Fort Lauderdale foreclosure listings still feature lower-priced condo units as foreclosures continue to rise in condominium complexes, based on data from the Florida Association of Realtors.

In August, Fort Lauderdale had the biggest number of condo sales among Florida cities, with a total of 883 condo units sold. Sales marked a 61-percent increase from sales in August last year. The median sales price dropped by 36 percent to $85,100.

Statewide, condo sales are rising as condo prices drop by about one-third their prices in August last year. In other Florida cities like Miami, Boca Raton, West Palm Beach, Saint Petersburg, Tampa, Daytona Beach and Jacksonville, condo units are being snapped up as their prices fall.

According to the realtor association, almost 4,700 existing condo units throughout Florida were sold in August, an increase of 45 percent from August 2008. The median sales price dropped by 32 percent to $107,500.

Cynthia Shelton, president of the realtor association, said the supply of condos is pushing prices down from their six-digit range in the past.

Meanwhile, based on another report from an online real estate research firm, the number of homes included in Fort Lauderdale foreclosure listings in August rose to nearly 13,500 units. Existing homes for sale totaled 14,319, accounting for 51 percent of all homes included in Multiple Listing Services in the city.

The total number of homes available for sale in August, as listed in MLS in the city, was 27,790 units. New homes for sale totaled 13,471 units.

While the prices of condo units in Fort Lauderdale dropped to around $85,000, the average price of homes in the city hovered around $177,448.

In Fort Lauderdale, 46 percent of all homes are occupied by homeowners while 38 percent are occupied by renters. About 15 percent are vacant.

Based on data from the National Association of Realtors, sales of previously owned homes remained flat in August in the southeastern part of Florida, which includes Fort Lauderdale and Miami. The median price dropped by 11 percent to $157,400 compared to the median in August last year. The decrease showed that foreclosures are still pushing down prices in South Florida.

However, compared to the median sales price of $143,300 in January this year, the median in August marked an increase.

Falling foreclosed property prices in the Tristate have been cutting down home appraisal values and have been hindering some mortgage loan applications.

While the low level of foreclosed property prices in the Tristate have been attracting large numbers of investors and first-time home buyers who have cash to spend, the lower home appraisals have been a barrier to some buyers who could not qualify for the loan-to-value ratios required by the lenders.

One homeowner in West Chester has been selling her house for $107,000, but the buyer who is ready with an FHA loan could not complete the purchase because the home appraisal was only $80,000. The seller said the appraisal is $8,000 lower than her current mortgage loan and $3,000 lower than the tax appraisal conducted by a Butler County assessor in 2008.

The appraiser said he based his appraisal on recent house sales in the area, which have been sold at foreclosed property price levels.

Another homeowner in Butler County has been selling his home for $105,000, but another house, about the same in size and look just several doors away, is being sold at $70,000. So it can be assumed that the $105,000-priced house will take a longer time to sell, especially if there are many foreclosed property units nearby priced at around $70,000.

Another homeowner in West Chester has found a buyer for his home listed at $126,000, but the buyer could not carry out the purchase because the home appraisal was only $100,000. The buyer said he is still trying to find some ways to come up with the $26,000 needed to cover the gap.

Large foreclosed property inventories have pushed down the prices of homes in many states. In April, home prices went down by more than 18 percent, based on the Standard & Poor’s/Case-Shiller 20-City Home Price Index released this week.

A top Barclays Capital economist had predicted home prices to go down further by a staggering 40 percent next year. A private equity fund executive claimed that hundreds of thousands of bank owned repossessed properties will be released to the market in the coming months. These factors will push down further home prices nationwide.

In May, Ohio was tenth among states with the biggest foreclosure rates. One house in every 446 housing units in the state was hit with a foreclosure action. Out of 11,360 homes which received foreclosure filings, more than 4,000 units were already scheduled for foreclosure sales while more than 3,000 units were already in foreclosed property listings.

Default rates on prime loans have increased in the first quarter, escalating the number of houses added to foreclosed home for sale inventories.

Homeowners who have good credit and who were previously making their monthly home loan payments religiously are now unable to make payments because of joblessness.

