Foreclosure Listings Blog

Foreclosed home listings continue to grow in the condo and townhome sector of the housing market in Brevard County, Florida.

Last year, 419 condo units and townhomes were repossessed by banks, based on records from the Brevard County Property Appraiser Records. A foreclosure research firm said that another 568 units were in default and are in the process of getting foreclosed.

Across the U.S., over 66,000 condo units were repossessed in 2009, with another 113,000 units in serious default.

In Palm Bay and in other areas with a lot of condo and townhome foreclosures, personal devastation arising from foreclosures has not been limited to the delinquent property owners.

Even condo and townhome owners who have been paying faithfully their monthly mortgage amortizations and their housing association dues have been suffering from the foreclosed properties. According to housing researchers, about 60 percent of multifamily properties in Florida are struggling from unmaintained foreclosed units and unpaid HOA dues.

Even property owners who have rented out their townhomes or condos and have been collecting the rentals have not been paying their HOA dues, according to HOA officers.

At the 50-unit Arlington Pines townhome development in Palm Bay, only 12 unit owners have been paying their HOA dues. In financially distressed times, even the $223 monthly HOA fee at Arlington has been a big burden to pay.

According to analysts, the current foreclosed home listings in Florida are not showing the real numbers of distressed condos and townhomes in the state. Banks have not been completing their foreclosure processes on condo units and townhomes which are difficult to sell and which belong to HOAs that are tenacious in collecting HOA dues.

In the meantime, condo and townhome owners who have not chosen to walk away despite the foreclosure problems of other unit owners have been filling the gap between maintenance and utility costs and the regular HOA collections. Their monthly dues are continually raised so the HOAs can pay property insurance premiums, maintenance costs, water bills and other utilities.

Jan Bergemann, head of the homeowner advocacy organization Cyber Citizens for Justice, said that his group has been calling on lawmakers to pass legislation that would force banks to pay HOA dues and maintenance fees for their foreclosure properties.

According to Bergemann, forcing responsible unit owners to pay for properties in foreclosed home listings is not fair and can even force them also to fall into financial distress and into foreclosure.

The foreclosures list of Pittsburgh failed to get the attention of the Housing and Urban Development Department in its second Neighborhood Stabilization Program funding round. Pittsburgh asked for $29 million in funding, but it did not receive any amount.

Rob Stephany, head of the Pittsburgh Urban Redevelopment Authority, said he could not believe that his city was not given any money, given that his team submitted a great application.

According to HUD spokeswoman Andrea Mead, not all applicants can be accommodated because only $2 billion was set aside for the program while applicants asked for a total of over $15 billion. She said that applications were scored based on 6 factors, the weightiest of which were level of need and proof of ability to use the funds effectively within a given period.

In the first NSP funding round last year, the city of Pittsburgh received $2 million and received another $4 million from the $60 million allocated to the state of Pennsylvania.

Tom Cummings, housing director for the URA, said that money from the first funding round was used to demolish dilapidated buildings, build affordable houses in the Hill District, establish an affordable housing program in Garfield, and buy and rehabilitate foreclosed homes in Manchester and in Beechview.

According to Terry Gillen, head of the Philadelphia Redevelopment Authority, the rate of foreclosures list growth in Pittsburgh and Philadelphia was not as high as in other cities in Florida, California or Arizona, but Pittsburgh and other older cities like Philadelphia and Cleveland have been suffering from population decline.

Unlike Pittsburgh, the city of Philadelphia asked for $58 million and was given $43.9 million. In the previous funding round, the city got $16 million and received another $4 million from the funds given to the state.

URA executive director Stephany said that the HUD probably rejected Pittsburgh application because the most distressed communities in the city have been distressed for a long time. Foreclosures in the city have also been slowing down.

In 2009, Pittsburgh had a total of 9,220 foreclosure postings, a drop of almost 8 percent from the 10,013 foreclosures filed in 2008. Of the 203 metro areas ranked by a California-based foreclosure research firm based on foreclosure rates, Pittsburgh ranked 156th.

Stephany said that the money would have been spent to fight the effects of decades of decline in certain neighborhoods and to help the neighborhoods of Sheraden and Elliott buy homes from foreclosures list and rent them out.

Real estate foreclosure listings are expected to grow further this year due to record levels of home-equity debts and other second-liens.

According to housing analysts and U.S. Treasury officials, the refusal of banks to restructure home-equity loans is among the biggest hindrances to successful loan modifications and foreclosure prevention. Treasury spokesperson Meg Reilly said that no lender holding a portion of the $1.05 trillion of home-equity debt has committed to modify second mortgages.

New York Banking Superintendent Richard Neiman, who is also a member of the Congressional Oversight Panel of the Troubled Asset Relief Program, said that the federal government should pressure banks to resolve the issue of second liens.

Joshua Rosner, analyst at New York City-based Graham Fisher, said that the major lenders Bank of America, JPMorgan Chase, Wells Fargo and Citigroup collectively hold second mortgages that are about $150 billion higher than the value of the properties securing them. Under current law, a second mortgage is eliminated in foreclosure unless the sales proceeds exceed the amount of the first mortgage.

The programs of the federal government to cut down real estate foreclosure listings have not been successful partly because only the first mortgage is modified, according to Scott Simon of California firm Pacific Investment Management Company. According to the Treasury Department, around 25 percent of borrowers whose mortgages were modified in 2009 have failed to sustain their monthly payments even after they have been reduced.

Rosner of Graham Fisher affirmed Simon’s statement. He added that high levels of home equity debts have prevented first-mortgage lenders to reduce principal balances to make monthly payments really affordable to borrowers.

John Taylor, CEO of the National Community Reinvestment Coalition, said that first-mortgage lenders are not willing to significantly reduce principal balances if second-mortgage lenders refuse to do the same.

According to foreclosure analysts, more homes will enter foreclosure this year as the employment situation continues to worsen and property values continue to fall. In the third quarter last year, 23 percent of all residential mortgages were underwater, based on a report from First American CoreLogic. Another California firm predicted that 3 million residential units will be foreclosed in 2010.

In April last year, the Treasury expanded its foreclosure prevention program to include second liens and help home-equity lenders reduce their interest rates. However, this second-mortgage program has not been carried out and has not been able to help cut down real estate foreclosure listings.

The number of house foreclosures for sale in the city of Cedar in Utah that closed in 2009 accounted for around 32 percent of all home sales.

Foreclosure lists are expected to grow, dampening hopes of recovery in the housing sector, because of the continued rise in mortgage delinquencies.

The pace of foreclosure house listing is faster in more urbanized areas in New Jersey, as shown in the much higher number of foreclosure filings in Middlesex County, which has more urban areas and higher population than other counties such as Hunterdon and Somerset.

Miami foreclosure listings continued to grow in November, based on data from a California-based real estate research firm.

Foreclosure house listings continued to grow in Connecticut in October as mediation and loan modification programs in the state failed to prevent residential mortgages from going into foreclosure.
According to housing advocates including Waterbury lawyer Eugene Melchionne, only 14 percent of the estimated 32,000 foreclosures filed during the period from July last year to October [...]

House foreclosed listings are growing in Wisconsin, based on data from the Mortgage Bankers Association and from a California-based real estate research company.
The MBA reported that 11 percent of all mortgage loans in the state were in default or in foreclosure at the end of September. Although the percentage was lower than the national [...]

Atlanta foreclosure lists are still growing because of continued job losses and the lingering effects of overleveraging in the commercial property sector.
According to Georgia economist Rajeev Dhawan, the Atlanta area has lost over 200,000 jobs over the past 2 years and that jobs will continue to be lost in the coming months. He added [...]