Loan Modification in Miami Beach Real Estate- Homeowners info

Lack of Progress on Loan Modifications Compromises Miami Beach Real Estate Values

loan-modification The Obama administration has finally begun to crack down on mortgage companies and loan servicers that are failing to do enough to help borrowers at risk of foreclosure. Measures announced this week include sanctions and fines that will be imposed via the Treasury Department. According to a random survey of approximately 50 of our clients who purchased property in Miami Beach after 2004, we have roughly estimated that only 25% of eligible borrowers who purchased premier waterfront properties in Miami Beach have been able to permanently modify their loans.

As part of the various Homeowner Relief Programs being advocated by policy makers in Congress, The Treasury Department, and The Obama Administration, over 35,000 homeowners received letters during the summer of 2009 from the Federal Regulators–offering them a new, more affordable mortgage payment. However, the real problem seems to be the bureaucratic bottleneck, disorganization, and lack of accountability on the part of loan servicers and banks. In the past two weeks alone, I have had four separate clients tell me that their loan modifications have either been denied due to lost files, incomplete paperwork (because a form changed from time of application), and general lack of responsiveness and policy confusion from lenders.

The Federal Deposit Insurance Corporation (FDIC) is offering many delinquent borrowers significant concessions on past due mortgages–in many cases lowering interest rates to as low as 3%, extending loan amortizations schedules from 30 to 40 years, waiving traditional qualification requirements, and keeping payments under 38% of a borrower’s gross income. Many Miami Beach homeowners who currently find themselves “underwater”, which is defined as owing more than the property is worth in today’s market, are anxious to participate in the loan modification programs.

Our sampling of Fortune International’s clients includes those that purchased a waterfront property as their primary residence on Sunset Island IV, Palm Island, Biscayne Island, and in Miami Beach condo buildings including The Murano at Portofino, The Portofino Tower, The Bentley Bay and The Continuum South Tower. Approximately 65% of those surveyed indicated a willingness to stay in their homes, as long as they were successful in lowering their monthly mortgage payments and bringing their cost of owning closer to the cost of renting a comparable property in Miami Beach (whether it be a condo or single family home).