The three largest cities in south Palm Beach County raked in millions of dollars from property owners as the housing market boomed, using much of that money to pay for the needs of a growing population. (more…)
In the clearest sign yet that the South Florida housing market boom has ended, a Miami mortgage lender confirms it filed a $50 million foreclosure action against the developers of a Boca Raton condo conversion. (more…)
A developer is considering a sale of unsold units at three South Florida real estate projects, in a proposed deal that shows how builders are grappling with the ongoing slowdown in the housing market. (more…)
Sales of existing homes in Florida remained at a sustainable pace in March, with buyers continuing to see favorable Florida mortgage rates and a range of housing options available in Palm Beach County and across the state.
Florida home loan officers in Boca Raton clouded by their connection to subprime lender New Century Financial Corp. are reinventing themselves with the help of a rival.
Roughly 35 employees from the Boca office of Home 123 Mortgage have agreed to join WCS Lending.
The deal comes just days after Home 123 and its California parent, New Century, stopped funding existing loans and accepting new business in the wake of a nationwide shakeout of subprime lenders, which make loans to borrowers with weak credit.
Trouble deepened for New Century on Tuesday when California, Florida and other states told the company to quit taking Florida mortgage applications and turn over pending home loans to rival lenders, the company said. Fannie Mae, the biggest source of money for U.S. mortgages, said it will no longer buy New Century’s loans.
Irvine, Calif.-based New Century’s managers have said the company may go out of business.
Eric Wallberg, who started Boca Raton-based WCS five years ago with partner Carlos Cepeda, said the addition of loan officers from Home 123 is “truly a perfect fit.”
WCS also has offices in the Fort Lauderdale housing market, along with Southfield, Mich., and New York. It originated more than $1.2 billion in home loans last year, with less than 10 percent of its business being the subprime market, Wallberg said.
Like WCS, the Boca office of Home 123 had few subprime Florida mortgage loans, working mostly with affluent clients and handling about $500 million in home loans last year. “We were making money hand over fist,” said Louis Spagnuolo, a senior mortgage banker. “[New Century] wasn’t definitive in the direction they wanted to go in, and we felt this was too compelling to pass up.”
The 35 Home 123 workers in Boca resigned since Friday so they could start with WCS. About 30 employees went to work with other local Florida mortgage firms, said Alan Reichstein, a Home 123 vice president who is moving to WCS.
“Nobody ended up without a job,” he said.
Clients of Home 123 shouldn’t have problems with their loans and might get better interest rates now that WCS is involved, Reichstein said.
Home 123 also has offices in the North Palm Beach housing market and Plantation that are not part of the WCS deal, Reichstein said. An executive at the Plantation office referred calls to New Century, and an official in North Palm Beach could not be reached.
New Century, the nation’s second-largest subprime lender, this month disclosed a criminal investigation related to the trading of its securities and accounting procedures. The New York Stock Exchange suspended trading in the stock and took steps to delist it.
Concerns over home loans made to high-risk borrowers that are defaulting during the housing downturn have rocked Wall Street in recent weeks.
The Home 123 deal with WCS is a precursor of things to come in the subprime market, said Jonathan Shapiro, chief executive of American Home Lenders in Plantation.
“A lot of loan officers are going to flee for safety, and some of the smaller places will ride out the storm or go out of business,” Shapiro said.
SOURCE: The Sun-Sentinel
Boca Raton is getting a new Florida mortgage company.
And it’s cause for notice by the Palm Beach County Business Development Board (BDB).
In fact, the BDB, at a meeting last week, said it was the largest project it has worked on in some time, according to the Boca Raton News.
At the meeting, the BDB extended an official welcome to NLC Financial Services, a Deerfield Beach-based residential mortgage company.
First NLC, which has many branch offices nationwide, is making preparations to move its corporate headquarters from Deerfield to a 120,000-square-foot facility within the Boca Corporate Center & Campus near the intersection of Yamato Road and Congress Avenue. Relocation is expected to take place in April or May 2007.
Kelly Smallridge, president of the BDB, said the Florida mortgage company will bring 450 existing jobs to Boca Raton and create more than 200 new jobs within the next few years.
“This is the biggest thing we’ve been involved with in several years,” Smallridge said. “Our goal was not to steal First NLC away from Deerfield. We simply wanted to retain their presence in South Florida.”
First NLC specializes in Florida mortgage loans to customers who do not live up to the credit, documentation or other underwriting standards that conforming mortgage lenders and loan purchasers stress.
Boasting six regional operations centers in the United States, including one in Tampa, the firm has seen its loan origination volumes steadily increase. In 2004, loan originations surpassed $3.3 billion.
Jeff Henschel, President and CEO of First NLC, told the audience that his firm’s core strengths are perseverance, attention to detail and customer satisfaction.
