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BankUnited blacklists 191 condo projects

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carlos alvarez

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Sophomore Member
May 8, 2006
Professional Status
Certified Residential Appraiser
South Florida Business Journal - by Brian Bandell and Oscar Pedro Musibay
Interested buyers looking for mortgages to buy units in Miami's Opera Tower, Everglades on the Bay or Four Ambassadors shouldn't bother approaching BankUnited. The Miami-based bank has included them on a list of 191 condo projects it won't write loans for.

The Business Journal obtained a list of "non-permissible" projects used internally at BankUnited (NASDAQ: BKUNA) and updated as of Jan. 14. Most of the forbidden properties were in Miami and were added at the last update. It wasn't clear who at the bank wrote the list, but the author stated a reason for almost every project declared off-limits.

Declining market value was the biggest culprit, followed by high investor concentration -- as much as 70 percent in one case. BankUnited also cited numerous foreclosures, delinquent homeowners association dues, structural-based litigation and the bank's existing exposure in the buildings.

BankUnited spokeswoman Melissa Gracey said the list is based a similar guidelines used by Fannie Mae and Freddie Mac.

"We look at it more from our level of risk, and we are extremely conservative on our lending guidelines," she said. "We scaled back on condo lending a few years ago. We don't have a lot of exposure in the condo market."

BankUnited had a $118 million provision for loan loses as of Dec. 31. Its non-accrual loans increased to $452.6 million as of Jan. 31, up 17.7 percent from $384.4 million a month before.

The bank plans to shrink its balance sheet, and it's starting by restricting loans to condo buyers, said Jefferson Harralson, a bank securities analyst with Atlanta-based Keefe, Bruyette & Woods. Banks worry that condo values could drop below the purchase price and buyers could walk away from the loan.

"The banks don't like to lend to the end buyers of a project they feel might not have significant occupancy," Harralson said. "Mainly, there is a fear that homeowners association dues would be very high on the few people who would be in there."

Many banks have lists of forbidden condo projects, but Harralson said he has never heard of one so long.

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.

"The banks want to see what prices they are selling at," Goodkin said. "They want to see sales that adjust prices downward. Once they establish the price per square foot, then they'll start lending again at 80 percent of the value."

Jack McCabe, CEO of Deerfield Beach-based McCabe Research and Consulting, said that the bank list means all presales are out the window. Buyers who had been pre-approved for mortgages may not be able to get them in the current lending market.

The BankUnited list and those prepared by other banks will also prompt lenders to call into question the integrity of the construction loans made to developers. Construction loans were made based on presales of at least 60 percent. Such a list could also give buying groups a stronger hand because both lenders and developers will know their are no more choices left to get rid of inventory.

Seth Gordon, a spokesman for Cabi Developers, which is building Everglades on the Bay, said the developer isn't worried about being on the list because its buyers will get their mortgages from other banks.

BankUnited's non-permissible condo list:

