Cape Coral/Fort Myers Real Estate as we see it

Little Boys' Games

There appears to be a transition in process with residential real estate in Southwest Florida.  We are seeing quite a few offers from buyers, and quite a few counteroffers from sellers.  Getting to a mutually acceptable contract has been a challenge this season.
 
One could be reminded of the schoolyard game of my youth, when sides were chosen and a line was drawn in the middle.  A long rope extended across the line on both sides, and the teams pulled against each other to try to pull the opposite side across the line.  The bigger, stronger team usually won out.
 
It feels like many buyers are trying one more time to pull a seller across the line before home prices resume their climb.  Desperate sellers are hard to find these days, because most of their homes have already been sold.  Many of today's sellers are willing to be patient, as they see mostly positive news about the housing market and the economy.  The end result of this "tug-of-war" is that "lowball" offers often go nowhere.  Many sellers are digging in their heels, and doing their own pulling.
 
For the first time in many years, there seems to be a relative "balance of power" between buyers and sellers.  It will be interesting to observe how this tug-of-war plays out in the coming months.  Will home prices rebound from their currently depressed levels?  Or will buyers continue to "have their way" with sellers?  Stay tuned.  

 
 

 

First Major State Lawsuit Filed Over ‘Robo-Signing’

major U.S. banks and the nation's state attorneys general, Massachusetts has filed the first major lawsuit over so-called "robo-signing" foreclosure processing.

Attorney General Martha Coakley filed suit against Bank of America [BAC  7.36    0.23  (+3.23%)   ], JP Morgan Chase  [JPM  37.60    0.30  (+0.8%)   ], Citi [C  31.59    0.87  (+2.83%)   ], Ally Financial and Wells Fargo [WFC  29.89    0.80  (+2.75%)   ], as well as the MERS corp (Mortgage Electronic Registration System, Inc.)

The Attorney General alleges these five entities, "engaged in unfair and deceptive trade practices in violation of Massachusetts' law by: Pervasive use of fraudulent documentation in the foreclosure process, including so-called "robo-signing", foreclosing without holding the actual mortgage, corrupting Massachusetts land recording system through the use of MERS, and failing to uphold loan modification promises to Massachusetts homeowners."

The suit seeks civil penalties and restitution for slleged harm to borrowers, in addition to compensation for state registration fees that were allegedly avoided. The lawsuit also seeks, "to hold the banks accountable through permanent injunctive relief to provide a solution for prior unlawful foreclosures and to require that the banks, going forward, register assignments and other documents in accordance with Massachusetts law."

When asked how much the banks could have to pay out if they lose the suit, Coakley responded, "I can't give you a number, but I can tell you it will be a lot of money."

While several lawsuits have been filed surrounding the subprime mortgage mess that resulted in the biggest housing crash since the Great Depression, this is the first state suit over alleged fraudulent documentation in foreclosure processing. The state of Nevada recently made foreclosure documentation fraud a criminal act.

The big banks are currently in negotiations with state attorneys general and the federal government over a settlement that could cost those banks $20 billion. Those talks, however, have been going on for over a year, with Massachusetts, New York and Delaware attorneys general no longer participating, and California's attorney general the main hold out. This now hits the banks in addition to that potential settlement.

"We are disappointed that Massachusetts would take this action now when negotiations are ongoing with the attorneys general and the federal government on a broader settlement that could bring immediate relief to Massachusetts borrowers rather than years of contested legal proceedings,” a spokesman from JP Morgan Chase tells CNBC.

"We have been cooperating with the Attorney General as she has looked into these matters, and believe we have operated appropriately in compliance with existing laws," said a Citi spokesman.

Meanwhile Iowa Attorney General Tom Miller, who is spearheading the 50 state negotiations, issued a release saying he was informed of AG Coakley's decision. "She also indicated that she'll evaluate the joint state-federal settlement we're negotiating, which we hope to reach soon."

foreclosureCoakley, however, today criticized the banks: "I believe that the banks have failed to offer meaningful and enforceable relief to homeowners for their deceptive practices."

This new lawsuit could be just the beginning of a slew of state suits against the banks if no multi-state agreement is reached.

"To us, this is all about politics," claims Jaret Seiberg, of the Washington Research Group. "Massachusetts Democrats are all getting into election mode even though State Attorney General Martha Coakley is not facing re-election. This action will generate significant attention for Coakley and will help energize the Democratic base."

