Nearly $30 million in federal housing money flows to bay area

Tampa Bay communities will get a nearly $30 million boost from the federal government through the latest effort to help neighborhoods marred by foreclosure.

The U.S. Department of Housing and Urban Development announced the aid Wednesday as part of $1 billion awarded in the third round of its Neighborhood Stabilization Program stimulus efforts.

Hammered by real estate struggles, Florida will receive $208.4 million, the largest allotment of any state.

Hillsborough County led the area with nearly $8.1 million.

Like past rounds of the program, money will go toward the purchase, repair and resale of property, as well as down payment help for people with low and moderate incomes.

Tampa Mayor Pam Iorio, U.S. Rep. Kathy Castor and other officials will highlight the program at a 10 a.m. news conference today outside a foreclosed Tampa home slated to become apartments for female veterans thanks to the program.

The latest infusion of money was part of the financial regulatory bill that Congress passed this summer. Grants were based on a formula using foreclosure rates, troubled loans and mortgage delinquency in a given area.

Local governments hope to avoid hang-ups that led Tampa and some other communities to nearly miss the deadline this month to commit money from the program's first round in 2009, which was part of the federal stimulus package.

That year, the region received nearly $70 million to fight foreclosures. Through August, all money is committed, although more than half remains unspent, federal reports show. Statistics on the program's second round are not yet available.

Local officials blamed the delay in using the money on reluctant banks and problems reselling properties, as well as difficulties working with HUD. But they also had their own problems.

"I think a lot of it was, a lot of local governments thought like governments," meaning they moved slowly and weren't creative enough in dealing with banks to get properties they wanted, said George Romagnoli, community development director for Pasco County. "When you redevelop housing, you have to think a little more entrepreneurially."

Local governments await new federal rules for using the money, which HUD anticipates releasing within a few weeks. Without the rules, St. Petersburg and Pinellas County officials would not say Wednesday how they want to use the money.

Hillsborough County will continue to target troubled neighborhoods previously designated for the program, foreclosure manager Lanette Glass said. But the money may help the county infuse cash into two struggling complexes in Plant City and the Town 'N Country area.

With $5.2 million for Pasco, Romagnoli said he would like to target rental housing creeping into neighborhoods of single-family homes because of foreclosures.

While it's a big amount, the money has to be used smartly because of the size of the foreclosure problem.

"It gets used up fast," said Romagnoli, chairman of the Florida Housing Coalition.

Terra Beachside rises from ashes

Nearly a year after acquiring the defaulted mortgage on the Terra Beachside Villas in Miami Beach, developer BH III LLC said construction has been completed on the 116-unit, six-story condominium on Collins Avenue. All the developer is awaiting is the certificate of occupancy.
As previously reported by the Business Journal, Regions Bank filed a foreclosure action against the developer in December 2008.
In November 2009, the Business Journal reported that the mortgage had been acquired by Fort Lauderdale-based BHN LLL, which is managed by Charles C. Phelan, Daniel Lebensohn and Gregory M. Freedman, Brokered by Teresa Williams of Prospera Realty.
Terra Beachside broke ground in 2004, but financial issues stalled the project.
The new developer re-launched construction and sales earlier this year, and more than 60 percent of Terra's units have been sold. The project recently received Fannie Mae and Federal Housing Administration approval, according to a news release.
"We had high hopes when we assumed control of this magnificent property,” Freedman said in the release. “The sales pace has far exceeded our expectations, and it's incredible to see the project complete."
The architecture includes a translucent, 400-foot atrium that spans the entire length of the property. Beneath the atrium, the building’s six floors overlook a courtyard of gardens and water features. Features include a three-story, cone-shaped lifestyle center, unique floor plans, rooftop terraces and ground-floor backyards.
One- to three-bedroom residences range from 1,095 square feet to 3,495 square feet and are priced from the high $200,000s to more than $600,000.

