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TALLAHASSEE, Fla. – Aug. 5, 2010 – Saying its stock has dropped 40 percent because of the Gulf of Mexico oil spill, Panhandle developer St. Joe Co. on Wednesday filed suit against Halliburton Energy Services Inc. for its role in the Gulf oil spill.

St. Joe, which owns 577,000 acres in Florida, filed suit in a Delaware court seeking damages as the paper company-turned-developer seeks to recover losses brought on by the threat of oil soaked beaches. About 70 percent of St. Joe’s Florida holdings lie within 15 miles of the Gulf of Mexico.

“We believe that Halliburton was grossly negligent and bears full responsibility for this tragic accident,” William A. Brewer III, lead counsel for St. Joe, said in a statement. “We believe Halliburton’s participation in the cementing process – and the company’s willful disregard of important safety measures – make it liable for the Deepwater Horizon Oil Spill and the catastrophic damages that it caused.”

The lawsuit claims Halliburton, one of the world’s largest cementing companies, committed numerous errors when pouring the casing for the BP Deepwater Horizon well. Among a litany of complaints, the suit says Halliburton opted for a faster, less expensive procedure to finish its work and did not use enough centralizers to secure the work.

The company reported that the explosion took place 20 hours after it had finished its work on the Deepwater rig. Cement used in the procedure usually sets within 18 to 24 hours.

“Halliburton has not seen this lawsuit yet,” said Halliburton spokeswoman Teresa Wong. “But from the information we have seen in the media so far, it appears to be without merit and we will vigorously defend it.”

Feds say most of the oil has been recovered

Also on Wednesday, the National Oceanic and Atmospheric Administration released a report saying 74 percent of the 4.9 million gallon Deepwater spill had evaporated, been collected or dispersed. The remaining 26 percent is either on, or just below, the surface as residue and weathered tarballs, or it has washed ashore.

“Teams of scientists and experts have been carefully tracking the oil since day one of this spill, and based on the data from those efforts and their collective expertise, they have been able to provide these useful and educated estimates about the fate of the oil,” says Jane Lubchenco, a NOAA administrator. “Less oil on the surface does not mean that there isn’t oil still in the water column or that our beaches and marshes aren’t still at risk.”

The estimates do not make assumptions on long-term impacts of oil on the Gulf, a process Lubchenco says will take time.

In other news, BP officials said Wednesday their “top kill” operation seems to have plugged the well that was temporarily capped late last month. The procedure involves injecting drilling mud into the borehole and using the weight of the mud to stop the leak. Cement is then typically added.

Source: News Service of Florida, Michael Peltier

TALLAHASEE, Fla. – June 18, 2010 – Florida’s efforts to renourish eroded beaches does not violate the rights of nearby property owners, the U.S. Supreme Court ruled Thursday in a case brought by Walton County landowners following 1995’s Hurricane Opal.

In a 15-page ruling, the nation’s highest court agreed with the state that beachfront owners are not severely harmed when renourishment efforts extend the distance their properties lie from the shoreline by, in essence, expanding the shoreline seaward.

The case stems from recovery efforts following Hurricane Opal, when Destin and Walton County began a process of pumping sand onto beaches, establishing a boundary line between public and private land to control future erosion.

Stop the Beach Renourishment, a not-for-profit group of six landowners, argued before the Supreme Court that these augmented beaches deprived them of direct beachfront access and should be considered a taking of their land. The First District Court of Appeal (DCA) agreed.

But the nation’s high court upheld the 2008 state Supreme Court opinion that overturned the earlier DCA decision. The state has a “constitutional duty to protect Florida’s beaches,” according to the Florida Supreme Court, and was within its rights by moving forward with renourishment.

Landowners’ rights were not violated, the U.S. Supreme Court ruled, even if the extra sand increased the distance between the landowners’ property lines and the water.

