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Condos Filling Lists of Miami Bank Owned Properties

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By : John Cutts    99 or more times read
Condos have been fillings lists of Miami bank owned properties over the past several months, as developers sell only a few of their condo units and fail to pay their maturing development loans.

The competition from low-priced single-family homes, the sharp declines in condo prices and the refusal of banks to refinance have been putting condo developers into severe financial difficulties. Additionally, every time a condo project enters a bank owned property listing, another downward price pressure is put on the condo sector.

Among condo developments expected to enter bank owned reo listings are two Miami-Dade County projects – Abel Homes and Carrington Park, which were foreclosed on by FirstBank Puerto Rico after developers GREC Homes V and GREC Conversions XXIII failed to pay their $12.7 million loan that matured in November last year.

GREC borrowed $29.5 million after it bought Abel Homes in 2005 for $10.5 million. Carrington Park was also covered by the mortgage. GREC, however, sold only 114 units of the 199 units at Abel, and also failed to sell the remaining 44 unsold units at Carrington. The last sale at Abel Homes was in December 2007, indicating the difficulty of developers to sell condos.

Previously, another project by GREC investors – the Venetian Parc homes in southern Miami-Dade – has entered lists of Miami bank owned properties. Venetian was hit with a foreclosure lawsuit in September last year after the $39.4 million loan that it secured remained unpaid. GREC has converted over 4,500 condo units since it started its operations.

Another multifamily property put into foreclosure recently was the two-building Marina Del Rey in Miami Beach. Sovereign Bank foreclosed on the property after the developer failed to pay the $4.9 million loan it obtained in 2004. The buildings were acquired in 1997 for $2.1 million.

The frenzied construction and conversion of condos peaked in South Florida in 2005, as demand for condos and homes skyrocketed. By 2008, as toxic mortgage loans began to unravel, condo prices were in free fall. Condo units were not selling while most of those that were sold defaulted and entered lists of bank owned properties in Florida.

The five-building Brittany’s Place, which are now deteriorating because of lack of maintenance funds, were among these apartment buildings converted into condos in 2006. As of latest count, more than 33 units have been foreclosed upon and owners of the few units that got sold have not been paying their association dues.

In one of the buildings, only 12 owners were paying for the maintenance of 96 units, most of which are vacant or in foreclosure. Lenders also have been refusing to pay for the units they have foreclosed upon, saying they have not yet taken title to the properties.

The case of Brittany’s Place is common in Miami-Dade County, as condo units continue to enter lists of Miami bank owned properties. Based on an online real estate firm specializing in distressed condos, there are more than 16,000 previously-owned condo units available for sale in Miami-Dade County.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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