Regions Bank Note Sale Brokered By Teresa Williams, Prospera Realty

116-Unit, Six-Story Development Receives Temporary Certificate of Occupancy; Project Exceeds 60% Sales Level in Six Months
MIAMI BEACH, Fla., Sept. 3 /PRNewswire/ -- Developer BH III LLC ("BH3") today announced construction has been completed at Terra Beachside 6000 Collins, its 116-unit, six-story upscale condominium community in the heart of Miami Beach at 60th Street and Collins Avenue. The development received its Temporary Certificate of Occupancy from the City of Miami Beach and will soon begin closings.
Originally conceived by renowned architects Sieger Suarez, Terra Beachside 6000 Collins broke ground in 2004, but construction was halted before completion due to financial issues. In November 2009, locally-based BH3, led by Charles Phelan, Gregory Freedman and Daniel Lebensohn, acquired the property. The new developer re-launched construction and sales earlier this year, and in six months, more than 60% of Terra's units have been sold. The project recently received Fannie Mae and FHA approval.
"This is truly a landmark day for Terra Beachside 6000 Collins," Freedman said. "We had high hopes when we assumed control of this magnificent property. The sales pace has far exceeded our expectations and it's incredible to see the project complete."
Terra Beachside 6000 Collins' innovative architecture includes a translucent, 400-foot atrium spanning the entire length of the property. Beneath the atrium, Terra Beachside's six floors overlook a courtyard of gardens and water features. A three-story, cone-shaped lifestyle center, unique floor plans, rooftop terraces, ground-floor backyards and a collection of inviting features and amenities make Terra an ideal choice for those seeking a contemporary Miami Beach lifestyle.
Buyers can choose from four specially designed floor plans named for the four elements of nature. Fire encompasses one bedroom/one bathroom at 1,095 square feet; Water offers two bedrooms/two bathrooms, plus a den at 1,882 square feet;Earth is made up of two bedrooms/two bathrooms, plus a den and private backyard at 2,052 square feet; and Wind boasts three bedrooms/three bathrooms, plus a loft and private rooftop terrace, at 3,495 square feet. The 1,350 square-foot rooftop terraces, featuring picturesque views of Miami Beach, Downtown Miami, and Biscayne Bay, are ideal for relaxing and entertaining.
Residence amenities include Miele and KitchenAid appliances, custom-made designer kitchen and bathroom cabinetry, andPhillipe Starck designed HansGrohe and Duravit bathroom accessories. Terra Beachside's lifestyle center houses an 80-foot long curving lap pool, Jacuzzi, fitness center and media room. The property also includes high-tech electronic surveillance, 24-hour security, secured underground parking garage, wireless internet access throughout the property, and convenient beach access.
One- to three-bedroom residences range in size from 1,095 to 3,495 square feet and are priced from the high $200,000s to more than $600,000. Each residence includes high-end finishes and 18-foot ceilings. All two and three-bedroom units are two-story floorplans. Three fully furnished models – two by the renowned Interiors by Steven G – along with a sales center are open on property.
Miami-based Pordes Residential oversees sales and marketing at Terra Beachside 6000 Collins. Pordes Residential is operated by Mark Pordes, whose more than two decades of experience includes directing numerous sold out and completed condominium and condo-hotel developments throughout South Florida and The Caribbean.
Terra Beachside 6000 Collins is located just steps from the ocean and minutes from upscale Bal Harbour Shops and Aventura Mall, delicious fine dining, exciting nightlife, limitless leisure options, the Adrienne Arsht Center for the Performing Arts, scores of art galleries and Miami International Airport.
For additional information on Terra Beachside, please call 305-809-7560 or visit www.terrabeachside.com.

30-Year Mortgage at 4.32 Percent, Another Record Low

Mortgage rates fell to the lowest level in decades for the tenth time in 11 weeks, as investors worried about the economy.


Mortgage buyer Freddie Mac says the average rate for a 30-year fixed loan was 4.32 percent this week, down from 4.36 percent last week. That's the lowest since Freddie Mac began tracking rates in 1971.

The average rate on 15-year fixed loan dropped to 3.83 percent from 3.86 percent the previous week. That's the lowest on records starting in 1991.

Rates have been falling since spring as investors shift money into safer Treasury bonds. That has lowered their yields, which mortgage rates tend to track.

Foreclosure Relief: Good for Banks, Not So For Borrowers

Home sales are hitting new lows, the number of homeowners behind on their mortgages is again climbing, as is the number of foreclosures. Housing market misery is widespread—but particularly intense for the troubled homeowners relying on the Home Affordable Modification Program (HAMP), the federal foreclosure relief program.

Criticized both by those who argue for more aid and those who think the lackluster program only delays a needed bank reckoning, HAMP stumbles along, more often simply prolonging the pain of foreclosure than providing a solution.

The dismal new housing numbers—sales of existing homes are 27% lower than a year ago, new-home sales have fallen even more—underline just how little demand there is for all the properties that banks are foreclosing on.

Real Estate Mortuary's Waiting Room

In extending the process, foreclosure relief in many cases simply stretches out borrowers' slow bleed of resources. By keeping borrowers in limbo while letting lenders delay repossessing houses they can't sell, foreclosure aid is now benefiting borrowers less than the lenders who created the mortgage mess. For lenders, mortgage modification is the waiting room in the mortuary, a convenient place to hold borrowers while the banks deal with the overflow of houses already repossessed.

Of some 3 million homeowners behind on their mortgages, only about half are eligible for HAMP. Most of the rest, ironically, don't qualify because their income is too low to handle even a modified mortgage. For those that do qualify, HAMP offers little immediate respite: Homeowners have to immediately start making payments on a trial modification plan.

Some 1.3 million borrowers have gotten the trial modifications, which last for at least three or four months (though many banks have stretched this out for longer). But 600,000 of those have already dropped out, unable to make payments in the trial stage. Another quarter-million are in modification limbo, sending checks to the bank as they wait to know if they'll get permanent adjustments. (Detailed numbers are available in the modification program's monthly reports, here.)

