeowners are also entitled to $3,000 of government money if they complete short sales through the Home Affordable Foreclosure Alternative (HAFA) program.

Banks are also now offering incentives above and beyond those. As such, the banks are offering money in an effort to push through short sales and avoid the lengthy and often times costly foreclosure process.

Continue reading "Short Sales are Dominating South Florida's Real Estate Market While Lenders Roll Out Incentives that could pay Homeowners up to $20,000" »

Real estate values continue to decline in South Florida as the local real estate market is still searching for its bottom.

Of all the South Florida homes that were sold between June and September, nearly half of them were sold for a loss. Specifically, 45.2% of all South Florida homes were sold for a loss in the last quarter.

The continued slide in real estate prices have further increased the amount of homeowners that are currently underwater on their mortgage. Since the peak of real estate values back in June 2006, home values have dropped 53.5% in South Florida. This has left almost half of all single-family homeowners underwater in South Florida. Put differently, approximately 42% of all single-family homeowners in South Florida currently owe more on their mortgage than their home is worth.

Many factors are contributing to the continued decline in real estate prices in South Florida. For instance, the continued high rate of foreclosures coupled with a weak job market are both continuing to influence housing prices, and the housing market, as a whole.

Short sales also continue to dominate the market. Indeed, sellers continue to slash their prices, making it a very attractive buyer's market. In fact, many buyers are finding very attractive deals in this market. That is illustrated by the fact that nearly 21% of all south Florida home sellers reduced prices in the third quarter. Moreover, short sales and foreclosures continue to account for most real estate transactions and are currently accounting for more than 60% of all south Florida sales.

The current real estate market, and ongoing foreclosure 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.

Continue reading "South Florida Real Estate Values Continue to Plunge as Foreclosures and Short Sales Continue to Drive the Market" »

According to news reports, the downturn slide in home prices may continue for another three years. Homes in default, or foreclosure, that may be offered for sale are preventing the market from bottoming out after a significant plunge in real estate values over the past few years. These properties, called shadow inventory, are in addition to homes that are vacant or that may soon be put on the market by owners.

The issue right now appears to be that there is more supply than demand. And much of this supply may actually be homes that are "underwater", thereby necessitating the need for a short sale. Short sales are seeing a strong rebound as banks are increasingly trying to work with borrowers to approve short sales, and new federal programs are also encouraging more short sales.

Nonetheless, the continued rise in supply is a threat to all efforts attempting to boost the housing market while potential home buyers await better deals. Since more price declines are required for a legitimate rebound, it may take three years before we can actually expect a rise in home values.

It is expected that once prices bottom out, prices will increase at a rate of 1 to 3 percent per year. This means it may take more than 10 years for the market to return to its peak. Regardless, it appears as though we can look forward to the recovery, in the real estate market, to begin some time in 2014.

The Miami lawyers at Alvarez & Barbara, LLP, are on your side. We are experienced trial attorneys who will help you understand your rights and options under Florida and federal foreclosure laws. Contact our law firm today for a free consultation and case evaluation.

Continue reading "Real Estate Inventory Continues to Increase as the Foreclosure and Real Estate Crises Continues to Impact the Miami Real Estate Market" »

According to the South Florida Business Journal, foreclosure filings were up across South Florida in July. Additionally, more homes have flooded the market in the past 10 weeks sparking many questions about the effect of foreclosures on the marketplace.

Florida had the third-highest foreclosure rate in the country with one in every 171 housing units receiving a foreclosure filing in July. Moreover, there has been a 4.6% increase of homes for sale in South Florida since May 31st, and that represents the first two month rise since the housing bubble burst.

It is therefore important to consult, and hire, an experienced foreclosure defense attorney to defend your rights. An experienced foreclosure defense attorney will be able to assess and evaluate what defenses you may have during the foreclosure process, and aggressively advocate your positions in the foreclosure. And when given an opportunity to defend these cases properly, we have actually not only won those cases, but we have secured attorney fees in our favor.

In Miami-Dade County, 1 in every 138 homes fell into foreclosure in July. Foreclosures in Palm Beach County shot up 77% in July, to 3,759 from 2,121 the month before, and were up 41.7% from a year earlier. In Broward County, 1 in every 125 homes was in foreclosure in July. In Broward, there were 6,471 foreclosure filings in July, and that represented a 4.76% increase from June.

