Renting in South Florida is Among Toughest in the U.S.

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The tri-county region is being hit the hardest among the nation by the ever increasing rental properties.

South Floridians bear the heaviest burden when it comes to rent in comparison to the rest of the country. According to a report from the Harvard Joint Center for Housing Studies, 62 percent of the tri-county renters pay a minimum of 30 percent on their income on housing costs alone, while thirty-five percent shell out at least half of their gross income on rent.  In the nation’s 100 largest metro areas, these two percentages are the highest.

Analysts advise monthly housing costs should not be more than 30 percent of the consumer’s salaries. However, this is significantly difficult in South Florida due to flat wages and the ever increasing competition for rentals. This is mostly common among young professionals and former homeowners. To make matters worse, builders are making up for lost time from years of almost no apartment construction to luxury apartments popping up like daisies that are largely unaffordable to lower and middle classes.

The newly opened Mark at Cityscape in Boca Raton are renting for more than $3,000 a month, while a 700 square foot studio in Fort Lauderdale at Manor at Flagler Village is around $1,750 a month. The Reinhold P. Wolff Economic Research in Oakland Park states that in Broward County the monthly rent went up around 8 percent from last year, averaging out to $1,553 a month. Rents in Palm Beach County rose 6 percent from a year earlier making them about $1,520. Miami-Dade County’s average rent is $1,609, 5 percent higher than last year.

The U.S. Census Bureau data show the average household income in South Florida is about $48,458 last year, which is $5,199 less than the U.S. figure of $53,657. In the largest metro areas surveyed by the Census Bureau, only Tampa had a lower median household income than South Florida. Daren Blomquist, a vice president of RealtyTrac, a foreclosure listing firm in Irvine, Calif., said he sees little relief in sight. While rent increases will level off, he said, builders will continue to push for luxury communities because those deliver the greatest profit margins. Consumers who purchase homes will have less expensive monthly payments than those who rent, however they face the problem of coming up with a down payments which is harder to do with the increases in rent.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Foreclosed homes to be rehabilitated for new buyers in South Florida

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The playing field is starting to even out as first time buyers are going to have first choice at properties of $175,000 or less thanks to Neighborhood Stabilization Initiation Program.

The housing organization in South Florida have been given the opportunity to purchase over 2,000 homes in foreclosure that could ultimately end up with individual homebuyers. The Federal Housing Finance Agency stated it is broadening its Neighborhood Stabilization Initiation to South Florida and 17 other metro areas across the nation.

Since the beginning of December, housing groups have been given the opportunity to purchase properties valued at $175,000 or less before making them available to the general public. Such groups can then renovate, rent and or resell them to such individual who meet the income qualifications.  Some properties will be torn down all together and rebuilt.

The properties under foreclosure are owned by mortgage companies Freddie Mac or Fannie Mae. All of whom are overseen by the FHFA. The program started last year in Detroit and later in the Chicago area. Rob Grossinger, the president of the National Community Stabilization Trust, nonprofit partners with Freddie, Fannie and community housing groups nationwide, stated that the homes will pay a big role for first-time buyers who have been struggling to get in the housing market. The program, however, is not designed for buyers in higher price rangers where there continues to be a shortage of listings.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Foreclosures in South Florida are Gradually Improving

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Florida was one of the states hardest hit by the housing crash, but things are looking up for South Florida.

New foreclosures dropped dramatically across South Florida last month, though the number of repossessed homes by banks has increased as the courts are clearing up the dockets. According to RealtyTrac, there has been a 53 percent decline since November of 2014 in foreclosure filing in South Florida. In November there were just 831 foreclosure law suits in Palm Beach, Broward and Miami-Dade Counties. Since RealtyTrac began counting in January 2006, this has been the fewest number of new foreclosure filings for the tri-county region.

The collapse of the housing bubble began in 2006. Many buyers who paid too much for the properties lost their jobs and weren’t able to refinance those taxing mortgages. However, in 2012 prices eventually bottomed out and the housing climate has steadily improved since then. A vast amount of the homes that went into foreclosure during burst of the housing bubble have clogged the system for years, but the courts are handling the situation better by getting rid of the backlogs. The tri-county region had an increase of 45 percent from last year in repossessions last month, by repossessing 1,845 properties.