What Happens After Gaining Relief Is Worse

If the wait for a modification is trying, though, what happens to homeowners who do manage to get relief is worse. Most borrowers behind on their mortgages are already overburdened with other debts. After the mortgage reduction, the typical modification recipient, despite an average $513 drop in monthly payments, has to devote 63.5% of his or her income to mortgage payments, other debt, and taxes.

It's not clear how many will default a second time. Treasury officials recently had to withdraw the government's numbers on mortgage modification success rates after they were shown to seriously understate re-defaults. One independent estimate from Barclay's Bank is that 60% of homeowners granted loan modifications will eventually default again.

So does HAMP really benefit anyone but the few borrowers who are able to run the foreclosure aid gauntlet, climb out from under their debts against tough odds and get back to making regular payments on their (still-underwater) mortgages? It does. If HAMP fails to make much of a dent in homeowners' troubles, it does mitigate a real problem for the banks: There are many more houses in foreclosure than today's market can absorb.

"Strategic Non-Foreclosure"

One of the foreclosure cascade's not-so-hidden secrets is that the banks and investors who hold millions of busted mortgages are in no hurry to kick debtors out of their homes. The markets hardest hit by the foreclosure crisis are already stuck with an enormous and growing inventory of repossessed houses, now estimated by Lender Processing Services, which tracks foreclosures, at 1 million to 1.2 million bank-owned homes nationwide.

Banks have steadily slowed down the foreclosure process: The average homeowner in foreclosure now is an amazing 461 days behind in his payments. (You can see that last stat in this report, on page 13). Barry Ritholtz of financial blog The Big Picture calls banks' reluctance to take over houses "strategic non-foreclosure." Taking a leisurely path to repossession lets lenders avoid the costs of maintaining properties they can't sell in a market that remains in free fall in much of the country.


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However, there's a limit: Lenders must eventually make good on the threat of repossession or face an epidemic of homeowners who stay in their houses without making payments. Many houses have been in foreclosure for so long that the banks have little choice but to act, and repossessions are rising.

Mortgage modification lets banks put a brake on the process, keeping up the pressure on borrowers (most of whom will eventually be foreclosed on anyway) without adding to the banks' inventory of foreclosed properties. As they sit in this antechamber, instead of simply writing off their mortgages, the strapped borrowers, given the gift of reduced payments, are likely to squeeze out whatever they can manage in a last effort to keep their homes. It's a study in what Rortybomb's Mike Konczal trenchantly calls the credit "sweatbox" -- under the guise of foreclosure aid.

Another Cudgel in the Hands of Lenders

The last insult added to this mess comes from Fannie Mae, which has promulgated new rules that lock those who don't make the effort to modify their mortgages out of the Fannie-backed mortgage market for seven years. So ultimately this comes full circle, and what started as an effort to help borrowers has become another cudgel in the hands of lenders.

If we were to conceive a program to persuade borrowers to stick to their obligations and make every effort, no matter how unrealistic, to avoid foreclosure, we could hardly do better than HAMP. The program probably increases what lenders collect before they eventually foreclose -- and may let those lenders slow the process enough to prop up prices as they sell off their inventory.

In this way, it may lead to a more orderly unwinding of the busted housing market. If so, HAMP might accomplish some part of its goal—just not the part that has to do with helping homeowners.

State to hold high-speed rail public meetings in Tampa, Orlando

The Florida Department of Transportation has set public meetings next week during which the agency will present its plans for high-speed rail connecting Tampa and Orlando.
FDOT officials will present an overview to the public of the Tampa-Orlando project, then hold a question and answer session with those in attendance. There will be three meetings from Aug. 31 to Sept. 2 next week in Tampa, Lakeland and Orlando.
Prior to each public meetings, FDOT officials will also be holding seminars for minority-owned and small businesses to learn more about the process of bidding for work on the project. The schedule for both the business and public meetings is here.
Meanwhile, work on the high-speed rail system connecting Tampa and Orlando is ongoing, with surveys, real estate appraisals and soil sampling along I-4. In January, President Barack Obama announced that $1.25 billion in stimulus money would go to constructing the Tampa-Orlando leg.

Miami Condo Sales

Downtown Miami Condo sales were up 110 percent with 1,933 units sold in the first 6 months of 2010. Great downtown Miami condos that sell due to drastic price reductions include Met I, Epic and Icon Brickell, which sold 49 units, including at least one with a $100,000 over-the-odds premium, after LeBron James announced his switch to the Miami Heat. The average sales price of a downtown Miami condo in the first two quarters of 2010 was reportedly $356,100 or about 16 percent higher than in 2009. "Miami Condo sales above the $1 million mark will continue to outpace single-family home sales in the same price category for the rest of 2010 and into 2011. Condominium living is the new lifestyle choice of the wealthy," said Katerina Brosda.