These numbers are particularly troubling to the real estate recovery. For the past two years, the housing supply had been plummeting. Indeed, there was a string of 24 straight months where the housing supply declined. However, and in addition to the increase in foreclosure filings in July, the past 10 weeks have also seen an increase in the amount of supply in the market, i.e. an increase in the number of homes for sale. This is a troubling sign as it illustrates that there is still considerable uncertainty in the real estate market.

This new trend could mean further declines in home values and asking prices. For buyers, more inventory means more homes to choose from, and more leverage when negotiating prices. For sellers, this means more price reductions and likely more time for the property to stay on the market before it is sold.

One possible explanation for the increased inventory is that banks are slowly starting to dump more distressed properties back on the market. These distressed properties will no doubt likely drive prices down, and also increase inventory. The result could be further price reductions in a market still searching for a bottom.

Continue reading "July Foreclosure Rates Rise and the Housing Supply Increases Too in Miami and Across the State of Florida " »

Short sales once were extremely rare. But now, with unemployment still high, and home values down, more homeowners are pursuing short sales when they can't afford their mortgage. Indeed, we recently wrote about the rise in short sales in Miami.

The sales of homes for less than the amount owed the bank, known as "short sales," have been widely viewed as an alternative that could help slow the foreclosure epidemic. In theory, delinquent homeowners escape a mortgage they cannot afford, and lenders, although taking a loss, avoid the even costlier process of completing a foreclosure.

However, many homeowners have struggled to sell their home in short sales. A USA Today report revealed that only about 1 in 5 short sales transactions actually close.

Help could be on the way. Thanks to the federal government's Home Affordable Foreclosure Alternatives, or HAFA program, many struggling homeowners may get some much needed relief.

HAFA establishes streamlined short sale rules and incentivizes borrowers and lenders to work together to avoid foreclosure. The rules -- in effect between April 5, 2010, and Dec. 31, 2012 -- also are intended to speed up the short sale process.

Under HAFA, borrowers receive preapproved short sale terms from the lender prior to putting the home on the market.

The HAFA guidelines apply to lenders who voluntarily participate in the HAMP program. The Department of Housing and Urban Development says more than 100 servicers have signed up to participate in HAMP, covering more than 89 percent of mortgage debt outstanding in the country.

Continue reading "New Federal Program - HAFA - May Bolster Short Sales in Miami " »

We recently wrote about the rise in real estate sales in Miami. Part of the reason for the rise in real estate sales locally is that many banks have become more willing to allow sellers to sell their homes via short sales. Consequently, short sales now account for one in every four homes sold in South Florida. For instance, in June, there were 944 short sales in Miami-Dade County, and that is up from 379 short sales a year earlier.

It seems that banks have become more willing to negotiate with buyers willing to sell their homes in these tough economic times. Therefore, those seeking to get out of foreclosure or stop foreclosure sales in South Florida need to consult with an experienced attorney about their options. Short-sales are an option to potentially avoid a foreclosure sale, but it has its own set of drawbacks and benefits that need to be carefully analyzed.

In Miami-Dade County today, half of the pending single-family homes for sale on the Multiple Listing Service are short sales. The increasing number of short sales and bank owned properties coming to the market has put a downward pressure on real estate prices in Miami, and South Florida in general.

In June, median prices of existing homes stood at $203,300 in Miami-Dade County, and that is down about 4% from the same month a year ago. Median existing condo prices at $128,000, were down about 9% in Miami-Dade County.

Increasing short sale approvals is one reason why South Florida has seen a recent resurgence in real estate sales. In July, pending home sales in Miami Dade County stood at 10,113, and that is an increase of 40.5% from July 2009. In Broward County, pending sales stood at 7,830 in July, and that is up 25.4% from a year earlier. These favorable numbers can also be attributed to many foreign buyers coming into our market and paying all cash for real estate priced at very attractive prices.

Continue reading "Short Sales on the Rise in Miami " »

According to the South Florida Business Journal, homes sales were up in June. Sales of single family homes in June rose by 23.6% from May. However, new home sales nationwide were down 16.7% from the same period a year ago.

This may be a good time to consult with an experienced real estate attorney, and foreclosure defense attorney, to determine your best course of action if you are looking to either sell or buy your home at this time. The changing real estate market requires you to consult with a professional that knows this market, and is prepared to guide you through the ups and downs of the ever changing market.

