FORT LAUDERDALE, FLA. - Imagine going to a house or condo you own and finding a stranger living there who claims the property no longer belongs to you. It’s happening across Florida and other parts of the country through what authorities say is abuse of a centuries-old concept known as adverse possession.

Dating back to Renaissance England, adverse possession allowed people to take over abandoned cottages and farmland, provided they were willing to live there and pay the taxes. These days, officials say, the legal doctrine is being misused by squatters, trespassers and swindlers to claim ownership of vacant or foreclosed homes.

In Broward and Palm Beach counties alone, adverse possession claims have been filed on some 200 homes in recent months. Three of the four people behind the claims have been arrested, and police are investigating the fourth man, who along with his father, a convicted mobster, tried to take over properties in Hollywood.

“We look at this as another con job, another get-rich-quick scheme,” said Don TenBrook, a Broward state prosecutor of economic crimes. “You’re starting to see them pop up all over the place. It’s been spawned by the real estate crisis.”

A bill in the Legislature this spring would have helped cut back on the abuses and better protect Florida property owners, but it failed to pass - the result of political retribution, state Rep. Ron Schultz, one of the sponsors, told the Sun Sentinel.

“We tried to nip this in the bud, but that didn’t quite work,” said the Republican from Homosassa. “This is becoming a fairly wide scam in Florida.”

Antonio Vurro owned an empty rental home in Sunrise that he was trying to sell when he discovered in February that someone had moved in, changed the locks and was trying to open a utility account.

“There were boxes all over the place and a mattress in each room,” Vurro said in a recent interview. “This is not right. It’s my house.”

The occupant, Fitzroy Ellis, told Vurro he was entitled to take over the home because it was abandoned. Police disagreed, and Ellis, 64, is now in the Broward County Jail charged with six counts of grand theft.

Ellis tried to claim a total of 48 properties in Broward, including a $1 million house in Coral Springs, through a company he formed called Helping Hands Properties Inc., county official records show. He told a Plantation police detective he planned to rent out the houses and condos and could offer tenants a good price “since he didn’t have to pay anything for the homes,” according to a police report.

Ellis, who is representing himself, wrote in court documents that the allegations against him are “false and an abuse of power.”

Another South Florida man, Mark Guerette of Wellington, filed notice in official county records that he was taking possession of 100 homes in Broward and three in the Palm Beach community of Lake Worth through Saving Florida Homes Inc. and two other companies. On one day last November, he filed takeover notices on 10 condos in the same North Lauderdale complex at 1200 SW 52nd Ave., records show.

Police say Guerette, 46, rented out six of the properties and collected more than $20,000 from tenants before he was arrested in April. He has pleaded not guilty to a charge of organized scheme to defraud.

His lawyer, Robert Shearin, said Guerette is nothing more than a good Samaritan, rescuing blighted homes.

“The banks are letting these properties go down the tubes,” Shearin said. “Here’s a guy trying to help out, and he ends up in jail.”

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New twist, old law

The attempted takeovers are more fallout from Florida’s declining housing market, said Dennis Koehler, a West Palm Beach lawyer.

“People who are upside down just choose to leave the property, let it sit,” he said. “Some people have decided, ‘Hey, this is an opportunity for me.’ ”

The opportunity involves a new twist on a very old law, dating to 16th-century England. Adverse possession allows non-owners of a property to eventually take ownership if they pay the taxes, occupy, maintain and improve the land for a period of years - seven in Florida. The purpose was to prevent abandoned properties from sitting idle with no one paying taxes on them.

It’s been used mostly to take over abandoned farmland or settle boundary disputes, such as a fence or building encroaching on a neighbor’s property.

In theory, vacant houses can also be taken through adverse possession, if the seven-year window passes and the property owner makes no attempt to pay the taxes or liens an unlikely scenario, especially when a bank is laying claim through foreclosure, property experts say.

Turmoil in the stock market and the European debt crisis are making life easier for American homebuyers and families looking to refinance: Mortgage rates are inching closer to a record low.

The window of opportunity may close soon. Home loan rates will rise if investors grow more confident and shift money out of the safety of government bonds, which influence mortgage rates.

For now, though, rates are tantalizingly low. The average 30-year fixed-rate loan sank to 4.78 percent this week, the lowest this year and barely above the record of 4.71 percent set in December. And 15-year loans are at their lowest rates in two decades.

