Miami-Dade condominium sales were up significantly in September compared to last year, but single-family home sales and prices were down throughout South Florida.
BY TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com
As South Florida's shaky real estate market searches for recovery, an investor group's $1 billion bet on the local condominium market is about to be put to the test.
Starwood Capital-led investor group ST Residential -- in charge of more than 1,200 new condo units in South Florida -- launched its ST Miami initiative this month, announcing plans to release hundreds of new condo units into South Florida's fragile market in the coming months.
Condo sales were the standout figure in the September existing sales report released Monday by the Miami Association of Realtors.
Existing condo sales in Miami-Dade County rose 36 percent in September compared to the same month last year, with 833 sales closed. Month over month, sales were down 2.8 percent, despite a 5 percent decline in median prices. In Broward County, condo sales slid to 828, down 4 percent from September of last year.
Existing single-family home sales continued their descent in September, falling 6 percent year over year in Miami-Dade, with 582 sales. In Broward, year-over-year single family sales dropped 16 percent to 673.
Nationally, the housing market improved in September, with existing sales increasing 10 percent from August.
Prices are still falling in many sectors of the housing market, but ST Residential CEO Wade Hundley said brand new condos have avoided that fate this year, even posting increases.
"Relative to all the other markets in the U.S., Miami is doing well," Hundley said. "We've seen prices increase about 10 to 15 percent since the beginning of the year."
ST Residential became a major player in South Florida's real estate market about a year ago when it bought a stake in the distressed real estate portfolio of failed Chicago-based Corus Bank. In a public-private deal with the Federal Deposit Insurance Corporation, ST Residential bought into a portfolio of condo projects that includes Paramount Bay in Miami, Jade Ocean Condominiums in Sunny Isles Beach and Tao in Sunrise.
The purchase made ST the second-largest owner of developer units in Miami's downtown condo market, behind Jorge Perez's Related Group, and the public-private deal gave the investor group the flexibility to adjust pricing levels.
ST Residential is "coming in at a time when prices have stabilized, and they're creeping upwards, in that Brickell-downtown area," said David Dabby, a real estate analyst with Dabby Group Advisors. "The market is weak overall, but there's enough acquisition activity to begin moving that [developer] inventory."
Dabby noted however, that prices are still 50 percent below where they were four years ago, and not likely to make significant gains anytime soon, since discounted foreclosures and short sales rule the market.
Distressed properties are responsible for more than half of existing home sales in South Florida, dragging down median prices.
In September, year-over-year housing prices fell nearly across the board, with Broward single-family homes standing out as the sole exception. The median priced home in Broward sold for $214,200, up 7 percent compared to last September. Broward condo prices were down 9 percent to $71,600. In Miami-Dade, condo prices fell 25 percent to $99,400, and single-family home prices fell 2 percent to $188,000.
ST Residential plans to relaunch 530-unit Mint on the Miami River into the market in December and will kickstart sales at the 346-unit Paramount Bay on Biscayne Bay north of the Performing Arts Center next year, pricing units "at market" rates, Hundley said.
"We control so much inventory that if we come in at very low price point we could disrupt the market," he said. "And we don't want to do that."
Read more: http://www.miamiherald.com/2010/10/26/1891129/market-bright-spot-condos-in-dade.html#ixzz13rhhj1Qc
Saturday, October 30, 2010
Monday, October 25, 2010
Miami Heat's Big Three a Boon to Neighboring Condos - October 25, 2010
Real estate stakeholders near Miami's arena are counting on LeBron James, Dwyane Wade and Chris Bosh to give an economic lift to neighboring buildings.
By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com
Drivers making their way east on Interstate 395 toward the exit marked "Arenas" can't help but notice the four skyscrapers towering over downtown Miami -- the highway seems to steer directly into them before curving off to the shores of South Beach.
As more cars and more cameras will be taking that exit to the arena where basketball giant LeBron James will bring his talents this season, downtown Miami's condo developers are looking to cash in on the new-found cachet of the Miami Heat team.
