Sarasota Real Estate Market News

Bankrate: Jumbo mortgage rates hit new record low

NEW YORK – Dec. 8, 2011 – The jumbo 30-year fixed mortgage rate fell to a new record low of 4.68 percent, according to Bankrate.com’s weekly national survey. The average jumbo 30-year fixed mortgage has an average of 0.4 discount and origination points.

According to Bankrate’s weekly survey, the average conforming 30-year fixed mortgage inched lower to 4.24 percent while the 15-year fixed mortgage held steady at 3.48 percent. Adjustable rate mortgages were mostly lower, with the average 5-year ARM sliding to 3.18 percent and the 10-year ARM inching down to 3.8 percent.

Mortgage rates are low, but based on the ultra-low levels of benchmark interest rates such as 10-year Treasury notes, mortgage rates could be even lower.

Since August, the European debt crisis has pushed the spread between risk-free U.S. government bonds and those of other bonds, such as mortgage-backed bonds, to the highest levels since the spring of 2009. At that time, financial tensions were at a fever pitch, particularly surrounding the health of the U.S. banking system. This time, it’s Europe’s banking system in the crosshairs, but the result is much the same – a higher-than-typical cost of borrowing when compared to the rock-bottom government rates.

Bankrate’s national weekly mortgage survey is conducted each Wednesday from data provided by the top 10 banks and thrifts in the top 10 markets.

© 2011 Florida Realtors®

December 28, 2011 Posted by | News related to Buyers, News related to Financing | Leave a comment

Realtors discuss outlook for Fla.’s real estate markets

ORLANDO, Fla. – Dec. 8, 2011 – An improving state economy, population growth and stronger demand are creating opportunities in the state’s residential, commercial and land markets, according to three experienced Realtors in Florida.

“To succeed in 2012, you need to think about how trends in the national economy tie into your local market,” said Clark Toole, president and chief operations officer (COO) of Coldwell Banker Residential Real Estate Inc. in Florida. Speaking on the state’s residential market, Toole said, “Florida is such a diverse state, both geographically and culturally, that you really need to do your homework.”

Toole was one of three expert practitioners who spoke at Florida Realtors® 2012 Real Estate and Economic Forecast Conference in Orlando earlier this week.

Cynthia Shelton, 2009 president of Florida Realtors and a director at Colliers International in Orlando, discussed the commercial market, and Dean Saunders, accredited land consultant and broker-owner of Coldwell Banker Commercial Saunders Real Estate in Lakeland, covered the market for land and undeveloped property.

Toole said that key trends affecting the Florida residential market include strong demand from international buyers, a growing population – 348 people a day net growth in 2010-11 – and an upswing in employment.

Reviewing Florida’s housing market, Toole said that inventories of for-sale homes have fallen to 7.4 months on a statewide average, and just 5.4 months for listings priced under $250,000. He added that lender-owned properties (REOs or “real estate owned”) now constitute about 6 percent of inventory, but 40 percent of sales. Short sales, where the market value of the home is below the mortgage loan value, make up about 31 percent of current inventory and 18 percent of sales.

Toole added that property management and leasing will be an increasingly important segment of the market in 2012, reaching $11 billion or more, due to the large numbers of investor buyers and “dark” multifamily buildings with few owners.

Turning to the state’s commercial markets, Shelton said investors are increasingly interested in buying office, retail and industrial properties. Vacancy rates, while high, have stabilized, along with rental rates. “Core assets (essential to businesses) are selling and lenders – including the life insurance companies – are lending again,” she said.

Shelton added that lenders are getting more realistic regarding the pricing needed to dispose of their distressed commercial properties. “There are great opportunities for Realtors to find owner-users with the funds to purchase buildings they have been renting,” she said.

Looking ahead to 2012, Shelton said she expects more tenants to come into the Florida commercial markets, helping to stabilize conditions. “I think Florida has bright days ahead, as more people seek to own investment real estate in our market.”

Saunders said the state’s land market is also highly diverse, ranging from cropland, pastures and timberland to transitional and infill land located in suburban and urban locations. “Land has both an investment angle and a romantic angle,” he said. “You can own it, walk on it and enjoy it.”

Overall, Florida has about 34.7 million acres of land, with only 3 million acres now developed, he said. Local, state and federal governments own about 10 million acres.

“As real estate professionals, you have to understand how the various types of land are affected by global trends and local market conditions,” Saunders said. “For example, the price of a citrus grove is closely tied to the commodity market, and a lot of investors are now active in that sector on a national level.” However, Florida has seen a 34 percent decrease in its citrus acreage in the last six years, he added.

