Countrywide Home Loans, the nation’s largest mortgage banker, has added two offices in upscale sectors of Miami-Dade County and plans to open several more South Florida housing market offices this year.

It is expanding locally, even though some analysts expect overall residential lending will decline this year amid the subprime lending contraction and tighter underwriting by some lenders.

“As some [lenders] struggle and some small ones go out of business, we see an opportunity to expand our market share,” said Anthony Giglio, VP and area sales manager for a group of Countrywide branches in Miami-Dade and Broward counties.

Countrywide’s size, its focus on prime Florida home mortgage loans and its diversity in products and locations are enabling it to expand and remain profitable, even though it is facing subprime problems, said Frederick Cannon, an analyst in the San Francisco office of Keefe, Bruyette & Woods. Cannon expects Countrywide will continue its recent years’ pattern of adding branches in Florida and other states with strong long-term growth prospects.

In mid-February, Countrywide opened a branch at 9538 Harding Ave. in Surfside. In early March, the company opened a branch at 19495 Biscayne Blvd. in Aventura. That gave Calabasas, Calif.-based Countrywide 21 South Florida home loan branches, to which it plans to add at least two Broward locations this year, Giglio said.

Realtors, law firms and builders in Surfside and neighboring towns had been referring borrowers to other Countrywide offices, according to Grace Dionne, branch manager for the company’s two new offices.

“Aventura is a large market where we wanted to be, and where we feel we can build those relationships,” Giglio said.

Countrywide also has several South Florida satellite offices, which have just two loan officers and report to branches.

Countrywide does not provide state breakdowns on its lending. In its 2006 10-K report to the SEC, parent Countrywide Financial Corp. said Florida mortgages made in the state had unpaid principal balance of $97 billion at the end of last year. That accounted for 8 percent of the company’s unpaid balance of $1.3 trillion.

Countrywide is among lenders that are concerned about possible increases in foreclosures on subprime mortgages.

About 7 percent of loans Countrywide made last year were subprime, said Sanford Samuels, an executive management director for the company, during a March 22 hearing of the U.S. Senate Committee on Banking, Housing and Urban Affairs.

Countrywide made $495 billion in residential mortgages in 2005 and $463 billion last year, placing it first in the nation, according to Inside Mortgage Finance, a Bethesda, Md.-based newsletter.

Samuels told the Senate Committee that, starting with loans made in 1997, Countrywide’s annual average of bad credit home loans that have gone through foreclosure was 3.4 percent. The company’s highest rate was 9.9 percent, for subprime loans made in 2000.

Citing declining Florida home prices and rising rates on adjustable rate mortgages, a big part of the subprime market, Countrywide expects foreclosures on subprime loans it made last year could approach or exceed the 2,000 mark.

Everybody knows that the region’s Florida real estate market lurched, staggered and stumbled through 2006 while attempting to find an elusive balance.

But just how bad was it?

The quartet of the Southwest’s largest and best-financed realty Florida mortgage broker houses - Michael Saunders & Co., Coldwell Banker Residential Real Estate Inc., Re/Max Properties and Prudential Palms Realty - dropped an average of 43 percent in sales and an average of 47 percent in unit sales.

In raw dollars, it was a drop of about $3.5 billion.

For many brokerages, it was not the third-best year ever, as many real estate agents had hopefully predicted early last year. Complicating slowing sales was the fact that some companies over-invested in infrastructure and some let expenses get out of hand during the heady boom years.

Real estate agents were coming off a sustained red-hot market to a drop-off that was the among the worst in a decade. For all four of the large brokerages, 2006 fell short not only of 2005 but also of 2004.

Two of the top four, Coldwell and Prudential, consolidated offices and reduced head count. Re/Max reduced its total number of employees, but expanded its total offices while Michael Saunders & Co. expanded both in the hope that Florida mortgage activity would pick up again.

The experience in 2006 was one that anyone in real estate will tell you that no one ever wants to repeat.

“The correction in 2006 was very different than previous corrections” said Joe Hembree, the president of the Sarasota Association of Realtors. The drop-off did not occur, as most do, in a general economic downturn. In fact, it was quite the opposite, he said.

It was speculation that fueled the historic sales and price increases and it was “at levels that simply are not sustainable in a healthy economy,” Hembree said.

Factors including high property taxes and insurance costs contributed to the scale of the correction, Hembree said.

Key West Florida mortgage broker Melanie Crocker sums up the past year’s housing market this way: “It’s been tough.”

She’s not kidding.

Both prices and sales fell considerably in 2006 in Monroe County, where the standoff between buyers and sellers has already given way to a down market.

The median price for a single-family home went down 11 percent, settling at $625,000, according to a Miami Herald survey comparing sales in the second half of 2006 to the same period a year earlier. Florida condo prices were off even more, dropping by 17 percent to $440,000.

