Life In Bonita Springs

Bonita Beach Florida - Wish You Were Here

Fixing The Mortgage Mess

President Obama is moving quickly to fix the problems in our country's financial system - and there is an incredible amount of work that needs to be done.

"Officials say they will make wide-ranging changes, including stricter federal rules for hedge funds, credit rating agencies and mortgage brokers, and greater oversight of the complex financial instruments that contributed to the economic crisis."

I've never been for increased government control.  However, one big cause of the of the mortgage / real estate mess that we're facing right now is the fact that there was absolutely no control at all!

You can make all of the laws that you want and you can go on about ethics all day long but if no one is enforcing these standards you wind up with a big mess.

The subprime mortgage situation that existed for the last few years was a great example.  It was basically a lending free-for-all.  Lots of money that was virtually thrown at people.  It wasn't irresponsible, it was idiotic.

'Let's lend someone (that can't repay) more then 100% of the current value of a home, even though the value looks like it will keep going DOWN!'

Hunh?

You don't need a degree in finance to see that there's something wrong with that.

Oh, I can here the complaints already!  "Marc, people need to be responsible for themselves, they shouldn't need to be TOLD what to do!"

Good point.  But when the actions of a few have negative effects for the entire country someone needs to put a halt to it.

Before we turn this into an exchange about philosophy & politics, let's wish Obama the best and help to get this mess cleaned up.

Marc J Blasi

For some time now, Knightlines Mortgage Services has been offering the people of Florida a convenient way to finance and re-finance their residential property.

But that isn’t the entire story - we are also doing commercial lending in all 50 states.  AND - now we can offer commercial financing OUTSIDE of the country as well.  Caribbean, South America, etc - just call for the details.

Canal Front Gulf Access Mail Boxes

This mailbox isn’t really in Bonita Shores, nor is it in Imperial Shores. Technically it’s in Riverdale Unrecorded but since Riverdale Unrecorded isn’t a commonly known name in Bonita Springs, Florida … I decided to use something more recognizable.

Riverdale Unrecorded, Bonita Shores and Imperial Shoresare all in about the same area and you probably wouldn’t know if you were one over another unless you were looking at the legal description on a deed. If you were to drive west on Bonita Beach Road toward Bonita Beach and get to Vanderbilt Road, on the left will begin Bonita Shores. On the right, about a block or two is Riverdale Unrec.

The area is a slice of Olde Bonita Springs and many of the homes are on canals with gulf access via the Imperial River. There are a variety of home styles which include single family, cottages, stilt homes and even gulf access duplex homes.

This area of Bonita Springs is popular for those who want to be within biking or walking distance to Barefoot Beach. Most of the area west of Vanderbilt Road and Luke Street is no more than a 10 minute bike to the beach.

The possibility of gulf access from your own back yard never loses its appeal. Many residents that move to Bonita Springs do so to fulfill the dream of owning gulf access real estate so they can boat from their own yard and fish from their own dock.

Since there have been price adjustments in real estate in the last few years, gulf access real estate is becoming affordable to those who were once priced out of the market. Gulf Access homes in Bonita Springs can now be purchased from the low $200,000’s and up depending upon size, age and location.

Some gulf access homes come with highly attractive parrot mailboxes. There generally isn’t an extra charge for the additional colors.  This mailbox belongs to a duplex on Shore Drive in Bonita Springs, Florida.

More to Look Forward to in Olde Bonita

If you didn't know, the town of Bonita Springs was once named Survey, back in the day.  I believe it was named Survey because the engineering crews who originally surveyed land of south Florida were stationed here.    I guess when the Nelson's were thinking of a name for their new cafe they decided to go old school.

Last week I was cutting through a few back streets in Olde Bonita Springs and I came up Wilson Street right by the Imperial River.  That's right where Benson's Grocery store is at the corner of Old 41.  I passed the new Survey Cafe, it's right behind Benson's Grocery Store and super easy to find.

Survey Cafe is nearly up and running.  It's scheduled for a grande opening January 26, 2009.

Survey Cafe is a renovated older home a stones throw to the banks of the Imperial River and Riverside Park.  Maybe you can stop by some time and have a cup of coffee and admire the restored building.

