Today's Local Real Estate News: "‘5.2 percent of all mortgages in Florida were delinquent."

The Sun-Sentinel Editorial Board wants the Bush administration to bailout irresponsible lenders:

“Last week, the administration announced a series of well-timed steps to avoid a sharp increase in foreclosures across the country. Among the actions is one permitting the Federal Housing Administration to guarantee loans for delinquent borrowers, buying them time to refinance their mortgages.”

“The housing mess is no small chasm in the U.S. economy. The growing numbers of foreclosures hint at a much deeper train wreck ahead. The worry has roiled the stock markets, as has the bankruptcy filing of a major mortgage provider.”

“There are well-founded fears of a credit crunch, and the last time this happened, in the early 1990s, it led to a recession.”

“So, the Bush administration is smart to take measures to keep the foreclosure mess from worsening. Creating space for mortgage borrowers to refinance loans at manageable, fixed rates could keep lots of people from losing homes, and also keep them making monthly payments.”

“BOTTOM LINE: Bush administration right to act now, perhaps head off more foreclosures.”

This comes as the Palm Beach Post is reporting that ballooning foreclosure rates are largely cause by “investors:”

“Foreclosure filings in the Treasure Coast more than tripled in August as the worst housing slump in 16 years continued to send shock waves through local households amid more evidence that severe economic problems could be on the horizon.”

“The grim numbers released Friday came in the wake of a report Thursday by the Mortgage Bankers Association that documented record delinquencies and foreclosures across the country.”

“The trade group reported 5.2 percent of all mortgages in Florida were delinquent by the end of the second quarter, up from 4.4 percent at the end of the first quarter.”

“Investors are a major cause of the surge in foreclosures, analysts say.”

“‘Owners of condos who speculated pre-construction are trying to dump them at their sales price,’ said real estate lawyer John Pankauski from his office in West Palm Beach. ‘Investors will have to realize that to get rid of their condos — and to stop paying real estate taxes and maintenance fees - they will have to take a hit.’”

“Buyers have dried up, however, because of tougher credit practices and ‘the fact that the housing boom has run its course,’ he said.”


Yesterday’s jobs report revealed that unemployment is increasing in South Florida. The Sun-Sentinel reports:

“Employers sliced payrolls in August by 4,000 jobs, the first such decline in four years and a stark sign that a painful credit crunch that has unnerved Wall Street is putting a strain on the national economy.”

“The latest employment snapshot, released by the Labor Department on Friday, showed the unemployment rate held steady at 4.6 percent, mainly because hundreds of thousands of people left the work force for any number of reasons. The report spooked investors and the Dow Jones industrials fell almost 250 points.”

“Florida's job market has weathered the housing downturn somewhat better than the nation. The state lost 17,900 construction jobs in the last year, but its July employment report also showed strong gains in other sectors such as education and health services. On average, Florida employers have created 10,967 jobs a month this year.”

“As a result, Florida's unemployment rate was a relatively low 3.9 percent in July, even while the number of people without jobs increased in Palm Beach, Broward and Miami-Dade counties by 12,615 compared with June.”

The Sun-Sentinel reports on huge job cuts that were announced after stock trading closed on Friday:

“Struggling Countrywide Financial Corp., the nation's largest lender, said Friday it will cut as many as 12,000 jobs as it struggles to deal with challenging conditions in the mortgage industry.”

“The company said the cuts, amounting to as much as 20 percent of its work force, are needed because it expects new mortgages to fall about 25 percent in 2008 from this year's levels.”

“The job cuts are expected to center primarily on the company's production divisions and its general and administrative support areas, Countrywide Chief Executive Angelo Mozilo said in a letter distributed to employees Friday.”

“The company employs about 60,000 people, with about 34,000 working in loan production. The lender has loan offices nationwide, including in South Florida.”

In addition to lawsuits from defrauded mortgage holders, Jack Moussa is now facing a lawsuit from one of his investors. The Sun-Sentinel reports:

“A Delray Beach investor, who claims he was lured into investing thousands to salvage properties facing foreclosure, has filed suit against a Broward County foreclosure rescue company to recover his money.”

“Matthew W. Anderson sued Equity Investment Capital Management, the firm that owns foreclosure rescue firm Florida Housing Council, in Broward County Circuit Court on Aug. 23. The suit also names FHC and Jack Moussa, the registered agent for EICM; Star Enterprises and its owner Rose Moussa, Jerome Weinstein, and homeowners Connie and Roy Hull, who had sought help from FHC.”

“FHC and Moussa have been sued by homeowners in Broward, Palm Beach and Miami-Dade counties in recent years, alleging fraud and deceptive practices. Some homeowners said FHC officials created the impression the company is a federally funded agency that helps homeowners in financial distress.”

“The lawsuit comes at a time when foreclosure fillings have soared in South Florida and across the nation. The real estate market is no longer seen as a place where investors can make a quick profit.”

“Consumer advocates say the suit also highlights the risks of homeowners hiring a foreclosure rescue firm when facing financial difficulties. A better strategy, experts advise: Homeowners should work with their lender to create a plan that will move them out of financial difficulty.”