Things were especially bad in Key West, where prices for single-family homes dropped 37 percent to $395,000. Condo prices fell 19 percent to $440,000.

The downturn comes after prices in the Keys soared into orbit. In past few years, investors and vacation buyers bid prices up so high that few residents could actually live there; and most Florida home mortgage loan borrowers stayed away.
Hospitals ran short of nurses, and hotels had to offer shelter for their employees. Companies searched for workers willing to drive south from Homestead and Florida City.

Now, lower prices may come as a relief to Keys residents priced out by the boom.

But they’re not rushing to buy just yet. Sales of houses in 2006 were down 38 percent from a year earlier. For condos, it was 47 percent.

”There were no buyers because they wanted to see the prices adjust,” says Crocker. “Now that has happened, and we are starting to see a little more activity. Though people are still wondering if we have hit bottom or not.’

Sometimes, when shopping for a home, cynicism is needed. Or at least healthy precaution.

It might appear that the friendly broker who listens to your needs, drives you around to showings and answers your questions is unflaggingly devoted to you and your Florida mortgage.

In reality, though, most real estate agents work for sellers. These days, more than ever, agents representing buyers are increasingly being showered with extra incentives that may cause them to push certain houses.

Traditionally, sellers pay 6 percent commissions - 3 percent to their agent, 3 percent to the buyer’s agent.

But with the market slowing, sellers are upping incentives to buyer’s agents. Those increased commissions draw agents and, in turn, buyers.

“People offer higher commissions because it works,” says Spencer Barron, a broker associate at HQHomes in Denver, who says houses in his area with higher commissions tend to get sold faster.

Consumer advocates, however, fear that higher payouts mean buyers will be shown houses more in the brokers‘ interests than in their own. Even so-called buyer’s brokers, agents who sign a contract saying they represent you, could be susceptible.

“It’s tough to be objective when the reward for selling one house is much greater than the rest,” says Joseph Fox, whose BuySide Realty in Chicago rebates the larger fees to buyers.

Federal rules require the disclosure of fees at closing, but by that time it is often too late to pull out. There is some industry debate over whether parties should be required to come clean, but until it’s resolved, you need to protect yourself.

Here’s how:

1. Go it alone
Finding a house yourself, rather than relying on a Florida mortgag broker, is easier than ever. Realtor.com has extensive listings, and you can call listing agents directly to set up appointments.

Once you decide to buy, ask for 3 percent off your final price. Listing agents often try to collect the full 6 percent if a buyer is brokerless.

But you did the work; you deserve the rebate.

2. Set the fee
If you’d rather use a broker, have him put in writing what percentage he’ll get paid and guarantee that it will be the same for every house. Do this before even applying for a Florida mortgage loan.

Tom Early, spokesman for the National Association of Exclusive Buyer Agents, says to sign a contract before looking at houses. Stipulate that any bonus being paid by a seller be used to pay closing costs.

3. Put it in dollars
Eliminate all conflicts by getting your agent to agree to a set dollar fee rather than a percentage of the sale. That way your broker will have no incentive to show you overpriced homes or discourage you from negotiating the price down, since she’ll get paid the same either way.

We’re not just saying this to drum up business. A new study confirms that borrowers with a poor credit score save more money by speaking with a Florida mortgage broker before taking any action.

A joint study released by economists at George Washington and Oklahoma State universities states that brokers are more cost-effective in this situation.

The report compared sub-prime Florida mortgages originated by brokers and traditional lenders between 1995 and 2003. Its findings reveal that the reason brokers originate more than 50 percent of all residential loans is because they are a more efficient option for consumers.

“Brokers are small business men and women who have to be competitive to remain in business,” said NAMB President Harry Dinham. “The hard data in this report is a clear sign that this competition is benefiting consumers in the sub-prime market.”

Dinham said that some groups have tried to use anecdotal evidence to accuse brokers of encouraging consumers to choose loans that are more profitable for the originator. This process of “steering” is simply fale.

The study notes the following:

“The evidence does not support the hypothesis that customers of brokers generally pay higher prices than customers of lenders because of steering … One can conclude only that in the sub prime market brokers’ customers generally paid less than lenders customers.”

“Unlike many of the largest lending institutions, most brokers are members of their community who help originate loans for the same people we spend time with at Kiwanis Club meetings and Little League games,” said Dinham. “Our reputation is the heart of our business and it only makes sense that we would do everything in our power to make sure our customers are treated fairly.”

We feel the same way. Those without a perfect credit score should consult with Florida home mortgage experts in order to take advantage of their knowledge.

Florida mortgage brokers have a message for those that believe the Palm Beach housing market is in the middle of a major slow down: think again.

Granted, there have been fewer sales since the spring and a larger-than-usual inventory on the market. But many say the summer quiet is about to be interrupted with a rebound in home sales, for these reasons:

* Forces at work elsewhere do not apply to resort “micro-markets” such as Palm Beach.