In Miami-Dade County, in June, 33% more condominiums were sold than in June of 2009. As for single family homes, June saw a 1% increase of sales as compared with June of 2009. However, median sale prices for both condos and single family homes were down for the year.

In June of 2010, median sales prices, in Miami-Dade County, was down 9% compared to June of last year, but up 2% from May of this year. For instance, the median prices for a condo was $128,800. For single family homes, the median sales price for a single family home was $203,000, down 4% for the year, but up 3.4% for the month.

Statewide, sales prices were also down. For instance, median prices were down 5% for single family homes, and 16% for condos. Nationally, June sales of existing homes were down 5.1% from May, but up 9.8% from June of 2009.

Continue reading "Miami Foreclosure Defense Lawyers See a Rise in Real Estate Sales" »

Many financial institutions, including Bank of America, are planning on getting tougher with those who do not try in good faith to work out a deal with the bank but who have the capacity to pay.

Proposals that are currently floating around, and being pushed by Fannie Mae, and others, include trying to encourage distressed homeowners to find alternatives to foreclosure by banning those who walk away from their home from getting new loans to purchase a home for seven years. Put differently, if it is determined that you stopped making mortgage payments despite having the capacity to do so, you may be banned from getting a new loan for up to seven years.

A strategic default is a decision by a borrower to stop making payments on a debt despite having the financial ability to make the payment. A Wall Street Journal report recently estimated that 1 in 5 mortgage defaults are "strategic". Indeed, many are anticipating that the next wave of foreclosures will consist of more and more individuals seeking to walk away from homes that are currently underwater.

Another weapon that many financial institutions have in their arsenal to combat strategic defaults is the pursuit of a deficiency judgment. A deficiency judgment occurs when the financial institution has not only taken the home back, but has also sold the home. However, the proceeds of the foreclosure sale were not enough to cover the full amount of the original mortgage. That difference between the foreclosure sale, and the original mortgage, is often referred to as the deficiency.

If a bank, such as Bank of America, suspects that the borrower simply walked away from the mortgage despite having the financial capacity to pay, the bank will likely have an increased incentive to pursue the borrower and seek recovery of the deficiency by way of a deficiency judgment. It should be emphasized that if a deficiency judgment is properly recorded, it could remain in effect for up to 20 years in the state of Florida. That means that the bank could have up to 20 years to recoup each and every penny, plus interest, of the deficiency judgment.

It becomes important to consult with an experienced foreclosure defense attorney to understand your rights. We have been successful in defending many foreclosure cases when given an opportunity to develop a plan to properly defend the foreclosure.

Continue reading "Strategic Defaults are Under Assault by Bank of America, and others, and May Lead to a Rise in Deficiency Judgments " »

Hugo V. Alvarez will be a speaking at a Foreclosure Clinic sponsored by the Florida Bar's Consumer Protection Law Committee, in conjunction with the Legal Aid of Palm Beach County. The clinic is scheduled to take place on June 24th from 6pm to 8pm at the Boca Raton Community Center.

Mr. Alvarez will be speaking on alternatives to foreclosure, and specifically discussing (a) options to retain one's home, while avoiding foreclosure, and (b) options to dispose of one's home, and avoid foreclosure.

Options to Retain Your Home

1. Payment or Repayment Plan - the quickest method of avoiding foreclosure is to come up with the necessary money to bring the delinquent loan current. In some instances, banks are willing to provide the delinquent borrower with a repayment plan in an effort to bring the mortgage current. This will typically involve an agreed upon time frame in which to make the regular payments, plus a little extra, to repay in the delinquent amount in full over time.

2. Refinance - in the event that you actually have equity in your home today, you may be in a position to refinance your mortgage. Refinancing your mortgage may actually provide you with a lower interest rate, and a lower monthly payment. If you do not qualify for a government-sponsored loan modification, you may also be eligible for a government-sponsored re-financing plan (HARP - Home Affordable Refinance Program).

3. Forbearance - some banks may offer you a forbearance plan. This option typically provides for a temporary reduction or a suspension of monthly payments for a specified length of time, and with an agreement that the amount that was forgiven will be paid back at a later date.

