Sunshine State: Darkness at Noon

[don]

22 Percent of Florida Mortgages Non-Current

11Nov09

A staggering 22 percent of all mortgages in the state of Florida are non-current, according to a new report from Lender Processing Services.

By non-current, they mean loans that are either delinquent or in some stage of foreclosure; perhaps more troubling is the fact that 10.4 percent of home loans in Florida are in foreclosure.

The LPS October Mortgage Monitor also revealed that the nation’s foreclosure rate was 3.12 percent as of September 30, up 2.6 percent from a month earlier and 88.9 percent year-over-year.

And remember that’s with all the government intervention, foreclosure moratoria, loan modifications, and the like; the national mortgage delinquency rate was 9.37 percent as of September 30.

The report also highlights the large shadow inventory of foreclosed properties that could wreak havoc on home prices and a possible housing recovery.

“The number of loans deteriorating further into delinquent status is now more than twice the number of foreclosure starts, indicating another major wave of troubled loans in an already clogged loan pipeline,” the company said.

“Nearly one-third of foreclosures remain in pre-sale status after 12 months – twice as many as the year prior. The six-month average deterioration ratio has risen the past two months to 300 percent, showing that for every loan that improves in status, three more deteriorate further.”

The only bit of good news in the report was increased loan production, with year-to-date 2009 loan totals of 2,032,973 (28 percent FHA) versus 1,903,723 (16 percent FHA) for the same period in 2008.

http://www.thetruthaboutmortgage.com...s-non-current/

[bw]

Re: Sunshine State: Darkness at Noon

indicating another major wave of troubled loans

Troubled loans. That's like saying the guillotine victim had neck trouble. Gary Gilmore had some skin integrity troubles, right about where the bullets went in. The last thing many tsunami victims saw was troubled waters.

Ahh, that's better; it's just a little out of adjustment instead of doomed.

[MulaMan]

Re: Sunshine State: Darkness at Noon

Great news. I'm waiting to buy a beach house in Florida.

Called some real estate agents - I'm looking for walking distance to the beach, detached home, Palm Beach to Boca Raton area would be ideal.

Not willing to pay more than $40K cash - inclusive of ALL real estate transaction costs.

[don]

Re: Sunshine State: Darkness at Noon

Great news. I'm waiting to buy a beach house in Florida.

Called some real estate agents - I'm looking for walking distance to the beach, detached home, Palm Beach to Boca Raton area would be ideal.

Not willing to pay more than $40K cash - inclusive of ALL real estate transaction costs.

We are also biding our time but...but...$40K?

[audrey_girl]

Re: Sunshine State: Darkness at Noon

over the last couple of years -just when you think you've seen every thing and you cannot be shocked anymore, this article stuns you

[MulaMan]

Re: Sunshine State: Darkness at Noon

I can't guess the bottom but,

FL is already has lots of homes priced at 80K - 150K for 3/2 tract homes in run of the mill areas, further inland then I want.

I've seen foreclosure pricing in other states, but not florida, but say you take off another 20K if you are agressive, all cash buyer, bargin hunter, have time to bargin hunt, and then you are at 60K - 120K.

Unless we get some serious wage inflation, I see florida going lower.

That is why I say 40K in a average area, not beach front and low HOAs required, then I'm a buyer.

If not, then there is no loss because it is just Florida and there is not shortage of property tax free condo rentals.

[jbm3996]

Re: Sunshine State: Darkness at Noon

I can't guess the bottom but, FL is already has lots of homes priced at 80K - 150K for 3/2 tract homes in run of the mill areas, further inland then I want.

I've seen foreclosure pricing in other states, but not florida, but say you take off another 20K if you are agressive, all cash buyer, bargin hunter, have time to bargin hunt, and then you are at 60K - 120K.
Unless we get some serious wage inflation, I see florida going lower.
That is why I say 40K in a average area, not beach front and low HOAs required, then I'm a buyer.
If not, then there is no loss because it is just Florida and there is not shortage of property tax free condo rentals.

I just moved to CA from FL, and I can personally tell you that FL R/E is in the tank and getting worse. I know alot of people in FL in most of the major locations from Tampa, Palm Bch, Naples, Miami, Jacksonville, and Boca, and anyone selling is having to take a severe beating. A couple I know who also moved from FL bought their FL ocean front 3800sq ft home for $1.7M in 2006 and the highest offer they have had in over 15 months is $600K. Their property taxes are $58,000/yr, and their homeowners insurance is over $40,000/yr. The big factors with the people I know who are moving away from FL are the porperty taxes and homeowners insurance. I had a small home in Florida in a very exclusive neighborhood that was NOT in a FEMA flood zone and my homeowners insurance was over $5,000/yr with a $34,000 deductible AND they would not insure contents over $80K (which did not even cover the art in the livingroom). The property taxes were over $12,000/yr and keep in mind the house was only 1700 sq ft. (small!). Thankfully, I found the last fool to over pay for property in FL, and took the money and ran. In CA I have over 3200sqft, built in 2006, with expansive mountain, valley and coastal views, property taxes of only $10,000/yr and homeowners insurance of $573/yr that covers the entire structure with only a $500 deductible and $300k basic contents coverage with special writers for expensive individual items. I could not even find an insurance company in FL that would issue the special writers for the individual items. Many of my FL neighbors decided to self insure (easy to do if you are worth tens of millions - not exactly my story ) ... and Charlie Christ is useless in effectively dealing with the heavy handedness of the insurance industry in FL. My advice to anyone considering moving to Florida is consider that decision carefully. Personally, I will never go back to Florida, and more and more of my FL skeptical-about-CA friends who have visited me in CA are seeing the light also.