* Baby boomers are newly liquid with retirement money and/or inheritances to invest in vacation homes; the barrier island is highly visible on their list of the most appealing places to settle.

* Florida home mortgage rates remain attractively low.

* There is pent-up demand among people who held off buying after the 2004 and ‘05 hurricanes. And to date, this storm season has been a fear-allaying reprieve.

* More people move into Florida than leave the Sunshine State; and Palm Beach is a magnet for all ages.

* Also boding well, “the rental market is stronger than I can remember,” said broker Rosalind Clarke of The Corcoran Group, who cited last year as “the worst. There’s all this new blood in town, and they don’t own property yet.”

Clarke, who has been interviewed on CNBC as an expert on Palm Beach housing market activity, said her optimism comes from “just looking at this whole market very logically. No dramas that scare people off. And people have made a lot of money in the (stock) markets.”

Although fewer homes sold this year than last, prices have held, Clarke said, because people sense that, “If you’re going to put money anywhere, you’re safe in Palm Beach.”

But Joel Naroff, chief economist for Commerce Bank and based in Cherry Hill, N.J., sounded a cautionary note.

“Some special factors are involved there; it’s a different market,” he said. “Construction has not been as totally out of control as in other parts of southeast Florida. That holds out hopes that major problems (elsewhere) might not hit as hard on the island.

“That doesn’t mean it will escape unharmed. Because you can afford it doesn’t mean you’ll be willing to pay a high price.”

But it does mean that Florida mortgage demand is never likely to remain slow. This is a popular, attractive area in which to reside for a handful of solid reasons.

Although two related industries are enduring a bit of a market slowdown, the classes to license Florida mortgage brokers and real estate agents / brokers continue to draw new students.

From the convenience of their own homes, candidates to become mortgage brokers and real estate agents in the Sunshine State can learn in new and ever-changing ways, the Tallahassee Democrat reports.

Technology has opened new doors for nearly every industry, and continuing education (CE) courses are now being offered online by the Florida Association of Mortgage Brokers (FAMB).

The course to obtain a mortgage broker’s license in Florida is only offered live in a 24-hour class by FAMB’s trained instructors who have decades of experience in the business. Upon completing the class, students take a state exam to obtain certification.

• Once certified, mortgage brokers must complete 14 hours of CE every two years to maintain their licenses, but now they can take classes online.
• The FAMB is the nation’s largest and oldest mortgage brokers’ association, representing nearly 50,000 Florida mortgage professionals since 1960.
• A membership in the National Association of Mortgage Brokers (NAMB), the industry’s largest trade association is included for all FAMB members.

“The FAMB Foundation handles our education classes, which are free to members who only need to purchase a $12 class book. We have classes constantly,” Executive Director Karen Wordell-Smith said.

At the FAMB convention in July, more than 2,070 CE certifications were issued. Online CE offerings include FHA underwriting and processing, the ABC’s of FHA lending, understanding and reviewing appraisals, mortgage business, the fundamentals of the Florida mortgage loan process, shedding the light on credit scoring, fraud detection and many more.

Classes usually have 20-50 students, when offered in a physical rather than virtual classroom. In the past year alone, the association trained 2,700 mortgage brokers in classrooms.

“We feel our classes are the best because they are taught by people who work in the industry. While the market has slowed a bit nationwide, the Florida home mortgage market still remains strong. We’ve refinanced the world in the past five years,” Wordell-Smith said.

Unlike mortgage brokers, real estate agents and brokers may take the basic licensing courses online, but later must pass a state exam before becoming certified.

We all know what sort of effect current market conditions have on buyers: it provides them with leverage during the Florida mortgage loan process and helps them make better offers.

While such a set-up is a positive for potential owners, it’s not as appealing if you’re an agent or Florida mortgage broker in the state; many are opting out of the profession.

The number of new real estate agents in the Sunshine State grew by the thousands over the past five years as property values and sales rocketed, providing good commissions for even inexperienced residential real estate brokers.

But now that sales have plummeted and prices are either flat or down, some agents are jumping off the bandwagon and into new careers.

Effect of Florida home mortgage market on brokers

Carole Enneking moved from The Keys to Boca Raton in 2000 to start a career in real estate and sold more than $2 million in property a year during the boom years. She used to set appointments for buyers with sellers and arrive with Florida home loan contracts at $5,000 to $10,000 above the asking prices to guarantee sales.

Not any more.

“All of a sudden, the bottom fell out,” Enneking says. “There’s an overabundance of inventory and no one to sell to. You can’t just walk into a house and sell it now.”

Although she still works for Prudential, Enneking only takes sales by referral now. She’s supporting herself by selling the Lilly Pulitzer clothing line and taking online classes at Kaplan University, with the goal of becoming a psychologist.