4. Loan Modification - a loan modification is a permanent change in one or more of the terms of the mortgage. It also allows the mortgage to be reinstated, and results in a payment that the borrower can afford. This can include anything from a reduction in interest, adding years to the mortgage (from say a 30 year mortgage to a 40 year mortgage), reduction in the principal amount owed, or any combination of the aforementioned. It should be noted that many financial institutions are provided with financial incentives from the government to modify loans. Additionally, the current loan modification program is not designed to save every home, but only geared toward saving the homes of individuals that can still afford to be in that home.

Continue reading "Saving Your Home: Alternatives to Avoid Foreclosure" »

Real Estate experts are anticipating that home sales will slow for the second half of the year. This is due in large part to the expiration of the $8,000 tax credit, for first time home buyers, that expired on April 30. However, those that signed purchase contracts prior to April 30th can still take advantage of that tax credit if they complete their transaction by June 30th.

Additionally, other factors will likely continue to contribute to the ongoing sluggish recovery in the housing market. For instance, the economic recovery that is currently taking place is largely a jobless one. In fact, since 2007, when the recession began, South Florida's workforce has only recovered to about 90% of where it was before the recession began. Since South Florida's economy was so dependent on the housing market, it will likely take some time for South Florida's economy to recover given the ongoing real estate crisis that is impacting all of us on a daily basis here in South Florida.

Additionally, another potential problem for our local economy, an economy that is still very dependent on real estate development, is that many lenders are increasingly reluctant to make new construction loans to developers. Now that certain tax credits have expired, coupled with the increasingly sluggish real estate market, builders see stormy days ahead. Indeed, increasingly high unemployment rates, coupled with stringent mortgage lending guidelines, are keeping many prospective purchasers on the sidelines.

All of these factors contribute to the general consensus that our real estate market will continue to struggle to stand on its own without the assistance of government backed programs, like the tax credit for first time home buyers, or a sharp turnaround in the economy as a whole.

In South Florida, with the storm season under way, a natural catastrophe could tip the ongoing real estate crisis into further disarray. If high unemployment rates, and rapidly declining real estate values were not enough, then a strong hurricane directly hitting South Florida and causing extensive damage will only serve to worsen the ongoing real estate crisis here in South Florida.

Continue reading "Real Estate Market Losing Steam as Hurricane Season Approaches" »

Florida remains number three (3) in the country for number of foreclosure filings, according to national statistics reflecting foreclosure filing in May. Nevada and Arizona were the only states that had more foreclosure filings than Florida in the month of May.

In May, one in every 174 Florida properties were in danger of falling into a foreclosure. The May foreclosure rate was actually higher than the foreclosure rate in the month of April. In April, one in every 182 Florida properties were in danger of falling into foreclosure.

However, it should be noted that in South Florida saw fewer foreclosure this past May as compared with May of last year. But the worst is far from over regarding the foreclosure crises, especially for those with adjustable rate mortgages. Now, and as will be discussed below, the recent disaster in the Gulf of Mexico, and massive oil spill, may impact future foreclosure filings as well.

On the other hand, while May saw less foreclosure filings this year as compared to last May, it still brought a spike in foreclosure filings as compared to April of this year. Put differently, there were more foreclosure filings in May than in April of this year. Overall, there were 7,700 foreclosure filings with one in every 127 properties receiving a foreclosure notice in South Florida.

The ongoing foreclosure crisis in South Florida may be further fueled by the oil from the Gulf of Mexico, especially if that oil makes its way onto South Florida's beaches in a hurricane storm surge, or other natural catastrophe. If that were to happen, many homeowners would be faced with the difficult prospect of having to sell depressed property in a region that is beset by natural catastrophe.

Continue reading "Will the BP Oil Spill Cause Florida to Surpass Nevada and Arizona in Foreclosure Filings?" »

Fisher Island is home to many of the rich and famous in Miami. Its residents have seen the likes of Oprah Winfrey, Mel Brooks, actress Sharon Gless, Florida first lady Carole Crist, and Boris Becker. Back in 2008, Fisher Island held the number one spot in Forbes magazine's annual ranking of America's most expensive postal zone.

The latest Forbes list, however, revealed that Fisher Island has dropped to No. 33, illustrating that no one is immune from the current economic and foreclosure crisis plaguing South Florida, and the nation as a whole.

Since 2009, at least 17 units have entered foreclosure and more than a dozen short sales - prospective deals in which the owner is willing to accept less than the amount owed - are listed. Smaller units have even been listed at the unbelievable price of $190,000. A recent report from Zillow.com shows that 97 percent of units on the island dropped in value since March of 2009.

