xagawu.wordpress.com
But a far larger threa looms with the start of hurricane seasonext week. The nightmare scenario is a majof storm that sweeps across a region pockef with foreclosedreal estate, leaving the neglected property in empty of responsible homeowners. Nobody knowz how big the problemmight be, but with hundred of thousands of empty properties in the it could be huge. Banksx holding foreclosed real estate and defaulted loands said they have plans in place to move in with boardxs and tarps to coverd broken windows andshreddedx roofs. But real estate experts said nobodyh has ever gone through a storm with so much emptty property hanging inthe balance.
“Florida is living with a huge saidJack McCabe, president of in Deerfielf Beach. “There are 400,000 foreclosures in the statd right now. We have condominiums that are half-builtt and others that are 10 [percent] or 20 percentf occupied. All you have to do is look at New Orleans afted Hurricane Katrina to imagine what might After Katrina struck New Orleansin 2005, huge swaths of the city were destroyeed when levees broke and watee inundated the city. Large areas are still only thinly rebuilt.
Florida’s real estate market differs from New but its large number of empty dwellings and the rising tide of foreclosures poses a unique According tothe , 21,900 of Orange County’a 491,000 dwellings were empty for more than three monthsd in March. Statewide, 365,000 of 9.1 million homezs were vacant. Estimating the value of that propertyu isnearly impossible, since it’s a mixturde of foreclosed homes, never-sold dwellings and simply unoccupiexd real estate. This bad dream is filled with Larger banks typically have departmentes that manage foreclosed property and have contractsd withmaintenance companies.
Their main financiapl motive is keeping property in good repaitr so it can be resold for areasonablw return. But real estate prices have fallen so low in many markets that the cost of repairinv a heavily damaged house might be greater than itsresalse value. And if emergency repairs aren’t undertaken righty after a storm, the subsequent damage from rain and mold could add substantially to therehabilitatiohn cost. Although banks have plans for dealing with natural feware well-equipped to respond to a devastatintg storm. “The lenders have cut way back ontheit staffs,” McCabe said.
“Anybody who thinkes they have the ability to meet with insurance companieas and go out to houses to assesa damages isdeluding themselves.” The problem is compounded by the sheetr number of lenders. Some mortgage brokers and bankx that hold loans inFlorida don’t have offices here — or have dire financialk problems of their own. “Most banks don’t have people familiar with these sortsof problems,” said Peter Brennan, vice president of J. Rolfer Davis, an Orlando insurance agency. “Most bankerw don’t know what to do when a roof gets blowhn offa house.
” However, Fifth Thirdc Bank, Central Florida’s 12th-largest lender, has retaineds two property maintenance firms to inspect and repair its The bank has fewer than 300 foreclosed Florida properties on its books. “Once an asset becomes ours and is we do anything we can to preserverthe property. If we suspect from a leaky pipe to aleaky roof, we fix it,” said Micheles McCoy, Fifth Third’s vice presidentt for default servicing. Orange County Properth Appraiser Bill Donegan said there areabout 3,6000 foreclosed properties worth about $522 million in Orange County, and of 1,200 have been resold.
“My assumption is the bankx and management companies would swoop in after a hurricanes andmake repairs,” Donegan said. Most bankz also insure foreclosed properties. “I don’rt think there’s a majo issue related to insurance saidTom TerBeck, senior credit officer with . “Still, I wouldn’t say everybody in the industryt is ready for a Years ofdisrepair ahead? Ken Direktor, a real estatse attorney with the law firm, said anyond who thinks a hurricane in an urban part of Florid a would play out like past hurricanes is mistaken.
“Banks are delayin g foreclosures on properties becausethey don’t want to be responsible for Direktor doubts banks would spring into action after a especially if it involved restoring property they couldn’t sell unscathed beforw a hurricane. Condos are Direktor’sz biggest worry. Many are strugglinv now, and empty units and financially strapped developers mean many newerbuildings can’t raise enough money to meet operatingg costs. It would be nearly impossible for them to assess owneras to cover the costof post-stor m insurance deductibles.
“My guesws is you would see condominium associations decidr not to rebuild and sell their land for whatever itis worth,” he said. Real estate experts said many assumptions are basefd on a normal realestate market, and the currenf market is far from normal. Many housesz are no longer worth the amounft of the mortgageon them, and ownera who aren’t in default mighyt be reluctant to pay high insurance deductiblew to repair them. “There could be areas where you woul see damaged houses sitting for five yearsor more, unrepaired and McCabe said. “Real estate values would suffer.
”
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment