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Florida Popular with International Buyers

Mon, 06 Sep 2010 22:00:42 +0000

International buyers have helped buttress Florida’s real estate market with 22 percent of all foreign clients nationally choosing property in the Sunshine State.

That makes Florida tops for attracting foreign interest, according to a summer report by the National Association of Realtors. California came in a far second with 12 percent of the international market.

While Florida’s share of foreign clients has slipped from a recent high of more than 26 percent in 2008, bargain basement prices and a weakened dollar have continued to lure Canadian and overseas buyers.

The study, which looked at sales between March 2009 and March 2010, found that buyers with permanent residences outside the United States spent an estimated $41 billion on residential property nationally during the period of the study - that’s 4 percent of the total residential market during the same time.

“I had an open house in the mid-$500,000s and a man from Canada came and bought it the same day,” said Palm Beach Gardens Realtor Jeff Lichtenstein, who has a page on his Website dedicated to foreign buyers. “Once they’re here, they tend to bring friends.”

And family.

Amsterdam native Annette Aalberts bought two Jupiter homes for herself and her daughter over the past few years. Combined, the homes are worth about $4.5 million.

But most international buyers don’t aim that high. According to the study, the median price paid by foreign buyers nationally is $219,400.

“International buyers are hugely important in absorbing inventory,” said Jenny Huertas, international sales director for the Miami-based consultant firm Condo Vultures.

Huertas estimates 30 percent of sales in Palm Beach, Broward and Miami-Dade counties are to international buyers.

It’s unclear how a recent dip in the Euro may temper overseas purchases. It’s now worth $1.28, compared with a high of $1.60 in 2008. That means to buy a $500,000 house, it would cost about 388,709 Euros.

But the Canadian dollar, which has traditionally been weaker than U.S. currency, is now near parity at 95 cents.

Toronto resident Domenic Triumbari bought two properties in the Palm Beach Grande condominium complex in March. The suburban West Palm Beach homes sold for $164,990 and $179,990 in 2006.

Triumbari picked them up for $60,000 each, paying in cash, and without ever seeing them in person.

“I know they’re in West Palm Beach, but not exactly sure where,” said Triumbari, who is renting the homes. “The numbers make sense right now. You can make money on your investment.”

Triumbari is also searching for a South Florida home for himself.

“I’ve seen a lot of the Caribbean, been all over the islands, but I like Florida,” he said. “We speak the same language, eat the same foods.”

While the Realtors Association of the Palm Beaches does not keep statistics on international buyers in local markets, statewide statistics gathered by the national association showed 31 percent of Florida’s international buyers are Canadian, compared to 24 percent nationally.

Nationally, about 55 percent of foreign buyers pay with cash, possibly because it can be harder for international clients to get financing here. In Florida, about 82 percent of international buyers paid in cash.

Realtor Craig Fialkowski, of Herman Group Real Estate in Palm Beach Gardens, said nearly all of his international clients buy with cash and sight unseen.

Typically, they’re looking for deals on homes they can rent.

“Buyers want a decent return on investment,” Fialkowski said. “The cash flow can be really good

Southern California Construction Job Gets the Go

Mon, 06 Sep 2010 04:39:52 +0000

Today we wrote about the excitement surrounding a big California land auction that was set for Thursday. Well, the bidders should just stay home.

Rosedale, the development that was up for grabs, is now under the control of a partnership between the Christopher Development Group and Brookfield Homes Southland Group, the companies announced Wednesday. Terms of the deal were not released.

The site, located in the foothills above the San Gabriel Valley, was carved up for a master-planned community that was to include 1,250 homes, a recreation center, parks and other amenities. But the housing crash stalled development.

Now, builders are ready to restart construction. The section of Rosedale that was expected to be auctioned off by US Bank is large enough to build more than 700 homes, according to sources close to the matter. With big land parcels hard to come by, several builders and investors were eager to bid. Industry experts said the final offer could have topped $70 million.

It’s unclear exactly what will happen next. In the release, Brookfield said it will “review the existing Rosedale community plan, sit down with all the stakeholders and discuss the options we have for moving Rosedale forward.”

