Florida Mortgage Report

Tomorrow is the Last Day at This Domain

I still see many of you subscribing to this feed and/or commenting on this blog.  This post is a reminder that the Florida Mortgage Report will not be located at www.floridamortgagedaily.com after tomorrow.  I will be moving my Florida Mortgage Daily (mortgage market updates) blog to this domain March 1, or shortly thereafter.

That being said, this blog is currently hosted under Typepad, so the blog will remain here for nearly a year, though no comments will be accepted (stopped 2/15/08) and the blog will not be updated any longer.  To follow my writings, please jump over to www.flmortgagereport.com and while there, don't forget to subscribe to that feed to stay up to date.

This will ensure lively discussions continue on the "hot topics" such as Money Merge Accounts and other mortgage acceleration strategies, as well as current events.  All prior posts are over there already (and some new ones), so if you liked a post (or even linked to one), check out the same post (and link to it) over at the new location, www.flmortgagereport.com. 

There are two main reasons for the change that I mentioned before in case you are wondering.  Number one is the change to WordPress to add more flexibility and control.  Since I rely on feedback from you, you can have an effect on how the site looks and its functionality.  I want it to be a very user interactive site and WordPress allows that more easily.  Number two is that I wanted to match domain names to the blog titles.  It was rather awkward, as you can imagine, say the Florida Mortgage Report was at www.floridamortgagedaily.com then turning around and saying Florida Mortgage Daily didn't have its own domain.

So, once again, please go over and visit www.flmortgagereport.com and subscribe to its feed to continue staying up to date on the Florida Mortgage Report.  If you want to see mortgage market commentary, keep www.floridamortgagedaily.com bookmarked and return in March when I have that blog up and running on this domain.  You can also check out my contributions over at Lenderama and Agent Genius.

Florida Cities Take 6 of the Top 25 Spots in Foreclosure Stats With Miami in Front

RealtyTrac released their year-end 2007 Metropolitan Foreclosure Report, and while not on top, Miami was leading the state, passing by Ft. Lauderdale.  Back in November, the rankings were different, with Ft. Lauderdale leading the state and ranking 4th in the nation.

The foreclosure rate for the total US came in at 1.033% of households, with the foreclosure rate of the top 100 metro areas coming in at 1.382%.  Detroit led the nation with a rate of 4.918%, fueled by economic chaos in that area.  The remaining top 5 were (in order):  Stockton, CA (4.866%), Las Vegas/Paradise, NV (4.228%), Riverside/San Bernardino, CA (3.826%), and Sacramento, CA (3.189%).

As far as Florida goes, South Florida still leads the pack and 6 Florida cities made the top 25 rankings.  Here is a breakdown of the Sunshine State:

Rank	Metro Area	Foreclosure Rate
8	Miami, FL	2.724
10	Ft. Lauderdale, FL	2.632
20	Orlando, FL	1.932
21	Palm Beach, FL	1.924
23	Tampa/St. Petersburg/Clearwater, FL	1.908
24	Sarasota/Bradenton/Venice, FL	1.840
27	Jacksonville, FL	1.748

As you can see, all the major metro areas in Florida made the top 30.  What does that mean to you?  Great news if you are a buyer, especially an investor.  Bad news for Florida homeowners as the rates will keep pressure on the declining home prices.

Can 'Asses or Elephants Really Save Homeowners' Assets?

It is a political year for sure and your vote counts.  Just don't screw it up over something neither candidate can truly fix. 

The housing crisis is all over the news, Internet, even on your toilet paper.  The political candidates know your fears, your "buttons" that need to be pushed to get you to push their button.  But, can they really do anything for you, or any other homeowner?

Think about it.  First off, they will not be in office until next year to begin with and whatever is happening will likely be a non-issue by then.  Next, they cannot do anything by themselves (thank God), and will have to get whatever they want accomplished pushed through both the House and Senate as well, a difficult task to say the least.

Add to that the fact they the government tends to overreact when faced with a crisis as we have already seen them scrambling to do something, yet can't fix anything going on right now.  Proposed laws do more harm than good overall and need to be amended if they will have the desired effect.

So, quit focusing on the today issues that most likely won't be there tomorrow and get them to spill their guts on the deeper issues, which they seem to want to avoid right now.  When you go to the polls later this year, vote for the "real" issues instead of the candidate who proved nothing more than how to take a current event and play it for all it is worth.

In Every Crisis Lies Opportunity

That statement is true, no matter how bad it gets and every entrepreneur out there understands its value.  Obviously, the real estate and mortgage industry is in turmoil, but so are many homeowners.  And since there is a foreclosure crisis, someone has found opportunity (you just knew it was coming).

I must admit I was not the one who found this first (hat tip Alex Stenback):

For only $995, you can simply walk away from your mortgage, but you still have to qualify for this program.  Sounds like a good deal to me, how about you?

Just How Are Homeowners Affected by Changing Mortgage Guidelines

I have been asked this exact question several times but never bothered to make a post as the demand for this answer had not been very high.  Ironically, as I was reading my feeds which came in last night, Dan Green over at the Mortgage Reports had done a video presentation on this exact subject.  So, instead of reading, watch this video as I think he does a pretty good job explaining in black and white (with shades of gray).

Of course, if you still have questions or want to know how it affects you personally, please feel free to contact me.

New Home Sales Hit Lowest in 12 Years

Surprise?  Get real, you should have been expecting it.  What is interesting is that of home prices.  Keep in mind that the prices on builder's homes does not take into consideration the incentives they are giving, and there are loads of them.

