News About Properties

Simple steps can prevent buying a home disaster

To avoid legal snarls when buying a new home, inspect the home carefully, check legal descriptions closely, read the title report and don’t rely on real estate agents for legal advice, experts say.

Jessie and John Bates thought they got a real deal on their first home, a newly remodeled rambler they bought in 2007 for $190,000. But over the next 18 months, they experienced a series of problems with the 14-year-old home, including failed plumbing, sodden insulation, black mold and rats.

When they tore up a bathroom to fix corroded pipes, their 8-year-old son Tyler had to be rushed to the hospital with breathing problems.

Finally, the Bateses spoke to neighbors and heard the home had likely been used as a meth lab by previous renters. The couple hired a private company to test for chemical residue. The test, which confirmed their fears, cost $283.

How to prevent flipping fraud

Flipping fraud was not invented during this decade’s real estate boom. It helped burst Florida’s real estate bubble during the 1920s and played a key role in the nation’s savings and loan crisis in the 1980s.

But widespread flipping fraud does not have to happen again with the next real estate boom.

Though people determined to commit fraud will always look for weakness in the system, experts say there are ways to make mortgage fraud more difficult.

Some changes have already been adopted or are in the works. In 2007, Florida lawmakers specifically made mortgage fraud a crime for the first time in the state. Before that, such crimes had to be prosecuted federally or under the state’s more generic fraud statutes.

Lifelines for Those ‘Underwater’

AS property values in the New York area slide, more borrowers are finding themselves “underwater,” which means they owe more than their homes are worth.
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Now the government is throwing a lifeline to such homeowners, along with similar borrowers nationwide.

This month, the Federal Housing Finance Agency unveiled a new version of its Home Affordable Refinance Program, whereby lenders can offer new mortgages to borrowers even if their home’s value exceeds the mortgage amount by as much as 25 percent — as long as the borrower hasn’t missed loan payments in the past year.

Under the initial plan announced in February, lenders could refinance a loan only if the borrower’s mortgage was no more than 5 percent greater than the home’s value. With property values in many areas down sharply from their peak levels, 5 percent wasn’t enough to help many borrowers.

Realtors see Ocala sales soar [North Florida]

The Ocala housing market got its largest boost in more than a year, when sales of previously occupied homes jumped 63 percent last month compared to a year ago.

The Florida Association of Realtors reported Thursday that sales by its realtors jumped to 311 in June, compared to 191 in June 2008, for the Ocala area.

Bert Meadows, president of the Marion County Association of Realtors, said the report shows that prospective buyers were no longer riding the fence but were starting to take advantage of low interest rates and cuts in home prices.

“We’re beginning to see buyers come out of the woodwork … and they’re making offers,” Meadows said. “I just think we’re getting people that were sitting and waiting and now are deciding to buy.”

Bidding wars break out on homes under $200,000 [South Florida]

Bidding wars are returning to South Florida’s housing market, as investors and first-time buyers compete for homes and condominiums listed at $200,000 or less.

The race for properties is reminiscent of the boom years from 2000 to 2005, when multiple offers on all types of dwellings helped push prices to record highs.

Back then, a dearth of properties for sale had buyers rushing to scoop up anything they could find, for fear that prices would keep rising. Now, frustrated with a bloated inventory of foreclosed homes in disrepair, buyers go to great lengths when they spot a house or condo in pristine condition.

“When they find a good listing, people are pouncing,” said Terry Story, a real estate agent for Coldwell Banker in Broward and Palm Beach counties.

Association must lien and foreclose to get unpaid fees

Question: I have three condominiums in different locations. One is paid for, which is my residence, and the other two are rentals that are upside down with the current real estate market. I stopped paying the mortgages and HOA dues on the rentals two months ago. The condominium has filed a lien on one of my units. I owe the bank $445,000 and the property value is down to around $350,000. Can a condominium association foreclose on a property that is upside down? Why would they? What can I tell my renters who are scared of being evicted? — G.M., Miami Beach

Answer: Yes, the association can foreclose on your property and I highly recommend that they take fast action. Condominiums must lien and foreclose to make the unit start paying the fees. This action enables the association to take title to the unit and start recovering losses and start paying fees. Once they have title they have several options, including renting the unit. They can collect the rent to recover their loss. They can sell the property even if it has a mortgage. Keep in mind that most association foreclosures will eliminate the second mortgage. They can ask the bank to agree to a short sale. One other way the association can cut their loss short is to deed the property to the bank if the bank will agree.