For the next few years, Saunders expects little demand for transitional land on the edge of the state’s cities. “There is a lot of existing commercial space that needs to be absorbed first,” he said. “There is pent-up demand for residential lots, but when that demand will be released is a big question.”

In the 2012 land market, Saunders said the biggest opportunities are likely to occur in the agricultural sector, as institutional investors purchase productive cropland to diversify their portfolios. “Take a look at alternative energy producers, as well,” he added. “They may be interested in buying acreage to support their biomass energy facilities.”

© 2011 Florida Realtors®

December 28, 2011 Posted by | News related to the Market | Leave a comment

Prices mostly stabilize: Why aren’t we talking about it?

NEW YORK – Dec. 7, 2011 – An improving job picture and prices stabilizing for non-distressed homes are all signs that point to a housing recovery taking shape, Barclays Capital analyst Stephen Kim told HousingWire.

“In the absence of government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year,” Kim said. “This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of non-distressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices.”

The key to when the housing recovery will largely take off “depends primarily on when first-time buyers decide it is safe to buy a house,” Kim told HousingWire.

Source: “Barclays Analyst Sees Housing Rebound Coming in 2012,” HousingWire (Dec. 5, 2011)

December 28, 2011 Posted by | News related to the Market | Leave a comment

Leading U. S. economists: Fla.’s housing market bouncing back

ORLANDO, Fla. – Dec. 7, 2011 – Despite national and global headwinds, Florida’s real estate market is entering 2012 on an upward trend, according to three leading U.S. economists.

“Our state is in a mini-recovery,” said Florida Realtors® Chief Economist Dr. John Tuccillo at the state association’s 2012 Real Estate and Economic Forecast Conference in Orlando. “Sales are trending up, listing inventories are falling, the supply of lender-related properties has stabilized, and we are seeing multiple offers on homes in some local markets.”

In fact, Florida homes today may be undervalued, Tuccillo added. “That may seem like a drastic statement,” he said. “But a buyer who plans to own the home for five to seven years can get some great bargains today.”

Mark Vitner, senior economist at Wells Fargo in Charlotte, N.C., said the U.S. economy will continue to face significant challenges, particularly financial concerns related to the European debt crisis. But he expects the U.S. economic recovery will continue next year, making it easier for Midwesterners, for example, to buy Florida homes.

“Florida’s economy is recovering, with tourism and healthcare leading the way,” Vitner said. “International tourism has been particularly strong in Miami and Orlando.”

Looking around the state, Vitner said Jacksonville’s unemployment rate has dropped and home prices are stabilizing. In Orlando, prices have not yet reached bottom, he said, but the winter tourism season should help the regional economy. Tampa and Southwest Florida have seen solid job growth, with little new home construction.

South Florida’s economy is growing thanks to trade relationships with Latin America and the Caribbean, while in the Panhandle, Fort Walton Beach is outperforming Panama City and Pensacola, according to Vitner.

Dr. Lawrence Yun, chief economist for the National Association of Realtors®, said many Florida markets are showing sharp drops in inventories of homes for sale – a sign that demand is picking up and prices are stabilizing. “That’s a major change from just a year ago,” he said. “Buyers have stepped back into the Florida market.”

Noting the state’s powerful appeal to international buyers, Yun said he was particularly optimistic about the outlook for South Florida. “Don’t be surprised to see a gain in home prices in the Miami and Naples markets in the next 18 months,” he said. “From there, the recovery is likely to roll northward to Central Florida and then North Florida.”

Tuccillo noted that foreclosed and distressed properties will remain a significant part of the Florida market in 2012, but lenders are feeding these properties into the market at a gradual pace rather than pushing them out all at once.

The event also featured a panel of Florida real estate professionals, who discussed the 2012 outlook for several sectors of the state’s real estate market from a practitioner’s point of view. Panelists were Clark Toole, president and COO, Coldwell Banker Residential Real Estate Inc. in Florida, discussing residential real estate; Cynthia Shelton, 2009 president of Florida Realtors and a director at Colliers International in Orlando, discussing the commercial market; and Dean Saunders, accredited land consultant and broker-owner of Coldwell Banker Commercial Saunders Real Estate in Lakeland, covering the market for land and undeveloped property.

