BOA is seeking to repossess 64 condominium units which is a result of the joint venture between MCZ Dev. Corp. and Centrum Properties. Additionally, BOA is requesting for a receiver to be appointed by the court to manage and operate the 240 condominium complex.

According to condominium complex officials, the two developers have actually reached an amicable agreement that they hope would resolve the condo foreclosures lawsuit. They said that the case will not have any adverse consequence on the condominium association nor the sales and closings.

Meanwhile, the Serenata Sarasota lawsuit is the second repossession case filed against the joint venture of MCZ and Centrum in Manatee. Orion Bank and the National City Bank have also filed a foreclosure case against MCZ and Centrum IX LLC last May. The case stems from the venture’s $27.1 million delinquent loan with the banks.

The lawsuit is also seeking foreclosure on the 788.2-acre property located at the northern region of Buckeye Road. The plan is for the development of the Curiosity Creek which consists of 150,000-sq ft commercial space and 1,594 houses.

MCZ/Centrum submitted an alternative development plan that includes a residential project in place of a 7 million-sq ft light industrial space.

The company said that the maturity date of its current loan was actually extended while the county is reviewing the alternate development plan. However, the banks decided against giving another extension on the company’s loan. They then initiated repossesion proceedings due to financial mismanagement.

Industry experts pointed out the growing number of condominiums in the state at risk of foreclosures. They said that increasing condo foreclosures is starting to show some devastating effects on condominium associations and residents. Most often than not, owners of vacant and foreclosed units do not pay their dues, leaving associations with no funds to be used for maintenance and services.

According to Peter Zalewski of Condo Vultures, many condo properties in the $4 billion real estate portfolio of Corus Bank will be sold off after investors complete a deal with the Federal Deposit Insurance Corporation which closed the bank in September.

The operations of Corus were taken over by MB Financial, which is also now considering selling off all the troubled real estate loans, many of which cover properties in Atlanta.

The FDIC initially wanted to sell off the properties immediately after the bank closure to cut down maintenance and related costs, but now the agency wants to sell all the troubled Corus property loans and foreclosed properties to one buyer by the end of this month.

Among the reported bidders for the Corus properties are Miami-based The Related Companies, Philadelphia-based Lubert Adler Group and Starwood Capital.

According to analysts, the FDIC is expected to choose one buyer with unquestionable financial strength and one willing to share profits from the immediate resale of the properties.

The analysts also added that real estate vultures have been monitoring the sale and have been making contacts with the reported bidders because they want to get hold of the more attractive properties including many Atlanta foreclosed homes.

As of the end of June, Corus had $463 million in foreclosed properties and $4.42 billion in commercial property loans. Almost $3 billion of its condominium loans were in default as of June.

Because of the closure, the FDIC is expected to lose around $1.7 billion to cover the insured deposits of Corus. Corus Bankshares, the former parent company of Corus, updated the loan portfolio of Corus when it filed its second quarter report in September.

In Atlanta, Corus Bank provided over $10 million in real estate loans to ten major borrowers. To attract bids, the loans are expected to be sold off at substantial discounts by the FDIC and the impact of the sales in Atlanta is still to be seen.

Out of the nearly 2,000 condominium units developed in Atlanta with loans borrowed from Corus, 80 percent were unsold. Atlanta was the third biggest market of Corus, providing loans for the development of over 2,000 condo properties during the housing boom.

However, the programs are facing some difficulties such as limited budgets and lack of financial incentives to lenders and developers. Added to these hurdles is the challenge of selling low-priced apartments which could result to complications for buyers whose loans depend on the financial status of the building.

Industry experts said that empty buildings are not good for the market and the economy. But they said that turning these empty buildings into affordable housing for moderate-income families brings a lot of problems.

They pointed out that there could be a negative effect on property values, apart and separate from changes in market conditions.

Meanwhile, New York State Housing Finance Agency Chief Executive Officer Priscilla Almodovar said that an affordable housing plan would likely include providing state-financed mortgages to help potential buyers purchase units in condominium buildings where market-rate buyers have already made some acquisition. This means that developers should reduce the market price of the condominium units.

Another state and city program involves allocating $5 million as grants. Under the program, about 125 homebuyers will each receive $40,000. For example, a three-member family earning $107,520 is eligible to purchase an apartment worth $411,000 using the $40,000 funding that the state will provide to the developer.

Similarly, a couple or single person earning not more than $92,160 is eligible to purchase an apartment worth $380,000 using the grant. Almodovar said that the program would take a lot of fine-tuning because the state has no experience with converting unfinished and vacant buildings into housing units that are moderately priced.