“Bubble loans” or loan taken out between 2004 and 2008 are the majority of the loans that are in the foreclosure backlog right now. In the past couple of years, the Sunshine State has been at the top of the list of the nation’s highest foreclosure rate, but Florida has seen a 36 percent decline in new foreclosure law suits in the last month. Florida still has the third highest foreclosure rate in November with one in every 662 units in foreclosure.  Palm Beach, Broward and Miami-Dade counties were ranked 12th nationwide, at one in every 645 homes at some stage of foreclosure.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Broward’s Foreclosure Division Needs Senior Judges

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After damaging budget cuts, loss of staff, and downsizing of judges, Broward County’s foreclosure division will need to borrow from less affected circuits by the housing market their allocation of senior-judge days .

Broward County’s foreclosure division is going to need all the help it can get in the next few months to keep its head above water. After several layoffs, harsh budget cuts, and the county taking a huge hit during the collapse of the housing market, it is going to take nothing short of a miracle for the thousands of foreclosure cases to work through the already clogged dockets. The foreclosure division has taken yet another hit after state legislators were unsuccessful in renewing the funds to pay senior judges. However, in spring Broward Circuit Chief Judge Peter Weinstein will present a plan to circuits less affected by the housing crisis to borrow from their allocation of senior-judge days.

Although the majority of the cases last hours, some take up entire mornings or afternoons, thus continuing to hinder the already overloaded division and its judges. The worst might be over, but the fallout from the market crash continues to plague the Broward court system. The court’s 11th Division handles foreclosure cases from 2011 to present date had 6,023 pending cases during September.  That same month, it had 363 new filings, reopened 955, but only disposed of 774. “We’re doing what we can, but it’s a big caseload,” Weinstein said.

Broward Circuit Court still receives hundreds of new filings each month since the housing bubble imploded eight years ago. The 363 new filings during September was the second lowest number of foreclosure filings in the last yet, January’s 350 new suits being the first.  This is a much lighter caseload in comparison to the first three months of 2013, where the enormous caseload was in the upward of 40,000 pending foreclosure. After resolving tens of thousands of pending law suits, October 2014 saw a significant smaller backlog, with 543 new filings, 1,100 reopened cases, disposed of 1,584 and left about 13,100 still making its way through the clog. But clearing up the backlog, in combination with lower new filings had its pros and cons.

In September, the Clerks of Court Operations Corp., which certifies the proposed budget for the state’s 67 clerks, estimated a $24 million statewide cut. The group relies on a state trust fund that during a time was flushed with court fees and costs at the height of the foreclosure crisis that legislators diverted a portion of that revenue to cover other expenses. But as foreclosures faded, clerks said not enough money entered or remained in the till. It meant a reduced budget of $444 million for Florida’s clerks and a 5 percent statewide budget cut. Broward County had a $2 million reduction from a $40 million budget which meant a hiring freeze, on unpaid furlough day every month through October and cutting operation hours to the public from 4pm to 3:30 pm. The office also had to lay off 17 employees and lost another 14 more to resignations.

All of South Florida was affected by the budget cuts. Miami lost $3.45 million of its $69 million budget and 130 employees, and Palm Beach County struggled with the $2.6 million shortfall. As we all know, South Florida was one of the regions hit the hardest by the housing collapse. What normally would be 13 case managers and two employees doing case management work to assist in speed litigation, Broward was left with just four staffers.  The court took yet another blow as it had hiring General Magistrate Lisa Dolin Eiss in 2013 as a full-time foreclosure magistrate, but was forced to eradicate her position due to budget cuts. Then in October, as part of the fallout from her arrest for driving under the influence, Broward Circuit Judge Lynn Rosenthal stepped down from the bench, leaving a courthouse vacancy unlikely to be filled before January.