Florida Realtors real estate and economic summit was webcast to 32 local association or satellite sites around Florida. “Turnout was high for our statewide event,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “We hope to hold more of these forums on a regular basis – sharing knowledge of market trends is a powerful way for our Realtor members to connect with buyers and sellers.”

A PDF of PowerPoint slides used during the 2012 Real Estate and Economic Forecast Conference is available on the floridarealtors.org research page.

December 28, 2011 Posted by | News related to Buyers, News related to Investors, News related to Sellers, News related to the Market | Leave a comment

The spec house makes a return in Sarasota-area market

They’re back. Spec houses, which once ruled the real estate world, went into hibernation when the market collapsed in late 2005. But the houses, built by contractors on the speculation that they can be sold at a profit during or soon after construction, are turning up in select locations — one of them the West of the Trail neighborhood between Mound and Bay streets, where some of Sarasota’s most eclectic and vintage housing stock is located.

Read more HERE

December 28, 2011 Posted by | News related to Investors, News related to the Market | Leave a comment

Thinking about becoming a landlord? You should know this

JUPITER, Fla. – Dec. 6, 2011 – With real estate prices low, many people are considering buying an investment property and becoming a landlord.

It might sound simple, but real estate pros warn that there’s a lot to know. The landlord who doesn’t follow such basic guidelines as conducting a thorough background check can get stuck with a nightmare tenant. It takes both business sense and common sense.

“Most of my tenants, 98 percent, are terrific,” said Jupiter real estate broker and investor Carl Presto, who owns 60 properties. “The problem is that 2 percent.”

The down economy that has resulted in real estate bargains also means it’s more difficult to find a tenant who can afford to pay first and last month’s rent and a security deposit upfront. Landlords report they have to go through 30 to 40 applicants before finding a qualified tenant.

Landlords also find they are competing with foreclosed houses, which some people rent below market, forcing rents lower.

Although picking up a cheap condominium unit might be tempting, David Dweck, founder and president of the Boca Real Estate Investment Club and a real estate broker and investor, advises avoiding them. Instead, buy a duplex, triplex, small apartment building or single-family home where you won’t be subject to a condominium board, he suggested.

Special assessments levied by condo associations can run into thousands of dollars.

Presto agrees: “Pay cash and buy a duplex. Offset your rent. Rent one side, and live in the other.”

Financing is also difficult. Douglas Rill, a West Palm Beach real estate broker who has been a landlord for 38 years, said about 70 percent of investment properties are cash deals.

Whatever the property, Dweck, Presto, Rill and other experts say finding a decent tenant starts with the screening process.

Credit checks and criminal background checks are a must. Small-scale landlords can find help at websites such as http://www.mysmartmove.com. Operated by Trans-Union, a major credit bureau, SmartMove gives independent rental owners access to the same tenant screening used by large property management groups. It also gives renters data privacy because they provide their identifying information directly to TransUnion in a secure, online setting.

For $25 the landlord receives a credit-based leasing recommendation, national criminal report including 50 state sex-offender and terrorist searches, renter fraud warnings and automated renter identity verification.

For an additional $5, the landlord also can get access to a credit report, a credit score and a detailed rental address history.

The $30 is well spent compared with the basic eviction filing fee, which is $185 in Palm Beach County.

A West Palm Beach landlord contacted recently did not conduct a background check. Now he has a tenant whose true identity is a mystery.

“My experience with landlording has not been positive,” the man said. “I am in the middle of an eviction and the person will not say who he really is.”

Dweck collects a nonrefundable application fee paid in cash before showing a property to a prospective tenant.

An application should be filled out in full as part of that process. The one Dweck developed covers such details as whether the applicant owns a vacuum cleaner, works on cars, owns a boat or personal watercraft, works at home and why he or she is moving.

‘Never be desperate’ for a tenant

Just because you’re offering a place you own for rent doesn’t mean you have to rent to the first person who comes along.

A rental applicant can be denied for such reasons as poor credit, poor personal references, poor job reference, lack of job stability, insufficient funds to move in, criminal background and too many occupants for the size of the dwelling, Dweck said.

“Never be a desperate landlord or landlady,” Dweck advises.

If the prospective tenants have been through a foreclosure or short sale, that doesn’t rule them out if their credit is otherwise OK, Dweck said.

“At the end of the day you have to make a good business decision. Do not let them tug on your heartstrings,” Dweck said.

Rill agrees that background and credit checks have to be conducted. At the same time, don’t expect a perfect credit report. It’s not uncommon to find people with credit scores below 600, Rill said.