On the other hand, Assemblyman Hakeem Jeffries has introduced a legislation that aims to help developers refinance distressed loans, with a maximum worth of $150 million. This proposal is aimed at making it easy to convert troubled condominiums and rental projects into apartments for rent to moderate-income families.

To become eligible for the program, a loan should have been taken out between 2004 and 2008. The refinanced loans would require a developer to add housing units that are moderately priced, which Jeffries hope would account for 50 percent of the building units.

In Brooklyn, there are 66 condominium projects in some phase of development and foreclosure.

The 199-unit 22-story River Oaks Condominium in Miami has been foreclosed by New York-based lender iStar FM Loans after developer 1951 NW South River Drive LLC and businessmen Fernando Marin Valencia and Luis Cardenas Gerlein failed to pay their $52.3 million development loan.

The developers borrowed the money in 2007 from Fremont Investment & Loan, which later sold the loan to iStar. They bought the two-acre land in 2005 for $5.3 million.

Construction began in 2008 and they started selling at $299,000 for the 760-square-feet units and $499,000 for the 2,039-square-feet units. The plan included a fitness center, pool, sun deck, botanical garden, boat slips for 18 units and a seven-story parking facility.

The developers are also facing numerous claims from contractors for unpaid bills.

Another residential building being foreclosed is a three-story complex of 43 apartment units in the Little Havana community. Development firm AGM Properties III Corp. and its president Massimo Tartaglia have received foreclosure action from lender Mercantil Commercebank for non-payment of a $2.8 million loan.

AGM purchased the building in 2002 for $1.7 million, and refinanced it in 2007 for $2.8 million.

The housing estate called Galloway Sunset Estates in the Kendall area of Miami has also been foreclosed by Miami-based lender TotalBank. The Galloway Estates site was designed for 12 houses, but the developers have sold only two homes.

In 2003, developers Hector Castellon, Maria Castellon and Carlos Fernandez borrowed money from Ocean Bank to build homes on the site. In January 2008, the loan was acquired by TotalBank and restructured it at $5.8 million.

The 29-unit housing development called Villas at Sorrento in the southern part of Miami-Dade County has also been targeted for foreclosure by Coral Gables-based lender Mercantil Commercebank.

Molj LLC and its managing officers Jorge Perez, Oscar de Armas and Lourdes Yabor De Diaz purchased the development site in 2006 for $2.2 million and borrowed $5.7 million from Mercantil to build villas on the site. However, only a few houses were built as the developers could not presell units as fast as they planned.

According to housing analysts, there has been condo overbuilding in the Miami metro area, pushing the condo vacancy rate higher.

Competition from lower-priced foreclosed single-family homes also worsened the condo market.

According to industry experts, condominiums as low as $20,000 and single-family homes at less than $60,000 are generating multiple offers and overbidding. They said that despite market data showing a slow rise in home prices, it appears that foreclosure houses will prevent further improvement in the pricing trend.

Experts said that many cheap properties are located in neighborhoods severely affected by the foreclosure crisis, including Antioch, Oakland, Richmond, Pittsburg and Vallejo. These cheap properties are mostly short sales or bank foreclosed homes.

As an example, experts pointed out that a one-bedroom condominium at Lakeview complex in Pittsburg is short selling for $48,000. The owner purchased the property in 2007 for $228,000.

Meanwhile, many homeowners’ properties are worth less than the total mortgage they owed to their lenders. This is one factor that is a cause of concern to industry experts. They said that homeowners whose mortgages are higher than the values of their properties are candidates for foreclosures.

They added that these homeowners would lose interest to continue paying their mortgages and instead would walk away from their distressed properties and leave them for lenders to be foreclosed.

Meanwhile, the popularity of bargain-priced properties has helped entice more buyers, who are just waiting for the right time, to get on the bidding frenzy. Industry experts said that banks, burdened with repossessed homes on their inventory, have started to offer properties at very low prices to attract cash-rich buyers, especially first-time homebuyers who are laden with federal tax credit of $8,000.

Furthermore, banks are in a hurry to dispose of properties clogging their inventory because the longer bank repo homes remained unsold, the higher the costs they would incur.

According to industry experts, banks prefer homebuyers with cash for quick closing of sales deals and because many foreclosed homes are uninhabitable which means they could not qualify for a loan.

On the other hand, experts said that condominiums are cheap buys because of some financing issues. They said that government-supported loans which accounted for about 90 percent of loans in the current market, are not made available to owners of these complexes.

They pointed out that many condominium residents are delinquent on their homeowners’ association dues plus the fact that most of these units are not occupied by their owners.

