Buying Foreclosures Selling

More Changes To Affect The Florida Real Estate Market In 2014

On December 20 I wrote a post about some changes to federal laws that may affect Miami’s real estate market in 2014.  I neglected to include two more (well one is a Florida State Law, but I will include it here anyway).  The first one I thought would be extended by now, but since we are coming up on New Year’s eve I thought I should mention it in case Congress lets it lapse.  It may not be that big of an issue since, due to the rising real estate prices, many real estate owners are no longer under water but the tax deduction on forgiven mortgage debt will end on January 1, 2014.  Although there are many benefits to short sell, even without the tax benefit, instead of foreclose the sun-setting of this deduction could decrease the number of short sales sellers participate in.  Should seller’s stop participating in short sales, this will put pressure on already short inventory since the foreclosure process usually takes longer.  Which leads me to the second change.

HB 87, the Fair Foreclosure Act, went into effect on June 7, 2013, but we will really start to see its affects in 2014.  Known as the “Speedy Foreclosure Law”, this law will help speed up the foreclosure process.  Prior to passage of this bill, foreclosing on a mortgage took approximately 853 days, which was more than twice the average.  This should help ease some of the shortages in inventory by getting at least a portion of the 350,000 plus foreclosure cases currently tied up in Florida courts through the process much faster.



Thinking of Short Selling Your Property? Now May Be The Time….

Many homeowners who are under water have been thinking of short selling their home because they have not been able to negotiate a loan modification with their mortgage lender.  If you are one of them, now may be a good time for several reasons.

  1. Banks are more willing to work with a short sale than they were just a year ago.
  2. A short sale is less damaging to your credit than a foreclosure.
  3. Inventory is low, so your property has a better chance of selling as a short sale now than it did last year.
  4. Although Congress is expected to extend a 2007 law that allows homeowners to avoid paying taxes on forgiven debt for their primary residence, it will expire at the end of this year if Congress does not act.
  5. It takes a lot longer than a normal sale to complete a short sale.  If it is an approved short sale, 2-3 months.  If it is not approved, significantly longer.

Buying Market Summary Selling

Investors Taking Advantage of Strong Rental Market

Over the last several months I have written about different signs, see blog links below,  that the real estate market is changing.  Today’s Miami Herald article, Rents rise as overseas buyers invest, talks about some of the reasons why.

More Proof Miami-Dade’s Housing Market is Turning Around

Investors Are Taking A Bite Out Of Inventory

Miami Real Estate – Commercial Construction Also Picking Up

Miami Real Estate: More Signs the Market is Improving

Miami Real Estate: The Market is Changing

Foreclosures Selling

Need To Short Sell Your Home?

Banks Offering Up To $20,000 Incentives

As the economy continues to trudge along, many South Florida homeowners are still struggling with unemployment and mortgage payments.  If you are thinking of short selling your home, you should be aware that several banks have incentives for you to short sell versus going through the lengthy, in Florida it can take close to two years, and extremely credit-damaging foreclosure process.

Wells Fargo and Chase offer up to $20,000 in incentives to qualified homeowners and Bank of America just launched a similar pilot program in Florida.

Buying Foreclosures Investment Real Estate Selling

Miami Real Estate – Shadow Inventory

Shadow inventory is basically the number of properties that are projected to hit the market due to distressed owners, those who are behind 90 days or more on their mortgage,  or because they will be or already have been taken back by the bank.  There has been a lot of speculation lately about how this background inventory will affect the housing recovery, with many experts saying it will significantly delay it.

A article on Shadow Inventory states: “Of the 20 separate markets S&P analyzed, Miami was the only market of the 20 that S&P analyzed where shadow inventory did not did expand during the first three quarters of 2010.”

What does this mean for buyers?  Record high affordability and a wide selection of properties to choose from.

For sellers, it means a continued suppression of prices, with prices either dropping further or bouncing along the bottom for a while.  If you were thinking of selling your home within the next year or two, you may want to put it on the market now.  Or, if you have equity in your home and have entertained the idea of owning investment property, turn it into a rental and buy your move-up, downsizing, or retirement home at the lowest prices we have seen in a long time.

Buying Selling

Foreclosures in South Florida Are Here For A While

According to RealtyTrac, foreclosure activity in South Florida will continue at high levels through 2010 and there will be a glut of inventory through 2013.

In the current market, 60% of active buyers interested in distressed propertys and 40-50% of sales involve a foreclosure or shortsale.


Short Sales Starting to Pick Due to New Treasury Rules

At the end of November, the United States Treasury Department released new rules attempting to encourage banks to speed up short sales.  The rules create a uniform process and documents that all banks must use as well as provide cash incentives to banks willing to participate.  The new rules are starting to work…I actually had a previously unapproved short sale close faster and with less problems than a regular sale that went under contract at around the same time.

This is great news for buyers and sellers as it will help us move through the inventory levels that much faster.  In order to qualify, a seller must:

  • use the home as his/her primary residence
  • have taken the loan out prior to January 1, 2009
  • must be delinquent on mortgage or likely to default on it
  • have a loan that is less than $729,750
  • have a monthly mortgage payment that is more than 31% of before-tax income


The Short Sale Process For Sellers

If you are selling your property and you owe more on your mortgage than the property is worth, you will have to do a short sale.  The following documents are going to be the minimum required by your lender to determine whether they will approve a short sale.

  •  Hardship Letter – explain in detail what your hardship is.  Include your name and loan number in the letter.
  •  Tax Returns  from the last 2 years
  •  W-2’s from the last 2 years
  •  Bank Statements (2 most recent months)
  •  Payroll Statements/check stubs from employer (2 most recent months)
  •  Financial Statement listing all of your assets and liabilities.
  •  Recent mortgage statement or coupon showing balances.  Include loan number, monthly payment, and the name/address of all mortgage /lien holders.
  •  Listing Agreement if you are selling your property through a Realtor
  •  Sale and Purchase Contract executed by Seller/s and Buyer/s
  •  Loan Commitment/Approval Letter received from Purchaser
  •  Preliminary Net Sheet (HUD-1)  prepared by Closing Agent)
  •  A Comparative Market Analysis (to be prepared by Listing Agent
  •  Any additional documents required by Lender/s to be submitted

The short sale process takes a long time, so in addition to having all of the above-mentioned paperwork you will need to have patience.  EWM Title has a lot of experience doing short sales and has created a short sale package to assist you.