“Strike now,” suggested Greg McBride, senior financial analyst at Bankrate.com.

Some homeowners are doing just that. Applications to refinance surged this week to the highest level in seven months, the Mortgage Bankers Association said.

Anxiety over the European crisis has caused global investors to snap up Treasury bonds, which they view as much safer than other investments. Treasury yields have fallen as a result, taking mortgage rates down, too.

When the crisis eases, and especially if the American economy recovery stays on track, expect investors to move out of bonds and back into stocks. That would make mortgages more expensive.

“If the economy finally really shows sustained improvement, rates are definitely going to go up,” said Fred Chamberlin, a consultant with Alpine Mortgage Planning in Eugene, Ore.

He suggests that homeowners looking to refinance move fast and not hold out for even lower rates. “If you want the bottom, the only way you’re going to know it is when you’ve missed it,” Chamberlin said.

As cheap as mortgages are these days, the number of loans being taken out to buy homes remains at its lowest point in more than 13 years. One reason is that a special tax credit for homebuyers expired last month. Many people had rushed to sign contracts by then.

Another obstacle: trouble qualifying for a mortgage. Borrowers need solid credit and a down payment of at least 3.5 percent. Banks tightened lending standards after millions of borrowers fell into default and foreclosure during the housing bust.

“They’re really looking with a magnifying glass,” said Steve Mevorah, a loan officer with Icon Mortgage Inc. in Las Vegas. “They’re trying to make sure that they are flawless loans.”

Analysts had expected mortgage rates to rise when the government ended a program designed to bolster the housing market. Instead, they fell because of fears that Greece would default on its debt.

Also keeping rates low is the government’s decision last year to provide unlimited support through 2012 for Freddie Mac and Fannie Mae, which buy mortgages and package them into securities and help keep rates low.

Since the financial crisis ended, mortgages of all types have become more affordable — from the 30-year fixed to adjustable varieties.

The premium that borrowers pay to take out “jumbo” loans for more expensive homes has dropped by a full percentage point since late 2008, to just 0.8 percent, for instance.

A week after Sea Acres Way LLC paid $12.25 million for attorney Lake Lytal’s North Palm Beach oceanfront house in Seminole Landing, the Delaware-based company bought two adjacent vacant parcels for $10 million.

Jupiter attorney David C. Tassell, as trustee for the seller, Seminole Beach Land Trust, conveyed Lot 2, Sea Acres, a vacant .99-acre parcel, and Lot 7, Banyan Road subdivision, a 1.71-acre oceanfront parcel, to Sea Acres Way LLC, according to the warranty deed filed Monday by Alys Nagler Daniels, a North Palm Beach attorney.

The two additional parcels were subdivided from an adjacent listing, called Palazzo Serena, being offered by Walter N. Colbath III of Simmons Estate Properties. The property is situated within a private gated enclave between the Seminole Golf Club and the Lost Tree Club.

Sea Acres Way LLC’s combined $22.25 million purchase is the area’s largest recorded residential sale since George and Frayda Lindemann paid $23.5 million for 1565 N. Ocean Way in September, according to records at the Palm Beach County Property Appraiser’s Office.

Although none of the principals involved would disclose the buyer’s identity, it was rumored to be Manalapan’s Ziff brothers.

A Ziff family spokesman would not comment.

But, the Sea Acres Way LLC office address on both warranty deeds, 300 First Stamford Place, Stamford, Conn., matches the same office building address as that of Ziff Brothers Investments, according to a current tenant list provided by W&M Properties, the office building’s managing agent. In 2005, Ziff Brothers Investments LLC leased 9,030 square feet of space for 10 years at 300 First Stamford Place.

With a family trust said to be worth more than $10 billion, according to Forbes magazine, the Ziff brothers, Daniel, Dirk and Robert Ziff, are the sons of the late William B. Ziff Jr., scion of the Ziff media empire. In 1984, William Ziff sold his consumer and business magazines for more than $700 million. A decade later, he sold his entire publishing group to Forstmann Little & Co. for almost $1.5 billion.

The Ziff family’s 9.25-acre Manalapan compound is set on more than 1,000 feet of ocean frontage.

WASHINGTON — New home sales in June posted the fastest increase in more than eight years as buyers took advantage of bargain prices, low interest rates and a federal tax credit for first-time homeowners.