Seventeen major banks are already facing a lawsuit from the Federal Housing Finance Agency over mortgage securitization issues during the housing boom and the resulting losses to Fannie Mae and Freddie Mac.

The new trend? Rate on 30-year fixed mortgage rises to 3.98%

Rate on 30-year fixed mortgage rises to 3.98%

WASHINGTON – Jan. 27, 2012 – The average rate on the 30-year fixed mortgage rose this week for the first time this month, though it remained below 4 percent for the eighth straight week.

The low rates may be contributing to a slow turnaround in the depressed housing market. Still, many who can afford to buy or refinance a home have already done so.

Freddie Mac said Thursday the average rate on the 30-year fixed mortgage rose to 3.98 percent this week. That’s up from 3.88 percent the previous week, which was the lowest level on record.

The average on the 15-year fixed mortgage also rose to 3.24 percent, from 3.17 percent the previous week. The 15-year mortgage hit a record low of 3.16 percent two weeks ago.

Mortgage rates are low because they tend to track the yield on the 10-year Treasury note, which fell below 2 percent this week.

For the past three months, the 30-year fixed mortgage rate has hovered near 4 percent. Historically low mortgage rates are among the signs that point to a pickup in the housing market this year.

Sales of previously occupied homes rose in December for a third straight month. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.

Still, new homes fell in December, the Commerce Department said Thursday. About 302,000 new homes were sold last year, making 2011 the worst year for new home sales on records dating back to 1963.

High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many don’t want to sink money into a home that they fear could lose value over the next few years.

Builders are hopeful that the low rates could boost sales next year. Low mortgage rates were cited as a key reason the National Association of Home Builders survey of builder sentiment rose strongly in December and January.

To calculate the average rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.

The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for the 30-year loan dipped to 0.7 from 0.8; the average on the 15-year fixed mortgage was unchanged at 0.8.

For the five-year adjustable loan, the average rate rose to 2.85 percent from 2.82 percent. The average on the one-year adjustable loan was unchanged at 2.74 percent.

The average fee on the five-year adjustable loan rose was unchanged at 0.7; the average on the one-year adjustable-rate loan was unchanged at 0.6.
Copyright © 2012 The Associated Press, Christopher S. Rugaber, AP economics writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Cape Coral home prices on the rise

The cities on this list that did go bust, such as Cape Coral, Fla., are beginning to recover, although home prices may still be bouncing around the bottom as buyers (particularly investors) dash in to nab bargains. The likelihood of continued double-digit price increases is slim, especially as more foreclosures come to market.

1. Cape Coral-Ft. Myers, Fla.
One-year change in home prices: 12.1%
Median home price: $100,000
Change in price since peak: -63.4%
Unemployment rate: 10.7%
Foreclosure rate: 1 of every 92 housing units (1.09%)

Sales vary greatly in the Cape Coral region. Photo: Euku at en.wikipedia

Cape Coral epitomized the housing boom and bust, so it's a shocker to see it rank first among cities where prices have risen most. That's especially true given that the rates of unemployment and foreclosure remain high and distressed properties still constitute half of all sales in the metro area, which ordinarily would exert downward pressure on demand and prices.

Sales in this appealing area, with its 400 miles of waterways and access to the Gulf of Mexico beaches, islands and fishing grounds, are steady (and traditionally rise with the arrival of winter snowbirds). The region has just four months' supply of homes for sale, but that figure varies greatly by locale and property type (for example, from less than a month's supply of single-family homes in Lehigh Acres to a year's supply of condos in Ft. Myers Beach).

Here are the four other cities on the list:

5. Rochester, N.Y.

4. Utica-Rome, N.Y.

3. Ann Arbor, Mich.

2. Bridgeport-Stamford, Conn.

The Right Selling Price Affects Your Bottom Line

When you’re selling your home, the price you set is a critical factor in the return you’ll receive. That’s why you need a professional evaluation from an experienced realtor. This person can provide you with an honest assessment of your home, based on several factors including:

• Market conditions
• Condition of your home
• Repairs or improvements
• Time frame

In real estate terms, market value is the price at which a particular house, in its current condition, will sell within 30 to 90 days.

