Good Faith Estimate (GFE) versus Initial Fees Worksheet

As of the first of the year HUD issued new rules regarding Good Faith Estimates (also know as GFE’s).  These newly adopted rules called for stricter guidelines for the preparation of GFE’s by lenders, mortgage bankers and mortgage brokers.  Obviously the look of the GFE and layout has changed; however, the real change in the rules is how accurate the preparer must be in estimating closing costs and loan origination fees.  In the past there were not many guidelines regarding the accuracy of these items.  Although, I feel that there are many great mortgage brokers and lenders working in our market; I must also admit that I had many instances where the final HUD at he closing table had significant differences from the original GFE, and trust me, it was never in the favor of the buyer.  Although, there is no way to prove it; it would appear that preparers of GFE would under estimate closing costs, prepaid items and origination fees in order to get the buyer / borrower to commit to them, only to later at the closing table, at the 11th hour change-up the numbers.  “Well, now what here we are a the closing table, with a ton of deposit money in escrow at risk if we don’t close.”  Naturally, this would anger any buyer and anger any agent or broker representing the buyer.

I for one am glad that the new rules are in place. The rules basically state that there is only a small margin of acceptable variance from the GFE to the final HUD for the previously mentioned fees.  Also, if these fees do vary by more than the acceptable margin then the lender must absorb the difference.  I feel that this will help in more honest and responsible lending.

Lenders are naturally concerned about this rule as they see it as potential losses.  Therefore, many lenders have responded by creating “initial fees worksheet”. This worksheet will give an estimate of fees and prepaid items, etc. However, this particular worksheet will be provided prior to application, that is prior to the borrower having their credit pulled, or even providing the property address.  The main thing for a buyer / borrower to remember is that this is not a GFE and should not be taken as such. The “initial  fees worksheet” offers no guarantees whatsoever.

Please browse our site where you may perform a property search or estimate your mortgage payment.

South Florida Brokers & Associates, Inc.

Two trendy properties in Aventura to consider in your apartment hunting.

Uptown Marina Lofts

This week Miamirentseekers.com is featuring two very trendy properties on our blog.  These properties are fairly new and offer a very unique feel in the Aventura luxury rental market.

Uptown Marina Lofts: This community is unlike any other in Aventura.  You would actually expect to see this type of property in Downtown Miami or even New York City. The community itself offers all the luxury amenities that you may have become used to when living in Miami’s luxury communities. Amenities include: valet parking, concierge services, on site management, pool, hot tub, spa, fitness center, community room, business center, basketball court, tennis court and a marina among other services.  All amenities are state of the art and kept up constantly.  However, the real surprise in this building comes when you enter these unique units.  They are true lofts!  The units offer huge open spaces, and open floor plans.  This allows the resident to become as creative as they want to be with the space with little to no limitations.  The ceilings are an impressive 16 feet high with exposed airconditioning ducts and lighting fixtures. The kitchens offer granite counter tops and modern hydraulic cabinets.  The bathrooms are all  finished with amazing european style cabinets and water fixtures. Floor to ceiling sliding glass doors and windows add the element of natural lighting.  So for a very trendy lifestyle, be sure to take a look at Uptown Marina Lofts.

The Atrium

Atrium: If you consider yourself trendy, yet feel that you ned a bit more division in your living spaces; then Atrium may be the choice for you.  Just as the prior community; Atrium also offers the best in amenities, they even have a swim resistance pool. This community has a dramatic lobby when you enter and then actually divides to the left and to the right, each passage leading to one of the two towers and together form this spectacular community. Each sub-lobby for each building will great you with six enormous palms and three glass elevators.  These units also offer european cabinets, with granite counter tops, marble floors (in most units), floor to ceiling windows for lighting and spectacular views.  For the trendy and private lifestyle be sure to take a look at The Atrium in Aventura.

For a complete property search Miamirentseeekers.com

Miami Rent Seekers

Reports of Short Sale Fraud

It is no big secret that in  the recent post real estate boom market there have been great deals for investors and end-use buyers in the foreclosure and short sale arena.  Many buyers know exactly what a foreclosure is but many are not familiar with short sales. Well, a “short sale” is a sale in which a lender agrees to allow a property to be sold in a sale which will produce proceeds insufficient to clear the actual loan amount / balance, in laymen terms the lender will take a loss on the loan.  This type of sale although considered cumbersome by most real estate practitioners are an essential part of a recovering market.  Therefore, as real estate brokers and agents we should do our best to help buyers find the best deal on the market; and if the best deal is a short sale we should certainly educate the buyer on short sales and work the deal and on the other side if we have the short sale listing we should educate the seller and work closely with the lender involved on the short sale to ensure a successful transaction.  However; buyer, seller and real estate practitioners BEWARE!!!!

I read a recent CNBC report which was a bit disturbing. This report depicted fraud when it came to these short sales.  Although, as a brokerage we have not experienced or witnessed this type of activity, the report did place me on guard and as a broker I have passed on the information to the associates working with us.

The allegations go something like this: There is a short sale listing which goes under contract. There are two mortgages on the property. The primary lender or first lien position accepts the contract and negotiates with the secondary or second lien holder a reduced amount, usually a small fraction of what they are actaully owed.  The buyer and seller all sign.  This is all perfectly legal and good until the secondary lender does one extra step. That extra step is that the secondary lender contacts either one of the real estate agents (seller or buyer agent) or the seller or buyer directly and states that they want additional funds paid outside of closing (POC) or wants fund paid which will not be depicted on the closing statement (HUD).  This is a violation of RESPA (Real Estate Settlement Procedures Act), which clearly states that all monetary transactions must be depicted on the HUD.  However, secondary lenders are allegedly ignoring this fact and asking for funds outside of closing disregarding the law; and going to the extent as to threaten to block or kill the short sale and allow the property to go into foreclosure.  The irony of all of this is that although it may harm the seller and buyer and the real estate licensee it still doesn’t help the secondary lender as the fact is that if the property goes to foreclosure the second loan will subordinate to the first lien position anyway.