Court spokeswoman Meredith Bush state that without the special foreclosure funding, the circuit will need to draw from the general annual allotment of senior judge days to handle foreclosures. The changes leave one full-time senior judge assigned to the foreclosure division, and three senior judges working on rotation to cover two part-time shifts. “We’re doing everything we can to keep the foreclosure division functioning. …. We’re doing the best we can, and I think doing a pretty good job of keeping everything going,” Weinstein said. “It’s quite a job.”

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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South Florida’s Zombie Foreclosures Have Plunged

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Zombie foreclosures, or abandoned properties facing foreclosure, have decreased tremendously within the last year and both lenders and borrowers are reaping the benefits.

Zombie foreclosure, or abandoned properties that are going through the foreclosure process, have had a dramatic decline in South Florida in the past year. According the RealtyTrac’s Zombie Foreclosure Alert, there has been a 46 percent decline in Zombie Foreclosure during the second quarter of litigation, which translates to about 7,021 properties. An attorney from Royal Palm Beach attributes this to higher knowledge of the law. Residents are aware that they are not required to leave the property until it is sold. This is a great benefit to both parties.

The average value of a property that remains occupied during the foreclosure process is $251,236. Once a property turns into a Zombie Foreclosure it loses about 22 percent of its value, knocking it down to $195,856. It is in the banks best interest for a property to remain occupied during the foreclosure process as zombie properties tend to have overgrown yards and incur fees for municipal code violations. Abandoned homes also tend to have mold issues which could become costly for the bank to amend. Empty homes tend to bring down the value of all homes around it, which eventually turn in to ghost neighborhoods, where every other property is deserted.

However; lenders are more inclined to offer loan modifications to keep borrowers in their homes and rehabilitate former nonperforming loans as the economy improves. An attorney from Miami who represents lenders stated that they are getting increasingly more wary and tired of the litigation process. They prefer to extend the option of loan modifications to borrowers to avoid the year to two year wait for the foreclosure process to be complete.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Supreme Court Declares 2nd Liens Can’t be Stripped in Chapter 7 Bankruptcy

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The Supreme Court ruled in favor of Bank of America to stop second lien stripping in Chapter 7 bankruptcies.

Banks win out after the Supreme Court ruled on Monday that homeowners cannot rid themselves of a second mortgage by filing for bankruptcy protection.  All nine Supreme Court justices unanimously agreed that filing for Chapter 7 bankruptcy will not void a junior mortgage lien when the amount owed by the senior lien surpasses the current amount of the collateral if the homeowner’s claim is both allowed under the bankruptcy code and is secured by a lien. This ruling allows the junior lienholders to collect on loans in the event a debtor files bankruptcy and treat the subordinate loan as secured in bankruptcy proceedings.

The ruling, which will mainly benefit commercial lenders, states that the bankruptcy courts are forbidden from “stripping off” junior liens on property if the value on said property is used as collateral is below the amount the homeowner owes to the principal lienholder. Bank of America v. Caulkett, where the Supreme Court ruled in favor of Bank of America and the new bankruptcy ruling originated, asserted that junior liens should not be considered as unsecured loans, because the bankruptcy code only “strips off” claims from property that are disallowed and because the Supreme Court’s ruling in Dewsnup v. Timm, disallowing “stripping down” of primary liens to the value of the underlying property, should extend to this case.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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South Florida Had An Increase Of Foreclosure Activity In March

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March broke the 17-month high everyone was riding on with an increase in foreclosed homes.

According to a study by RelatyTrac March had an increase of foreclosure activity, reversing months of declines.  February had 4,577 filings in the tri-county area but during March the foreclosure filings went up to 6,329 for the tri-county area. The filing counts as a repossession, a judgment, or a new foreclosure lawsuit.  Broward County was at the top of the tri-county area with 3,169 foreclosure filings during March.  This is a 58 percent increase from February and a 68 percent increase from March of 2014.  Miami-Dade County followed with 1,872 foreclosure filings in March, which is a 29 percent increase from February but a 49 percent decrease for March of last year.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Personal Bankruptcy Petitions Drop in March

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The tri county area has had significant decrease in bankruptcy petitions during March 2015.