“Most people going into a rental are not going to have an 800 credit score. There is a reason why they are renting. Some have low scores because they just lost their house,” Rill said.

Rill said he never checks with the applicant’s most recent landlord.

“If they had a problem, the previous landlord would say anything to get rid of them. I will go to the previous, previous landlord,” Rill said.

Rill advises thoroughly reading the Florida Landlord Tenant Law, Florida Statutes Chapter 83 and giving a copy to the tenant. It states what the landlord’s responsibilities are, such as complying with health and housing codes, and the tenant’s, which include keeping the dwelling clean and sanitary.

Understanding the law can help avoid disputes. For example, the law states that if a deposit is nonrefundable, that should be noted in the rental agreement. The statute also states that the landlord has the right to enter the property at any time in case of an emergency and under other circumstances, such as for repairs, with 12 hours’ notice.

Lawyer review of lease form advised

A written lease is essential. Standard leases are available for free at sites such as http://www.mrlandlord.com or can be purchased at office supply stores. Rill recommends having an attorney review the lease form you select and modify it specifically for your property.

Of course, leases cover such basics as the term of the lease, when the rent is due and how much the rent is. But they also should include sections on policies about late rent, security deposits and how many people are allowed to live on the premises and that the premises are for residential purposes only.

The lease needs to state what might seem obvious. Many landlords err by not spelling out everything. If you don’t allow pets, don’t just say, “No pets.” State that no pets of any kind are allowed, including visiting pets. Or one day you will knock on your tenant’s door to find her holding a ferret, as one West Palm Beach landlady did.

Don’t just state that parking is provided. Be specific. For example, the lease Dweck created states that the tenant must park in his or her assigned space.

Don’t simply state that the premises must be left clean and undamaged in order for the tenant to receive his damage deposit back after he moves out. Dweck’s lease requires tenants to comply with a number of conditions, such as having the carpet professionally cleaned and cleaning the entire home, including the range, oven, refrigerator, bathrooms, closets, cabinets, windows, carpet and balcony, etc.

‘Professional tenants’

No matter how ironclad the lease is, what some experts call “professional tenants” do exist. These are people who move in and never pay rent. They know that it often takes awhile for an eviction to be carried out.

“Anything is only as good as the tenant’s word. They can still walk out on you,” said a West Palm Beach landlord. “I went to court on an eviction. The guy said, ‘Yes, I owe the money.’ The judge said I did not properly file the three-day notice. The name and address were supposed to be on the bottom right-hand side. It was at the top on my letterhead. It cost me a couple thousand and the guy owed me four grand. I never got paid.”

Landlording is a business, and experts say it’s not for the softhearted.

When rent is past due, Florida law requires landlords to give tenants three days’ notice that they must pay the rent or move. If the rent is not paid after three days, excluding weekends and legal holidays, then the landlord can begin legal action to evict the tenant.

“You have to be on top of it. The stories can get ridiculous. I keep a three-day notice act in my car. I have had people tell me they will not pay the rent because they are buying Christmas presents,” Rill said.

Despite the challenges, people like Alberto Rabadan, a Jupiter real estate broker who owns a 14-unit apartment building in Miami, say they want to expand their investment holdings.

Rabadan was among 20 or so people who attended a real estate investment course that Dweck recently conducted.

“The property values have gotten to a point where it is feasible to be a landlord. I am looking for a bread-and-butter property. Everybody needs a place to live. I want to provide affordable, clean housing,” Rabadan said.

© 2011 The Palm Beach Post (West Palm Beach, Fla.), Susan Salisbury. Distributed by MCT Information Services

December 28, 2011 Posted by | News related to Investors | Leave a comment

Bank of America extends cash-for-keys experiment

Mega-lender Bank of America is extending an experimental program in Florida — where nearly half of all home loans are underwater — to curb foreclosures with cash-for-keys deals.

The bank, which services 1.1 million Florida mortgages, is now giving struggling borrowers until Dec. 12 to apply for its program, which pays borrowers who agree to expedited short sales at bank-set prices.

Typically, payments range from $5,000 to $20,000. In addition to the cash, many borrowers are also absolved from any future deficiency judgments.

Bank of America has notified about 20,000 Florida homeowners that they might be eligible for the program, and about 15 percent have verbally indicated they want to participate.

