The Sub-Prime Mortgage Crisis and Your Options
written by Philippe Symonovicz, Esq.

                   This country and especially the State of Florida is going through a
severe economic period, perhaps unlike any it has ever seen before since the
Great Depression.  Thousands of properties are being foreclosed upon or are
about to be foreclosed upon by institutional lenders.  These lenders have, for
years thrived upon a booming real estate market and encouraged Floridians to
borrow most if not all the equity in their homes, whether through a refinance
or through the purchase of a new home or property, with the promise that
the market would keep flourishing at the same pace that it  had for a period
of five or six years.  They offered the citizens of this country the lowest
adjustable rate mortgages in history and allowed unscrupulous mortgage
brokers to cajole their borrowers, you the homeowner, into 100% and even
110% loans, regardless of the borrower’s income or  financial resources.   
Furthermore, these loans were given without  considering the impact that
adjustments in the interest rate would have on the property owner’s ability to
make monthly payments not to mention any adverse economic impact which
might befall a property owner due a diminishment in income occasioned by
loss of employment or business, illness, or simply unanticipated expenses
which we as human beings all experience at one time or another in life.  

Some people who have owned their properties for a decade or more had in
fact acquired a substantial amount of equity in their homes due to the rapid
rise in property values.  As a result of the appreciation in the real estate
market and a recalcitrant stock market, these homeowners turned to the
equity in their properties enticed by mortgage brokers and lenders.  Some
were encouraged to purchase investment properties with little or no money
down, thus further fueling the spiraling values of real estate.  We were all told
that this was a sound financial investment, well worth the risk.  These
factors contributed to the consequences which we now live in.  The
homeowner who took out a $350,000 mortgage on his primary residence is
finding that he cannot make the payments on that mortgage in addition to the
mortgages which he took out on other properties.  The income is not there
and the upward adjustment in these adjustable rate mortgages have made the
payments even more prohibitive. Many people have refinanced their
properties at least once a year in order to put enough money in their pocket to
pay the arrearages on their bills in an effort to make up for the deficiency in
their income.  Few could keep up at this pace.  Consequently, homeowners
have not only stopped making payments on their investment properties, but
are now unable to make the payments on their primary residence.  The result
is a glut of properties on the market and a rapid decrease in the value of real
estate in Florida.  

The sad truth is that, with the rare exceptions of those fortunate few who
either own their properties free and clear or purchased their property prior to
this century with a sizeable down payment while resisting the temptation to
refinance years later, most people in Florida and particularly South Florida are
in a negative equity situation.   It is not uncommon for someone who paid
$350,000 for a property or refinanced their property with a $350,000.00 loan
in 2006, to find themselves in a property which is now worth $250,000.00.   
In fact it is rarer to find someone who is not in that situation.   We have
come across certain cases in which property owners have a property valued
at well under two hundred thousand dollars less than the outstanding
mortgage balance on the property. For example, we represented a
homeowner who purchased a home for $351,000 in 2003 then refinanced it
in 2006 for $ 500,000 because it was then appraised at $550,000 by the
lender, only to find that the property is now worth less that the initial $
351,000 that the homeowner paid for it.  The reality is that this property as
well as all those in South Florida is still dropping in value.  Statistics claim
that properties have dropped 20% in 2008 thus far.  And there is no end in
sight.

So where do we go from here.  Are we all going to lose our properties to
institutional lenders. The answer is an emphatic “no”.  The good news is that
you are not alone as is borne out by the statistics.  The lenders, mostly the so-
called “sub-prime lenders,” have gone bankrupt overwhelmed by the waves
of defaulting mortgages.   The mortgage brokers who sold us these sub-
prime loans,  have also gone out of business.  The remaining lenders who
bought the mortgages are stuck for the most part with paper that is worth
less than property it is on.   Here’s a secret - they don’t want your property,
they already have more than they can handle, they actually want to work with
you, although they don’t want you to know that.  So what is the solution or
more precisely the solutions?

The solution is our office.  Philippe Symonovicz has been a licensed attorney
in the State of Florida since 1981 specializing in real estate. He is a member
of Attorneys’ Title Insurance Fund, Inc. since 1990 and in 2007 was
awarded the President’s Circle Award which is reserved for the top 2.5% of
the attorney agents in the State of Florida.  Our office is dedicated to saving
your most precious asset - your home or in some cases your investment
property. Our office offers personalized services which are customized to
suit your particular set of circumstances.   Do you want to keep your
property or sell it without the consequences of a foreclosure judgment
against you?   There are many options available.  Please contact our office so
that we may discuss what the solution that would fit your situation the best.
The Sub-Prime Mortgage Crisis and Your Options:
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