“Regardless of whether an … event exposes land previously submerged or submerges land previously exposed, the boundary between (private) property and sovereign land does not change,” Justice Antonin Scalia wrote for the majority. “It remains (ordinarily) what was the mean high-water line before the event.”

Attorneys for the landowners said Thursday they we disappointed in the ruling, saying it further diminishes private property protections guaranteed in the U.S. Constitution.

“Private property rights are a legacy forged in the American Revolution by our Founding Fathers and passed on to us through the generations,” attorneys Kent Safriet and Richard Brightman of Hopping, Green & Sams wrote in a joint statement following the high court ruling. “They are a cornerstone of our society’s prosperity and freedom. Today’s ruling weakens those rights to the detriment of private property owners everywhere.”

Source: News Service of Florida, Michael Peltier

Foreign buyers are flocking to Florida condos again
TORONTO – June 1, 2010 – Nearly 800 Canadians jammed a hotel ballroom near the Toronto airport Sunday to hear the gospel of Florida real estate.

High-end Brazilian buyers prefer to be wooed more intimately – perhaps at a cocktail party or a small private dinner – but they are just as pumped.

Lured by rock-bottom prices, international buyers are now flocking to buy Florida properties. It’s especially true in countries where the currency is strong against the dollar.

“We’re telling Canadians this is a once-in-a-lifetime opportunity – the perfect storm,” said Brian Ellis, who heads Toronto-based Florida Home Finders of Canada. “The prices are just incredible and the Canadian dollar has been so strong.”

At least three of five buyers in the Greater Downtown Miami condo market are coming from abroad, estimates Jenny Huertas, international sales director for Condo Vultures, a real estate advisory and research firm.

The stampede from overseas is “kind of like a foreign subsidy helping us resolve our real estate problems,” said Peter Zalewski, a Condo Vultures principal. “This time the assistance isn’t coming from Washington. It’s coming from Caracas, London, Milan, Bogota.”

The buying frenzy was set off by developers lowering prices on new units to below what it costs to build in today’s market, Huertas said.

“There were many people on the sidelines watching for the floor. In the last three or four months there’s the perception that we’re there,” said developer Edgardo Defortuna, president and chief executive of Fortune International.

Cash customers

Most of the foreigners are cash buyers like Leroy Jean Francois, who has snapped up 47 properties since January for the two real estate firms he works for in France and Switzerland. The plan, he said, is to buy, fix up if necessary, rent out for the next five years, then sell – for a profit.

The Frenchman has already made a paper profit on a unit he closed on in January at Marquis Residences, a 67-story luxury tower in downtown Miami where prices for a one-bedroom apartment start at $375,000. His unit cost $317 per square foot – “a great price, incredible,” he said.

A recent plunge in the euro – it’s now worth $1.23, down from its high of more than $1.60 in 2008 – could cool things off a little. To buy a $1 million condo, it now takes around 814,000 euros compared to 625,000 euros under the old exchange rate.

Meantime, prices at Marquis Residences also have strengthened to around $400 per square foot.

But even the declining euro has barely given Francois pause.

“I think the euro will weaken more. But even if the exchange rate is $1 to 1 euro, South Florida real estate is still a great bargain for us,” said Francois, who is president of The Bridge, a real estate fund consultancy.

Average Joes

Luxury condos are once again popular among Latin America buyers who purchase them as investments but also as a home base. While their children attend school here, they attend to business interests or escape strife at home.

But for his Canadian buyers, Ellis scours South Florida for condo units at around the $150,000 price point. “We’re basically the Wal-Mart. We’re for the average Joe.”

And these days average Joe Canadian can afford much more. For decades the U.S. dollar was worth more than the Canadian dollar and buying in the U.S. was always more expensive for Canadians. But in September 2007, the Canadian dollar reached parity with the greenback for the first time in 31 years. It fell back again, but now the Canadian loonie, which takes its name from the loon pictured on the one-dollar coin, is near parity at around 95 cents.