In conclusion, our advice to sellers buyers and all of our counterparts is to not participate in this type of activity.  No commission or deal is worth a license being revoked or to be accused of aiding in fraudulent activity.

Find Great DEALS in South Florida.

South Florida Brokers & Associates, Inc.

2009 was a great year for Condo Sales in Downtown Miami

According to a recent article in the Miami Herald 2009 was a pretty good year for condo sales in the Downtown Miami area. The article expresses that buyers snatched up good deals at a rate of 7 condos per day.  In my opinion this is extremely impressive in light of the downturn in the real estate market in recent years. The article goes on to describe a possible reason for the buying frenzy, that is developer slashing of prices by roughly 33% from an average of 300 per square foot to 200 per square foot.  We ourselves can say that we have seen many sales closing in our office in this 200 per square foot for condos off the ocean (areas such as Downtown, Brickell and even Aventura).

However, I don’t believe this means we are out of the woods yet.  I also read another report where realty track is depicting the foreclosure filing shooting up by 21%.  This may keep the inventory at high levels, meaning good news for buyers who will be able to shop in a market that will still have great deals due to high inventory, but hopefully in a recovering real estate market.

Take a look at the great priced unit available in Downtown Miami and Brickell areas.

South Florida Brokers & Associates, Inc.

My landlord is in foreclosure, what are my rights?

As foreclosures have increased in recent years; tenants have found themselves to be major victims of lack of information and much frustration.  We hear the same story all the time; “I have been paying my rent and now I come to find out that the landlord has been pocketing the money and not paying the mortgage and now they are in foreclosure”.  Naturally, this brings up many issues and questions. First, is the landlord in breach by not paying the mortgage? Second, can the tenant break the lease? Third, what about the security deposit the tenant may have placed with the landlord or perhaps advanced rents paid to the landlord?

These are all valid concerns that a tenant may have and the reality is that the tenant is usually the least informed in such an instance. Well, it looks like finally there is some relief for tenants in this exact situation.

In the past landlord / tenant issues have been governed solely by The Florida Landlord Tenant Act ; however, recently a new law was passed to address specifically tenants in a foreclosure situation.

The Protecting Tenants at Foreclosure Act became effective on May 20, 2009.  The new law has several aspects to it and although I am certainly not a lawyer by any means and am not interpreting the law I would like to point out some of the obvious aspects which may be of use to a tenant in this situation.

1. The law will require the purchaser of a foreclosed property at the actual foreclosure (this could be the bank or another party) to give a tenant a 90 day period in which to find a new property to live.  This certainly alleviates a ton of pressure and the fear of getting “kicked out” of your home.

2. If the tenant has a written lease the bank that foreclosed must allow the tenant to live out the lease term and in essence become the landlord; unless the home is sold to a new buyer who actaully wishes to occupy the home as a primary residence. In which case the 90 day to vacate clause would kick in. Again, this is a nice peace of mind for the tenant.

Some practical advice for prospective tenants when looking for a property:

1. Check public records for any “Lis Pendens” or action against the property you are considering prior to signing a lease agreement.

2. Know exactly where your security deposit is being held.

3. Use a licensed real estate professional when locating your lease property.

Miami Rent Seekers

Rental Property Inventory is low…..

At Miami Rent Seekers we specialize in residential real estate in the Aventura, Sunny Isles, North Miami, Hollywood, Hallandale, Bal Harbor, Miami Beach, Brickell and Downtown Miami markets.  In recent months we have noticed a significant drop in the inventory levels for available rentals.  I believe this may be attributed to several factors which we are noticing in the market.

1. The market is offering excellent rental rates for properties which in the past would have rented for much more.

2. There are many people unfortunately losing their homes to foreclosure, this sector is turning to the the rental market for there housing needs. Increasing the pool of potential tenants

3. Banks are placing REO or Foreclosure properties on the market for sale but not for rent.

4. We are currently in the “snow bird” season; therefore, many owners which have rental properties in buldings which allow short term or vacation rentals will simply take advantage of the increased rental rates for a vacation rental during the season.

In essence all these factors are adding up to a decrease in available inventory.

Our advise is that if you are currently in a rental property and you do not need to move yet, but your lease is expiring, that you simply negotiate a renewal with your current landlord.  If you used a real estate agent to locate the unit in the first place, you can simply contact your agent and they will be happy to take care of the negotiations for you.  When one of our associates attempts to negotiate a renewal with a landlord on behalf of the tenant they will typically suggest a rate reduction when appropriate due to market conditions; pointing out aspects of the deal like; your “great payment history”, the fact that there will be no down time for rental payments (no waiting for a new tenant), the idea that the landlord will not need to paint or clean the unit for a new tenant.

If you do not need another year, landlords are sometimes apt to renew for a shorter period of time. Again, the agent you originally used should be able to assist you with this process.

If you must move we recommend you contact an agent which is familiar with your desired area and you start your apartment hunt as early as possible.  We recommend 45 to 60 days prior to your lease expiration.  This will provide ample time and will avoid the pressure situation of having to settle because you are in a hurry. This will also allow proper time for the application process.

In short rental rates are still great; you will get much “bang for the buck”, but your choices may be less than in the past.

Miami Rent Seekers