Florida is one of the eight-states-running-out-of-homebuyers

by Douglas A. McIntyre, Michael B. Sauter and Charles B. Stockdale
Tuesday, January 18, 2011

provided by

The single biggest problem in the U.S. real estate market is simple: There are very few homebuyers.

That seems obvious, but the "buyers' strike" has caused house prices to drop, along with an epidemic of foreclosures. What's worse, the long depression in real estate is probably not over. S&P has forecast that home prices will drop by 7% to 10% this year. The S&P Case-Shiller Index has dropped for most of the 20 largest real estate markets over the last several months. RealtyTrac recently reported that more than 1 million homes were foreclosed upon in 2010.

Many economists argue that the housing market may take four or five years to stabilize. Even if that's proven to be true, the all-time highs of 2006 may never be reached again.

24/7 Wall St. looked at a number of the standard measures to find the housing markets facing the biggest problems attracting buyers. After a detailed examination, six metrics were chosen: (1) vacancy rates for 2010; (2) foreclosure rates for 2010; (3) November 2010 unemployment rates; (4) change in building permits from 2006 to 2010; (5) change in population from 2005 to 2010; and (6) price reduction by major cities for 2010. Taken together, they create a strong statistical base to describe markets which buyers have largely abandoned.

The real estate crisis has gone on for four years. In the states 24/7 Wall St. has chosen here, the crisis will go on much longer:

1. Michigan
2. Nevada
3. Arizona
4. California
5. Illinois
6. Georgia
7. Oregon

And: #8. Florida

Vacancy Rate: 21.03% (2nd Worst)
2010 Foreclosures: 5.51% (3rd Worst)
Decrease in Building Permits 2006-2010: -81.37% (3rd Worst)

Unemployment in Florida is 12%, the fourth worst in the country. (The REAL unemployment and under-employment is much higher) Approximately 1.1 million residents are out of work. Statistics show that 21.03% of the state's housing units are vacant. Furthermore, 5.51% of homes have been foreclosed upon. Florida was among five states that had the largest real estate booms from 2000 to 2006. Residential prices in some  areas like…Palm Beach rose by much more than double during that period. New home and condominium construction soared. Many of those residences have never been occupied and are still part of the inventory of homes for sale.

If you are thinking about selling, now or in the near term, even if you owe much more than your home is worth, please call me directly at 561-602-1258, or email me: Steve@thejacksonteam.com. We just know how to sell homes, even in this market...This week, I put a home in under contract in about 5 days and had a closing yesterday for another seller for whom we applied a secret strategy that generated overwhelming property interest and a top price in about 2 weeks.

Top lenders set for foreclosure settlement: report | Reuters

 And so it has come to pass..even the state Attorneys General are in the pocket of the TBTF financial institutions. The  Attorneys General , on behalf of Fannie and Freddie, have ‘settled’ with the five biggest TBTF banks, for ‘future losses’ from the fraudulently written, fraudulently packaged, fraudulently rated and sold loans. Possibly the biggest fraud ever perpetrated will now, effectively, be swept under the rug in exchange for 1 or 2 cents on the dollar…I’d sure love a deal like that!

(Reuters) - The five largest mortgage loan servicers, including Bank of America Corp and JPMorgan Chase & Co, may be the first to settle with 50 state attorneys general who are investigating foreclosure practices, Bloomberg reported, citing Iowa Attorney General Tom Miller…

Ally Financial, Bank of America, Citigroup, JPMorgan and Wells Fargo could not be immediately reached for comment by Reuters outside regular U.S. business hours…

Here’s another report, below, from CnnMoney.com:

Is Fannie bailing out the banks?

Posted by Colin Barr January 3, 2011 10:11 pm

Financial stocks just caught fire. Someone must be getting bailed out, right?

Why yes, say critics of the giant banks. They charge that Monday's rally-stoking mortgage-putback deal between Bank of America (BAC) and Fannie Mae and Freddie Mac is nothing more than a backdoor bailout (QE4?) of the nation's largest lender (emphasis mine). It comes courtesy, they say, of an administration struggling to find a fix for the housing market while quaking at the prospect of another housing-fueled banking meltdown.

