Miami Beach Waterfront Homes Blog

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).

The State of Florida is still in desperate need of property tax reform & reduction. The measure that was approved last year has helped to provide some limited tax reductions, but has turned out to be a complicated & very limited property tax reduction effort. There is a new initiative to significantly reduce property taxes next year, called AMENDMENT FIVE, which would eliminate from 25-40% of today’s current property taxes, creating a SIGNIFICANT reduction in the total cost of home and/or business ownership. To replace the lost revenue, Florida sales tax would increase by about 1%.

5 Reasons To Vote YES for Amendment 5

Amendment 5 is a long overdue tax cut for all property owners: families, businesses, second homeowners and investors. Property tax levies have doubled over the past six years – from $15 billion in 2000 to $30 billion in 2006. With higher fuel prices and food costs, and stagnant incomes, it’s no wonder Florida families are struggling to make ends meet. If you’re living the American Dream in Florida, you stand to save 25% to 40% on your property taxes in 2010.

Amendment 5 will jump start Florida’s economy. Economists estimate that Amendment 5 will save property owners more than $10 billion in taxes. This will increase the liquidity and net spendable income of millions of property owners.

Amendment 5 will shift the burden of funding education from property owners to all who access the public school system. Currently, property owners pay a disproportionate share, compared to renters, for our schools. And property owners whose children attend private school pay tuition and public school taxes. By funding schools through sales taxes and other measures, Amendment 5 creates a more equitable tax system.

Amendment 5 offers much-needed tax relief for millions of property owners and continues the momentum created by Amendment 1 – approved by voters in January 2008 – toward reforming Florida’s archaic property tax system. Amendment 5 also pressures legislators to get serious about tapping stable and lucrative revenue sources for schools such as Internet sales (a $3 billion cash cow and an increase in state sales tax — much of it paid by non residents!).

Amendment 5 will provide much-needed tax relief to Florida’s seniors, many of whom fear losing their homes because of an inability to pay higher property taxes on a fixed income. On November 4, you have an unprecedented opportunity to vote YES for the biggest property tax cut in Florida history. Vote YES on Amendment 5.

The Five Most Common Myths about reducing Property Taxes Further:

Myth #1
Opponents say Amendment 5 will take valuable funding away from schools.

False! Amendment 5 requires the Legislature to provide required funding for schools. Instead of the funds coming from property owners in the form of taxes, it could come from sales taxes, reduced spending or any other source determined by lawmakers.

Myth #2
Opponents say Amendment 5 will raise the state sales tax and disproportionately affect the poor and needy.

False on two counts! First, Amendment 5 does not require the Legislature to increase the state sales tax. Second, necessary goods and services will remain exempt from a higher sales tax. These include unprepared food, rent, heating fuel, medicine, electricity and health care services.

Myth #3
Opponents say Amendment 5 equals a sales tax on services.

False! Amendment 5 does not dictate to lawmakers how to make up the revenue to fund our schools — including any new tax on services. It points out obvious options, such as a reduction in spending, and encourages lawmakers to come up with other revenue sources, such as collecting sales tax on items currently taxed in retail stores but not when purchased on the Internet.

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