Developers of the four skyline-shaping condo towers across the street from American Airlines Arena -- Marina Blue, 900 Biscayne Bay, Ten Museum Park and Marquis Residences -- are hoping James and Co. can increase their buildings' clout and help them sell virgin square feet.
Some say that's already happening.
"You can call the sales office and sometimes not get through to anyone because they're so busy," said Lori Levine Ordover, director of sales for Marquis developer Africa Israel USA. "That bodes well for what's going to happen this season."
With restaurants, retail space and residential units to fill, downtown's stakeholders are bracing themselves for the yet-to-be-known impact of the new Miami Heat, as the regular season starts Tuesday against the Celtics in Boston. The home opener is Friday against Orlando.
Built during the mid-decade developers boom, the four condo buildings closest to the arena symbolize the spectrum of real estate highs and lows in South Florida over the past five years.
Two of the buildings sold out quickly as the market peaked, while two others still have a glut of unsold units available at off-peak prices. Buyers in the properties enjoy top-of-the-line amenities, but many have seen their home values plummet during the market crash. In all four buildings, thousands of square feet of office and retail space sit empty at the base of the towers.
While real estate analysts acknowledge that James' arrival in Miami won't cause a massive condo-buying stampede or heal the city's battered housing market, there is growing evidence that the new Heat lineup is spurring activity in the area around the arena.
At the Marquis, 1100 Biscayne Blvd., a penthouse unit sold for $4.2 million on July 8, the same day James announced he would be joining the Heat. That purchase was the largest amount ever paid for a condo in the downtown area, and the businessman who bought the unit admitted proximity to the arena influenced his decision.
"I'm a big basketball fan and we chose the Marquis because we like the building and the location," said Russell Wright, who has floor-level season tickets for the Heat games. "At first, I was just hoping that Dwyane Wade would re-sign -- I had no clue that LeBron and Chris Bosh would join him."
At Marina Blue, 888 Biscayne Blvd., a Sunny Isles Beach investor scooped up 5,100 square feet of retail space in August, netting the sellers $2.1 million. That investor, Sergey Novov, has drawn up plans to build a microbrewery there.
There are also reports of rising rent prices, game-day sellouts at hotels and soon-to-come hangout spots within walking distance of the arena.
With economists calculating James' impact in Cleveland in the hundreds of millions of dollars during his seven-year tenure there, Miami stakeholders are maneuvering to cash in on the star's presence once the season starts.
"I think downtown is just coming into fruition, coupled with the Heat stars and all that's going on there," said Penni Chasens, a real estate agent who has been selling developer units at 900 Biscayne Bay and the Marquis. "I think it's given us a shot in the arm that we needed."
The four towers are likely to be in hundreds of aerial shots of Miami's skyline during internationally televised Heat games, and each is looking to gain from that exposure.
Here is a look at each building.
MARINA BLUE
The southernmost building among the group, Marina Blue, pitches itself as one of the healthiest buildings downtown. The developer's residential units are completely sold out and the Castle Group, which manages the building, said more than 95 percent of the 516 units are occupied.
The so-called "LeBron Effect" made its mark in the building's retail sector, which had been sitting empty and unheralded for two years.
"The week that the LeBron announcement came -- we sold three commercial units immediately," said Donald Campbell, general manager at the 57-story Marina Blue. "They started construction three days later."
The micro-brewery envisioned by Novov, the investor, is in a frenzy to open as soon as possible, Campbell said.
Another restaurant is set to open there early next year, pitching Brooklyn-style pizza and plasma TVs to sports fans. A sign hanging in front of its undeveloped space plays into the hoops-generated hype: "Pucci's Pizza: Coming soon. Before the playoffs (hopefully)."
A Spain-based advertising agency, Tribeca Media, also scooped up about 5,000 square feet in the building shortly after James announced he'd be joining Wade and Bosh in Miami.