Personal bankruptcy filings have dropped 16 percent between February and March throughout South Florida.  This is according to the Sun Sentinel with data that was released in Miami by the U.S. Bankruptcy Court.  There were 2,389 new bankruptcy petitions filed by South Florida residents in February but only 2,008 files in March. Personal bankruptcies have lowered by 32 percent, dropping from the 2,969 filed in March 2010.  This drop shows that consumers are handling their finances better than they did a year ago.

The tri-counties in South Florida show a decrease in bankruptcy filings.  In lead with the most petitions is Miami-Dade County with 979, followed by Broward County with 680, and finally Palm Beach County with one 349 petitions.  The Associated Press reports that the drop in bankruptcy petitions may be the result of home foreclosure cases that have been stalled in South Florida courts.  According to the news source, foreclosure courts were established across the state last year to prevent those hearings from overwhelming the regular circuit court system.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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February Shows Major Improvements for Foreclosures

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South Florida has shown massive decline in new foreclosure filings during February.

A 35 percent decrease in new foreclosure filings can be seen in Broward and Palm Beach counties, showing how the improving economy and higher home prices are benefiting homeowners. In February 2014 Palm Beach County had 342 new filings, February 2015 only 223. Last year Broward County had 690 new filings in February but in 2015 there have only been 448 new filings. However, Florida still has the third highest foreclosure rate across the country with one in every 570 properties facing some kind of foreclosure process.  RealtyTrac reports that although Palm Beach and Broward counties are still seeing some adversity, the overall foreclosure numbers, which include bank repossessions and scheduled auctions, are expected to drop below pre-crisis levels.

New foreclosure filings have decline substantially during this past year. This is mostly due to the improving economy, job advancement, and the increase in home prices. The majority of the foreclosures in the court system right now are leftover from the height of the housing collapse.  South Florida attorneys agree that judges are working tirelessly through the backlog, and are aggressively setting dates for trials and auctions.  A Boca Raton attorney stated that homeowners could respond to a foreclosure lawsuit and put a series of delays that would leave the case sitting for two or three years but that is no longer happening as judges are pushing those cases forward. Data provided by RealtyTrac also shows that February’s figures were the lowest since the housing collapse in July 2006.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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Reset of Loans Causes Increase in Home-Equity Payments

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As Heloc payments are being reset, the risk of defaults has increase immensely.

As interest-only periods expire on loans begun during the housing bubble era, 3.3 million homeowners will be facing higher payments during the next four years on home-equity lines of credit, according to RealtyTrac.   The Heloc loans that totaled at $158 billion are requiring principal paydowns beginning this 2015 through 2018.  There is rising threat over the amount of new defaults due to the new monthly bills increasing an average of $146. This is especially concerning to those homeowners who already have properties underwater.

According to S&P/Case-Shiller index of property values, home prices have gone up 4.5 percent in the last year in 20 major cities. The threat is magnified because slowing price appreciation gives homeowners less hope of gaining equity.  Home prices are 16 percent below their July 2006 high, after recovering 29 percent from the post-bubble low in March 2012, the index shows.

Nearly $88 billion of the Heloc debt that began during the last house bubble is backed by homeowner’s who owe more the 125 percent of the resale value of the property and therefore have less incentive to keep up the with payments. Although the reset that took place in 2014 didn’t increase the default, the expectancy for defaults is high due to the increase of payments whose loans are already underwater. RealtyTrac estimates the peak will be 62 percent in 2016.

There are several states that have a high amount of properties that are seriously underwater and that will have borrowers facing a payment increase.   RealtyTrac reports that Nevada is at 84 percent, Arizona at 74 percent, and Illinois and Florida matching at 71 percent. However, the state of California has the largest amount of loans that will be scheduled for reset- 645,872 to be exact.  Out of those properties, two-thirds of them are seriously underwater with an average Heloc payment increase of $215.

If you have questions about Foreclosure, Loan Modification, Bankruptcy, Short Sale, or other alternatives, please feel free to call my office at 888-886-0020, send an e-mail to emil@fleysherlaw.com, or complete the contact form below.

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