So Ellis has been offering his Florida real estate seminars to packed houses in Ontario and is thinking about taking the show on the road to Montreal. There was so much interest in the latest seminar that he had to schedule two sessions for 400 people each this Sunday.

Most of his Canadian buyers are what Ellis calls “end-vestors,” meaning they plan on renting a unit out for now with an eye toward using it themselves down the road.

Since Home Finders is licensed as a brokerage only in Canada, it works with Florida brokers who complete the sales and pay the Canadian firm referral fees. By year’s end, Ellis said he expects to have facilitated 500 Florida closings.

MIAMI (AP) – April 1, 2010 – Freddie Mac is moving to buoy the battered Florida condo market, waiving lending rules that made it harder to buy and sell units in many condo buildings.

Freddie Mac said Wednesday it will back mortgages on units in financially troubled condo developments as long as the seller’s loan is already owned or securitized by the mortgage finance company.

The announcement is a reversal by Freddie Mac, which had been rejecting mortgages for units in condo developments with low occupancy and high delinquency rates for condo association fees.

The change, intended to increase financing availability for Florida condos, is effective April 1. To qualify, the closing date for the new mortgage must be on or before March 31, 2011.

Florida’s once-burgeoning condo market has been hit hard by foreclosures, falling prices and high inventory caused by overbuilding. Condo prices have fallen by half since 2006 in many parts of the state.

Condo associations with a glut of empty units have struggled to collect fees, causing buildings to fall into disrepair and forcing associations to delay improvements.

The condo market woes led Freddie Mac to implement rules governing mortgages in troubled buildings. Units in condo developments where more than 15 percent of owners were delinquent on their association fees could not get Freddie Mac financing. Also, Freddie Mac would not guarantee mortgages in developments unless at least 70 percent of the units were occupied.

The rules were meant to ensure that a building was in good shape and there were enough owners to pay for maintenance and preserve the value of the property.

But those same rules led to complaints from buyers as well as condo associations and developers, who saw them as obstacles to getting empty units sold and occupied.

Developers may now have an easier time selling units.

“Without a doubt, the condo developers that already have Freddie Mac loans in their buildings will be dancing a jig tonight because its the best news they can get,” said Jack McCabe, president of McCabe Research & Consulting, a real estate research firm based in Fort Lauderdale, Fla.

Freddie Mac’s sibling company Fannie Mae announced a separate plan for Florida condos earlier this year.

Fannie Mae is reviewing hundreds of condo projects in the state that currently don’t qualify for its loans. Buildings deemed stable after the review will be given a special approval.

If projects receive special approval, lenders will be allowed to offer mortgages to homebuyers and sell those loans to Fannie Mae, which pools them into bonds and sells them to investors.

Copyright © 2010 The Associated Press, Adrian Sainz, AP real estate writer.

by Alyssa Katz
Heartened by the recent rise in home prices? Don’t get too comfortable. Standard & Poor’s, the credit-rating agency that tells investors what mortgage-backed securities are worth, reports that the increase was just an illusion. It predicts the nation is about to see a deluge of new foreclosures that will drive real estate values back down.

Blame the “shadow inventory” – nearly 1.8 million homes that are on the road to foreclosure but for all kinds of reasons haven’t gotten there yet.

Many homeowners have fallen behind on their mortgages or stopped paying, but foreclosure has not yet arrived. Mortgage servicers, the folks who send you the bills and file for foreclosure when you can’t pay them, are overwhelmed. Courts, too, are backed up. Mortgage modifications and foreclosure moratoriums have put off the day of reckoning for borrowers, but not forever. And unemployment is sabotaging more homeowners every day.

Out of more than $1.6 trillion in existing mortgages that were packaged into mortgage-backed securities by Wall Street, some $425 billion worth are extremely late on their payments, and therefore likely to go into foreclosure. Only a fraction of borrowers who fall seriously behind are able to catch up, with the help of a loan modification. And even then the majority end up falling behind again. That amount of bad mortgage debt has been spiking up every month, slowing down just a little thanks to the government’s Home Affordable Modification Program, but still continuing to rise.