On the residential side, rental interest has grown over the summer. Selling prices averaged about $350 per-square-foot during the boom, and many investors have had to buffer falling values by renting units during the market downturn.
"Some of our investors are taking the opportunity to raise their rent [asking] prices," Campbell said. "If we have someone move out, we'll have someone new in there within the week."
MARQUIS RESIDENCES
Marquis Residences, the tallest of the four structures, probably has the most to gain from increased attention and foot traffic around the arena. The 67-story structure has more than 200 unsold condos, and a recently opened hotel, restaurant and lounge that could benefit from pre- and post-game patrons.
Ordover, the sales director, said the Heat's new lineup has already increased interest in the luxury building, and residential "sales have been good and steady."
She attributes at least three recent sales directly to the Heat effect, including the $4.2 million penthouse purchase. With a typical two-bedroom trading for more than $500,000 at Marquis, that's about $5 million in revenue that can be tied to the team across the street.
As the tallest residential skyscraper in the state, Marquis will stand out as aerial cameras zoom in on the city during more than 30 nationally televised Heat games this season.
Ordover is hoping to parlay that free advertising into increased interest at the building's boutique hotel, and has placed ads in Heat game programs and the team's commemorative yearbook.
One ad for Tempo, the hotel, describes the building as "within three-point range of the arena."
Those kinds of ads will be common this season, Ordover said, as they have already shown results.
"I have a room in the hotel, because I travel back and forth. Now the hotel has so many nights of 100 percent occupancy that they're kicking me out," she said. "And it's directly correlated to the Heat games."
Out-of-town visitors searching online for the closest hotel to the arena will find Tempo listed at the top, 0.3 miles away, another marketing boost for the hotel, which opened in June. Rooms start at about $229.
The hotel has bought into the Heat mania, with player-based room specials tied to Wade, Bosh and James.
900 BISCAYNE BAY
The 900 Biscayne Bay condo tower, built in 2008, also has a large number of condos left on its rolls. The building has nearly 130 of its 509 developer units available and sold 18 units between July and September, according to data from real estate consultancy Condo Vultures.
Peter Zalewski, principal at Condo Vultures, said that with units going for $500,000 and more in buildings like 900 Biscayne Bay, the Heat effect will be limited.
"I don't think anyone is going to buy a residential property because of LeBron," he said. "But I do think that they're going to go to the bars and restaurants and get more comfortable with the area."
Owners of Miss Yip restaurant are counting on those expected bar-hoppers to help boost sales at the Chinese eatery's new downtown location at 900 Biscayne.
Shortly after the Heat play their first home game, the Chinese restaurant will open its downtown Miami branch, said Deniz Kose, the restaurant's manager. Miss Yip, a mainstay in Miami Beach since 2003, had contemplated expanding downtown long before this summer, but the Heat's revamped team was the tipping point.
"We have a lot of customers coming from downtown saying `I wish you had a location near me,' so it's the demand and supply thing," he said. "We expect to have even more people for the basketball games."
Still, the Heat effect at 900 Biscayne has been limited -- the building has a good chunk of vacant retail space near its bottom that has been for sale for more than a year.
TEN MUSEUM PARK
Ten Museum Park sold nearly all of its 200 units soon after being completed in 2007, and many boom-time investor-buyers have seen an uptick in rental interest this summer, said Shelly Abramowitz, owner of Museum Park Realty.
Those renters have helped the building reach near-full status, as they dish out $1,700 and more each month for one-bedrooms there.
The building has been a draw among the young professional crowd seeking big-city life, Abramowitz said.
"This neighborhood is spreading its wings right now by adding all these entertainment options," he said.
"That was what was missing before."
Read more: http://www.miamiherald.com/2010/10/24/v-fullstory/1889670/miami-heats-big-three-a-boon-to.html#ixzz13OqkL2DY
By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com
Drivers making their way east on Interstate 395 toward the exit marked "Arenas" can't help but notice the four skyscrapers towering over downtown Miami -- the highway seems to steer directly into them before curving off to the shores of South Beach.