Brookfield President Adrian Foley wasn’t immediately available for comment.

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California Loan Modifications

Sat, 04 Sep 2010 16:38:48 +0000

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Foreclosures Trump Loan Modifications

Wed, 01 Sep 2010 22:45:58 +0000

When President Barack Obama launched the $75 billion Home Affordable Mortgage Program a month after taking office, he touted it as a way of helping the economy by keeping as many as 3 or 4 million people out of foreclosure.

“The home mortgage crisis, the financial crisis and this broader economic crisis are all interconnected,” he said. “By making investments in foreclosure prevention today, we will save ourselves the costs of foreclosure tomorrow — costs that are borne not just by families with troubled loans, but … by our economy as a whole.”

A year and a half later, the program has provided permanent loan modifications to 422,000 homeowners, including 6,500 in San Diego County — slightly more than one-tenth of the 4 million loans that Obama mentioned as his upper-end target. Those numbers are from the Treasury Department, which oversees the program.

In San Diego, twice as many homes have gone into default this year as have gotten permanent modifications through HAMP. And the number of borrowers in trial modifications — a preliminary step to permanent approval — has plummeted 63 percent, mirroring nationwide trends.

Many critics blame the lenders. “Sometimes lenders push modifications forward, but often they let them die on the vine,” said David McDonald, a past president of the San Diego chapter of the California Mortgage Brokers Association. McDonald said loan-servicing agencies, which oversee many of the mortgages, “tend to make more money the more delinquent a loan gets, so there’s not as much motivation for them to help borrowers.”

He said some lenders seem to keep borrowers in trial modifications long enough to drain their savings and then foreclose anyway.

Lenders say they were unprepared for the crush of modification requests they have received — Bank of America alone gets 125,000 calls a day asking for mortgage help — and that changes in HAMP’s guidelines have added time and labor to the process.

“The mortgage modification process is complex and is more cumbersome than a refinance,” said BofA spokeswoman Juwana Bauwens. She added that since the latest federal changes in June, “each case now has to be manually underwritten and approved to ensure it meets Treasury’s guidelines” before a trial modification can begin.

Treasury spokeswoman Andrea Risotto acknowledges that some of HAMP’s changes have slowed modification activity. But she added that the new procedures help ensure that modifications are workable. Only 15 percent of HAMP borrowers go back into default within nine months of the modification, instead of the redefault rates as high as 60 percent that some lenders were getting before HAMP was launched.

Since its launch, more than 1.5 million people have applied for HAMP modifications. But 246,000 didn’t make it into the trial program and 617,000 were canceled from the trials before getting permanent modifications. Half of the trial modification dropouts have found other ways to pay their loans, but 17 percent have been foreclosed upon, filed for bankruptcy or sold their home at a loss through a “short sale,” a Treasury Department survey found. Thirty percent are currently in limbo, waiting for the lender to decide how to proceed.

HAMP modifications typically cut mortgage payments by more than one-third, reducing monthly bills to 31 percent of the borrowers’ monthly income by slashing the interest rates and extending the term of the loan to 40 years. In June, the median monthly payment on modified mortgages in San Diego was $1,272, down from a premodification median of $2,152, Risotto said.

Of course, some borrowers may not be able to pay their mortgages even at that reduced rate. But the biggest obstacle from making it from a trial to a permanent modification has less to do with whether borrowers can make the payments than whether they submit the right paperwork.

“Insufficient documentation” is the top reason for canceling a trial, a Treasury Department survey found.

Critics blame the banks, saying lenders often ask borrowers to send the same documents over and over again, explaining that they have been lost.

After four months, the information becomes so dated that the entire process has to start over again. Those paperwork glitches leave many borrowers paying their mortgages with no assurance they will avert foreclosure.

“The ‘lost fax scenario’ happens frequently,” said Gabe del Rio, who heads San Diego’s HomeOwnership Center, a nonprofit agency that offers free advice to homeowners. “Lenders often say the documents have been lost or misplaced. We try to make sure they have everything they need, and wehave our clients call every two weeks to make sure everything is there, but even then there are times the borrower has to resubmit all the documents.”

