Miami-Dade passed new local laws this week to rein in rot on abandoned homes and protect buyers.
BY MONICA HATCHER
mhatcher@MiamiHerald.com
Hagen Hendrix never thought selling homes would require him to pack heat.
But the real estate agent now brings a pistol when he visits the foreclosures he is trying to sell for banks, in case he runs into ne'er-do-wells squatting in the long-vacant homes.
Job safety is one reason Hendrix supports Miami-Dade County's plan to require lenders to start maintaining vacant homes before they have finished foreclosing. Another ordinance requires lenders to provide buyers with a full report of building and zoning defects. The laws, passed Tuesday, are the latest endeavor by local governments to prevent blighted properties from dragging down home values.
Other real estate agents believe the extra measures -- which only pertain to homes in unincorporated Miami-Dade -- will add headaches and slow the selling of bank-owned homes.
Typically, foreclosures are sold ''as is,'' with limited or no inspections. The new law requires a building and zoning inspection by the county that would uncover defects or code violations. Inspection reports must include estimates of repair costs and be recorded with the county clerk where the public can review them.
''There's nothing wrong [with `as is']. People aren't lying to you,'' said Alex Doce, president of Miami-based Baron Mortgage. ``When you go to an auction, there's a reason why you're getting such a great bargain.''
In addition to slowing down the already complex foreclosure process, requiring lenders to maintain homes before they actually own them could expose them and their representatives to legal liabilities, lenders and agents say.
Commissioners, though, fear that as interest in buying bank-owned homes grows, naive bargain hunters may end up getting stuck in money pits. Foreclosures are often stripped of wiring, appliances and fixtures, if not by homeowners then by burglars.
The moves by Miami-Dade reflect the ongoing efforts of cities throughout South Florida to govern the way banks sell the growing number of homes they take back from borrowers.
Lenders owned nearly 21,000 homes in Miami-Dade and Broward at the end of October, according to data firm RealtyTrac. Tens of thousands more are in some stage of foreclosure and vacant. According to Coral Gables-based realty firm EWM, about 30 percent of all homes listed for sale are in foreclosure or bank-owned.
In Florida, it can take up to a year before a lender gets title to a property through foreclosure. But most homeowners move out before then, leaving the home empty and untended for months. That leaves local governments struggling to pick up the slack, spending scarce resources to mow laws and clean pools.
''The problem is going to become more and more exacerbated,'' said Commissioner Barbara Jordan, whose district covers Miami Gardens and Opa-locka, which have some of Miami-Dade's highest foreclosure rates.
But the new laws may make the problem worse, says Doug DeWitt, a local real estate agent who also manages foreclosures for lenders. 'I believe if my asset managers were told you need this and that . . . they would say, `Just put this file to the side of your desk and we'll talk about it later.' And six months would go by and neighborhoods would suffer,'' DeWitt said.
DeWitt also said it did little good to have such ordinances in only unincorporated areas, and that a concerted effort among cities was needed to make a difference.
Several cities, including North Miami and Hialeah, already have more stringent rules mandating that houses are fully livable before they can change hands, meaning working utilities, bathrooms and a kitchen -- a major obstacle given the condition of many foreclosures.
Hendrix said he nearly lost a deal on a North Miami home because the buyer's agent had not secured an inspection, delaying the closing.
''In one to two weeks, interest rates could have changed, the process on financing can have to start over,'' Hendrix said. Hialeah officials said they were trying to be flexible with lenders and agents and were expediting inspections.
Cities in Broward are taking similar steps. Over the summer, Coral Springs began requiring lenders to register properties with the city as soon as they filed a foreclosure so that code enforcement officers could alert them when problems arose. There are about 170 properties registered, said Assistant City Manager Erdal Donmez.
As for keeping up homes before misfits strike, few argued against the need to protect the value of a home and its neighbors.
But Jim Angleton, senior vice president of Miami-based Republic Federal Bank, said forcing lenders to maintain homes before they own them was ``foolish.''
''If we haven't received title, we're inheriting someone else's liabilities,'' Angleton said. ``Some borrowers go bankrupt or play stalling games of reinstating the mortgage, then they don't come up with the money.''
A bank representative was once prevented from inspecting a foreclosure on Fisher Island because he could not prove the bank owned the home and was blocked from riding the ferry, Angleton said.
source: miamiherald.com
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