As more cars and more cameras will be taking that exit to the arena where basketball giant LeBron James will bring his talents this season, downtown Miami's condo developers are looking to cash in on the new-found cachet of the Miami Heat team.
Developers of the four skyline-shaping condo towers across the street from American Airlines Arena -- Marina Blue, 900 Biscayne Bay, Ten Museum Park and Marquis Residences -- are hoping James and Co. can increase their buildings' clout and help them sell virgin square feet.
Some say that's already happening.
"You can call the sales office and sometimes not get through to anyone because they're so busy," said Lori Levine Ordover, director of sales for Marquis developer Africa Israel USA. "That bodes well for what's going to happen this season."
With restaurants, retail space and residential units to fill, downtown's stakeholders are bracing themselves for the yet-to-be-known impact of the new Miami Heat, as the regular season starts Tuesday against the Celtics in Boston. The home opener is Friday against Orlando.
Built during the mid-decade developers boom, the four condo buildings closest to the arena symbolize the spectrum of real estate highs and lows in South Florida over the past five years.
Two of the buildings sold out quickly as the market peaked, while two others still have a glut of unsold units available at off-peak prices. Buyers in the properties enjoy top-of-the-line amenities, but many have seen their home values plummet during the market crash. In all four buildings, thousands of square feet of office and retail space sit empty at the base of the towers.
While real estate analysts acknowledge that James' arrival in Miami won't cause a massive condo-buying stampede or heal the city's battered housing market, there is growing evidence that the new Heat lineup is spurring activity in the area around the arena.
At the Marquis, 1100 Biscayne Blvd., a penthouse unit sold for $4.2 million on July 8, the same day James announced he would be joining the Heat. That purchase was the largest amount ever paid for a condo in the downtown area, and the businessman who bought the unit admitted proximity to the arena influenced his decision.
"I'm a big basketball fan and we chose the Marquis because we like the building and the location," said Russell Wright, who has floor-level season tickets for the Heat games. "At first, I was just hoping that Dwyane Wade would re-sign -- I had no clue that LeBron and Chris Bosh would join him."
At Marina Blue, 888 Biscayne Blvd., a Sunny Isles Beach investor scooped up 5,100 square feet of retail space in August, netting the sellers $2.1 million. That investor, Sergey Novov, has drawn up plans to build a microbrewery there.
There are also reports of rising rent prices, game-day sellouts at hotels and soon-to-come hangout spots within walking distance of the arena.
With economists calculating James' impact in Cleveland in the hundreds of millions of dollars during his seven-year tenure there, Miami stakeholders are maneuvering to cash in on the star's presence once the season starts.
"I think downtown is just coming into fruition, coupled with the Heat stars and all that's going on there," said Penni Chasens, a real estate agent who has been selling developer units at 900 Biscayne Bay and the Marquis. "I think it's given us a shot in the arm that we needed."
The four towers are likely to be in hundreds of aerial shots of Miami's skyline during internationally televised Heat games, and each is looking to gain from that exposure.
Here is a look at each building.
MARINA BLUE
The southernmost building among the group, Marina Blue, pitches itself as one of the healthiest buildings downtown. The developer's residential units are completely sold out and the Castle Group, which manages the building, said more than 95 percent of the 516 units are occupied.
The so-called "LeBron Effect" made its mark in the building's retail sector, which had been sitting empty and unheralded for two years.
"The week that the LeBron announcement came -- we sold three commercial units immediately," said Donald Campbell, general manager at the 57-story Marina Blue. "They started construction three days later."
The micro-brewery envisioned by Novov, the investor, is in a frenzy to open as soon as possible, Campbell said.
Another restaurant is set to open there early next year, pitching Brooklyn-style pizza and plasma TVs to sports fans. A sign hanging in front of its undeveloped space plays into the hoops-generated hype: "Pucci's Pizza: Coming soon. Before the playoffs (hopefully)."