Of the total home sales last month, 737 or 41.99 percent were Orlando foreclosure homes. The number of foreclosure homes sold was the reason why home prices failed to catch up with the rising sales in the area.

According to industry analysts, foreclosure properties continue to pull down home prices. This is because foreclosed houses are sold at below market prices and sellers of existing homes are forced to slash their prices in order to attract buyers.

Statewide, existing home sales increased in July for 11 consecutive months. Last month’s home sales also represented an increase compared with the previous month’s figures.

Sales of existing homes increased by 37 percent or 15,882 in July, compared with 11,595 properties sold for the same month the previous year. Compared with June figures, July sales of existing homes rose by 0.2 percent.

Meanwhile, statewide condominium sales in July rose by 48 percent. For the same month, existing home sales in 18 metropolitan statistical areas in Florida also inch up, as well as in condominium sales.

Last month, the median existing home sales price in Florida was $147,600, a 24 percent decline from the previous year’s $193,800. As with other areas in the country where home prices are languishing at the bottom, the drop in prices is blamed on the significant number of foreclosure homes for sale on the market.

Meanwhile, the median existing single-family home sales price in Florida was $181,600 in June, a decline of 15 percent from the same month a year ago.

Industry analysts said the continuing drop in home prices is a major reason why Florida experienced an increase in home sales. Buyers flocked to the market because of discounted prices and a wide selection of properties to buy.

Added to these reasons are the federal tax credit provided by the government to first-time homebuyers.

But analysts said that the current increase in home sales is not enough to assume that the housing market is recovering. They said that the rising unemployment rate is threatening to destroy whatever steps the housing market has made towards achieving a full recovery.

Statewide, sales of previously owned homes, including houses in foreclosed home listings, increased by 16 percent to 13,921 housing units. In May last year, just a little over 12,000 houses were sold. Compared to April this year, total sales in May from foreclosure home listings and non-foreclosure listings increased by more than 6 percent statewide.

Sean Snaith, head of the Institute for Economic Competitiveness at the University of Central Florida, said that the jump in sales of properties in foreclosed home listings and non-foreclosure listings in the past several months indicates a positive trend in the residential market. The other positive sign is the slowdown in the decline of home prices.

However, Snaith added it is not yet time to declare that the residential market is stabilizing because home prices have not stopped dropping. He said he hopes the increasing pace of home sales continue so that the market can begin to recover.

Polk County’s housing market has been duplicating the statewide home sale and price trends. In May, more than 300 properties from foreclosed home listings and non-foreclosure listings were sold, representing an 18 percent increase from the total sales of 271 units in May 2008.

Compared to April’s sales of 323 units, however, Polk’s May home sales represented a decrease.

In Florida, the median price for a single family house decreased to $144,400 in May, an almost 30 percent drop from the $203,800 median in May last year.

The median home price in Polk County decreased in May to $112,300, compared to the $146,500 median home price in May 2008. The median price point refers to the point where half of total homes sold were priced higher and half of total sales were priced lower.

Property analysts have observed that the statewide pre-owned median price last month surpassed each of the statewide median home sales prices in the past 4 months in Florida. They interpreted this as the overall housing market effect of prices of properties in foreclosed home listings.

The median price for condos in foreclosed home listings in Polk County also decreased in May to $113,400, a nearly 40 percent decrease from the $181,700 median sales price in May 2008. But while statewide condo sales increased in May, Polk County condo sales decreased.

Over 30 unsold condo units in a housing complex called Centre Pointe along Bakerview Road are set to become foreclosed properties for sale on June 26 if the developer is not able to find financing to pay over $6 million in real estate loans provided by Bank of the Pacific.

The Centre Pointe condo complex was designed to comprise four buildings with a total of 132 condo units. All units in the first building were sold, but many units in the other buildings were not sold, as the condo market weakened after lower-priced foreclosed properties for sale flooded housing markets.

However, British Columbia-based developer Ken Komenda, a co-owner of the condo project, is still hopeful that he can find a solution to save the units from becoming foreclosed properties for sale.

Komenda is looking for a way to restructure the loan, although he is facing difficulty because lenders have been hesitant to provide new loans to back condo projects. Lenders want to see strong sales data first before starting to negotiate.

But sales of condo units in the area have been slowing down. In the three years before 2008, condominium sales had been averaging 69 units per month in Bellingham, but in the last months of 2008, condominium sales have dropped to ten units per month.

Komenda and other condo developers explained that the target clients of Centre Pointe, the empty nesters, have been tied up to their family homes because of declining home prices. Although they have been planning to sell their typically larger homes to be able to buy more manageable condos, they could not sell their houses at the prices they like.