In the first quarter, the number of prime loans past due by two months or more has increased to almost 3 percent of total prime loans, from only 1.1 percent in the first quarter last year, according to a report released by the Office of Thrift Supervision and Office of the Comptroller of the Currency.

John Dugan, Comptroller of the Currency, expressed his concern about the increases. The rise in default rates was always followed by a rise in foreclosed home for sale inventories. Compared to the last quarter of 2008, first-time foreclosure actions on prime loans increased by 22 percent.

Even non-economists know that job losses would trigger defaults, even in the cases of homeowners who had excellent credit and who had always been good debt payors. They also know that even good payors would just see their houses get added to foreclosed home for sale inventories if they have no other recourse.

The report showed that defaults on prime loans in the first quarter jumped to 661,914, compared to 250,986 in last year’s first quarter. Delinquencies of two months or more increased by 88 percent, compared to defaults in the first quarter last year.

Despite the provision of loan modification and loan refinancing programs to prevent these defaults from putting houses into foreclosed home for sale inventories, many of these defaults still moved on to actual foreclosures.

In the first quarter last year, approximately 53 percent of borrowers whose loans were modified had redefaulted two months or more after the modification while 63 percent redefaulted after one year.

Aside from job losses, the other major factor for loan redefault is negative equity – a condition reached when the home value becomes much lower than the loan amount.

Additionally, the report said that around 67 percent of troubled loans processed were modified by using two or more schemes, with around 70 percent adding missed payments and fines to the outstanding loan balance.

Only 13 percent froze the interest rates. It is not surprising then that many redefaulted and just let their properties get added to foreclosed home for sale inventories.

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Over 6,000 properties in Dallas-Fort Worth Metroplex in Texas were added on repo homes listings scheduled for auctions in July. The figures were 62 percent higher than the same month last year.

For the few months of this year, over 35,000 residential foreclosures were reported, representing a 20 percent increase from the first seven months of the previous year. According to records, the 6,072 foreclosures included on repo homes listings scheduled for July auctions have exceeded the May filings of 5,500.

For 10 consecutive months, home foreclosure filings surpassed 4,000 units every month in the Dallas-Fort Worth Metroplex. And in the last four months, foreclosure postings exceeded 5,000 per month. The July figures are the first time that repo homes listings added over 6,000 properties for auctions.

Real estate specialists said that July foreclosures for auctions may have surpassed the number of postings in 1988 or 1989 which reached 2,000 per month.

Meanwhile, about 2,579 homeowners in Dallas County are facing the possibility of losing their homes to foreclosures, an increase of 56 percent from the previous year.

An even more significant increase occurred in Tarrant County where foreclosure postings surged by 66 percent compared with figures recorded a year ago. The increase represented 2,015 properties scheduled for auctions in July.

In Collin County, foreclosure postings were up 67 percent while 68 percent of homes in Denton County are up for grabs among bidders in July.

According to industry experts, various programs designed by the government and mortgage companies to help distressed homeowners may be a cause on the rise in foreclosure postings. They explained that while lending institutions are negotiating with homeowners, they usually re-post each distressed property every month while foreclosure actions are pending.

They noted that many lenders are delaying actual foreclosures to give more time for loans lined up for modification to be processed. As the number of delinquent mortgages continues to inch up, it follows that lenders would be overwhelmed by the volume of loans under foreclosure proceedings.

Generally, nearly 40 percent of properties on repo homes listings are sold at foreclosure auctions by lenders. The remaining distressed loans were renegotiated or some arrangements have been made in order for homeowners to avoid foreclosures.

Brookings’ survey of 100 markets showed that the Dallas-Fort Worth Metroplex area was ranked 36 in terms of high number of properties on repo homes listings.

Short sales represent a way out for distressed homeowners who want to avoid putting their properties on repo homes listings. In short sales, homeowners will sell the house at less than the total amount of mortgage they owed.

This foreclosure prevention method requires the complete cooperation of lenders who will agree to accept the sale price as settlement of homeowners’ debt. Short sales represent a good option for almost 20 percent homeowners to avoid putting their properties on repo homes listings.

However, real estate experts said that the process of completing a short sale transaction has become complicated. This resulted for hundreds of pending short sales deals to fail as potential homebuyers grew tired of negotiating and then waiting for lenders to complete an approval process.