A Spain-based advertising agency, Tribeca Media, also scooped up about 5,000 square feet in the building shortly after James announced he'd be joining Wade and Bosh in Miami.
On the residential side, rental interest has grown over the summer. Selling prices averaged about $350 per-square-foot during the boom, and many investors have had to buffer falling values by renting units during the market downturn.
"Some of our investors are taking the opportunity to raise their rent [asking] prices," Campbell said. "If we have someone move out, we'll have someone new in there within the week."
MARQUIS RESIDENCES
Marquis Residences, the tallest of the four structures, probably has the most to gain from increased attention and foot traffic around the arena. The 67-story structure has more than 200 unsold condos, and a recently opened hotel, restaurant and lounge that could benefit from pre- and post-game patrons.
Ordover, the sales director, said the Heat's new lineup has already increased interest in the luxury building, and residential "sales have been good and steady."
She attributes at least three recent sales directly to the Heat effect, including the $4.2 million penthouse purchase. With a typical two-bedroom trading for more than $500,000 at Marquis, that's about $5 million in revenue that can be tied to the team across the street.
As the tallest residential skyscraper in the state, Marquis will stand out as aerial cameras zoom in on the city during more than 30 nationally televised Heat games this season.
Ordover is hoping to parlay that free advertising into increased interest at the building's boutique hotel, and has placed ads in Heat game programs and the team's commemorative yearbook.
One ad for Tempo, the hotel, describes the building as "within three-point range of the arena."
Those kinds of ads will be common this season, Ordover said, as they have already shown results.
"I have a room in the hotel, because I travel back and forth. Now the hotel has so many nights of 100 percent occupancy that they're kicking me out," she said. "And it's directly correlated to the Heat games."
Out-of-town visitors searching online for the closest hotel to the arena will find Tempo listed at the top, 0.3 miles away, another marketing boost for the hotel, which opened in June. Rooms start at about $229.
The hotel has bought into the Heat mania, with player-based room specials tied to Wade, Bosh and James.
900 BISCAYNE BAY
The 900 Biscayne Bay condo tower, built in 2008, also has a large number of condos left on its rolls. The building has nearly 130 of its 509 developer units available and sold 18 units between July and September, according to data from real estate consultancy Condo Vultures.
Peter Zalewski, principal at Condo Vultures, said that with units going for $500,000 and more in buildings like 900 Biscayne Bay, the Heat effect will be limited.
"I don't think anyone is going to buy a residential property because of LeBron," he said. "But I do think that they're going to go to the bars and restaurants and get more comfortable with the area."
Owners of Miss Yip restaurant are counting on those expected bar-hoppers to help boost sales at the Chinese eatery's new downtown location at 900 Biscayne.
Shortly after the Heat play their first home game, the Chinese restaurant will open its downtown Miami branch, said Deniz Kose, the restaurant's manager. Miss Yip, a mainstay in Miami Beach since 2003, had contemplated expanding downtown long before this summer, but the Heat's revamped team was the tipping point.
"We have a lot of customers coming from downtown saying `I wish you had a location near me,' so it's the demand and supply thing," he said. "We expect to have even more people for the basketball games."
Still, the Heat effect at 900 Biscayne has been limited -- the building has a good chunk of vacant retail space near its bottom that has been for sale for more than a year.
TEN MUSEUM PARK
Ten Museum Park sold nearly all of its 200 units soon after being completed in 2007, and many boom-time investor-buyers have seen an uptick in rental interest this summer, said Shelly Abramowitz, owner of Museum Park Realty.
Those renters have helped the building reach near-full status, as they dish out $1,700 and more each month for one-bedrooms there.
The building has been a draw among the young professional crowd seeking big-city life, Abramowitz said.
"This neighborhood is spreading its wings right now by adding all these entertainment options," he said.
"That was what was missing before."
