Move My Realty - Real Estate News

Realtor News Update 4/21

April 21st, 2007 3:29 PM by Ron Mastrodonato

No housing upturn in sight: Subprime loan woes worry builders
HOLLYWOOD, Fla. – April 13, 2007 – Home builder Ara Hovnanian was asked Thursday to rate the housing market on a scale of 1 to 10.

“Am I allowed to use negative numbers?” he said, drawing laughs from the crowd of about 400 at a real estate conference at the Westin Diplomat in Hollywood.

The CEO of Hovnanian Cos. and other builders and analysts agreed that home sales continue to sag, and they fear that recent trouble in the high-risk mortgage business could extend the housing slump into next year.

Regions like South Florida that soared during the recent housing boom are now feeling the worst of the downturn.

“We’re in for a fairly ugly correction,” said Ron Terwilliger, head of Atlanta-based Trammell Crow Residential.

David Seiders, chief economist for the National Association of Home Builders, opened the session with a sobering housing outlook that was more pessimistic than the one he delivered at the International Builders Show in Orlando in February.

Seiders said there are a record 1.4 million excess vacant housing units for sale nationwide, and the number will grow as homeowners lose their properties to foreclosure. He expects more home and condominium price declines in many areas, including South Florida.

“Some markets will really be in the doldrums for quite a while,” said Seiders, adding that he still doesn’t think housing will pull the nation’s economy into a recession.

Two months ago, Seiders predicted the housing market would begin to recover toward the end of 2007. But since then so-called subprime lenders nationwide have faced financial problems when borrowers with weak credit defaulted on home loans they secured in the boom years.

The number of late house payments skyrocketed this year in Broward and Palm Beach counties, although actual foreclosures are increasing more slowly, according to Plantation-based Realestat.com.

Because of the subprime crunch, traditional lenders are tightening their standards. That’s leading to fewer qualified buyers and keeping the housing market depressed.

“The subprime world has really changed the market in for-sale housing,” said Hovnanian, adding that his New Jersey-based company’s two softest areas in Florida are Fort Myers and West Palm Beach. “I’m a bull long term on housing. But the short term is not so rosy.”

Builders and other real estate businesses nationally and regionally have cut jobs in recent months as the demand for housing wanes. A government report released this week showed that South Florida wages are flat or declining, in part because of the real estate slide.

The average weekly salary in Broward County grew just under 1 percent to $754 a week for the third quarter of 2006, compared with a year ago. Palm Beach County’s weekly wage fell 1.6 percent to $756.

While the single-family home and condominium sectors remain sluggish, the rental market is thriving, developers said.

Home prices are still too high for some consumers, who are choosing to rent instead. Developer Trammell Crow is building more than 15,000 apartments nationwide this year, the most ever for the 30-year-old company.

Demand for rental units is driving up prices. Fort Lauderdale and Miami were among the nation’s top markets for rent increases at the end of 2006, said Ron Witten, with Witten Advisors, a Dallas advisory firm specializing in the apartment market.

“I think it’s a confusing time to buy,” said Bill Donges, chief executive of Lane Co., an Atlanta-based apartment and condo developer. “It’s hard to tell if prices are at the bottom. With all the uncertainty, a lot of people think it might be better to rent for awhile.”
 

Copyright © 2007 South Florida Sun-Sentinel, Paul Owers. Distributed by McClatchy-Tribune Business News.

 

HUD settles RESPA violation case against Florida title company
WASHINGTON – April 13, 2007 – The Department of Housing and Urban Development (HUD) today announced two settlement agreements with a Florida title insurance company and New Mexico builder for violations of the Real Estate Settlement Procedures Act (RESPA).

HUD alleged that Fidelity National Title Insurance Company and Longford Homes of New Mexico Inc. had a business arrangement that violated RESPA’s anti-kickback and referral fee provisions. HUD concluded that Fidelity provided pre-paid “just sold” and “just listed” postcards and listing agreements to real estate agents at no- or below-cost. In addition, HUD found that Fidelity essentially provided Longford with a $25,000 annual line of credit in exchange for the referral of settlement service business. That fund enabled Longford to obtain store gift certificates, event tickets and dinners for Longford employees and real estate associates.

“Kickbacks and referral fees hurt consumers by artificially driving up the cost of buying a home,” says Brian Montgomery, HUD’s assistant secretary for housing-federal housing commissioner. “The law clearly prohibits the giving or taking of anything of value in exchange for the referral of settlement service business.” RESPA was created in 1974 to provide consumers advance disclosures of settlement charges and to prohibit illegal kickbacks and excessive fees in the home buying process.

As a result of the agreements, Fidelity will pay $68,635 and Longford Homes will pay $20,700 to the U.S. Treasury. Both also agreed to cease the activities HUD cited as a violation of RESPA.

HUD maintains RESPA information on its Web site at: http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm.
 

© 2007 FLORIDA ASSOCIATION OF REALTORS®

Posted in:General
Posted by Ron Mastrodonato on April 21st, 2007 3:29 PM

Archives:

Sites That Link to This Blog:


English French German Portuguese Spanish