50 Biscayne in Miami
600 Biscayne in Miami
1650 Biscayne in Miami
900 Biscayne Bay in Miami
500 Brickell in Miami
1390 Brickell Key in Miami
1001 Center in Miami
1600 Club in Miami
Allure in Las Vegas
Altas de Miami in Miami
Asia in Miami
Atlantis Condo in Miami
Avenue in Miami
Axis on Brickell in Miami
Bay Lofts in Miami
Bayshore Place in Miami
Beacon in Miami
Belle Plaza Efficiency in Miami
Biscayne Tower in Miami
Blue in Miami
Boulevard Condos in Miami
Brickell Bay Club in Miami
Brickell Bay Tower in Miami
Brickell Biscayne in Miami
Brickell City Center in Miami
Brickell Commons in Miami
Brickell East in Miami
Brickell Forest in Miami
Brickell Harbour in Miami
Brickell Key in Miami
Brickell Key I in Miami
Brickell Mar in Miami
Brickell on the River in Miami
Brickell Park in Miami
Brickell Place in Miami
Brickell Station in Miami
Brickell Tennis Club in Miami
Brickell Townhouse in Miami
Brickell View in Miami
Brickell Vista in Miami
Bristol Tower in Miami
Capital at Brickell in Miami
Captiva-F in Miami
Carboneil in Miami
Carriage Hills in Hollywood
Cima Condo in Miami
Cite in Miami
City 24 in Miami
Club at Brickell in Miami
Commodore Bay in Miami
Coral Station in Brickell in Miami
Costa Bella in Miami
Courts Brickell Key in Miami
Courvosier Courts in Miami
Cynergi in Miami
Delray Estate Condominium in Delray Beach
District in Green Valley in Las Vegas
Downtown Lofts 4 in Miami
Elliot House in Miami
Emerald at Brickell in Miami
Empire Towers in Miami
Epic-Dupont in Miami
Espirito Santo Plaza in Miami
Everglades on the Bay in Miami
Filling Station Lofts in Miami
Flagler First Condo in Miami
Fortune House in Miami
Four Ambassadors 1 in Miami
Four Ambassadors 2 in Miami
Four Ambassadors 3 in Miami
Four Ambassadors $ in Miami
Four Seasons Hotel & Tower in Miami
Golden Bay Club in Miami
Houses of Brickell in Miami
Ice in Miami
Ice 2 in Miami
Icon in Miami
Imperial in Miami
Infinity at Brickell in Miami
IOS on the Bay in Miami
Ivy in Miami
Jade Residences at Brickell in Miami
Kenland Bend south in Miami
Lake Beach Condo in Miami
Lakewood Village in Miami
Latitude on the River in Miami
Loft in Miami
Loft II in Miami
Lofts on Brickell 1 in Miami
Lofts on Brickell 2 in Miami
Los Suenos De Brickell in Miami
Lyghte Miami Condos in Miami
Lynx in Miami
Manhattan Condos in Las Vegas
Marina Blue in Miami
Mark in Miami
Marquis Miami in Miami
Mary Brickell Village in Miami
Mayfield in Miami
Meridan at Hughes Center Condo in Las Vegas
Met 1 in Miami
Met 2 in Miami
Met 3 in Miami
Metropolitan in Miami
Midtown Miami in Miami
Mint at Riverfront in Miami
Mirage Condominium in Las Vegas
Neo River Lofts in Miami
Neo Vertica in Miami
Newport Lofts in Las Vegas
New Wave in Miami
Nu River Landings in Fort Lauderdale
Oasis on the Bay in Miami
One Broadway in Miami
One Miami in Miami
One Miami West in Miami
One Plaza in Miami
One Queensridge Place in Las Vegas
One Riverview Square in Miami
One Tequesta Point in Miami
Onyz 2 in Miami
Opera Tower in Miami
Overtown Miami in Miami
Palace in Miami
Panorama Towers in Las Vegas
Paramount on the Bay in Miami
Paramount Park in Miami
Parc Lofts in Miami
Park Avenue Condo in Las Vegas
Park Place in Miami
Platinum in Miami
Plaza on Brickell in Miami
Point at Brickell in Miami
Point View in Miami
Pompeii in Miami
Premiere Towers in Miami
Provincial Gardens
Pyramids of Key Biscayne
Q Club Condo Hotel in Fort Lauderdale
Quantum on the Bay in Miami
Regency Towers in Las Vegas
River Breeze in Miami
River House Lofts in Miami
River Oaks in Miami
Riverfront in Miami
Riverfront Wind in Miami
Sail in Miami
Sail Boat Cay in Miami
Samari Lake East in Miami
Seacoast Towers in Miami
SIAN Ocean Residence Condo in Hollywood
Sky Las Vegas in Las Vegas
Skyline Mary Brickell Village in Miami
Skyline on Brickell in Miami
SMA in Miami
Soeil Miami in Miami
Soho Lofts in Las Vegas
Solaris Brickell Bay in Miami
South Miami Ave Condo in Miami
Summit Brickell in Miami
Star Lofts in Miami
Sunset Harbour
Ten Museum Park in Miami
The Carriage House
The Jade Condominium
The Mark on Brickell Bay
The Palace Condominium
The Resort at Singer Island in Riviera Beach
The Village of Kings Creek
Three Tequesta Point in Miami
Turnberry Place in Las Vegas
Turnberry Towers in Las Vegas
Two Tequesta Point in Miami
Uptown Lofts in Miami
Vanderbilt Gulfside
Venetian Bay Villages Condo in Kissimmee
Villa Brickell in Miami
Villa Magna in Miami
Villa Regina in Miami
Village at Hawk's Cay
Villagio Condo in Port Orange in Port Orange
Vue at Brickell in Miami
Wind by Neo in Miami
Yorker in Miami
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