If the price of your home is too high, several things could happen:

• Limits buyers. Potential buyers may not view your home, because it would be out of their buying range.
• Limits showings. Other salespeople may be less reluctant to view your home.
• Used as leverage. Other realtors may use this home to sell against homes that are better priced.
• Extended stay on the market. When a home is on the market too long, it may be perceived as defective. Buyers may wonder, “what’s wrong,” or “why hasn’t this sold?”
• Lower price. An overpriced home, still on the market beyond the average selling time, could lead a lower selling price. To sell it, you will have to reduce the price, sometimes, several times. In the end, you’ll probably get less than if it had been properly priced at the start.
• Wasted time and energy. A bank appraisal is most often required to finance a home.

Realtors have known it for years – Well-kept homes, properly priced in the beginning always get you the fast sale for the best price! And that’s why you need a professional to assist you in the selling of your home. 

Is FHA mortgage the right choice?

* minimum FICO score starting at 620
* 3.5% down payment
* may use gifts or down payment assistance for the 3.5%
* may use 203k loan for financing in repairs
* not just for 1st time homebuyers
* primary residence
* approved FHA condos
* Collier County loan maximum $531,250
* Lee County loan maximum $356,250
* Charlotte County loan maximum $296,250
* Sarasota County loan maximum $442,500

Do you owe federal income taxes in 2013 if you have a short sale, foreclosure?

WASHINGTON – Jan. 9, 2012 – You may owe federal income taxes in 2013 if you have a short sale, foreclosure after this year.

Now is the time to make the hard decision: Are you going to walk away from your underwater home? Uncle Sam is still giving homeowners until Dec. 31, 2012, to go through a short sale or foreclosure without tax consequences – as long as the lender officially releases the debt.

But on Jan. 1, 2013, the rules change: The amount a lender forgives, ether in a short sale or foreclosure, on a primary residence will be taxable on federal income taxes. So if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section. Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter: The banks must officially sign off in writing before Dec. 31.

“It’s a huge issue – it will be a shock to many taxpayers after 2012,” said Mark Steber, the Florida-based chief tax officer for Jackson Hewitt Tax Service. The law first came into affect five years ago as the housing market went bust nationwide. The Mortgage Debt Relief Act of 2007 “generally allows taxpayers to exclude income from the discharge of debt on their principal residence,” according to the Internal Revenue Service. “Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.”

Up to $2 million of forgiven debt can be forgiven this year, $1 million if married and filing separately, according to the IRS. Homeowners declaring bankruptcy could escape paying income taxes on any cancellation of debt income if the debt is forgiven in the bankruptcy even if the debtor is solvent, said Nick Jovanovich, a board-certified tax attorney in Fort Lauderdale, Fla. “Bankruptcy trumps everything,” he said. Or homeowners might not have to pay income taxes on any cancellation of debt income to the extent that they are insolvent immediately before the cancellation – that is, their debts exceed the value of their assets, Jovanovich added. Steber and Jovanovich said homeowners should decide now what they are going to do – to give themselves time. Short sales can take a long time, said Timothy Singer of Coldwell Banker in Fort Lauderdale. He said he knows of one that had been pending for three years. But lenders “have been gearing up” and speeding up the process, Singer added. But even if banks quickly approve a short sale, the would-be buyer may get cold feet and the deal fall through, Singer said. Then the sellers have to begin again, he said. Copyright © 2012 the Sun Sentinel (Fort Lauderdale, Fla.), Donna Gehrke-White. Distributed by McClatchy-Tribune News Service.

What to expect at Closing

Here, at Secret Places Realty, Inc, we like to keep our clients at ease in every step of the buying or selling process. The closing day is the BIG day. 

You've survived house hunting and the bidding and negotiating on your new home, and now it's time to make it yours. But to do so, you have to sit down with various people, which may include the seller, your real estate agent, title and mortgage company officials and possibly your attorney at what's known in real estate lingo as the "closing table."

At closing, you will close on the purchase of your new home, and if you are taking out a mortgage, on your home loan, as well. The whole process may take about an hour. Here's what's expected of you:

• Complete the walkthrough

  Before the actual closing, you'll most likely have the opportunity to perform a walk through of the property and confirm that the condition of the home is as it should be, as specified in the sales contract.
  

  We realtors at Secret Places Realty are prepared to do this walk through with you or even on behalf of you, should you not be in town at the time of closing. We have a check list to make sure no crucial issue will be overlooked.

• Bring enough cash

  At closing, you'll be paying for your share of the closing costs, and will be bringing the down payment, so be sure to bring a certified check or a cashier's check. Your lender will provide a lender's check for the remaining balance that's due on the home.

