Abysmal Down-payments on Recent Production Home Sales in Miami-Dade. By Geniusofdespair

The Wall Street Journal reported April 24th that 8.4% of South Florida’s loan payments are overdue which is the highest percentage in all of the major cities in the U.S.

Imagine our surprise when we saw this ad (left) in the April 28th Miami Herald, saying that “Ocean Bank” is incredibly offering 5% down-payments when they have one of the worst bad loan rates of any South Florida bank. According to Bauer Financial, Ocean Bank was at 5.2% as of Dec. 31, 2007. In contrast, in the same ad, Third Federal Savings and other lenders were responsibly offering loans at 20%.

We, at Eye on Miami were wondering if production homebuilders had tightened up on mortgage loans, which they traditionally arrange for their buyers, by requiring larger down-payments. We also wanted to see if lenders were taking the crisis seriously by requiring higher down-payments for these homes to help avoid foreclosures and to increase their capital reserves.

By researching current records for 4 production homebuilders in the county real estate transaction database we found these recent sales, mostly with less than expected down-payments:

Shoma Homes

1. Richard 3/18/2008 paid $200,000. His mortgage was for $179,910 from American Banc Shares. Down-payment was $20,000 (10%).
2. Barbara 3/06/2008 paid $227,000. Her mortgage was for $215,600 from Wells Fargo. Down-payment was $11,350 (5%).
3. Joel 3/06/2008 paid $225,000. His mortgage was for $213,750 from Flagstar Bank. Down-payment was $11,700 (5%).
4. Guissella 2/06/2008 paid $232,100. Her mortgage was for $220,400 from Olympia Funding. Down-payment was $11,700 (5%).
5. Guiovanny 1/15/2008 paid $220,000. His mortgage was for $220,000 from JP Morgan Chase. Down-payment was $0 (0%).

Horton Homes

1. Emilio 2/2008 paid $371,300. His mortgage was for $371,250 from JP Morgan Chase. Down-payment was $50 (0%).
2. Davis 10/04/2007 paid $315,700. His mortgage was for $315,600 from JP Morgan Chase. Down-payment was $100 (0%).
3. Cirenia 4/11/2008 paid $292,800. Her mortgage mortgage was for $288,210. from Wells Fargo. Down-payment was $4,590 (about 1.5%).
4. Ivan 3/12/2008 paid $189,900. His mortgage was for $187,054 from Countrywide Bank. Down-payment was $2,936 (less than 2%).
5. Isiah 9/2007 paid $295,900. His mortgage was for $295,895 from Homecoming Financial Network Mortgage. Down-payment was $5 (0%).

Lennar Homes

1. William 4/15/2008 paid $291,000. His mortgage was for $286,483 from Universal American Mortgage. Down-payment was $4,517 (about 1.5%).
2. Michael 4/15/2008 paid $307,166. His mortgage was for $313,753 (VA Rider) from Universal American Mortgage. Down-payment was -$6.587 (less than 0%).
3. Sylvan 4/16/2008 paid $283,500. His mortgage was for $289,646 (VA Rider) from Universal American Mortgage. Down-payment was -$6,146 (less than 0%).
4. Bernardo 4/03/2008 paid $292,000. His mortgage was for $266,742 from Universal American Mortgage. Down-payment was $25,258 (less than 10%).
5. Rodolfo 4/02/2008 paid $265,000. His mortgage was for $262,922 from JP Morgan Chase. Down-payment was $3,000 (less than 1.5 %).

Caribe Homes

1. Michael 1/08/2008 paid $282,500. His mortgage was for $226,000 from HSBC Mortgage. Down-payment was $56,500 (20%).
2. Maribel 11/06/2007 paid $322,833. Her mortgage was for $306,650 from JP Morgan Chase. Down-payment was $16,183 (5%).
3. Jose 11/06/2007 paid $328,000. His mortgage was for $327,000 from JP Morgan Chase. Down-payment was $1,000 (less than 1%).
4. Mark 11/06/2007 paid $209,000. His mortgage was for $188,100 (2nd Home Rider) from JP Morgan Chase. Down-payment was $20,900 (10%).
5. Nelson 1/29/2008 paid $227,800. His mortgage was for $216,350 from JP Morgan Chase. Down-payment was $11,550 (5%)

There weren't a heck of a lot of recent sales in 2008 for any of the production homebuilders.