Del Rio said one borrower had to submit the same profit statement 15 times over eight months before the loan was modified.

“I’m not accusing anybody of malicious intent,” he said. “The entire system is overwhelmed because nobody ever contemplated something this big. Most loan servicers (which are primarily bill collectors) have never been in the business of loan modification.” [CLICK HERE for a link to the HomeOwnership Center.]

But Mark Goldman, a loan officer with Cobalt Financial in San Diego, said “it really seems like some lenders are intentionally screwing up modification requests.”

Gary Andrews of Rancho Peñasquitos began negotiating for a modification last summer, after a sharp drop in income from his painting business. “We weren’t asking for a handout,” he said. “We were just looking for a mortgage we could afford.”

Andrews said CitiMortgage gave him a trial modification last October, cutting his $3,000 mortgage payment to $1,550, which added 10 years to the term of the loan. Three times over the next eight months, the bank asked for more documents to make the modification permanent. As he supplied the documents and kept paying the mortgage, he called the bank every week to see if he had been approved. “They kept saying, ‘Stop worrying. You’re a perfect candidate. We just have to finalize some things,’” he said.

But when Andrews called on about June 1, the bank told him it would no longer accept his payments and asked him to call back in two or three weeks. When he called back on June 16, he was told that he had been removed from the HAMP program as of May 26 and that his home would be foreclosed upon in eight days. After Andrews pleaded against the foreclosure, he was told that if he submitted new financial statements, he might be readmitted to the HAMP program.

Andrews spent the 48 hours compiling and resending yet another copy of his financial statements. But when he called back, he was told that his loan officer was out for a week, his financial statements had not been reviewed and his home was slated for sale in just three days. With the help of a lawyer, he staved off the foreclosure, but he has since filed for bankruptcy, hoping for some protection through the court.

Although CitiMortgage declined to comment on Andrews’ specific case, it maintains that it provides workout arrangements and other options so that, whenever possible, borrowers are able to stay in their homes.”

U.S. Home Prices up in 2nd Quarter

Tue, 31 Aug 2010 21:41:24 +0000

A quarterly index of national home prices in the second quarter showed improvement from both its first quarter and year-ago figures, according to the latest Standard & Poor’s/Case-Shiller National Home Price Indices reportreleased today.

The indices, which are based on repeat sales of single-family homes over time, have a base value of 100, with levels above 100 representing the percentage of home-value appreciation since January 2000.

The U.S National Home Price Index rose 3.6 percent year-over-year in the second quarter to 138.03, and rose 4.4 percent from the first quarter of this year.

Meanwhile, the monthly 20-City Composite Home Price Index rose 4.2 percent in June, to 147.97, compared to June 2009. That follows a 4.6 percent year-over-year increase in May.

“After 16 consecutive months of improvement in their annual rates of return, June’s figures were the first to moderate from their prior month’s pace, pointing to a possible deceleration in home-price returns,” the report said.

Fifteen of the 20 metropolitan statistical areas covered by the index saw their home prices rise year-over-year. The index’s month-to-month gain was more modest: 1 percent.

“While the numbers are upbeat, other more recent data on home sales and mortgages point to fewer gains ahead,” said David M. Blitzer, chairman of the Index Committee at Standard & Poor’s, in a statement.

“The worry starts when you remember that the homebuyers’ tax credit has expired, foreclosures are still at high levels, and July data on home sales and starts were very, very weak. The inventory of unsold homes and months’ supply data were particularly troubling. If this relative weakness in demand continues, it will likely filter through to home prices in coming months.”

The 20-city composite was down 28.4 percent in June from its peak in June and July 2006.

“Even with concerns about near-term developments, we recognize that the housing market is in better shape than this time last year,” Blitzer said.

“Further, California’s cities have moved from some of the hardest hit to three of the four leading cities based on year-over-year gains. Among the other hard-hit cities, the news is also a bit encouraging — Las Vegas, however, remains among the weaker cities.”