Meanwhile, even as the amount of unpaid mortgage debt rises, the number of foreclosed, bank-owned homes for sale has been holding fairly steady. That tells us that the number of foreclosures for sale on the market is actually just a sliver of all the ones that are really out there. S&P’s chilling conclusion: “Overall, it is our opinion that recent positive housing reports should not be construed as a sign that the distress in the residential housing market is abating, but rather should be attributed to the temporarily limited supply of homes on the market.”

The bottom line: just counting the homeowners who are currently behind on their mortgages, along with the existing number of foreclosures for sale, at the current pace it will take nearly three years to sell all the foreclosures out there. That doesn’t include all the borrowers who haven’t fallen behind yet but are going to, because of unemployment or because their Option ARM payments are spiking up or because they just decide to stop paying.

The shadow inventory is equal to half the size of the entire market of homes for sale. When it starts getting listed, expect home prices in areas with lots of foreclosures to plummet. Yes, more.
Tags: Foreclosures, Home Affordable Modification Program, home prices, housing market, mortgages, shadow inventory, Standard Poors

Former Countrywide borrowers get cash

TALLAHASSEE, Fla. – Feb. 16, 2010 – More than 2,700 people will receive checks from a 2008 settlement Florida negotiated with Countrywide Financial Corporation. As part of the settlement, Countrywide is offering foreclosure relief payments to eligible borrowers who returned valid and timely claim forms and releases under a program administered by the Countrywide settlement administrator.

More than $16.9 million will be distributed this week, and each check will be written for just over $6,000.

In July 2008, Attorney General Bill McCollum filed a lawsuit against Countrywide, one of the nation’s largest mortgage companies, for allegedly engaging in deceptive and unfair trade practices. The lawsuit claimed Countrywide put borrowers into mortgages they couldn’t afford or loans with rates and penalties that were misleading. That lawsuit was resolved in October 2008, and the settlement agreement included a foreclosure relief payment program for Florida homeowners with qualifying Countrywide mortgages.

Eligible homeowners should consider the following:

• Important information: The checks must be cashed on or before May 13, 2010.

• A payment under this settlement may be taxable, and recipients should consult a tax advisor if they have any questions concerning possible tax liabilities.

• Recipients with any questions should contact the settlement administrator, Rust Consulting, toll free at (866) 411?6987, or http://www.countrywidesettlementinfo.com.

The settlement also includes $4 million to fund a foreclosure defense assistance program. The money will be provided to organizations over the course of two years, and the first funds were distributed in late 2009. The organizations that receive the grants agree to provide free legal assistance to eligible homeowners who face foreclosure but cannot afford an attorney to review their case.

“These resources, both the checks to homeowners and the grants to fund pro bono foreclosure defense assistance, are substantial assets to Floridians,” says Heather Rodriguez of Holland & Knight law firm and president of the Legal Aid Society of the Orange County Bar Association, one of the organizations that received grant funding and has an attorney dedicated to foreclosure defense assistance. “Orange and Osceola counties are both high in foreclosures, and homeowners are struggling.”

Countrywide Chief Executive Angelo Mozilo was also named in the Countrywide lawsuit and the civil case against him is still pending in Broward County Circuit Court. McCollum has also called on Bank of America, the company that acquired Countrywide after the lawsuit was filed, to be more responsive to consumers trying to modify loans and save their home from foreclosure.

During the past 20 months we have been reducing our inventory at a pace of about 111 units per month. We have 1,267 units still on the market, which would be almost a 12-month inventory if we continued at the same pace. A lot of this is perception and once the buyers are convinced we have reached the bottom the inventory could evaporate in a hurry. The event that could trigger a large number of sales will be the opening of the new airport in mid May. The FAA has just completed their testing of the Instrument Landing System and it looks like the terminal is ahead of schedule.

