Condo Owners Walking Away due to Foreclosures of Other Tenants.

http://www.npr.org/templates/story/story.php?storyId=90024860

[as other condo owners can not their payments, their , the
maintenance, security is going to the wayside. The other tenants can
not take up the slack ,so their property looks like ***.]
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As in the rest of Florida, much of the fervor was driven by
speculators who snatched up condos and houses as fast as they could be
built, expecting that the days of easy money would last forever. In
some condo towers, three-quarters of the units were bought by outside
investors hoping to flip them, Weeks says.

Weeks says he even had undergraduate students who waited tables for
money who were able to get mortgages to buy and flip properties.

Backlog of Unsold Homes

As prices have fallen back to earth, owners have increasingly found
themselves owing more than their properties are worth, and are walking
away from them, helping to create a backlog of more than 19,000 unsold
homes — about six times as many as two years ago.

Marcus Netto, 47, has to work two jobs to pay the mortgage,
maintenance and taxes on the two Fort Myers properties he owns; he
also has a time-share in Orlando. But he has to dip into savings to
cover his expenses.

"I got almost $4,000 every month (in costs)," says Netto. "That's a
lot of money for me. I don't make that."

Although Netto could sell his properties, he is unlikely to receive as
much as he owes on them, so he is hoping to arrange short sales. That
means finding a buyer and persuading his lenders to accept whatever
price they offer. Banks sometimes agree to short sales as a way of
avoiding foreclosure, even though they absorb a loss.

Walking Away from Properties

For banks, the number of forecosures and short sales is a big problem.

Even some buyers who can afford their mortgages are opting to quit
paying because they owe too much, Speronis says. With prices falling,
some amazing deals are now on the market, and owners figure they can
better themselves by purchasing another home and walking away from
their existing properties, she says.

With so many deals to be had, bargain-hunters are beginning to come
into the market, including many from Europe and Canada, trading on the
favorable currency exchange rates. Moreover, few new homes are being
built. As a result, the huge inventory of unsold homes may be
stabilizing or even shrinking a bit, says Russ Weyer of Fishkind and
Associates, a consulting firm.

But prices will probably keep falling for a while longer, Weyer says.

Waiting for the Bottom

The problem is being aggravated by the downturn in the economy. With
real estate development at a halt, construction jobs are disappearing,
and the county's unemployment rate now stands at 6.5 percent. As a
result, many construction workers are leaving the area, meaning more
homes on the market and even lower prices.

The continuing glut of unsold homes has a psychological effect on
buyers, says Florida Gulf Coast University's Weeks.

"We have a lot of folks who are here and interested in buying who
would take some of this inventory off the market," Weeks says. "But
nobody wants to be that first mover. They would all like to wait until
they're sure we're at the bottom."

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Feb. 25, 2008
A Site's New Tack: Walking Away from Mortgage
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April 23, 2008
Facing Foreclosure, One Home at a Time
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Feb. 13, 2008
Why Not Just Walk Away from a Home?
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Feb. 13, 2008
Home Foreclosure Rate Surged in 2007
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Dec. 4, 2007
Florida Locales Divest Fund Tied to Bad Mortgages
*
March 30, 2007
Florida Copes with Slump in Condo Market




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