While home prices are still falling, the figures released Monday were another sign the housing market is finally bouncing back. Earlier this month, the government reported that new home construction rose to the highest level since last fall. And data out last week showed home resales rose almost 4 percent in June, the third straight monthly increase.

“The worst of the housing recession … is now behind us,” said David Resler, chief economist at Nomura Securities. “We’re turning the corner toward increased activity in housing.”

New home sales rose 11 percent in June to a seasonally adjusted annual rate of 384,000, from an upwardly revised May rate of 346,000, the Commerce Department reported Monday.

Shares of big homebuilders soared on the news, with Beazer Homes USA up by more than 13 percent and Hovnanian Enterprises rising 8 percent in afternoon trading. But with home prices still falling, these companies won’t be making much money anytime soon.

The median sales price of $206,200 was down 12 percent from $234,300 a year earlier and off nearly 6 percent from $219,000 in May.

In addition to lower prices, buyers are rushing to tax advantage of a federal tax credit that covers 10 percent of the home price or up to $8,000 for first-time buyers. Home sales need to be completed by the end of November for buyers to take advantage.

“The window of opportunity is closing,” said Bernard Markstein, senior economist for the National Association of Home Builders.

June’s results were the strongest sales pace since November 2008 and exceeded the forecasts of economists surveyed by Thomson Reuters, who expected a pace of 360,000 units. The last time sales rose so dramatically was in December 2000.

There were 281,000 new homes for sale at the end of June, down more than 4 percent from May. At the current sales pace, that represents 8.8 months of supply — the lowest level since October 2007. If that number falls to just over 6 months, analysts say, builders will feel more comfortable ramping up construction.

Fallout from the housing crisis has played a central role in the U.S. recession, now the longest since World War II. Foreclosures have spiked, homebuilders have slashed construction, and financial companies have lost billions.

But it will still be a while before homebuilders turn into an engine for the economic recovery. Construction levels are still weak because builders still have too many unsold homes sitting vacant.

In another sign that the deepest economic downturn in decades is drawing to a close, Palm Beach County home prices rose modestly in April.

In better days, a slight increase in home prices was nothing to cheer about. But in the depths of the Great Recession, it qualifies as good news that home prices haven’t fallen for two months in a row now. (Palm Beach County prices were flat from February to March.)

The median price of an existing single-family home climbed to $234,400 in April, up from $228,100 in March but down 25 percent from a year ago. The number of sales totaled 681, up 3 percent from a year ago but down slightly from March, the Florida Association of Realtors said today.

Many observers took the Realtors’ report as further evidence that long-plunging home prices finally have stopped falling.

“It certainly looks like we’re skidding on the bottom,” said Fritz Hawkins, general sales manager for The Keyes Co. Realtors.

Hawkins and other Realtors are counting on low mortgage rates and new levels of affordability to pull the Florida economy out of its nosedive.

Bill Pittenger, an economist at Seacoast National Bank in Stuart, sounded almost giddy about the housing statistics, which he called “a very positive sign,” especially when combined with Tuesday’s news that a national consumer confidence index had soared in May.

“Consumer confidence is up significantly from its historic lows,” Pittenger said. “Consumers in general are getting some much-needed relief in oil prices and tax refunds.”

Indeed, many economists think the worst is over. The National Association of Business Economists said Wednesday that all of the professional forecasters it surveyed recently predict the recession will end by the first quarter of 2010, and fully 74 percent think the recession will be over by the third quarter of this year.

“While the overall tone remains soft, there are emerging signs that the economy is stabilizing,” said NABE President Chris Varvares, also president of Macroeconomic Advisers. “The survey found that business economists look for the recession to end soon, but that the economic recovery is likely to be considerably more moderate than those typically experienced following steep declines.”

In another hopeful sign, the jobless rate in Palm Beach County fell slightly in April, state economists said last week, although lower unemployment came because fewer people were seeking work, not because more people were working.

Still, Palm Beach County’s job-creation engine seems to be revving up, according to Kelly Smallridge, president of the Business Development Board of Palm Beach County. Smallridge said she’s “crazy busy” as the economic development group works on projects that could bring hundreds - and perhaps thousands - of jobs.

“We have more activity than we’ve seen in 10 years,” Smallridge said.

A few years ago, the sky-high prices of homes and commercial real estate caused many companies to cross Palm Beach County off their lists. No more.

“It’s now more attractive than ever, because there are great deals,” Smallridge said. “You’ll find a couple months free rent and a sweet real estate package. I don’t think this is a cure-all for Palm Beach County, but it’s at least a step in the right direction.”

