Say you want to sell your unit at Related Group’s new 50 Biscayne Condo in downtown Miami, you find a buyer willing to purchase your unit, you agree on terms, and you probably think, “whew, I’m really lucky I sold.” Not so fast: today’s Daily Business Review is reporting
Banks and mortgage lenders compile lists of buildings they find too risky for lending, and they refuse to finance purchases there.
What This Means if Your Miami Condo is “On the List”
It could mean that it will very hard to obtain financing for your condo, whether you are a buyer or a seller, in one of the “non-warrantable” condominiums.
The lists include finished buildings and projects still under development.
Prominent projects on BankUnited’s list include the Related Group’s 50 Biscayne and 500 Brickell; Terra Group’s 600 Biscayne and 900 Biscayne, and Cabi Developers’ Everglades on the Bay.
Is This the Last Nail in the Coffin for Miami Condos?
The impact of today’s news on the Miami condo market:
- Developers with unfinished buildings on the list may have high “walk-away” rates
- Owners of units in “blacklisted” condos may find it next to impossible to sell
Check out Miami’s “blacklisted” condos here:
UPDATE: South Florida Business Journal is reporting that Bank United has blacklisted Opera Tower as well.
Even buyers with good credit can’t get a mortgage for a condo that has an uncertain value, said Lewis Goodkin, president of Miami-based Goodkin Research. He said because sales have been so slow and 35 percent to 40 percent of buyers could pull out of contracts in some buildings, no one knows the real value of these condos. And, if lenders don’t know the value, he said, they can’t set a loan-to-value ratio with any certainty.
Categories: Miami Condos, Miami Real Estate, Real Estate News
5 Responses to “Big News: Lenders Blacklist Some Miami Condos”
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Matrix » [Riding The Bus] For Closure Of Optimism Says:
February 19th, 2008 at 10:48 pm[...] Banks are blacklisting condo projects to minimize their damage. Major lenders have created blacklists. This seems like a prudent decision…avoid certain projects to avoid issuing a high risk mortgage. But doesn’t this accomplish exactly opposite by poisoning a local market delaying its recovery and placing performing assets in the market at higher risk? [...]
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The Balcony Observer » Blog Archive » Miami Blacklists Condo Sales Says:
April 23rd, 2008 at 1:08 pm[...] April 23, 2008 12:08 pm Blagica Owner’s Corner Looks like some lenders are making it difficult to buy and sell condos in Miami. Leave a [...]
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February 14th, 2008 at 8:54 am
Great post Kevin, I can always learn something new by checking out your fantastic blog. Thank you, Monica
February 14th, 2008 at 12:56 pm
Kevin: I just closed a unit at 50 Biscayne last week, the term “Declining Value” basically cover ALL of Miami Dade County. I think what is more relevant is that Lenders are listing properties when they have over a 20% exposure in the building. The Lenders you listed are Lenders that normally keep their loans after closing and thus are concerned with their exposure in that particular building. ( Bank United is known to be a Foreign Investor Lender ) The normal rule is that when a building in located in a declining market, Lenders will lend but not at the maximum LTV that they normally would, the LTV would need to be dropped by 5% to take the declining value into account.
February 14th, 2008 at 1:02 pm
Hey Hector,
Thanks for stopping by! Thanks for the “on the ground” Miami insight. This is good info. So basically, lenders will lend in these buildings, but they want more money down?