Read more: http://www.miamiherald.com/2010/10/24/v-fullstory/1889670/miami-heats-big-three-a-boon-to.html#ixzz13OqkL2DY
Friday, October 15, 2010
Robo-Signers: Mortgage Experience not Necessary - October 15, 2010
By MICHELLE CONLIN
AP Real Estate Writer
NEW YORK -- In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in "foreclosure expert" jobs with no formal training, a Florida lawyer says.
In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn't define the word "affidavit." Others didn't know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers' accusations about document fraud.
"The mortgage servicers hired people who would never question authority," said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them - earning them the name "robo-signers."
The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.
Ticktin said he would make the testimony available to state and federal agencies that are investigating financial institutions for allegations of possible mortgage fraud. This comes on the eve of an expected announcement Wednesday from 40 state attorneys general that they will launch a collective probe into the mortgage industry.
"This was an industrywide scheme designed to defraud homeowners," Ticktin said.
The depositions paint a surreal picture of foreclosure experts who didn't understand even the most elementary aspects of the mortgage or foreclosure process - even though they were entrusted as the records custodians of homeowners' loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn't define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff's assignor or defendant. She testified that she didn't know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. "I don't know the ins and outs of the loan, I just sign documents," she said at one point.
Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.
Judges are unlikely to look favorably on a bank that claims paperwork flaws don't matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book "Foreclosures."
"There has to be a cornerstone of integrity to the process," Coffey said.
Bank of America responded to Tiktin's depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. "This review will ensure we have a full understanding of any potential issues and quickly address them," Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank's foreclosure customers have not made a payment in more than 18 months.
JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.
Litton Loan Servicing did not respond to a request for comment.
Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.
For a housing recovery to occur, all the foreclosed properties - which could account for 40 percent of all residential sales by 2012 - need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.
"This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?" says Cris deRitis, director of credit analytics at Moody's Analytics. "We need to fix these issues before the economy can recover."
Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you've reviewed documents you've never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.
So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.
But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of "foreclosure king" David Stern, now under investigation by the Florida attorney general's office. "Pending the outcome of the AG's investigation, Citi is not referring new matters to this firm," the bank said in an e-mailed statement.
Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern's firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.
Stern's lawyer, Jeffrey Tew, did not respond to a request for comment.
Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.
The Earls and their attorney now allege that they were victims of fraudulent paperwork.
Read more: http://www.miamiherald.com/2010/10/12/v-fullstory/1870177/robo-signers-mortgage-experience.html#ixzz12RQGZOm3
AP Real Estate Writer
NEW YORK -- In an effort to rush through thousands of home foreclosures since 2007, financial institutions and their mortgage servicing departments hired hair stylists, Walmart floor workers and people who had worked on assembly lines and installed them in "foreclosure expert" jobs with no formal training, a Florida lawyer says.
In depositions released Tuesday, many of those workers testified that they barely knew what a mortgage was. Some couldn't define the word "affidavit." Others didn't know what a complaint was, or even what was meant by personal property. Most troubling, several said they knew they were lying when they signed the foreclosure affidavits and that they agreed with the defense lawyers' accusations about document fraud.
"The mortgage servicers hired people who would never question authority," said Peter Ticktin, a Deerfield Beach, Fla., lawyer who is defending 3,000 homeowners in foreclosure cases. As part of his work, Ticktin gathered 150 depositions from bank employees who say they signed foreclosure affidavits without reviewing the documents or ever laying eyes on them - earning them the name "robo-signers."
The deposed employees worked for the mortgage service divisions of banks such as Bank of America and JP Morgan Chase, as well as for mortgage servicers like Litton Loan Servicing, a division of Goldman Sachs.
Ticktin said he would make the testimony available to state and federal agencies that are investigating financial institutions for allegations of possible mortgage fraud. This comes on the eve of an expected announcement Wednesday from 40 state attorneys general that they will launch a collective probe into the mortgage industry.
"This was an industrywide scheme designed to defraud homeowners," Ticktin said.