  Your HUD Uniform Settlement Statement (which both you and the seller will sign) will detail the closing costs (plus all the monies involved in the transaction), as well as who is expected to pay them.
  

  We realtors at Secret Places Realty Inc. get the HUD statement sent to us for approval. This also gives us the opportunity to talk and walk you through the two pages document. So you get a chance to ask questions before sitting down at the closing table and signing at the "dotted line"!
  Never hesitate to contact us, if you have any questions!

• Show id

  You will also be required to show proof of your identification, such as your driver's license or passport.

• 

• Proof of insurance

  Bring a copy of and proof of payment for your homeowner's insurance, plus your flood insurance policy, if you have one. Your lender may want to review these before allowing you to close on the home.

• Sign on the dotted line

  To transfer ownership of the home, both the buyer and seller will be required to sign several documents.

  You may be required to review and sign the purchase agreement, a promissory note for your loan, mortgage documents, title documents, the settlement statement and the truth in lending statement (which will outline the costs of your loan, your payment schedule and amount financed), while the seller will also sign the settlement sheet -- and, importantly -- the deed to the home to transfer ownership of the property to you. Copies of these documents will be filed at the county recorder's office, but be sure to keep your own copies as well.

• Take the keys!

  Once all the necessary paperwork is completed and everything is in order, you will be given keys to the home. While you will no doubt immediately change the locks upon moving in, the keys are the final sign that the home is indeed yours.
  

  We realtors at Secret Places Realty, Inc. are looking forward to go with you all the way and take you from the closing table to your new home ... with a little house warming gift waiting for you and to thank you for allowing us to be of assistance.

  

Warum Sie einen Immobilienmakler beauftragen sollten

Qualifizierte und kompetente Makler begleiten Sie bei den Tausenden von Entscheidungen, die beim Hauskauf bzw. -verkauf getroffen werden müssen. Ausgebildete professionelle Makler sind in vielfältiger Weise für Sie wertvoll.

• Wir übernehmen die Kosten für Werbung und Marketing Ihrer Immobilie
  
• Wir bringen Erfahrung, Sach- und Fachkenntnis in allen Bereichen des Verkaufsvorgangs ein, einschließlich Marketing, Finanzierung, Verhandlung und vieles mehr.
  
• Wir übernehmen für Sie alle Showing Termine
  
• Wir verfügen über ein verzweigtes Netz von gut beleumundeten Kollegen im Bereich Immobilien. Sollten wir Makler einmal nicht die Antwort haben, dann kennen wir aber jemanden in der Branche der weiterhelfen kann.
  
• Wir vertreten Ihre Interessen und stehen Ihnen zur Seite.
  
• Wir beraten Sie in allen Preis- und Vertragsverhandlungen und agieren in Ihrem Sinne.
  
• Wir zeigen Ihnen rückhaltlos alle Möglichkeiten und Chancen auf.
  
• Wir geben Ihnen eine objektive und unvoreingenommene Einschätzung Ihrer Immobilie und Ihrer Möglichkeiten.
  
• Wir haben, anders als Käufer und Verkäufer, keine emotionale Bindung an das Objekt.
  
• Wir helfen Ihnen, die richtigen Fragen zu stellen.
  
•  Wir erfahren von einem Käufer eher die Wahrheit darüber, was er von Ihrer Immobilie hält, auch wenn sie nicht schmeichelhaft sein mag. Damit können wir Ihnen helfen, die nötigen Veränderungen am Preis oder an der Immobilie selbst vorzunehmen, damit sie verkauft werden kann.
  
•  Ihre Zeit ist kostbar. Indem Sie mit uns zusammen arbeiten, können Sie Ihre Zeit nach Ihren Wünschen verbringen.

Contingency sale offers become more acceptable

NEW YORK – Dec. 15, 2011 – It can be difficult for homebuyers to make a purchase without selling their current residences, or for sellers to hand over the keys to their home without having located a new place to live.

Although less common in active housing markets, offers contingent on the sale of the buyer’s home are more acceptable these days – especially among sellers whose homes have languished on the market, and they’re happy simply to receive an offer.

Multiple deals can fall apart if just one party in a contingency arrangement can’t sell or get financing, but several steps can minimize the risks. Buyer’s and seller’s agents must cooperate, with the seller’s agent determining whether the buyer’s home is likely to move during the specified period, and maybe even helping set the price or stipulate when the asking price must be lowered.