“When this company started, it only had $5,000 to its name. We’ve obviously come a long way,” said Henschel. “Hopefully, we can take our strengths and watch them really grow and prosper in Boca Raton.”
Henschel added that choosing Boca Raton as its new corporate site was an easy decision.
“In the past, when I graduated from Tulane University, I thought of all the places I could go to live. Boca became the number one choice for me,” he said. “It’s only appropriate that we move the headquarters to this city. Both it and Palm Beach County have been very good to us.”
Hopefully, this newly-arrived bad credit Florida home loan provider helps those in need achieve the “American Dream” while bolstering the greater South Florida economy as well. With the slow housing market, we need all the help we can get these days.
A new report on the U.S. office and industrial space markets pegs West Palm Beach as a national player in both sectors.
The new findings by CB Richard Ellis identify West Palm and Boca Raton as among the top 10 Sun Belt markets best able to raise office rents during the next five years, given growing demand for Florida real estate — which happens to also be in scarce supply.
There are problems, of course: Volatile gas prices and the bursting of the speculative bubble in the Palm Beach housing market are cited as potential stumbling blocks.
Although neither would halt development altogether, the authors write:
“Markets having the greatest exposure to inflated housing prices may have the most difficult time in dealing with the fallout from soaring gas prices and plummeting home values.”
That would seem to describe the scene in Palm Beach County, where historic Florida mortgage rates remained low for so long that home prices ballooned by 30 percent from July 2004 to mid-summer 2005. People simply believed they could not lose money.
Of course, housing markets have cooled since then, and the Port St. Lucie area is ranked sixth in overvalued markets in the country, according to a mid-year survey of real estate information firm Global Insight and National City Corp. West Palm Beach weighs in at number 19.
Yet demand for office space remains robust, and scarce industrial space continues to push up prices, even as the long-term future of both Florida home mortgage loan rates and residential real estate is highly questionable.
Here in Palm Beach County, that’s as true in wide open St. Lucie County as it is in Boca’s crowded industrial market.
“The problem with St. Lucie is that no one is speculating on building product up there. “Instead, investors are buying land - and waiting to build,” Robert C. Smith, a CB Richard Ellis V.P., said.
Across Boca Raton, the cooling conditions of the Florida real estate market are apparent.
“There’s a lot of product out there, but prices are going down” said Boca Raton Realtor Marlene Piccolo.
Signs of optimism are slightly popping up, as those looking for a Florida mortgage loan sent in an increased number of applications last week. That proves some interest is out there. But Jack McCabe, president and chief executive officer of Deerfield Beach-based McCabe Research & Consulting LLC, agreed, said the supply and demand formula that usually fuels the market “is not returning to normal.”
“The demand side of the supply ratio is returning to a historical norm,” he said. “The supply side is at the highest level in history.”
McCabe does predict a dropping in prices at least, meaning affordability will be there for lower-income buyers in the Palm Beach housing market that have had trouble receiving Florida home loan approval recently. Hopefully, the foreclosure rates for these individuals will fall back down in the near future.
Buyer incentives offers by builders
How does on bump up the Florida home mortgage loan demand? By bribing people, essentially. Builders and developers in Boca Raton have been offering buyer incentives for months, McCabe said. “Now, individual sellers are doing the same to try and sell their properties.”
Recent statistics compiled by the Florida Association of Realtors (FAR) indicate that June existing single-family home sales for the Boca Raton-West Palm Beach area totaled only 947 - a 39 percent drop from the same month in 2005. In addition, condominium sales totaled 512 - 41 percent less than June of last year, when 872 were recorded.
“This year, appreciation levels for Palm Beach were completely flat for the first time in five years,” McCabe said. “Broward and Miami-Dade appreciated slightly, but nothing of that sort happened in Palm Beach.”
Historically, normal appreciation for South Florida homes - prior to the 2000-2005 boom - was 6 to 10 percent, he said. “The last five years, appreciation was artificially inflated to 20 to 42 percent.”
Many potential owners are currently saving money, biding their time, waiting to apply for a Florida mortgage home loan until prices have truly plummeted. They will return, however, meaning this is no time for seller panic.
“Housing slowdown? What housing slowdown?”
These are the words of Joel Levy, V.P. of Oriole, a construction company in Boca Raton. His comments are indicative of many local builders, which are reporting consistent or better-than-average employment projections for the upcoming months, despite all the signs of a sagging Florida housing market.
“We certainly haven’t experienced any decreases so far. Our workforce is expected to remain steady for the rest of the year,” Levy said.
This assertion, as reported by the Boca Raton News, flies in the face of a bevy of recent statistics indicating a cooling trend in the market, blamed by analysts on the quadruple whammy of rising Florida home loan costs, ever-escalating property taxes, lingering hurricane fears and the increasing property insurance costs felt across the state.