We follow Polynomial Trend Lines on all the complexes and have actually seen some of the sales figures turn positive. It is two early to know if those trends will continue for the next few months but I believe they will. We keep hearing about a “shadow inventory” which some say is the Lenders holding foreclosures and other owners wanting to sell but are waiting for the market to turn.

My advice to buyers is to buy now while there are still several distressed properties available at great prices. MY advice to sellers that don’t have to sell is to hold for a few months.

Crooks that are offering to get the owner out of a jam if they will just pay them a few thousand dollars upfront have scammed a lot of owners that have found themselves in a distressed situation. If you need help contact a real estate agent that is a member of the National Association of Realtors and holds the SFR Certification.

Jim Free Realty
02/01/2010

ORLANDO, Fla. – Jan. 25, 2010 – Florida’s existing home sales rose in December, marking 16 months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®.

Existing home sales rose 33 percent last month with a total of 14,630 homes sold statewide compared to 11,013 homes sold in December 2008, according to Florida Realtors. Statewide existing home sales last month increased 4.3 percent over statewide sales activity in November.

Florida Realtors also reported a 91 percent increase in statewide sales of existing condos in December compared to the previous year’s sales figure; statewide existing condo sales last month rose 22 percent over the total units sold in November.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales and higher condo sales in December. A majority of the state’s MSAs have reported increased sales for 18 consecutive months.

Florida’s median sales price for existing homes last month was $140,400; a year ago, it was $155,300 for a 10 percent decrease. Housing industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in November 2009 was $171,900, down 4.4 percent from a year earlier, according to NAR. In California, the statewide median resales price was $304,520 in November; in Massachusetts, it was $285,000; in Maryland, it was $245,569; and in New York, it was $210,000.

According to NAR’s latest outlook, home sales are seeing a boost from the federal homebuyer tax credit. “There are many more potential buyers who can enter the market in the months ahead,” said NAR Chief Economist Lawrence Yun. “Activity should ramp up for another surge in the spring when buyers take advantage of the expanded tax credit, which hopefully will take us into a self-sustaining market in the second half of 2010. In all, 4.4 million households are expected to claim the tax credit before it expires, and balance should be restored to the housing sector with inventories continuing to decline.”

In Florida’s year-to-year comparison for condos, 5,968 units sold statewide last month compared to 3,132 units in December 2008 for an increase of 91 percent. The statewide existing condo median sales price last month was $107,000; in December 2008 it was $130,300 for an 18 percent decrease. The national median existing condo price was $178,000 in November 2009, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 4.93 percent last month, significantly lower than the average rate of 5.29 percent in December 2008, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state’s larger markets, the West Palm Beach-Boca Raton MSA reported a total of 849 homes sold in December compared to 638 homes a year earlier for a 33 percent increase. The market’s existing home median sales price last month was $247,900; a year ago it was $246,000 for an increase of 1 percent. A total of 763 condos sold in the MSA in December, up 45 percent over the 527 units sold in December 2008. The existing condo median price last month was $111,400; a year earlier, it was $112,900 for a decrease of 1 percent.

Related: Dec. existing-home sales down, prices rise; 2009 sales up, says NAR

© 2010 Florida Realtors®

Investor Report: Florida Condos
by Kenneth R. Harney
Good news: Investors and condo sellers in Florida could be major beneficiaries of a new policy by Fannie Mae that’s designed to provide more mortgage money to stimulate sales.

Last week Fannie announced an easing of its tough previous rules on spot loans in dozens of condo projects throughout Florida, including 51 buildings in the hard-hit Miami area with more than 17,000 units.

Fannie Mae said it would now provide “special approvals” for loans on units in condo projects that otherwise wouldn’t qualify for financing because of a variety of issues — from excessive unpaid condo association fees to high concentrations of investor units.

The company also said it is dispatching a team of analysts who will look at condo projects throughout the state to determine whether to grant exceptions to its rules – and pump up sales volume.