To prevent buyers from looking for a better deal, sellers should limit the contingency to 30, 60 or 90 days. Some experts recommend that buyers not look for a home until their current residence is under contract, noting that listings come on the market all the time so they should not worry about finding a “perfect property.”

Source: Chicago Tribune (12/09/11) Richardson, Kari

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

Scheduled home auctions hit 9-month high in Nov.

LOS ANGELES (AP) – Dec. 15, 2011 – Fewer U.S. homes entered the foreclosure process or were taken back by banks in November, reflecting a seasonal pullback in foreclosure activity by lenders and mortgage servicers.

But for some homeowners already behind on their mortgage payments, the end-of-year slowdown isn’t likely to provide much of a reprieve.

The number of homes in foreclosure and scheduled to be auctioned hit a nine-month high last month, foreclosure listing firm RealtyTrac Inc. said Thursday.

The surge came about because of a spike three months earlier in homes entering the foreclosure process for the first time. And unless those borrowers find a way to get current on their mortgage payments, many of those homes will likely be sold at auction or end up being taken back by the lender.

“Despite a seasonal slowdown similar to what we’ve seen each of the past four years, November’s numbers suggest a new set of incoming foreclosure waves,” said RealtyTrac CEO James Saccacio.

All told, foreclosure auctions were scheduled on 96,540 U.S. homes last month, RealtyTrac said. That’s up 13 percent from October, but still down 17 percent from November last year.

Some states posted far higher monthly increases in scheduled home auctions last month. In California, they were up 63 percent, while in Washington they climbed 56 percent.

Those homes could end up back on the market as foreclosures or short sales, when a homeowner sells their property for less than what they owe on their mortgage. And that means more pressure on home values, because foreclosures and short sales typically sell for a lot less than other homes.

U.S. foreclosure activity slowed sharply starting in October of last year, after problems surfaced with the way many lenders were handling foreclosures. Specifically, signing off on home foreclosures without first verifying documents – a practice referred to as “robo-signing.”

Many of the nation’s largest banks reacted by temporarily ceasing all foreclosures, re-filing previously filed foreclosure cases and revisiting pending cases to prevent errors.

The pace of foreclosure activity continued to slow much of this year as major lenders worked toward a possible settlement of government probes into the industry’s mortgage-lending practices.

Those settlement talks, led by a group of state attorneys general, have suffered some setbacks in recent months after officials in California and Massachusetts broke with the rest of the states. There also has been disagreement among the states’ prosecutors over what terms to offer the banks.

Still, there have been signals that foreclosure activity will be increasing in coming months.

Banks stepped up action in August against homeowners whose mortgage had gone unpaid. The number of homes receiving an initial notice of default that month jumped 33 percent from July. Default notices also rose between September and October.

That helped set the stage for the sharp increase in scheduled foreclosure auctions last month and will likely contribute to an anticipated bump in home repossessions early next year, Saccacio said.

Home repossessions hit their lowest level since March 2008 last month, according to RealtyTrac. In all, banks took back 56,124 homes last month, down 17 percent from October and from November a year ago.

Banks are now on track to repossess some 810,000 homes this year, down from more than 1 million last year, according to RealtyTrac. The firm had originally anticipated lenders would repossess some 1.2 million homes this year.

High unemployment, a sluggish housing market and falling home values remain a major factor in homeowners falling behind on their mortgage payments. Many borrowers also have simply stopped paying their mortgage because they are underwater – a term for owing more on a mortgage than the home is worth.

At the end of September, 10.7 million, or 22.1 percent of all U.S. homes with a mortgage, were underwater, according to CoreLogic. And an additional 2.4 million borrowers had less than 5 percent equity in their homes, the firm said.

In all, 224,394 U.S. properties received a foreclosure-related notice last month, down 3 percent from October and down 14 percent from November last year, RealtyTrac said. That amounts to one in every 579 households.

Initial default notices declined 8 percent from October and were down 9 percent from November last year.

At the state level, Nevada had the nation’s highest foreclosure rate last month with one in every 175 households receiving a foreclosure notice – more than three times the national average.

California, which alone accounted for 28 percent of all U.S. homes receiving a foreclosure notice last month, had the second-highest foreclosure rate. Arizona was third.