Monday's arrangement, according to this view, will keep the banks standing -- but leave taxpayers on the hook for an even bigger tab should a weak economic recovery falter. Sound familiar?…

And you don't need to be a conspiracy theorist to see that austerity talk in Congress means no more upfront support for financial firms. At a time of double-dipping house prices and nearly 10% unemployment, you can see where some people might find themselves devising new ways to prop up BofA and its housing-exposed rivals JPMorgan Chase (JPM), Wells Fargo (WFC) and Citi (C).

"This looks to me like a gift from Tim Geithner," said Chris Whalen of Institutional Risk Analytics. "There's politics all over this."…how sharp is Freddie if all it can do is squeeze a $1.28 billion payment out of a giant customer in exchange for relinquishing fraud claims on $117 billion worth of outstanding loans? The very best its million-dollar executives can do is claw back a penny on each bubbly subprime dollar?

…"How Freddie can justify this decision to settle 'all outstanding and potential' claims before any of the private-label putback lawsuits have been resolved is beyond comprehension," says Rebel Cole, a real estate and finance professor at DePaul University in Chicago. "This smells to high heaven and they should be called out."

 

Nice…

Palm Beach County Bar Association - Residential Mortgage Foreclosure Mediation Program

Below, from the Palm Beach County Bar Association website, I have the details, forms and FAQ’s regarding the Florida State Supreme Court mandated pre-summary judgment mediated meeting between the foreclosed-upon homeowner and their lenders representative…

What is foreclosure?
Foreclosure is a legal process by which the mortgage holder causes the judicial sale of the secured real estate to pay a defaulted loan. The mortgage on real estate acts as collateral for the repayment of the loan so when this loan is in default, the mortgage holder exercises its rights to take the collateral by selling the home.

What is the RMFM Program?
The RMFM Program is the Residential Mortgage Foreclosure Mediation Program that has been ordered by the Florida Supreme Court, and the Fifteenth Judicial Circuit Court. This program mandates that all homestead foreclosure lawsuits filed on or after July 12, 2010, be sent to mediation prior to any final order being issued.

How do I enter the RMFM Program?
All homestead foreclosure suits that are filed on or after July 12, 2010 will be automatically referred to the RMFM Program. The Program Manager will contact you based on information received from the lender. However, if you have been served with a foreclosure suit and/or your contact information has changed, please contact the RMFM Program directly at (866) 900-4254 (toll free)

I am a Homeowner who was served with a foreclosure lawsuit filed before July 12, 2010. Can I participate in the RMFM Program?
You may request a referral to this Program by filing a Borrower’s Request to Participate in the RMFM Program (download copy here). File this request with the Court and mail a copy of the request to the lawyer for the Lender.

Is there a cost to me to participate in the RMFM Program?
There is no cost to homeowners for this program. The Plaintiff (usually the bank) pays the required fees, which include financial counseling and the mediation session. In the event that you choose to have a second mediation session, you will have to pay $100, which is one-half of the fees for this session. The Program anticipates that one mediation session will be sufficient for most cases and this second mediation is optional.

What financial disclosure information will I need to provide to the lender to proceed to mediation?
Most borrowers will need to file the Foreclosure Mediation Financial Worksheet (click here for that document).
Homeowners must sign and then mail, hand-deliver or fax the Release (last page of the financial agreement) to the RMFM program before the Program can schedule mediation.
Mail or hand-deliver to: Palm Beach County Bar Association, RMFM Program, 1601 Belvedere Road, Suite 304E, West Palm Beach, FL 33406.
Fax to: (561) 828-3922
Email with Release as a pdf to mediations@palmbeachbar.org
Borrowers will need to file Fannie Mae Hardship Form 1021 if they are seeking a Short Sale or Deed in Lieu of Foreclosure. (click here for that form)
For short sales, borrowers also need to file a signed purchase contract for the residence or a listing agreement for the sale of the residence, a preliminary HUD -1 form, and written permission from the borrower authorizing the bank or the bank's representative to speak with the real estate agent about the borrower's loan.
For Deeds in Lieu of Foreclosure, a current title search for the residence should also be uploaded.

What is a short sale?
A short sale is a sale for less than you owe on the mortgage loan.

What is a Deed in Lieu of Foreclosure?
A Deed in Lieu of Foreclosure is when you voluntarily execute a deed that transfers the property to the lender in exchange for the lender canceling, in part or in whole, the debt owed on the property.