Drew Wilkens, a top executive of Bank of the Pacific, also said that potential condo buyers are finding it harder to obtain refinancing or new loans. He added that Freddie Mac and Fannie Mae were tasked to acquire home mortgages so that banks can provide new loans, but they have not been making a lot of mortgage purchases because they have added more constraints and limits to their mortgage repurchasing programs.

Nevertheless, Komenda advised prospective home buyers to buy now and consider condos and foreclosed properties for sale in Bellingham before prices climbed up again.

During the first wave of the foreclosure crisis, only houses formerly owned by low-income borrowers were being foreclosed. Now, high-priced homes and non-residential buildings could not be prevented by owners from being added to foreclosure lists.

Among the condos and commercial properties being added to foreclosure lists are South Florida’s Inverrary Plaza; the Ponce de Leon Condo in South Florida’s Coral Gables; the Richardson Heights shopping mall in Dallas; the Sion Estates in Miami-Dade; and the Key International Development projects in Miami.

Bank of America, trustee of mortgage-backed securities handled by Bear Stearns, has lodged in Broward County a foreclosure case against developer Post Time Properties II, which acquired a CMBS loan after purchasing the Inverrary rtail plaza in 2005. Post Time Properties has been in default by over 3 months on its $8.6 million balance.

Similarly, Wachovia Bank has lodged in Miami-Dade a foreclosure case against Shear Construction and Development, which developed the Ponce de Leon condo complex, and other Shear partners. The condo, which has 50 residential units, 9 office units and 11 commercial units, still owes the bank $13.1 million. Wachovia intends to acquire the unsold units, as there were only 26 units sold in 2008.

Shear Construction is facing two other foreclosure lawsuits in connection with unpaid loans for its commercial and residential development projects. It obtained $4.6 million from Pacific National Bank for its River Marina LC project and obtained $2 million from Pacific National Bank for its Flamingo Ranch Estates in Davie. This housing development featured 13 home sites, but only sold 7 sites because of the effects of forclosure lists.

Meanwhile, the Richardson Heights shopping mall in Dallas, which has been operating for 50 years has been added to foreclosure lists after the owner, a Shafer Property affiliate, failed to pay over $32 million in mortgage debts.

According to executives at Foreclosure Listing Service, a bigger number of older commercial properties have been added to foreclosure lists during the past years because they could not compete with newer commercial complexes. Aside from competition, operators have also been unable to obtain credit to continue their operations.

Another housing development that faces the risk of being added to foreclosure lists is Sion Estates, a master-planned community in Miami-Dade. Sion Estates LLC was provided with a $3.9 mortgage loan by Premier American Bank, which it was not able to pay after the project stalled.

The stock market collapse, the mortgage crisis and the glut of foreclosure homes across the country have adversely affected New York City, which is now saddled with 8,000 unsold new condos and an additional 22,000 units scheduled to be marketed in 2010.

These condos were all built to serve young financial hotshots and international investors, but the continued entry of foreclosure homes into the housing market nationwide, the global economic downturn and corporate downsizing have put a stop to most real estate purchase plans.

Residential real estate developers in the city are now awash with inventories, as more and more New Yorkers lose their jobs and fewer foreigners buy Manhattan condos because of the global downturn. Developers are also considering real estate auctions, which are rare in New York, just to move properties and show buyers how low home prices have fallen. The city is rarely mentioned in news related to foreclosure homes, but the nationwide foreclosure crisis has extended its adverse effects on the city.

Real estate auctions were last undertaken in New York City in the 1990s when the city was overloaded with a surplus of co-op condos and interest rates were at two-digit levels. Now New York City condo and apartment builders are planning to use auctions to obtain liquidity. They also have seen how auctions succeeded in rescuing housing markets in South Florida which were devastated by foreclosure homes.

Boston-based Accelerated Marketing Partners, an auctioneer and real estate marketer, has been approached by several developers for possible auction deals. One is a developer who wants to auction five mid-range and high-end condos in Manhattan in Brooklyn. Another is a condo builder who wants to auction units in his downtown building, priced previously at $1,100 per square foot. Now the units would probably be priced at minimum bids of $700 per square foot.

One strategy of Accelerated to prevent condo prices from diving to the price level of foreclosure homes is to auction only several units of a particular building at a time. The other unsold units are marketed outside the auction arena. Auctioneer Sheldon Good & Company will also auction condo properties located in various parts of the city and neighboring New Jersey in May. Among these condo properties are the 17 units of a new condo in one wealthy community of New Jersey.