Retired builder Arnold Schiller, finds that Fisher Island is not the only luxury community that is suffering during the current economic climate. Other pricy locations such as the Hamptons are feeling the effects of approximately 30 percent decreases in their home values.

However, residents and real estate agents are optimistic that Fisher Island will see signs of improvement in the near future. At the end of the day, Fisher Island is still a captivating place in an incredible location. Its privileged location, pristine beaches, views and unheard of prices will continue to draw attention.

Continue reading "Foreclosures Hit the Rich and Famous in Miami" »

According to the National Association of Realtors, sales of existing homes and condos in Miami-Dade, Broward and Palm Beach county rose 27% in April.

Additionally, and another positive trend, last month's statewide existing home median price of $140,100 was 1% higher than the statewide median price in April of 2009. While the median price for single family homes also rose, the same can't be said for condos. Statewide, condo prices fell 1%, to $79,300 from $79,000.

In the tri-county area, Miami saw the smallest increase in home sales in April. There were 594 sales, up 7% from 555 in April of 2009. The median price was up 8%, to $192,000 from $177,000.

There several factors behind these positive numbers. We previously anticipated this news, and discussed many of the many positive factors that are behind the recent news regarding the trends in the Miami, and South Florida, real estate market.

As for some of the reasons behind this trend, they include the following:

• The recent expiration of certain tax credits forced many to buy before the tax credit expired.
• We're starting to see a stabilization of home prices.
• Home prices are starting to stabilize because inventory levels are starting to fall.
• Inventory levels are starting to fall because foreclosures are being absorbed in the market at manageable levels.

Continue reading "South Florida Real Estates Sales Are Up As Foreclosures Steady " »

In Miami, the mortgage crises continues its ugly march into the record books. According to the Mortgage Bankers Association, more than 10% of homeowners with a mortgage had missed at least one payment between January and March of this year. That is a record high and up from 9.1 percent from a year ago.

While many are predicting an improvement soon, the continued high number of homeowners in default or at risk of losing their home to a foreclosure will have a lingering effect on the economy as a whole.

Worse yet is the fact that a Wall Street Journal report reveals that one in four in the government's loan modification program are dropped. According to the U.S. Department of the Treasury's April update, the Making Home Affordable Program (HAMP) has 78,356 home loans under active modification, of which 30,923 are in Miami-Dade, Broward and Palm Beach counties.

On the other hand, we are starting to see some slow progress. For instance, while loan modifications got off to a slow start, housing officials have recently created incentives for lenders and servicers which have resulted in more modifications. Additionally, the number of homeowners starting to show signs of trouble is trending downward. As of March, nearly 3.5% of borrowers had missed at least one month of mortgage payments, down from 3.8% from a year earlier.

But the slow progress we are seeing is not enough to correct a bad situation. Therefore, should loan modifications fail to help, many homes will go up for sale either as a short sale or in a foreclosure sale. Therefore, many are forecasting that home prices will soon see yet another dip as more of these homes go up for sale at deeply discounted prices. While the mortgage crises was initially triggered by lax lending practices, today's mortgage crises has many reasons other than just a home underwater.

Continue reading "Mortgage Delinquencies Continue to Worsen in Miami" »

According to a recent news report, home repossessions increased to record levels and more than one fifth of all U.S. mortgage holders were underwater on their mortgages in that they owed more on their mortgage than their home was worth.

More than 1 in 1000 homes were repossessed by lenders in March. Twenty three percent of owners of homes with mortgages owed more than their home was worth, and that was up from 21 percent in the prior three month period.

Moreover, U.S. home values continue to drop. The values dropped 3.8 percent in the first quarter, and that is the 13th straight period of year over year declines. These trends make it increasingly difficult for home owners with homes underwater to move the homes. Thus, when they fall behind, their options are limited. This makes it more likely that those homeowners will lose their homes in a foreclosure.

The continued high number of homes, and homeowners, underwater will continue to place a downward pressure on home prices. Thus, it is likely that we will see home prices continue to fall a bit more during the course of the next 12 months.

Additionally, banks are repossessing homes at a greater rare. In the first quarter, bank repossessions rose by 35% in comparison to the same period of the prior year. Indeed, repossessed homes now account for 1/5 of all homes currently for sale.

Continue reading "Increase in Miami Homes Being Repossessed Due to Foreclosures " »