The seasonally adjusted numbers were 647,000, well below expectations of 715,000 and they dropped 9% from October to November.  Median prices dropped 0.4% as well, though the average price ticked up 0.5%.

Depending on what region you were in, you may have experienced large drops or even gains.  The Northeast dropped 19.3%, the Midwest dropped 27.6% and the South dropped 6.4%, but the West gained 4%.  Annual sales in the last year have dropped over 34% nationwide, the largest annual slide since 1991.

Will the end come soon?  Don't count on it.  Keep in mind though, that the two hardest hit regions had bad weather to deal with as well.  If you read my forecast for 2008, you can see I expect the bottom to show up in 2008 for Florida, though it is still a ways below the current level.

IndyMac Bails on Florida Homeowners

There is a major wave on changes on the horizon as the more conservative lender, IndyMac Bank starts the trend with the following:

Florida Guideline Restrictions

Transactions securing properties located in the state of Florida are subject to the following restrictions/limitations:

For all Loan Programs:

• All loans are restricted to Full Documentation
  
• Primary Residence transactions:
  
  - The maximum LTV and CLTV otherwise available for the transaction type must be reduced by 5%.
  - The Borrower’s current primary residence must be sold and closed prior to,
  or concurrently with Indymac’s funding.
  - If the to-be-secured property is a single family residence, condominium or planned unit development, it must be located within an established project. An established project is one in which 90% of the total project units have been sold, and the subject property has been previously occupied / owned by someone other than the developer.
  
• Second Home and Investment Property transactions are limited to a maximum 60% LTV / CLTV.

Thinking of investing in Florida?

Well, you might want to speed that thought as other lenders will likely follow suit, furthering reducing access to credit for investors, at least those who don't want to shell out the 40% down payment requirements.  Since cash is king and liquidity determines success, investing in Florida may be "drying up" soon.

But that is actually good news...

WHAT?!?

That's right.  Home prices in Florida, especially South Florida, will start getting "priced to reality" (what I like to call it), meaning house prices are going to drop dramatically, and quickly.  Once they do, the improvement in the market I have forecasted will take place.  It will take some time since there is over 24 months of inventory that need to move, but hope is on the horizon.

Investors, don't fret.  There will still be plenty of opportunity throughout Florida.

Top 5 News Stories of 2007

Taking a look back through the events of this year, there is been numerous stories across the US, so we look at the top stories of 2007..

#5 - Dow Tops 14,000 - Hard to imagine at this time, but back in July and again as recent as October, the Dow broke above 14,000.  Volatility remains in the markets.

#4 - Fed Moves - Since August 3, the Fed has been battling the worst credit crisis in nearly a decade and has moved to cut rates three times in an effort to bail out the markets and to keep the economy on track.  Our opinion is they over reacted as inflation already ticked higher, but time will tell for sure.

#3 - Toy Recalls - Recall after recall came out about Chinese products that contained lead-based paint, illegal pesticides, electric shock risks, and even laced with the "date rape" drug.  And most came just in tome for Halloween.

#2 - Record Oil Prices - While oil has backed off a little, we are still feeling the increased expenses in our wallets.  A lot of the increase came from the falling value of the dollar, along with fears of dwindling supplies and increased demand in growing places such as China.

and the #1 story, yet again...

#1 - Housing Contagion - Mortgage defaults, increased foreclosures, failing debt across the markets.  Between the US and Europe, more than $100B have been written off after downgrades occurred.  Add to that, we are likely to continue to see write off into next year.  The effects are spilling over into other areas of credit, including commercial paper.  2008 will likely see increased defaults in credit cards, auto loans, and more.

There you have it, no surprises as far as we can tell.  What does 2008 hold?  Who knows, but we can expect increased legislation of the housing industry, mortgages in particular, for good or for bad.  We can also expect to see more foreclosures, credit card defaults, and basically continued write offs for the foreseeable future.

Where do I see the Florida mortgage and real estate markets in 2008?

I see a slow improvement coming as reality sets in, particularly in South Florida.  I don't see a recovery per se.  Many in the real estate industry, both realtors ad mortgage brokers, will be bowing out under the financial strains of staying in business and not adapting to the new marketplace.  That can be good news for the consumer as most who fall out will be those you wouldn't want to work with anyway, though I am sure a few will be.

As for those who work in the industry, if you can adapt and persevere, you will be rewarded.  Slowing markets do not mean your business needs to slow also, rather it can actually increase in these times.  As for me and Solid Rock Mortgage Corporation, our plans are to grow in 2008 and beyond, still meeting our goal of being #1 in Broward County for mortgage planning services by 2012!

Congress Does Provide Some Benefits

Congress managed to pass two laws recently to help out taxpayers.  They managed to get the AMT patch through both houses and to the President's desk, thus saving an average tax hit of $2,000 to millions of Americans.

The other was the Mortgage Forgiveness Debt Relief Act of 2007 which got through both houses late Tuesday and is also awaiting the President's signature. 

This bill provides legislation that limit will provide a three-year change to the tax code to eliminate any taxes home owners may face if a lender forgives a portion of outstanding mortgage debt, irregardless of whether a deficiency in foreclosure or a loan modification.

Additionally, Congress extended the PMI deduction to 2010, so anyone paying mortgage insurance on qualified properties may be eligible to deduct that expense if they are making less than $100,000 AGI.  After the $100,000 limitation, it begins to phase out and is not deductible for those making over $109,000.