The depositions paint a surreal picture of foreclosure experts who didn't understand even the most elementary aspects of the mortgage or foreclosure process - even though they were entrusted as the records custodians of homeowners' loans. In one deposition taken in Houston, a foreclosure supervisor with Litton Loan couldn't define basic terms like promissory note, mortgagee, lien, receiver, jurisdiction, circuit court, plaintiff's assignor or defendant. She testified that she didn't know why a spouse might claim interest in a property, what the required conditions were for a bank to foreclose or who the holder of the mortgage note was. "I don't know the ins and outs of the loan, I just sign documents," she said at one point.
Until now, only a handful of depositions from robo-signers have come to light. But the sheer volume of the new depositions will make it more difficult for financial institutions to argue that robo-signing was an aberrant practice in a handful of rogue back offices.
Judges are unlikely to look favorably on a bank that claims paperwork flaws don't matter because the borrower was in default on the loan, said Kendall Coffey, a former Miami U.S. attorney and author of the book "Foreclosures."
"There has to be a cornerstone of integrity to the process," Coffey said.
Bank of America responded to Tiktin's depositions by re-affirming that an internal review has shown that its foreclosures have been accurate. "This review will ensure we have a full understanding of any potential issues and quickly address them," Bank of America spokesman Dan Frahm said. Frahm added that, on average, the bank's foreclosure customers have not made a payment in more than 18 months.
JP Morgan Chase spokesman Thomas Kelly said the bank has requested that courts not enter into any judgments until the bank had reviewed its procedures. But Kelly added that the bank believes that all the underlying facts of the cases involved in the document fraud allegations are true.
Litton Loan Servicing did not respond to a request for comment.
Even before the foreclosure scandal broke, the housing market was in the midst of an ugly detoxification. Now the escalating crisis is likely to prolong the housing depression for at least another few years. The allegations are opening the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned. Others could be deemed illegal.
For a housing recovery to occur, all the foreclosed properties - which could account for 40 percent of all residential sales by 2012 - need to be re-scrutinized by the banks and resold on the market. Now, with so much inventory under a legal threat, the process will become severely delayed.
"This just adds more uncertainty to the whole mortgage process, so buyers are asking themselves: do I want to buy a home in this environment?" says Cris deRitis, director of credit analytics at Moody's Analytics. "We need to fix these issues before the economy can recover."
Though some have chalked up the foreclosure debacle to an overblown case of paperwork bungling, the underlying legal issues are far more serious. Yes, swearing that you've reviewed documents you've never seen is a legal offense. But at the center of the foreclosure scandal looms something much larger: the question of who actually owns the loans and who has the right to foreclose upon them. The paperwork issues being raised by lawyers and attorneys generals have the potential to blight not just the titles of foreclosed properties but also those belonging to homeowners who have never missed a mortgage payment.
So far, JP Morgan Chase, PNC Financial and Litton Loan Servicing have stopped some foreclosure proceedings in 23 states. Bank of America and GMAC, recently renamed Ally, have extended their moratoriums to all 50 states. Wells Fargo and Citigroup have said they are continuing with foreclosures, adding that they are confident in their documents and processes.
But Citigroup has now backpedaled some on that assertion. The bank sent out a press release Tuesday that it was no longer using the law firm of "foreclosure king" David Stern, now under investigation by the Florida attorney general's office. "Pending the outcome of the AG's investigation, Citi is not referring new matters to this firm," the bank said in an e-mailed statement.
Late last week, in an interview with the Florida attorney general, a former senior paralegal in Stern's firm described a boiler-room atmosphere in which employees were pressured to forge signatures, backdate documents, swap Social Security numbers, inflate billings and pass around notary stamps as if they were salt.
Stern's lawyer, Jeffrey Tew, did not respond to a request for comment.
Meanwhile, the public outrage continues to mount. In what is perhaps a sign of things to come, a Simi Valley, Calif., couple and their nine children broke into their foreclosed home over the weekend and moved back in, according to television station KABC of Simi Valley. The couple, Jim and Danielle Earl, say they were working with the bank to catch up on payments until they discovered a $25,000 difference between what they owed and what the bank said they owed. The family was evicted from their Spanish-style two-story in July. The home has been sold, and the new owner was due to move in soon.