Of the five metro areas that experienced declines in the past year, Las Vegas fell the most in June: -5.2 percent, to 101.77. The other metro areas to see drops were Charlotte, N.C. (-2.7 percent, to 117.24); Seattle (-1.8 percent, to 146.83); Tampa, Fla. (-1.6 percent, to 138.58); and Chicago (-0.1 percent, to 124.9).

San Francisco, San Diego and Minneapolis experienced double-digit year-over-year gains: 14.3 percent, 11.2 percent and 10.7 percent, respectively. San Diego, in particular, posted its 14 straight month of gains, the report said. The index for Los Angeles also rose substantially in June, up 9.2 percent.

Pasadena Wright House Still for Sale

Tue, 31 Aug 2010 01:27:49 +0000

A historic Frank Lloyd Wright-designed home in Pasadena, Calif., could be dismantled and rebuilt elsewhere, says the real estate agent listing the property.

La Miniatura, one of four textile-block homes designed by Wright, has been on the market for more than two years and reduced in price by more than $2 million, but no one in the United States has offered to purchase it, the Los Angeles Times said Monday.

Los Angeles-based listing agent Crosby Doe said he is talking to an international art dealer with Japanese clients who might be interested in buying it. Asking price: $4.99 million.

“With my position in the preservation community, I will probably be crucified for saying this,” Doe said. “But we have to consider all options. We moved the London Bridge to the Colorado River. Why couldn’t we move this house to Japan?”

Only four of the homes were built, all of them in Southern California. Another, known as the Ennis House, remains unsold after more than a year. It was listed for $15 million; in an effort to sell it the price was cut in half, the newspaper said.

Even with their multimillion-dollar price tags, some wonder why they haven’t sold.

“There’s still a lot of money in this city. It’s hard to believe that someone isn’t stepping forward to support these houses,” said Ken Breisch, who oversees another of the textile-block homes the architect designed. Harriet Freeman gave that house, which bears her name, to the University of Southern California in 1986.

Senate Bill Not a Sure Thing for Homeowners in Foreclosure

Sun, 29 Aug 2010 23:47:59 +0000

A state legislative effort to save homeowners from foreclosure that once seemed to enjoy broad support is close to failing in the wake of an intense banking industry lobbying effort in Sacramento.

SB1275 would require lenders to provide homeowners with a fully considered decision on a loan modification prior to starting foreclosure.

The bill addresses what some say has become a far too common phenomenon for homeowners who are delinquent on their mortgages: While negotiating a loan modification, their lender forecloses. The proposed rules would allow the homeowner to sue if that occurs.

The federal government imposed similar rules on June 1 for banks participating in its main foreclosure reduction plan, but did not provide for legal action and uses no formal enforcement mechanism, according to SB1275’s sponsors.

The banking industry has opposed the state bill, arguing that lawsuits could be brought against lenders for technical violations and could delay the foreclosure process even if owners were ineligible for a modification. Banking representatives also have said that federal rules have evolved and could change again, potentially making SB1275 outdated and creating a conflict.

The bill’s author, state Sen. Mark Leno, D-San Francisco, said his legislation was born of the belief that lenders will continue to mistreat borrowers and handle foreclosures incompetently unless they are forced to change.

“Banks are not being held accountable,” Leno said in an interview Thursday. “The result has been devastating to homeowners and neighborhoods, and cities and counties, which have lost tax revenue. … The banks caused this entire mess; they brought the world down.”

Representatives from the California Bankers Association were not available Thursday. In June, a spokeswoman told The Chronicle that the association was “extremely opposed to any sort of private right of action.”

The state Senate passed SB1275 on June 3 and all three Assembly committees that reviewed the bill also approved it. But when it surfaced for a full Assembly vote on Tuesday, it did not get enough votes, losing 38-27, with 14 Democrats abstaining and some voting no, according to Leno.

The Assembly granted the bill a reconsideration vote that must occur before the end of business Tuesday, when the legislative session is scheduled to end, Leno said. He noted that the vote was expected to run along party lines and that his office and others were trying to persuade Democrats to get off the sidelines, or if they went against the bill, to change their votes.

“The banks are in full force to kill this bill, which is really intended to prevent avoidable foreclosures and letting lenders know that there are consequences to not doing their job properly.