Do I have the right to consult with an attorney?
Yes. You have the right to consult with an attorney at any time during the mediation process and to bring an attorney with you to the mediation session. You do not have to have an attorney; you may represent yourself. If you cannot afford an attorney, you may call the Legal Aid Society of Palm Beach County and inquire about their pro bono foreclosure assistance program, Monday through Friday, 9:00 a.m. to 5:00 p.m., (561) 655-8944 ext. 325 or (toll free) 800-403-9353 ext. 325. You may also contact the Lawyer Referral Program at the Palm Beach County Bar Association by calling (561) 687-3266 or (561) 451-3256 (Boca/Delray). There is a $30 fee for a half-hour consultation with an attorney through the Lawyer Referral Service.

Do all Borrowers who signed the mortgage need to attend the mediation session?
Yes, all Borrowers must be present at the mediation session. If not all Borrowers can attend, the Borrower not attending should bring a completed Power of Attorney for the other Borrower.

What happens if we cannot settle during the mediation?
The parties can agree to continue to another mediation session. If that session cannot be scheduled for the same day, this session is optional and both parties have to pay one-half of the fee, or $100 each for this additional session. If the parties cannot agree at all, and reach an impasse, then the case is returned to the court.

What happens if I do not attend mediation?
The case is returned to the court.

Link to Frequently Asked Questions About Mediation

Homeowner Forms

Help for Homeowners in Foreclosure – FREE!
presented by the Palm Beach County Bar Association & The Legal Aid Society of Palm Beach CountyFind out how the Residential Mortgage Foreclosure Mediation Program Can Help You
Space is limited. To reserve your seat, call the Palm Beach County Bar Association at (561) 687-2800
or RSVP by email

StreetInsider.com - Schiff: Look Out Below! Home Prices to Fall Additional 20%

A ‘Happy New Year’ news story from Peter Schiff…one of the earliest predictors of the ‘pop’ of the housing bubble.

December 30, 2010 10:50 AM EST

According to Peter Schiff, the recent drop in home prices  is unnerving, but there is still another 20% drop to go before we reach a historical trend line. (emphasis mine)

Schiff notes that some economists anticipate a further correction, but most don't believe that the vicious correction of 2007 and 2008 could return. To counter, Schiff notes that many underestimate how distorted the market had become.

From the start of 1998 through the middle of 2006, arguably at the peak of the market, the Case-Shiller 10-City Index rose an astounding 173% at 19.2% per year. Schiff notes that we now know that the gains had little to do with fundamentals and more to do with "distortionary government policies that mandated  loans to marginal borrowers, and set off a national mania for real-estate wealth and a torrent of temporarily easy credit."

One of the co-founders of the Case-Shiller index, Robert Shiller, contends that home prices, from 1900 - 2000, followed a more muted 3.35% average growth rate, which included the Great Depression, post-war eras, and the boom of the 90's.

So, Schiff notes that in 1998, the Case-Shiller index was at 82.7. Following the 3.35% average annual price increase predicted by Shiller lands us at a point of 126.7 in October 2010. However, the Case-Shiller Index came in at 159.0, suggesting an additional 20.3% decline in the index to get it back to more normalized levels.

Schiff continues that no one is making a case that fundamentals have gained traction, and most point to government intervention as an artificial stop to the free fall. Programs like "the home buyer's tax credit, record low mortgage rates, government mortgage-assistance programs, and the increased presence of Fannie Mae, Freddie Mac and the Federal Housing Administration in the mortgage-buying business" have put the kibosh on falling prices for now.

But, contends Schiff, with "bloated inventories, 9.8% unemployment (and much higher REAL unemployment), a dysfunctional mortgage industry and shattered illusions of real-estate riches, does it makes sense that prices should simply fall back to the trend line?" He argues that they will overshoot to the downside.

So what's the outcome? A major market correction in the next year.
Schiff thinks not, rather that there may be potential for an additional 10% dip below the 100-year trendline in the next five years, especially if mortgage rates continue upwards to more historical rates of 6% or more. He notes that that would put the index at 114.02, or about 28.3% below where were at now. Even a 5% dip would put the index at 120.36, about 24.3% below current levels.

Concluding, Schiff comments that, "In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with."

 

A little Christmas gift for my Lake Charleston blog readers

I have put together a report...a quick read...with many interesting stories and details regarding the possible origins of contemporary Christmas traditions. Click on the image and read or download the entire booklet if you like. Feel free to pass it along to others too!

Has anyone seen my $3.3 Trillion?