Read more HERE

December 9, 2011 Posted by | News related to Short Sales and Foreclosures | Leave a comment

CoreLogic: Fewer U.S. homes have negative equity

SANTA ANA, Calif. – Dec. 1, 2011 – CoreLogic released data yesterday that showed 10.7 million residential properties with a mortgage, or 22.1 percent, had negative equity at the end of third quarter 2011. That’s down slightly from 10.9 million properties, or 22.5 percent, in the second quarter. Florida ranks third in percentage of homeowners with negative equity behind Nevada and Arizona.

An additional 2.4 million borrowers nationwide had less than 5 percent equity, referred to as near-negative equity, in the third quarter. Together, negative equity and near-negative equity mortgages accounted for 27.1 percent of all residential properties with a mortgage nationwide in the third quarter, down from 27.5 percent in the previous quarter.

Negative equity, often referred to as “underwater” or “upside-down,” is the condition in which borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.

“Although slightly down, negative equity remains very high and renders many borrowers vulnerable when negative economic shocks occur, such as job loss or illness,” said Mark Fleming, chief economist with CoreLogic. “The nearly $700 billion mortgage debt overhang has touched many corners of the market, and this overhang is holding back the recovery of the housing market and broader economy.”

Data highlights

• Nevada has the highest negative equity percentage with 58 percent of all of its mortgaged properties underwater, followed by Arizona (47 percent), Florida (44 percent), Michigan (35 percent) and Georgia (30 percent). This is the first quarter that Georgia entered the top five, surpassing California which had been in the top five since tracking began in 2009.

• The top five states combined have an average negative equity ratio of 41.4 percent, while the remaining states have a combined average negative equity ratio of 17.6 percent.

• There are nearly 22 million borrowers, or 45 percent of all borrowers, that have mortgages with an 80 percent or more loan-to-value (LTV) ratio, and 69 percent of those mortgages have above-market interest rates of 5 percent or more. Conversely, only 54 percent of borrowers who have less than 80 percent LTV have above-market interest rates. While above-market interest rates make refinancing at today’s historically low rates a cost-effective step for qualified homeowners, it can be more difficult for borrowers with above-average LTV ratios to qualify for refinancing.

• Of the 10.7 million borrowers in negative equity, there are 6.3 million first liens without home equity loans that have an average mortgage balance of $222,000. They are underwater by an average of $52,000, which equates to an average LTV ratio of 131 percent. The negative equity share for the first lien-only borrowers was 18 percent, and 40 percent had an LTV of 80 percent or higher.

• The remaining 4.4 million negative equity borrowers hold first liens and home equity loans with an average mortgage balance of $309,000. These borrowers are underwater by an average of $84,000 and have an average LTV of 137 percent.

• The negative equity share for first lien borrowers with home equity loans is 38 percent, or twice the share for first lien-only borrowers. Over 60 percent of borrowers with home equity loans have combined LTVs of 80 percent or higher.

• Of the total $699 billion in aggregate negative equity, first liens without home equity loans account for $329 billion aggregate negative equity, while first liens with home equity loans account for $370 billion. CoreLogic estimates that of the $370 billion first liens with home equity loans, $190 billion is due to the first lien component.

• There are 8.6 million conventional loans in a negative equity position that have an average mortgage balance of $272,000 and are underwater by an average of $70,000.

• There are 1.5 million FHA loans in a negative equity position that have an average mortgage balance of $170,000 and are underwater by an average of $26,000.

• Given that bank portfolios account for 15 percent of all first lien mortgage loans, CoreLogic estimates that 1.6 million properties valued at $105 billion of aggregate negative equity are in bank portfolios.

© 2011 Florida Realtors®

December 9, 2011 Posted by | News related to Short Sales and Foreclosures, News related to the Market | Leave a comment

Today’s market once-in-lifetime opportunity

WASHINGTON – Nov. 30, 2011 – The monthly cost of owning a home is more affordable now than in the past 15 years, and is less expensive than renting in numerous cities, according to The Wall Street Journal’s third-quarter survey.

Low home prices mixed with low mortgage rates – hovering at 4 percent or lower – create an appealing buyer’s market, analysts say. For example, buyers today have a 77 percent increase in their borrowing power compared to 1991, according to Dan Green, a loan officer with Waterstone Mortgage in Cincinnati. He says that in 1991 a $1,700 mortgage payment allowed a borrower to take out a $200,000 mortgage; today, at current interest rates, the homebuyer can get a $350,000 loan for that same monthly mortgage payment.

In 12 our of 28 cities tracked by The Wall Street Journal, monthly mortgage payments on a median-priced home – including taxes and insurance – were lower than the average rent levels.