Rounding out the top 10 states with the highest foreclosure rate in November are Utah, Georgia, Michigan, Florida, Illinois, Ohio and South Carolina.
Copyright © 2011 The Associated Press, Alex Veiga, AP real estate writer.

Ft. Myers home prices climbing

It's in the media everywhere!
By: Gulf Coast Business Review
December 14, 2011

FORT MYERS — The median price for Fort Myers residential properties sold in November is $103,900 — up 25% over the year, according to the REALTOR Association of Greater Fort Myers and the Beach, I
In November 2010, the median sale price was $83,400.
For the month, 963 properties were sold, down slightly from last year (972 closings). Year to date, Fort Myers residential closings are down 5% from the same time in 2010, with 14,082 properties sold this year.
But while sales have slowed, November marks the fourth time this year that the median sale price for residential properties came in at $100,000 or higher. Between 2009 and 2010, the median price never reached that mark, and only ever exceeded $90,000 just three times.
The price increases are being caused by a decrease in foreclosure sales as a percent of all area closings. In November, less than half of all sales in the area involved distressed properties; in January, the ratio was at 66.5%, the REALTOR Association says.

NAHB: Flawed appraisals killing more deals

WASHINGTON – Dec. 12, 2011 – In many recent cases, new homes are being appraised for less than the cost of construction, according to the National Association of Home Builders. Builders are blaming flawed appraisals for holding back the housing market’s recovery, saying that new homes should not be compared to foreclosed homes that have sat vacant and are in disrepair.

“The inappropriate use of distressed and foreclosed sales as comparables in determining new home values is needlessly driving down home prices, killing home sales, causing more workers to lose their jobs and delaying a housing and economic recovery,” says NAHB Chairman Bob Nielsen.

Sixty percent of builders say they’ve had problems with appraisals coming in below their contract sales price, according to a recent survey by NAHB. One out of three say they’ve had signed sales contracts canceled in the last six months because appraisals were less than the contract sales price.

In a separate study by the National Association of Realtors® from June, 16 percent of real estate professionals also reported an increase in deals being canceled mostly due to low appraisals.

“This is not only unfair and unreasonable, but it perpetuates the cycle of declining home values, drives more homeowners underwater, harms local economic activity and acts as an obstacle to the recovery of the housing market,” Nielsen said in a statement.

NAHB is calling on regulators to make major reforms to appraisal practices and oversight to prevent flawed appraisals from continuing to hamper a housing market recovery.

© 2011 Florida Realtors®

Mixed reviews for luxury homebuyer visa bill

 MIAMI – Dec. 12, 2011 – Buy a house for half a million dollars and get a visa to stay in the United States for three years. That’s part of a bill in Congress that aims to stoke the weak U.S. real estate market by luring more wealthy foreign buyers. But the plan is getting mixed reviews in South Florida, one of the country’s hardest-hit housing markets. Critics say the incentives for foreign investors, as written, won’t attract many buyers. For example, the bill does not let foreigners work while they’re here, and it does not offer them a path to permanent residency. That’s what many Chinese investors want, said developer Lon Tabatchnik, who is luring Chinese investors to his Margaritaville hotel project in Hollywood with a different visa program. “The Chinese aren’t coming here for a three-year vacation,” Tabatchnik said. “They’re coming here to work and educate their children.” The bill also would classify the housing investors as full-time residents, requiring them to pay U.S. taxes on their worldwide income. Many Latin Americans and Europeans now buy U.S. real estate as an investment but don’t stay full-time, so they won’t be taxed on their global holdings, said immigration lawyer Larry Behar of Fort Lauderdale. The provisions are part of a bill co-sponsored by Sens. Charles Schumer, D-New York, and Mike Lee, R-Utah, that would change travel visa programs to lure more foreigners to America. Its real estate portion would let foreigners stay in the country for three years if they invest at least $500,000 in housing, including at least $250,000 for what would become their principal residence. The travel visa could be renewed. Many Florida lawmakers are still studying the bill, dubbed VISIT-USA. Some say they’re encouraged by creative efforts to reduce the state’s glut in housing. “In Florida, if we can help the real-estate market, we can help the general economy,” said Rep. Ted Deutch, D-Boca Raton. He said the terms of the bill could be tweaked to boost its effectiveness. Travel leaders in South Florida give rave reviews to provisions that would modernize the visa process. It now can take three months for qualified applicants in Brazil and China to get U.S. travel visas. The bill would let foreigners pay extra to get their visas processed within three business days and let U.S. officials interview applicants by video conference to speed approvals, among other measures. But details of the travel visa-for-homes proposal are prompting the most concerns locally. Behar said the new bill might distract Congress from extending a different law that brings foreign investment to job-creating ventures. The employment-based visa program, known as EB5, is helping fund Miami’s Life-Science Technology Park and other regional projects. EB5 will expire Sept. 30 unless renewed. “At the end of the day, it really has to be about job creation for Americans,” Behar said. The Schumer-Lee bill does not require that new jobs be created. Said developer Mo Abbas, who promotes EB5 projects in Hollywood: “In my opinion, the bill will result in sellers’ inflating residential prices so their homes qualify for the proposed three-year tourist visa. What we need is long-term investment, not a quick fix.”