Now, you and I might lose track of where we spent that $20 bill we had in our pocket...but Mr. Bernake can't seem to remember where he spent (our) $3.3 TRILLION! Courtesy of my friends, Brian and Frank, at Think Big, Work Small

A Thanksgiving greeting

Finally, one of the big franchises goes public with something I've been saying for years!

Thanks to the NotoriousROB blog for the heads-up on this video. Keep in mind while you watch this that this is a Keller Williams agent recruiting video...



And this is why I opened a small, personalized office long ago...I realized that it was me, my wife and our like-minded agents that our clients were hiring...not some company logo.

 I don't think many realty companies, large or small, make ANY promise to the consumer other than vague platitudes "we are the biggest/we sell the most etc., nothing like "we hire only the most highly skilled/we fire the bad agents...you know what I mean. And the ones that do make consumer based promises often do absolutely nothing to actually KEEP AND ENFORCE that promise, from recruiting, to rules, to marketing, to service standards.

But it is refreshing to finally see one of the big guys admit what the consumer already knows: It is the AGENTS, not the company.

All of the big franchises say that they have the best agents...etc, etc. But if you've ever gone on an interview as a real estate agent, you would know that there is never a competency test, ethics test or any kind of test for that matter. As a matter of fact, it is usually a 'reverse' interview...with the agent deciding whom THEY want to go work for. It's almost: If you have a license, you have a job.

I hate to say "I told you so"...but

"GET READY FOR THE GREAT MERS WHITEWASH BILL"

"Wall Street money is pouring into the coffers of those who are receptive (i.e., almost everyone in Congress). The legislation is already being drafted under the interstate commerce clause to ratify MERS and everything it did retroactively. It appears that the Obama administration is ready to pardon all the securitization deviants by signing this bill into law. This information is corroborated by several people who are in sensitive positions — persons who would be the first to know such proposals. Fortunately, there are some people in Washington who have a conscience and do not want to see this happen."

John Carney, CNBC--"When Congress comes back into session next week, it may consider measures intended to bolster the legal status of a controversial bank owned electronic mortgage registration system that contains three out of every five mortgages in the country.

The system is known as MERS, the acronym for a private company called Mortgage Electronic Registry Systems. Set up by banks in the 1997, MERS is a system for tracking ownership of home loans as they move from mortgage originator through the financial pipeline to the trusts set up when mortgage securities are sold.

The system has come under scrutiny by critics who charge MERS with facilitating slipshod practices. Recently, lawyers have filed lawsuits claiming that banks owe states billions of dollars for mortgage recording fees they avoided by using MERS...

Now it appears that Congress may attempt to prevent any MERS' meltdown from occurring. MERS is owned by all the biggest banks, and they certainly do not want it to be sunk by huge fines...And be subject to court challenges on mortgage ownership by foreclosure defense attorneys.

Investors in mortgage-backed securities also do not want to see the value of their bonds sink because of doubts about the ownership of the underlying mortgages.

Remember, this is the SAME Congress that "almost" passed the "Notarization Act" by voice vote and it reached Obama's desk. We will never know who voted for it, as a voice vote is not recorded, and it flew threw BOTH House and Senate.

So it looks like the stage may be set for Congress to pass a bill that would limit MERS exposure on the recording fee issue and perhaps retroactively legitimize mortgage transfers conducted through MERS' private database...."

Just look at my post of 10/26 on my Winston Trails blog at www.WinstonTrails.info ...this is EXACTLY what I feared would happen. Too big to fail also means too big to have to comply with the laws I guess. When was the last time you broke the law and then had legislation passed on your behalf?  I don't want to turn this into a politcal blog...but...

That one heck of a 5 o’clock shadow

Standard & Poor’s, known as a leader of financial market intelligence, has revised estimates for when we can expect this much-talked-about shadow inventory to clear up. S&P now estimates that it will take 41 months—or nearly three and a half years—to get through and sell off all that shadow inventory lurking in the national real estate market background.

This number is up drastically from it’s assessment a year ago when it estimated it would take 33 months to complete this process…(That’s 25% longer than their last estimate and these guys are the “leader in financial market intelligence”?) S&P’s report states that the growth in the nation’s shadow inventory is affecting the housing market in three ways.

First, low liquidation rates are artificially skewing the visible supply of these distressed properties on the market. Second, this ever-growing inventory is having a negative affect on existing home prices. And finally, home prices will only begin to stabilize once this shadow inventory backlogged is cleared out.