A newspaper article in the Sun-Sentinel this morning reported that the property values across Broward County were about 19% less than those reported in 2008. The figures were established by Broward County Property Appraiser, Lori Parrish. The article when on to speculate that the drop in property values will have a direct affect on property taxes collected by the County. Ultimately, it could mean a rise in the millage rate, or a cut in county services.
The drastic drop in property value may have an even more devastating effect on property owners seeking either a short sale, or principle loan modification. Both of those pre-foreclosure transactions are premised on the current property value, as opposed to the property value at the time of purchase. One wonders, as the gap or increment between the original property value at the time of purchase, and the current value widens, whether short sales and modifications may become even more difficult to obtain. In the case of short sales, it decreases the chance of a lender agreeing to a short sale unless there is a deficiency agreement in place.
In speaking to insiders at the Property Appraiser’s Office a comparable drop in property value is anticipated for 2010. It underscores the need to do a short sale or loan modification earlier rather than later. Any short sale or loan modification should be preceded by a Forensic Loan Audit to determine if there are any TILA, RESPA or predatory lending violations. That may provide a bargaining advantage with the lender a critical time.