This is a link to Survey Cafe website:  www.TheSurveyCafe.com

Maybe Credit Isn't Always The Issue

Setting off to purchase a new home is usually a daunting task and it’s mostly due to the learning curve. Chances are a buyer hasn’t dealt with the process in some time and quite often their last real estate purchase was made in another state. How they did it back home is usually not how it is customarily done in Southwest Florida.

Besides the local customs that are different many buyers may be embarking on a condominium purchase and they have many questions and concerns. The process of buying a condominium is a little more involved than purchasing a single family home. It should be more involved. A buyer is becoming part of a community and will have to live closely with others, share common areas and count on others to pay their quarterly assessments for the upkeep of the association.

The upkeep and management of the association, the common elements and the cash reserves are crucial. After the sales contract is executed buyers of resale condominiums have three days to review condominium documents, budgets, frequently asked questions and rules and regulations. Basically, buyers get to verify the quarterly assessment, look for any recent or upcoming special assessment and see where the money is spent that is collected in the quarterly fees.

Before the downturn in the real estate market a simple review was enough. If the budget looked good and their dog met the pet weight restrictions the buyers moved ahead with the purchase. Buyers and sellers never thought twice about buying or selling a condominium and wondering how it would get financed.

There are some fantastic deals on condominiums in Lee and Collier Counties. Everyone probably knows of a complex or section within a community with mess lot of condos for sale; short sales and even a few bank owned units. They’re usually very attractive to investors and folks who had once been priced out of the market and can now back get in for pennies on the dollar.

There’s a little know wrinkle that’s starting to show itself in condo financing. Whether you’re an owner in a complex with growing pains or you’ve flown down special just to buy a great deal, if you’re financing a purchase in a high risk area you run the possibility of being denied a mortgage. Yes, even with a ready, willing, qualified buyer a mortgage can be turned down in underwriting.

Have you ever heard of a condo questionnaire? Not many people have because it’s just part of the process and it is quietly done behind the scenes. It’s not subterfuge, its just one of the many facets of a transaction that usually goes unnoticed.

A lender sends a condo questionnaire to the condominium management company as part of the underwriting process. The questionnaire asks dozens of questions about the association, the stability of the finances, insurance and more. A good many of the associations charge as much as 150 bucks for one of these questionnaires, too.

There are a couple of crucial questions on the condo questionnaire that are now a fly in the ointment.

• What are the total number of units that are occupied as primary or second homes and what are the total number of units that are tenant occupied?
• Provide the total number of unit owners that are 30 delinquent on unit dues and/or special assessments.

Current underwriting conditions require 60% or more of the units to be primary or second homes. That only leaves a maximum 40% of units or less permitted to be investor owned or tenant occupied to still meet the guidelines.

A condominium association that is inundated with tenants and/or foreclosures runs the risk of not qualifying for a mortgage. Yes, foreclosures count, too. Those foreclosures are considered investment properties since they are no longer a primary residence or second home.

Anyone that thought special assessments to make up the difference for delinquent owners was merely a one time inconvenience or just part of having “growing pains” needs to know that it is becoming so much more. Typical underwriting guidelines state that if 15% of owners are in default, that mortgage is a no go.

Who would have thought that after researching and looking for a home, qualifying for a mortgage, paying for the inspections, appraising for purchase price and making every deadline the transaction could flat line because of the condo questionnaire?

If you’re a seller of real estate in a troubled area you need to pay attention to what is going on in your community. The 2009 budgets should be in your clutches or on the way by the end of this month. You might want to scrutinize the budget and last set of association meeting minutes to see where you stand, especially if you are trying to sell.

Marketing a unit and finding a buyer is only part of the struggle for anxious condo sellers. It would be a shame to find out the hard way, after having your condo under contract for weeks, that the mortgage won’t fund due to the occupancy ratios or delinquencies.

Condo buyers who are preparing to pick up one of the steals and deals in a community chock full of investors and tenants may want to do a little homework and ask a few questions prior to contract, especially if they’re counting on getting a mortgage to pay for the purchase. After all, that great deal isn’t a great deal if you’ve invested time and travel expenses to find it and can’t get the financing that you’re counting on to pay for it.