[Tybee Island]

Re: Sunshine State: Darkness at Noon

I can confirm all of the above and feel that $40K will get the job done ultimately.

I would study the Boca Raton area (inclusive of Lighthouse Point and Deerfield Beach) up to Delray Beach, which is the northern neighbor to Boca, closely. You have beachfront, and intracoastal access and I know of dozens if not hundreds of homes that will be waterfront and obtainable for your cash offer in the not too distant future.

My only question, why pay so much? $40K may be a bit heavy.

I have a plan to do the same just to have a fishing shack on the intracoastal. (Perhaps even rebuying the house I sold there in 2005 for a 95%+ discount to what I sold it for.)

And moreover, it has become commonplace now for Sellers to throw their boats into the deal when selling. I am talking Cabo, Contender, Pursuit and Buddy Davis for starters. If you know boats, you can appreciate how severe things are and how much worse it will become.

I am hereby decreeing the I-Tulip Open Fishing Invitational Tournament at my digs in South Florida as soon as the deal is done.........."Hey, is that Metalman and Jay in the pool sipping margaritas?.................Cannonball!!!!

[Jay]

Re: Sunshine State: Darkness at Noon

I am hereby decreeing the I-Tulip Open Fishing Invitational Tournament at my digs in South Florida as soon as the deal is done.........."Hey, is that Metalman and Jay in the pool sipping margaritas?.................Cannonball!!!!

I'm in!

[BiscayneSunrise]

Re: Sunshine State: Darkness at Noon

Also a long time Florida resident, I agree with the general sentiment here.

Because of high property taxes Florida is becoming untenable for retirees.

Hurricane insurance is criminal. I mean really, how many structures collapse or suffer major damage, even in a category 4-5 storm? Drive through neighborhoods of homes built in the 20's or those with substandard construction. They seem to have weathered the storms over the years just fine.

As for specific neighborhoods in south Florida, Lighthouse Point, Deerfield and further south in Hollywood will likely see the greatest depreciations. Other than being on the water, they have no intrinsic desirability. Boca Raton and eastern parts of Palm Beach County will also drop but because those neighborhoods have a certain amount of panache and desirability they should hold up better. Dade has some great areas too. Different kind of demographic but you gotta love Key Biscayne and Ocean Reef.

[Tybee Island]

Re: Sunshine State: Darkness at Noon

Try insuring a place in the Keys! Before this is all over, the banks will pay you to take a property in the Keys!. I am a native of Miami and spent all of my summers as a child between Key Biscayne and Marathon. Looking forward to seeing the Keys revert to how it was in the 1960's.

[don]

Re: Sunshine State: Darkness at Noon

Also a long time Florida resident, I agree with the general sentiment here.

Because of high property taxes Florida is becoming untenable for retirees.

Hurricane insurance is criminal. I mean really, how many structures collapse or suffer major damage, even in a category 4-5 storm? Drive through neighborhoods of homes built in the 20's or those with substandard construction. They seem to have weathered the storms over the years just fine.

Is hurricane insurance mandatory? Including a no-mortgage property?

[Tybee Island]

Re: Sunshine State: Darkness at Noon

Insurance is only mandatory if a lender is involved to protect their collateralized interest. In the event there is no mortgage, the Buyer would either elect to self insure or pay for insurance which is exorbitant for the Keys.

[BiscayneSunrise]

Re: Sunshine State: Darkness at Noon

Is hurricane insurance mandatory? Including a no-mortgage property?

No, it is not mandatory if you own unencumbered.

One thing that is important to know about Florida coastal areas is that even though it may appear to be flat there are very subtle changes in topography.

There is a costal ridge that runs parallel to the shoreline that can be as high as 20' above sea level. Doesn't sound like much but it makes a big difference. If one can find a nice house in the right neighborhood along the ridge then it makes some sense to go "bare" if you dare. Nicest neighborhoods in south Florida that sit high: In Dade County: Cutler Ridge, Coconut Grove, parts of Coral Gables. In Broward: Collee Hammock, Victoria Park. In Palm Beach County; parts of Boca and Delray near Dixie Highway, parts of Lake Worth and W Palm Beach. Unfortunately, most of the really nice neighborhoods along A1A are on barrier island: 'nuff said. The quick and easy rule of thumb is that if you see old growth oak trees you are high ground. Oaks don't like to get their feet wet.

Personally, in a house sitting on the ridge, concrete block construction with a strong roof and hurricane proof windows, I'd have no qualms at all about being uninsured and riding a storm out at home. As a matter of fact, I've done it several times. If you are well constructed and battened down, in a Cat 4 storm the roof will creak like a sailing ship and you'll lose some trees, but that's about it.

[BiscayneSunrise]

Re: Sunshine State: Darkness at Noon

Try insuring a place in the Keys! Before this is all over, the banks will pay you to take a property in the Keys!. I am a native of Miami and spent all of my summers as a child between Key Biscayne and Marathon. Looking forward to seeing the Keys revert to how it was in the 1960's.

Some of the best boating in the world is right there between Key Biscayne and Marathon: Biscayne Bay. An idyllic childhood, no doubt.