The idea, said a Fannie official, is to provide liquidity to depressed condo markets where combinations of problems – speculative overbuilding, walkaways by earlier buyers abandoning sales contracts, tanking prices and financially-troubled condo associations – have created crisis conditions for real estate activity.

Realtors generally reacted positively to Fannie’s switch. Moe Viessi, owner of Viessi & Associates in Miami, told Realty Times last week that “easing up on spot loans will help greatly.”

Combined with the $6,500 tax credit for repeat buyers and the $8,000 credit for first time purchasers, he said, “I think this will generate a real opportunity” to move condo units that otherwise would sit unsold.

Investors who bought multiple-unit blocks of condos within the past year at deep-discount, wholesale prices should also get a major new resource. Rather than having to hold their units as rentals for extended periods of time before selling, they will now have the possibility of selling at a profit – essentially short term flips — because financing is more readily available to retail purchasers.

“No question this will be great news to investors who managed to get in low,” said Jack McCabe of McCabe Research Associates of Deerfield Beach, a condo market feasibility expert.

But not all Miami area condo experts agree that Fannie’s new special approval program will make a big splash. Peter Zalewski, founder and principal of Condo Vultures, a brokerage and investment advisory firm based in Bal Harbour, says 80 to 90 percent of his clients are all-cash buyers, mainly from foreign countries.

Bottom line for investors: Check out Fannie’s list of eligible buildings and its “special approval” rules on www.efanniemae.com. Talk to local lenders who may find that units in buildings that previously were unacceptable to Fannie Mae, now make the grade.

Published: January 15, 2010

Fannie to ease condo mortgage restrictions

WASHINGTON – Jan. 8, 2010 – Fannie Mae announced yesterday that it would comprehensively review hundreds of condominium projects in Florida. Through a new “Special Approval” designation, Fannie hopes to streamline mortgage approvals for projects that don’t currently fit Fannie Mae guidelines even though they present limited risk to the company.

Florida Realtors strongly urged Fannie Mae to revisit its lending program in the condo market, and it consulted a number of Florida Realtors as it developed the program, including Florida Realtors® Vice President Summer Greene, regional manager with Prudential Florida 1st Realty in Fort Lauderdale.

“This is good news for Florida and a step in the right direction for the state’s condominium market,” Greene says. “Hopefully, with the special approval designation process, we can begin to get our condo inventories reduced and absorbed as more condo buyers receive a green light from lenders for loans. This will help boost confidence in the market.”

Fannie Mae and its cousin, Freddie Mac, back more than half of all U.S. mortgages. As the Fannie Mae initiative develops and gains momentum, Greene hopes it provides incentive for Freddie Mac to follow suit.

While Fannie Mae currently has boilerplate guidelines for approving condo loans, it will sometimes grant a mortgage to a non-conforming condo if requested by a lender. The Special Approval designation takes that a step further by approving exceptions before a lender request has been submitted.

A dedicated team of six Fannie Mae professionals based in Florida will now examine statewide condominium projects that may not currently meet Fannie Mae’s standard eligibility criteria and assessing specific criteria more closely. The team will look at a condo project’s occupancy level, association dues, financial stability and property condition. If a project is deemed sufficiently stable following a closer examination, it will be granted the Special Approval designation, freeing lenders to originate and deliver mortgage loans secured by Fannie Mae. Projects deemed eligible will be listed on www.eFannieMae.com, and qualified borrowers will be eligible for financing.

“NAR applauds Fannie Mae for taking this important step to make condo loans more readily available in Florida,” says Moe Veissi, National Association of Realtors® first vice president and broker-owner of Veissi & Associates Inc. in Miami. “Our state is probably the hardest-hit as far as the condo market is concerned, and Fannie Mae’s new effort to take a closer look at project eligibility could go a long way to putting projects back on a healthy financial track.”

A Special Approval designation will be effective for a period between 9 and 18 months, and lenders must confirm a project’s Special Approval designation on the date of the loan application. The Special Approval initiative applies to established condominium projects only.

© 2010 Florida Realtors®