The Real Estate Professional

Last year we kept hearing how the recession was over or almost over and things were going to look up at any moment. Well, 2009 came and went and we soon discovered that the recession was, in fact, not over. The question now is not if millions of people are going to lose their homes—which millions already have—but what the final toll of homes in foreclosure is going to be when this economic is finally over.

Part of the problem was that many people across the nation lost their jobs last year or had their hours severely cut back, leaving them with smaller household incomes. The concern for the current year is that number of unemployed people across the US is still very high and may in fact continue to rise this year. This will continue to be a problem until not only the official unemployment rate changes for the better, but also the rate of under-employed people across the country.

Another problem is that the Federal Reserve program to buy mortgage-backed securities will be ending on March 31st of this year; this program has been helping to keep the interest rate on mortgages low. The program was quite a success and did, in fact, help keep interest rates down to much more appealing levels than we had seen in years for all of 2009.

Another issue looming on the horizon in 2010 is that many home owners who’ve been struggling to have their mortgages modified by the government Home Affordable Modification Program are not qualifying read more

While the current recession languishes on, some states are suffering from a huge backlog of foreclosures in the process and large numbers of foreclosed homes on the market. Florida is one such state, having the third highest mortgage payment delinquency rate behind both the sunshine state of California and the silver state of Nevada.

Florida’s foreclosure rate for 2009 was up by 29% over the previous year, which was in itself up over 100% from the previous year. There are almost half a million pending foreclosures in Florida currently and the court system is clogged with them.

The Supreme Court of Florida has recently issued an order which will require foreclosures to go through a managed mediation process that will help to alleviate the pressures on the court system and provide some solutions to many home owners.

When managed mediation is ordered the program is paid for by the complainant, up to approximately $750. The success rate for cases that go to mediation is around 75%; a successful mediation is generally one that results in a mortgage modification. Mediation is helping to settle many cases, many within 3 months, clearing up the bottle neck that’s become such a problem in the court system.

Until such time as the waves of foreclosures that have swamped the Florida market subside though, there will be many foreclosure properties available in the Florida area, particularly in south Florida. At this time read more

The economic climate of the past year or so has led to the proliferation of homes in distress, facing short sales and foreclosures; many of these homes have made it to market where buyers are hungry to snatch up deals. While many prospective home buyers are eager to lay claim to one of these possible bargains, the fact is that not all of these homes will be a bargain.

What is important to remember though, is that not all foreclosures or short sales are a good deal.

Properties that haven’t yet progressed to the foreclosure stage are called short sales. Short sales are homes that are worth less than what is left owing on them and are subsequently sold for less than what is owed on their mortgage. A short sale can free a homeowner from their debts from the home, but can leave them still owing if their lenders won’t negotiate a settlement on the funds owing. Short sale homes may have liens on them from more than just mortgages as well; sometimes they’ll have debts connected to them based on unpaid utilities or taxes as well. Short sales can also take a long time to complete, so if you’re in a hurry to buy a home they are likely not a good choice.

Foreclosures, in contrast, are bank owned properties which can be a faster and more straightforward purchase. There are a few dangers in purchasing a foreclosure; foreclosures are usually sold as-is and consequently there is no option to have any problems repaired before read more