University of Phoenix adjunct professor Bruce Fraser says several students at its Broward County campus are leaving real estate careers to become nurses.

Overall, the pool of sales for real estate agents to draw from has been shrinking. A total of 2,281 existing single-family homes sold in the Orlando housing market this past July, down from 3,137 in July 2005.

Statewide, a total of 14,451 existing single-family homes sold in July, down 33 percent from 21,691 homes sold the previous July.

Florida mortgage broker reaction

When Michael Morris of West Palm Beach started seeing his property sales income decline because his clients couldn’t afford to buy homes, he began helping people find apartments with Florida Rent Finders.

The commission from signing five sizable rental deals is about equal to selling a moderately priced home, he says.

Major ebb and flow among the ranks of real estate agents is nothing new, says Frank Kowalski, past president of the Florida Association of Realtors and president of Metro-Dade Realty in Miami.

The down markets of the early 1980s and early 1990s also were accompanied by an exodus of agents, who were replenished and then some when the market came back. FAR membership declined from 84,633 in 1987 to 65,285 in 1995. It wasn’t until 2002 that it surpassed the prior high, but it has since reached 161,531 members as of Aug. 31.

“There are cycles where they think it’s easy money - and they find it’s not,” Kowalski says. “And when the market shifts, they can’t adjust.”

However, the recent influx of agents was bigger than ever because of the record increase in property values, he says. That means the adjustment could be similarly large if sales don’t start improving soon.

As always, it goes back to the demand for Florida home loans. As buyers come, agents will remain right where they are.

We talked last month about the usefulness of a Florida mortgage broker in starting your home search. Although estimates vary, it’s generally thought that about half of all American homeowners get their loans through mortgage brokers. Still, many worry that using a broker does not represent as good a deal as going directly through their bank or credit union.

The long and short of it: A good mortgage broker has access to loans offered by a wide variety of lenders, and will do much of the shopping around for you. But in all likelihood, brokers charge for their services and you will be affected by this.

• If you’re unfamiliar with the various types of Florida home loans being offered, their services can be indispensable.
• It can, in many cases, be especially valuable if there’s something tricky about your home loan application, such as a glaring financial flaw or a bad credit history.

Watch out with many online services that don’t reveal much about fees until later. Talk to as many people as you need to, but get the details at the onset. Be sure to look for points paid at closing. Each point is an up-front fee equivalent to 1 percent of the Florida home loan amount.

The biggest hurdle to watch out for is payment. Many brokers will claim they are being paid by the lender. But the fee for the broker’s work comes from the borrower’s pocket one way or another — typically through closing costs or a slight increase in the interest rate of the loan.

Of course, if the broker gets a low wholesale rate from the lender, the final rate may still be attractive despite the broker’s markup. The key question is whether you end up paying the lowest mortgage rates available in the marketplace at the time.

Even if you want the hand-holding you can get from a broker, shop around. Check with several brokers as well as banks, savings and loans, and your credit union. Ask each mortgage broker you talk to which lenders it deals with.

Many companies advertise Florida mortgage rates in newspapers, and shopping without having to commit in order to compare them is easy with online services such as our site. For a free consultation, complete our secure form now!

More than any other state’s housing market, ours is driven by Hispanics seeking a Florida mortgage loan. Therefore, it’s important that agents and lenders are familiar with this sector of society.

With that in mind, The National Association of Hispanic Real Estate Professionals announced its lineup for the 2006 Hispanic Marketing Convention & Expo, set for this fall at the Bally’s Las Vegas on November 2-5, 2006.

The Hispanic-themed industry event features a packed schedule of workshops, town-hall meetings and a trade show expo that will update all involved in real estate, such as mortgage brokers, on the latest products and services best suited for the 2.2 million Hispanic home buyers expected to buy homes by 2010.

Earlier this summer, we reported on similar sessions and groups meant to help Latino buyers seeking Florida home loans of all kinds. It’s important to educate such first-time home owners because they have the potential to make up a large part of the market.

The emergence of the Hispanic population as a dominant force in the marketplace has made the convention more popular with each passing year, as more companies and practitioners tailor their goods and services to attract Latino homebuyers.

Between 1995 and 2005, the number of Hispanic owner-occupied homes increased by 3.1 million, reaching a total of 6.9 million in 2005. Hispanics accounted for 50% of the nation’s population growth between 2000 and 2004 - and we live in the state that saw the most distinct impact. Many first-time Florida home mortgage applicants are Latino.

“At present, the industry is unprepared to meet the needs of Hispanic home buyers,” said Frances Martinez Myers, chairman of NAHREP. “There are not enough bilingual, bicultural professionals to work with this segment, which will comprise as much as 40 percent of the first-time home buyer pool in a few short years. This represents a business imperative for the industry and a prime opportunity for practitioners that want to broaden their business base in this slowing market.”