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Real Life in Bonita Springs is a project by Chris Griffith dedicated to writing useful blog posts for consumers about the Bonita Springs, Florida area.  Find out what it is really like to live in Bonita Springs, Florida by reading about our fair city. You’ll get the latest in local real estate information, Bonita Springs real estate market reports and a little bit of humor.  If you have topic ideas, feel free to request a story about the idea, after all, this site is just for you.

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Do Consumers Understand Lending?

Jason Price brought up a good point as he was ignoring the Steelers game yesterday:

We get bombarded with home loan information - the problem is that most of it is so totally over the average person's head that they tend to get lost in the babble. Which is exactly what the advertisers want! It's the old "Baffle them with BS" - thing.

Before you can REALLY make a good decision about financing (or refinancing) your real estate you need to understand the BASICS. After that, if you want to go on to mumble about what the Government may or may not do and blah, blah.... go right ahead.

Here are the most basic basics - make sure you understand them and the whole process will be a lot easier for you and your family:

Note: This is the IOU that you sign where you promise to pay back the money you borrowed from the bank. The note outlines the terms of how you are to pay back the loan (term, interest rate, payment, and principal amount).

Mortgage: This the lien that a bank places against your home. Think of it as collateral for the bank.

Term: This is the length of time that your note is amortized over. The most common term is 30 years. Basically, this is how long it will take to payoff the note.

Interest Rate: This is the percentage rate that a bank charges for you to borrow the money.

Annual Percentage Rate (APR) : This is NOT the interest rate! This is the true cost of your note (closing costs, interest paid and principal amount repaid) expressed in terms of a percentage. The closer the APR to the interest rate, the less expensive the loan will be.

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Marc J Blasi

This Old Mailbox

This two dollar mailbox was found on Horne Avenue in Olde Bonita Springs.  I wonder where it is now...

Mailboxes are now like magnets to me. I can spot a good one a mile away.  Sometimes it's not a mile a way, it's just next door.  Last weekend I stopped by one of my new listings to drop off some paperwork and the neighbors were having a garage sale.  Only I could find a mailbox across a yard, grab my camera and say, "I'm going to make your mailbox famous." and have people believe me.  (It's the conviction with which I say it.)

If you don't know about this little section of Olde Bonita Springs you should take a drive.  Do you know where Riverside Park is and the Banyan Tree?  The Banyan Tree is at Childers Street.  Take Childers and drive around back there.  That's where you'll find some of the old railroad houses and early homes of pioneer retirees that came to Bonita Springs in the 50's and 60's to escape the winter cold.

The best part about the homes in this area is that the lots are big for Bonita Springs real estate.  From .34 acres and up; a third of an acre and most of them are zoned TFC2 so a duplex could be built if it meets the codes.

When I first moved to Bonita Springs, almost 25 years ago, these were the only homes available.  There were no gated communities, no golf course communities, there was only two grocery stores and Nelson's Hardware Store was where Dixie Moon and the Panaderia (Bakery) is.  Little did we know, back then, that Ben Nelson Jr. would eventually become our Mayor.

Back in the day the homes seemed super affordable in comparison to the boom year prices.  The tide has turned in real estate and prices have adjusted.   There was once a time when no single family home real estate was available for under $200,000 even in Olde Bonita Springs.  These days we have home prices bumping around $100,000 and a few under that price.  There are a few that may be short sales.

There are home owners that decide to sell and they have equity and didn't refinance when it was oh-so-easy to get money.  They can price their homes well to get noticed and buyers who thought they were priced out of the Bonita Springs real estate market can get in.  It's a win win situation.

Unfortunately, consumers don't understand that most of these homes qualify for FHA financing so even if they're worried about qualifying for a mortgage, they should at least try.  It may work out for them.  I'm actually going to predict that a few of these owners will start owner financing.  The home is paid and the stock market isn't going to bring them the return that financing a buyer would.   Just watch!

Take a drive around the Olde Bonita Springs area and see what's been shaking.  Worst case scenario you'll stumble onto a garage sale and get a two dollar mailbox.  If you do, take a picture of it and email it to me.  I'll make your mailbox famous.