THE REAL ESTATE BUST IS STILL IN THE HANGOVER PHASE.
Courtesy therealdeal.com
In 2007 anyone yelling 'fire'! about the imminent real estate sector meltdown was treated with derision. This writer too was scoffed at when she suggested that the prices of real estate could plummet, when talking to a real estate agent friend. The real estate agent's response at the time was 'In your dreams".
One has to wonder why no one, not even professionals saw the meltdown coming, or at least they were in complete denial (one hopes at least that much). This writer's belief is that they might have given it a thought, but somehow hoped that a financial super-man would swoop in and save the day.
Five years on, the crisis has diminished in certain areas, mainly due to the steep drop in new construction, which has caused the market to have a much lesser supply of inventory of used or new houses.
However, in the areas where the banks and the realtors and the whole constellation of operators in the real estate sale/mortgage debacle were most brazen in their malfeasance, the crisis seems to have deeper roots than elsewhere.
One of the places where it persists like a wistful ivy is Florida. Here, in 2007, houses that were close to being condemned were selling for double, triple the amount or higher, than its true market value. This made Florida 'numero uno' in the crisis, and the problem runs so deep that it still holds the premier position when it comes to foreclosure, now that Nevada's problem seems to be abating.
In Tampa, the courthouse seems a circus of hollering defendants, lawyers, and bank representatives. Foreclosure trials here are so numerous that they average three minutes. Indeed the demand is so great that the court is forced to hire retired judges to sit in for 350$ a day.
One in every 32 homes in Florida is in foreclosure or waltzing toward it. That is double the national average.
Foreclosures here are coming in fast and furious. Although the final determination may take three minutes, the backlog is such that it might take more than two years for it to come to court.
As long as the foreclosures do not diminish, the value of the homes will stay depressed because the price of distressed properties are averaged out with the price of the healthy ones. Most of the backlog however stems from the banks' less than diligent practices.
During the bust, many banks either lost or misplaced documents that were vital to the foreclosure judgment. Indeed, because mortgages were packaged and re-packaged, the property's title and docs were often shuttled from bank to bank.
In addition the originators of the mortgage 'docs' were often found to have originated financial papers either through straight forgery or had allowed the financing to go forward even though no papers were offered by the mortgagee.
Some banks claim to have tried earnestly to help the homeowners keep their homes, by allowing them to pay a reduced rate, but this is not a permanent re-financing. It is usually a 'break' which expires in two years, so that many homeowners are now back to square one, having to file for relief, since they were not able to pay at the onset, and are not able to pay again.
In some cases too, the foreclosure attorneys are using the system to delay the process. But in Florida, the law allows the consumer more protection than is some other states.
That is cold comfort to all of those people who imprudently or not, became homeowners during the boom.
As far as Florida goes, the end is not in sight. It just remains to be seen if this lesson, in the end, is one learned or one forgotten.
Source: NPR news /Sussingham
One has to wonder why no one, not even professionals saw the meltdown coming, or at least they were in complete denial (one hopes at least that much). This writer's belief is that they might have given it a thought, but somehow hoped that a financial super-man would swoop in and save the day.
Five years on, the crisis has diminished in certain areas, mainly due to the steep drop in new construction, which has caused the market to have a much lesser supply of inventory of used or new houses.
However, in the areas where the banks and the realtors and the whole constellation of operators in the real estate sale/mortgage debacle were most brazen in their malfeasance, the crisis seems to have deeper roots than elsewhere.
One of the places where it persists like a wistful ivy is Florida. Here, in 2007, houses that were close to being condemned were selling for double, triple the amount or higher, than its true market value. This made Florida 'numero uno' in the crisis, and the problem runs so deep that it still holds the premier position when it comes to foreclosure, now that Nevada's problem seems to be abating.
In Tampa, the courthouse seems a circus of hollering defendants, lawyers, and bank representatives. Foreclosure trials here are so numerous that they average three minutes. Indeed the demand is so great that the court is forced to hire retired judges to sit in for 350$ a day.
One in every 32 homes in Florida is in foreclosure or waltzing toward it. That is double the national average.
Foreclosures here are coming in fast and furious. Although the final determination may take three minutes, the backlog is such that it might take more than two years for it to come to court.
As long as the foreclosures do not diminish, the value of the homes will stay depressed because the price of distressed properties are averaged out with the price of the healthy ones. Most of the backlog however stems from the banks' less than diligent practices.
During the bust, many banks either lost or misplaced documents that were vital to the foreclosure judgment. Indeed, because mortgages were packaged and re-packaged, the property's title and docs were often shuttled from bank to bank.
In addition the originators of the mortgage 'docs' were often found to have originated financial papers either through straight forgery or had allowed the financing to go forward even though no papers were offered by the mortgagee.
Some banks claim to have tried earnestly to help the homeowners keep their homes, by allowing them to pay a reduced rate, but this is not a permanent re-financing. It is usually a 'break' which expires in two years, so that many homeowners are now back to square one, having to file for relief, since they were not able to pay at the onset, and are not able to pay again.
In some cases too, the foreclosure attorneys are using the system to delay the process. But in Florida, the law allows the consumer more protection than is some other states.
That is cold comfort to all of those people who imprudently or not, became homeowners during the boom.
As far as Florida goes, the end is not in sight. It just remains to be seen if this lesson, in the end, is one learned or one forgotten.
Source: NPR news /Sussingham
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