RealtyTrac vice president Rick Sharga noted that short sales require lot of paperwork, adding that majority of lenders are overwhelmed by the process.

The need to do some changes to improve the short sales process to live up to expectations that it could help homeowners protect their properties from repo homes listings, has prompted the Bank of America to revamp the way it handles short-sale requests.

A typical short sale request takes about 45 to 60 days to process at banks, according to real estate executive David Sunlin. Under the revised plan of the Bank of America, the response time for a single short sale application will take a week or less.

Sunlin explained that banks usually do not want to lose money. However, he added that homeowners’ demand for short sale as a way to help them avoid putting their properties on repo homes listings is rising.

He said the use of short sales to avoid foreclosures was not fully explored until today and this resulted to the double increase in short sale deals in 2009 compared to figures in 2008.

The Bank of America’s plan will allow it to reach out to distressed homeowners and start working with them the moment they decide to put their properties on short sale.

The current process of assessing requests for short sales starts when delinquent homeowners approached the banks with a proposal to sell their distressed properties for less than their outstanding debt to avoid repo homes listings.

Foreclosures in California and Florida have dropped significantly from December to January.

Based on reports from Foreclosures.com, California Foreclosures have decreased by 31.5 percent within the last month, while Florida foreclosures have dropped by around 22 percent.

This is a sign of the states’ recovery, since both have been at the top of the list of states that have the highest number of foreclosed homes. This is good news, especially for homeowners who fear that they might experience foreclosures as well.

Alexis McGee, president of Foreclosures.com, attribute this trend to some factors. First, he said that the government’s efforts to rescue ailing properties and mortgages have significantly helped people to keep their homes. The government is set to release $50 billion worth of rescue funds to assist banks and other mortgage lenders in providing moratorium and loan adjustments to homeowners.

Second, mortgage financers Freddie Mac and Fannie Mae’s moratorium on foreclosures before last year’s holiday may have saved some houses from foreclosure. Other major banks and lenders also released loan workouts and adjustments to prevent foreclosures.

Lastly, states have been taking necessary action and have been implementing measures to keep their communities and homes. California, for instance, adopted last November Senate Bill 1137, a bill that requires banks and lenders to make necessary negotiations and arrangements with homeowners facing foreclosures. Some other states continue to enact bills to regulate and pacify foreclosures.

These actions have also affected the country as a whole, as there has been a 25 percent drop in foreclosure cases nationwide. So far, this month’s number of foreclosures is the lowest recorded number of foreclosed properties since April 2008. Among all the states, Only Michigan and Texas experienced continued increase in foreclosures.

Amid this trend, however, McGee says that the country is not to be confident about the situation. This is not necessarily a sign that foreclosures will continue to decrease and that there will now be a reversal of trends. There is a need for the government to execute its plans as soon as it can, so that just like Florida foreclosures and California foreclosures, the numbers will decrease.

The past year saw erratic mortgage rates, reflecting the country’s national housing crisis and foreclosure problem.

Usually, mortgage rates are fairly stable and predictable. The steadiest time would be in winter, increasing toward the end of the year. By late February, going into March, rates would decrease and become steady until late fall.

Sharon Heitman who owns the mortgage consulting firm, Heitman Group says that the 1980s refinancing boom was already wild time for mortgage rates.

However, 2008′s home loan rates were even more volatile as more homes went into foreclosure. At the start of 2008, a few long-term mortgages hovered in the 6 percent area, with the average rate nearing 7 percent by July. In October, rates had risen by half a percentage point in only a seven-day period. This dropped by the same rate the following week, then surged again the week after.

Thirty-year fixed-rate ,0mortgages which are the most common started at around 6.14 percent in the northeast parts and 6.07 or lower. Interest rates dropped to a national average of 5.1 percent or lower.

Heitman says that mortgage rate highs and lows are usually separated by only around a tenth of a percentage point. In the past, sudden swings such as those experienced in 2008 would reflect an error.

There were also a marked interest rate swings when the government-seized Fannie Mae and Freddie Mac increased mortgage fees to buoy their own weakening finances, to the detriment of those with foreclosure problems.