In another indication of real estate deals, Treasure Coast house prices dipped to $116,400, down slightly from March and off 27 percent from a year ago.

The number of resales in the Treasure Coast jumped to 490, down slightly from March but up 26 percent from a year ago, Realtors said.

The sharp decline in condo prices also slowed. The median condo price in Palm Beach County was $98,200, down slightly from March’s $99,800. The number of condo sales was up 11 percent from a year ago.

Joe Keating, chief investment officer at RBC Bank in Raleigh, N.C., said bargain-hunting buyers can rest assured that prices are unlikely to fall much more.

“It was a crazy, speculative, overbuilt market. But the good news is that’s well behind us,” Keating said. “All indications are that we’re at a bottom.”

The national median price for existing single-family homes in April was $170,200 down 15.4 percent from a year earlier, the National Association of Realtors said today.

Existing-home sales rose to a seasonally adjusted annual rate of 4.68 million units in April, up 2.9 percent from March but down 3.5 percent from April 2008.

First-time buyers and modest-priced homes continue to drive the market, said NAR Chief Economist Lawrence Yun.

“Most of the sales are taking place in lower price ranges and activity is beginning to pick up in the mid-price ranges, but high-end home sales remain sluggish,” he said.

Article from the PalmBeachPost.com

Tuesday, May 26, 2009

NEW YORK — National home prices are at levels not seen since the 2002 Winter Olympics, but a closer look at a housing index released Tuesday shows real estate is indeed local with some prices in certain cities falling to pre-2000 values.

The Standard & Poor’s/Case-Shiller National Home Price index reported home prices tumbled by 19.1 percent in the first quarter, the most in its 21-year history. Home prices have fallen 32.2 percent since peaking in the second quarter of 2006.

But in cities across the country home prices varied dramatically, depending on affordability, foreclosure activity and the local economy. The bottom may be in sight in some markets, but nationally home values are expected to decline - though at a slower pace - for the rest of the year.

“By our estimation, the composite 20-city index is perhaps two-thirds of the way through its ultimate total decline in this cycle,” according to Joshua Shapiro, chief U.S. economist for MFR Inc.

It’s hard to believe it could get much worse for homeowners in Detroit. Homes there are worth what they sold for in 1995. And while that’s good news for homebuyers, the implosion of the auto industry and economic fallout means fewer buyers have the money to qualify for a mortgage.

“I feel like houses here are free,” said Detroit area real estate agent Rose Marie Jouan with Re/Max Showcase Homes. Her house that she sold in 2004 for $200,000 is on the sales block, bank-owned, for $86,000.

In Phoenix and Las Vegas, where prices have plunged by half since their peaks, home values have receded to levels not seen since the beginning of the real estate boom. Phoenix prices are at early 2001 levels and Las Vegas values hover at mid-2002 prices.

Home values in Charlotte, N.C., Portland, Ore., and Seattle are steady at 2005 prices, the best showing of all 20 cities in the Case-Shiller report. All three were some of the last to fall into the housing slump.

The Case-Shiller report offered other hopeful signs the worst may be over for some cities. Denver prices posted an increase over February, while Dallas prices were flat.

Also, the rates of annual decline for the 10- and 20-city indexes slowed in March, the second straight month they didn’t set record price drops. The 20-city index fell by 18.7 percent from the year before and the 10-city index lost 18.6 percent.

Still, there are no signs home prices nationally have hit bottom.

“We see no evidence that a recovery in home prices has begun,” said David M. Blitzer, chairman of the S&P index committee.

All 20 cities showed monthly and annual price declines, with nine setting annual records. Fifteen cities posted double-digit drops and Phoenix, Las Vegas and San Francisco recorded declines of more than 30 percent.

Minneapolis posted a 6.1 percent decline from February to March, the biggest monthly drop on record for any metros in the indexes. Ron Peltier, chairman and chief executive of HomeServices of America, attributed the drop to a jump in distressed sales in March.

Economists will get a look at April housing data Wednesday when the National Association of Realtors releases sales data for previously owned homes, and on Thursday when the Commerce Department puts out numbers for sales of newly built homes. Economists surveyed by Thomson Reuters expect existing home sales to rise 2 percent from March to April, while new home sales are forecast to rise by 1.1 percent.

Article from the PalmBeachPost.com