Copyright © 2011 the Sun Sentinel (Fort Lauderdale, Fla.), Doreen Hemlock. Distributed by MCT Information Services

2012 mortgage delinquencies seen dropping sharply

Mortgage delinquency rates – the ratio of borrowers 60 or more days behind on their payments – will likely tick up to about 6 percent through the first three months of 2012, TransUnion said in its annual delinquency forecast issued Wednesday.

But by the end of next year, it could drop to 5 percent, TransUnion said. That’s well off the peak of 6.89 percent seen in the fourth quarter of 2009.

Chicago-based TransUnion’s forecast takes into consideration several factors, including expectations that consumer confidence and the economy will improve next year.

Also, banks are expected to get a good portion of pending foreclosures off their books next year, said Charlie Wise, TransUnion director of research and consulting.

Banks are still working through a backlog of foreclosures created by issues including the robo-signing scandal, in which bank officials signed mortgage documents without verifying the information they contained. The issue surfaced last year in areas with large numbers of foreclosures, and banks had to backtrack and review foreclosures across the country to make sure their paperwork was in order.

That slowed down the process, Wise said, and left mortgages listed as delinquent for longer than they otherwise might have been, temporarily boosting delinquency rates.

Economic uncertainty has also contributed. In the third quarter of 2011, mortgage delinquencies saw their first uptick in six quarters, largely fueled by concerns over the economy as lawmakers were debating the U.S. debt ceiling and Europe’s debt crisis was unfolding.

Helping to cut the mortgage delinquency rate are a slowly improving job market and a stabilizing housing market.

While the drop will be significant, the rate will remain well above the pre-recession average of 1.5 to 2 percent.

“We have a long way to go to get back,” said Steven Chaouki, a TransUnion vice president.

The situation with credit cards is much stronger. Card delinquencies – payments late by 90 days or more – dropped to their lowest levels in 17 years during the spring, then saw a slight increase in the third quarter, but still remained near historic lows.

TransUnion expects further edging up in the current quarter and the first three months of 2012, but then late payments on bank-issued cards should fall again.

One reason card delinquencies are expected to remain so low is that credit is much tighter than it was before the recession. TransUnion data showed that nearly a quarter million new card accounts were opened by people with less-than-stellar credit scores during the third quarter, which contributed to the slight increase in late payments during the summer months. But banks are mainly still going after consumers with top-tier credit histories.

“Lenders are willing to lend, but are still pursuing the best customers,” said Chaouki.

TransUnion predicts by the end of 2012, just 0.69 percent of cards will be considered delinquent, down from a predicted 0.74 percent in the current quarter. The rate has wobbled in the last few years, peaking at 1.36 percent in the fourth quarter of 2007, then dropping and bouncing back up to 1.32 percent in the first quarter of 2009.

The figures reflect a shift in which debt payments consumers consider most important, largely because home prices fell so far.

Chaouki said the conventional wisdom before the Great Recession was that homeowners would put their mortgages first because of concern about their reputation and the emotional attachment involved in owning a home. But what has become clear as housing prices have continued to fall, he said, is that bill payment is far more practical.

“People were protecting their home equity,” he said. Credit cards were relatively easy to come by in years past, he said, so when money got tight, it was an easy decision to default on cards and maintain house payments. Now it’s common to owe more on a mortgage than a house is actually worth, but credit cards are harder to get. So consumers are being practical and protecting what is more valuable to them.

He said he expects the equation will shift again if housing prices rebound and people go back to building home equity.
Copyright © 2011 The Associated Press, Eileen A.J. Connelly, AP personal finance writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.