According to the Florida Association of Realtors, 982 homes in the Boca Raton / West Palm Beach area sold this past May, representing a 26 percent drop from the 1,335 homes sold in May 2005. The slowdown has also been felt across Florida, translating to 18,860 homes sold last month compared to 24,523 in May 2005.
The Florida Realtors are quick to point out, though, that housing in South Florida is bound to pick up soon because of the abnormally large amount of inventory currently on the market. Such availability can be attributed to companies such as Southeast Contractor Services in Boca Raton, which has met the slowdown head-on.
“There haven’t been any layoffs within the company. In fact, when I see a slowdown, I expand my business and build more. I’m one who doesn’t go with the flow.” said Jude Endres, President of Southeast Contractor.
Besides single-family home builders, those who specialize in condominiums and custom homes are also enjoying strong employment. Julie Miller, owner of Boca Raton-based Miller Custom Homes, remarked that her business is successful due to a great many people in the region being priced out of the market.
“Many of my customers can’t afford to move to another house because of high prices or other factors. Therefore, they’ll contact us to renovate their current house in order to make it much nicer. Since this has been going on a lot lately, the amount of subcontractors I use has tripled,” Miller said.
A survey conducted by Manpower, a national temp agency, reveals that many construction companies in the U.S. share Boca’s optimism for a productive 2006 third business quarter. Experts caution, though, that builders‘ employment rates have been inching downward throughout 2006 because of housing slowdowns occurring in other parts of the country.
According to Levy, employment and other factors important to a construction company often depend on what projects it deals with on a daily basis.
“Some companies work on large-scale housing developments that require a lot of manpower. Because we specialize in smaller single-family, townhouse and condo projects around South Florida, we don’t need as many. That’s what we prefer,” Levy said.
The dearth of hurricanes striking South Florida over the last two years have also inadvertently helped certain Boca construction companies maintain a sizeable workforce. A good example is Ritz Construction in Boca Raton, in the midst of completing projects originally scheduled two years ago.
“Do I think a reduction in the number of subcontractors we use will take place? Yes, that might happen sometime next year. For now, the backlog of projects we have will keep our workforce with us for quite awhile,” said Barry Webster, Director of Operations for Ritz.
Webster added that the acres of available land space for residential units within South Florida, especially in Palm Beach County, makes a significant difference. Things are proceeding well enough for now, but if Florida home loan rates continue to rise, and the demand for housing declines as predicted, vast economic changes could be on the horizon.
The South Florida housing market has been cooling for some time now. Speaking with various insiders from that area, one receives mixed viewpoints on whether or not the state of Florida home loans in the city will continue to favor buyers.
Boca Raton realtor Marlene Piccolo, for example, doesn’t feel too concerned about the current real estate situation.
“The market’s a little slow right now, but I think it’s going to improve soon,” said Piccolo, who works for Realty Associates. “There’s a lot of product out there and it seems like potential buyers are waiting until they find the best deal.”
Piccolo made her comments while attending a recent “open house” seminar presented by Deerfield Beach-based HomeBanc Mortgage Corporation.
Inside this Florida home loan seminar
As the seminar’s main speaker, Florida Association of Realtors (FAR) President Mike Dooley gave the audience - many of whom were Boca realtors - a generally positive outlook for South Florida real estate over the next few years.
“Is the future bright? Yes, it’s incredibly bright,” Dooley said, echoing Piccolo’s sentiments. “Although we’re facing challenges, I’m sure we’ll be able to deal with them.”
The main reason behind slowing Florida home loan sales, according to Dooley, is not the rise in prices but other factors, i.e., a fear about paying higher taxes when moving from one house to another.
Dooley mentioned efforts to push a “tax portability” bill at the 2006 Florida legislative session that would help homeowners relocate while keeping the same tax base. Unfortunately, the bill died in both chambers of the legislature.
Others factors behind Florida mortgage loan slowdown
Other elements impacting home sales have been rising property insurance costs and the threat of hurricanes. Nevertheless, Dooley feels confident the real estate market will experience a turnaround in the near future.
Besides the enhanced availability of new products these days - such as instant approvals on Florida home loans - Dooley also pointed out the ongoing surge in Florida’s population.
“It’s expected to double within 10 years. Just in South Florida alone, it’s going to be approximately 36 million people when that time comes,” he said. “An increased need for housing will naturally follow suit.”
The local area’s rapidly aging Baby Boomer population is additionally expected to bring about more wealth transferences, prompting many to purchase second homes. Dooley wrapped up his talk by reminding his audience the crucial role that realtors play in the home sale process.
“Homeowners who attempt to sell their properties without realtor assistance usually don’t succeed as much,” Dooley said. “Your job as realtors is to guide people toward achieving the American dream.”
They could start by making single-familg Florida homes and other residences a lot more affordable to borrowers.