In Atlanta, owning was the most favorable compared to renting. The monthly rent on a median-priced home there was $539 during the third quarter (with a 20 percent downpayment) compared to the average asking rent, which averaged $840, according to data provided by Marcus & Millichap.

Nationwide, apartment rents are expected to rise by about 4 percent this year, which may make the owning vs. renting picture tilt even higher, according to some analysts.

Despite the appealing housing picture for homebuyers, some continue to stay on the sidelines, unable to sell their current home, qualify for a mortgage due to the tighter credit requirements or keep a steady job, housing experts say.

Source: “Stronger Lure for Prospective Home Buyers,” The Wall Street Journal (Nov. 26, 2011)

December 9, 2011 Posted by | News related to Buyers, News related to Investors, News related to the Market | Leave a comment

New refinance program targets ‘underwater’ owners current on payments

WASHINGTON – Nov. 30, 2011 – Matt Hamilton has dutifully paid the loan on his Maitland house and a Longwood rental condo, but until now he could not refinance them to obtain more-affordable interest rates because the properties are financially underwater.

Starting Thursday, Hamilton and many of the other quarter-million Orlando-area residents with “underwater” mortgages can apply for a new Fannie Mae and Freddie Mac refinance program geared for pretty much everyone who owes more on a home than it’s worth – including landlords and second-home owners.

“It’s been difficult because I’m so far in the hole that no one wants to refinance me,” said Hamilton, a product developer for Longwood-based Onlinelabels.com. “But if you look at my payment history, I am a safe risk.”

The federal government’s previous foreclosure-prevention efforts, such as the Home Affordable Modification Program (HAMP), lowered the interest rates on mortgages of homeowners at risk of foreclosure because they had lost income. But the new Home Affordable Refinance Program (HARP) is seen as a possible game changer even for homeowners who are underwater but who have stayed employed and continue making their payments.

Homeowners who have missed mortgage payments in the past six months need not apply. And not all the details – such as loan limits – have been disclosed yet. But this is one of the first refinance programs that doesn’t require an appraisal to determine the value of the house.

“It’s a reward for the responsible borrower who swallowed a bitter pill but still kept moving,” said Travis BeMent, mortgage-loan originator for Home Loans Today of Orlando. “There’re a lot of people out there ready to pounce on this.”

The HARP application process begins Thursday, just as new reports show that more than half of the mortgaged homes in Metro Orlando are saturated with more debt than they are worth. In all, 254,146 mortgaged homes in the four-county metro area are in that situation, according to a report released Tuesday by the mortgage-research company Corelogic.

Even though Orlando has a greater share of underwater homes than Florida overall or the nation as a whole, the percentage of “negative-equity” houses in the metro area actually decreased slightly during the third quarter: 51.6 percent of the mortgaged homes in Orange, Seminole, Osceola and Lake counties were worth less than their loans in the July-through-September period, down from 53.1 percent in the second quarter.

About 44 percent of the mortgaged houses in Florida, and 22 percent of those in the nation, were underwater in the third quarter, according to Tuesday’s report.

Many of those mortgages were sold to homeowners who purchased at the peak of the market in 2006-07, when sales prices were double what they are today and when interest rates ranged from 5.7 percent to 6.5 percent, according to the Orlando Regional Realtor Association. Today, interest rates on a 30-year mortgage are less than 4 percent.

One cautionary note about HARP: Interest rates could change by the time a qualified property owner’s refinancing application is processed, BeMent said. Fannie and Freddie are not expected to have the ability to process the new loans until as late as next March.

But HARP, he noted, also offers a break to homeowners who want to refinance for 15 or 20 years instead of 30 years. To qualify, an owner must have a mortgage backed by Fannie Mae or Freddie Mac and will likely need a credit score of at least 620.

Orlando lawyer Jeremy Sloane hasn’t missed any payments on a rental home he owns in east Orange County’s Avalon community, but he still loses money on the property every month because the mortgage he took out in 2006 far exceeds the rent he collects, now that prices have collapsed. He said he has already talked to FBC Mortgage about the new federal refinancing program.

“At the end of the day, I don’t think it’s anyone’s responsibility but myself to make the payments, but the frustrating part was that other people have been able to get out of their situation and not take a loss,” Sloane said. “This program will hopefully make it a lot more palatable renting out that house and not taking a loss.”

Copyright © 2011 The Orlando Sentinel (Orlando, Fla.), Mary Shanklin. Distributed by MCT Information Services

December 9, 2011 Posted by | News related to Short Sales and Foreclosures | Leave a comment