The Earls and their attorney now allege that they were victims of fraudulent paperwork.
Read more: http://www.miamiherald.com/2010/10/12/v-fullstory/1870177/robo-signers-mortgage-experience.html#ixzz12RQGZOm3
Wednesday, October 6, 2010
Pending Home Sales Rise in South Florida - October 5, 2010
Miami Herald Staff and Wire Report
The number of people who signed contracts to buy homes in South Florida rose in September compared to last year, according to data released Monday by the Miami Association of Realtors.
In Miami-Dade County, pending home sales were up to 10,219 in September. That's an increase of 28.6 percent compared to the same month a year ago, and an increase of 1 percent from August. In Broward, 7,719 pending sales reflected a year-over-year increase of 7 percent, but a decrease of 1.6 percent from the previous month.
Nationwide, pending home sales also grew, but remained far below last year's pace. The weak economy and fears that prices will fall are keeping many consumers away from the housing market.
The National Association of Realtors said Monday that its seasonally adjusted index of sales agreements for previously occupied homes in August -- the most recent month available nationally -- rose 4.3 percent to a reading of 82.3. That's still more than 20 percent below the pace in the same month a year earlier.
Economists surveyed by Thomson Reuters had expected the index would rise to 81.4.
The index provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.
A reading of 100 indicates the average level of sales activity in 2001, when the index started. The reading was above that threshold from March 2003 through April 2007. It sank during the recession, only to surge above 100 a year ago when the government first offered tax incentives to spur sales. When the credits expired in April, the index sank.
"With underlying economic conditions still so weak, a robust housing recovery remains highly unlikely," Paul Dales, U.S. economist with Capital Economics, wrote in a research note.
High unemployment, weak job growth and tight credit have hurt the housing market, despite the lowest mortgage rates in decades.
Miami Herald business writer Toluse Olorunnipa contributed to this report, which was supplemented with information from The Associated Press.
Read more: http://www.miamiherald.com/2010/10/05/1857549/pending-home-sales-rise-in-south.html#ixzz11ariFb3c
The number of people who signed contracts to buy homes in South Florida rose in September compared to last year, according to data released Monday by the Miami Association of Realtors.
In Miami-Dade County, pending home sales were up to 10,219 in September. That's an increase of 28.6 percent compared to the same month a year ago, and an increase of 1 percent from August. In Broward, 7,719 pending sales reflected a year-over-year increase of 7 percent, but a decrease of 1.6 percent from the previous month.
Nationwide, pending home sales also grew, but remained far below last year's pace. The weak economy and fears that prices will fall are keeping many consumers away from the housing market.
The National Association of Realtors said Monday that its seasonally adjusted index of sales agreements for previously occupied homes in August -- the most recent month available nationally -- rose 4.3 percent to a reading of 82.3. That's still more than 20 percent below the pace in the same month a year earlier.
Economists surveyed by Thomson Reuters had expected the index would rise to 81.4.
The index provides an early measurement of sales activity because there is usually a one- to two-month lag between a sales contract and a completed deal.
A reading of 100 indicates the average level of sales activity in 2001, when the index started. The reading was above that threshold from March 2003 through April 2007. It sank during the recession, only to surge above 100 a year ago when the government first offered tax incentives to spur sales. When the credits expired in April, the index sank.
"With underlying economic conditions still so weak, a robust housing recovery remains highly unlikely," Paul Dales, U.S. economist with Capital Economics, wrote in a research note.
High unemployment, weak job growth and tight credit have hurt the housing market, despite the lowest mortgage rates in decades.
Miami Herald business writer Toluse Olorunnipa contributed to this report, which was supplemented with information from The Associated Press.
Read more: http://www.miamiherald.com/2010/10/05/1857549/pending-home-sales-rise-in-south.html#ixzz11ariFb3c
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