The home loan swings were a reflection of the national economic problem. Despite government programs to address foreclosure issues, lenders worried that borrowers would not be able to pay their loans, causing interest rates to soar. Rates also depended on the immediate possibility of banks reselling the loans to investors.

2008 was a year beset with foreclosure problems and a souring economy. Home buyers are encouraged to continue shopping around for the best loan options. Hopefully, 2009 housing prospects will be better.

The increasing foreclosure rate has in part been blamed on the Bush Administration for failing to make the problem a top priority. Added to that, Treasury Secretary Henry Paulson refused to use a part of the $700 billion financial grant to help homeowners Avoid Foreclosure.

However, hope is being pinned on the coming administration of Barack Obama who said that lowering foreclosure rate is important in the country’s economic and financial recovery.

Federal Deposit Insurance Corp. Chairman Sheila C. Bair, in her testimony before the U.S. House Committee on Financial Services, said that lowering the number of homeowners who are facing the threat of losing their homes is important to the effort to stabilize the country’s economy and the global financial markets.

In line with this, the departments of Treasury and Federal Reserve have announced a rescue fund of $800 billion for the credit markets.

This includes $600 billion to purchase debt issued by the Federal Home Loan Bank and government-sponsored enterprises , Federal National Mortgage Association or Fannie Mae and Federal Home Loan Mortgage Corp. or Freddie Mac.

The announcement resulted to a 5.5 percent interest rate decline on a 30-year fixed-rate mortgage and the increase in the number of people who applied for loans in an attempt t buy homes or refinance mortgages.

Susan M. Wachter, a real estate professor at Wharton, believes that these developments are helping the housing market recover and stop the plummeting home prices.

Meanwhile, the private sector has also embarked on its own programs to help alleviate the foreclosure problem.

Both Citigroup and JP Morgan Chase have launched loan modification programs, focusing on loans that they own and not on mortgage-backed securities loans.

Other banks have announced a postponement on foreclosures on homeowners who may be behind their payments but have the capacity to continue paying if their loans will be modified.

During the first quarter of 2008, the Riverside-San Bernardino area of California experienced the second highest foreclosure rate of any other metropolitan region in the country, according to reports. The area has long been a leader in the foreclosure rate category, but new statistics show that the first part of the year vaulted the local foreclosure inventory to new heights.

The current rate is over 210% higher than it was in 2007, and from the last quarter of 2007 to the end of the first quarter in 2008, the rate of foreclosure homes had risen 32%. The number one area for foreclosures during the first quarter was the city of Stockton, also located in the foreclosure plagued state of California.

During the first quarter, California experienced just shy of 170,000 foreclosure filings, including defaults and foreclosure home sales, equaling roughly 1 in every 75 households.

California has the largest inventory of foreclosures in the country currently, and its drawing a lot of investment from buyers looking to take advantage of the extremely low prices that foreclosure homes are currently going for at auction.

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December 2007 ended with 45,327 homes being repossessed by banks and January 2008 started with a jump of 57% on bank foreclosures across the nation. In total, the number of homes affected by foreclosure in January was 233,001, which is a straight increase of 8% since December 2007. The good element in an otherwise depressive state of affairs was that the month-to-month filings have not shown any rapid appreciation. But the question is: is that good enough?

Most homeowners would not agree as they are not only losing their homes but some of them don’t even have any other place to go. On top of that the real estate prices are falling especially in areas where there have been maximum government foreclosures. If this isn’t painful enough, most of the streets wear a deserted look and the crime rate seems to have spiraled upwards. Such is the impact of foreclosures!

On the brighter side of foreclosures is the fact that efforts are being made by both the government as well as the lenders to normalize the situation and for effective fire-fighting at the federal as well as state level. To an extent, these measures have started to take effect although there is still a long way to go. The important thing is: are these measures in any way helping the homeowners fight the issue of foreclosure?

In the past it has been seen that some of the efforts made by lenders include the basic solutions like offering the borrowers another opportunity to pay any missed payments. The fact of the matter is that the solutions offered to avoid foreclosure homes have not been focused on lowering their monthly payments. The crux is that lenders need to find better solutions that what they are offering so that the homeowner doesn’t have to go through the painful situation of tackling with bank foreclosures.

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