FBC Mortgage Blog

Filings in Orlando area down for third straight month, but no one’s predicting a bottom

Foreclosure-related filings have fallen in Metropolitan Orlando for a third straight month, according to a new report by RealtyTrac Inc. Still, the Orlando area ranked eighth in the U.S. for foreclosure activity in November, with 7,349 legal actions filed, down 3 percent from October but up 21 percent from November 2008. Jeffrey Sachs, a senior mortgage consultant for FBC Mortgage LLC in Orlando, said it’s still too difficult to say whether Central Florida has hit bottom in terms of foreclosures, because banks are dealing with their legal filings and short sales at such different rates. “I firmly believe that what we see with the number of foreclosure filings is never an accurate reflection of where the market is,” Sachs said Thursday. “. . . At this point, we should be near the bottom — we’re seeing bidding wars on some bank-owned properties.” Florida had the nation’s second-highest rate of foreclosure activity in November: one in every 165 households received some sort of foreclosure filing during the month. Florida, behind only Nevada, took the No. 2 spot from California, which posted the nation’s third highest foreclosure rate, with one in every 180 housing units getting a foreclosure filing. The only Florida metro area with an activity rate higher than Orlando’s last month was Fort Myers, which was also fourth in the nation. Las Vegas and seven California metro areas filled out the rest of the national top 10. The four-county Orlando metro area had one foreclosure for every 120 households in October, according to RealtyTrac, a Californiabased
research company. In comparison, the nationwide rate of foreclosure activity in November was one household out of every 417. “Loan modifications and other foreclosure-prevention efforts, along with the recently extended and expanded homebuyer tax credit, are keeping a lid on the most visible symptoms of the nation’s ailing housing market — foreclosures and home-value depreciation,”
said James J. Saccacio, chief executive officer of RealtyTrac. “This is providing a welcome respite for the real-estate industry, but a full recovery will only come when unemployment recedes to normal, healthy levels, and when availability of credit reaches a more rational
balance between the extremes of the past few years.”
Within Metro Orlando, Osceola was the only county that showed an increase in foreclosure filings, which jumped 56 percent from a month earlier, though they were up only 4 percent from November 2008. Lake County had an October-to-November decrease of 3 percent (also down 3 percent from a year ago); Orange, 5 percent (down 41 percent from a year ago); and Seminole, 40 percent
(down 3 percent from a year earlier). Outside the metro area, Volusia County recorded a 16 percent increase in filings (up 61 percent from a year ago), Brevard a 19
percent increase (up 9 percent from a year ago), and Polk a 58 percent increase (up 8 percent from a year ago).

Mary Shanklin can be reached at 407-420-5538 or mshanklin@orlandosentinel.com.

Orlando Business Journal – by Christopher Boyd Staff Writer

New Federal Housing Administration rules promise relief for some badly stressed condo projects — but mortgage and real estate
brokers said the impact could be short-lived.
The changes are important, though, because condo prices have plunged from speculative highs in 2006, with units in many
buildings now selling for a quarter of what they cost back then. As lenders watched values shrink, they became reluctant to
finance sales to anyone without a big down payment — typically 20 percent or more.
That has left some new condo towers in downtown Orlando relatively empty, with some deciding to lease out unsold units.
“Given how hard it is to get financing, this certainly will help the condo market — but it won’t set it on fire,” said Joe Nunziata,
CEO of FBC Mortgage LLC in Orlando.
The metro Orlando condo resale market has 2,873 unsold units. In downtown Orlando, just 118 condos were resold this year
through the end of October, for an average of $153,859 per unit, said the Orlando Regional Realtor Association.
The revamped guidelines are temporary and would benefit only condo developments with a limited number of investor-owned
or foreclosed units. Nonetheless, they offer potential relief for some sellers after a long period when financing has been difficult
to find.
Among the temporary changes:
• FHA loans would require down payments as small as 3.5 percent of the sales price.
• The guidelines extend the amount of time lenders have to submit so-called spot loans, or loans on individual condo units in buildings that don’t have
overall FHA loan approval, to February. Spot loans were supposed to go away in December.
• The rules increase from 30 percent to 50 percent the units in a condo project the FHA will finance.
• The FHA will finance buildings in which just 30 percent of new units have been sold. Private-sector lenders generally require sales of 70 percent or
more.
• The FHA will offer financing to all the units in a project if all of them have been sold, no single entity owns more than 10 percent of them, a
homeowners association operates the project and owners occupy half of the dwellings.
The looser new rules take effect Dec. 7 and remain through the end of next year, when they likely will become more restrictive.
Lindsey Pfaeder, sales and marketing manager for the Vue at Lake Eola condo tower in downtown Orlando, said her building is seeking FHA
approval to create a financing channel for its unsold units. The developer has sold 210 of the building’s 375 units.
“It is nearly impossible to get conventional financing, even if a buyer has $1 million and can put 80 percent down,” she said. “We all have buyers for
condos, but they can’t buy because of financing.”
Less-restrictive FHA rules could mean more sales and increase the potential that conventional lenders would provide financing on the remaining
units, said Pfaeder.
Ernst Urbainczyk, an agent with Keller Williams Heritage Realty in Lake Mary, said the revisions could stimulate sales, but the prospect that
they’ll change again is a drawback. “If I buy a condo today under these FHA rules and the rules change, where will I find a buyer two years from now
when I want to sell it?”
Marcus Burke, owner of the Condo Metropolis brokerage in Orlando, said another FHA requirement, which demands at least half the units in a
building be owner-occupied, will limit the number of eligible condos. “A lot of older buildings won’t qualify because so many units are foreclosures or
delinquencies.”
Cristian Michaels, an agent with Re/Max Town Centre in Orlando who specializes in downtown condo towers, said price is another problem. Even
with the new rules, the FHA won’t finance units costing more than $400,000, which are still fairly common despite the plunge in prices. “I don’t think
it will increase our sales because of the price points.”