The Miami Herald reported today that the rapidly declining property values pushed 77,000 homeowners into foreclosure during this latest surge in home-loan delinquencies we saw the first quarter of the year, a signal that instability in the Florida housing market is far from over.
According to a report released Thursday by the Mortgage Bankers Association., Florida ranked second in the country in failing loans and California led the nation with 109,000 foreclosures. Texas, Michigan and Ohio, were the states with the next highest numbers which saw no more than 24,000 foreclosures during the same period.
Jay Brinkmann, vice president for research and economics with the MBA, said ''The problems in California and Florida are extraordinary; they are the main drivers of the national trend.''
One investor was forced to walk away from a $1.4 million home he began constructing on a Miami Beach waterfront home in 2004. He went into foreclosure in April and is negotiating a short sale, in which a lender settles for a partial payment of the loan.
In 3.5 million loans that were examined, representing roughly 163,000 homes, Florida foreclosures were at a 4.61% rate. That compares to 1.03% of 3.42 million loans in the same period a year ago, or roughly 35,200 homes.
Overall, 11.6% of Florida property owners were more than 30 days past due on a mortgage payment or in foreclosure, suggesting more trouble ahead.
The Miami-Dade County Clerk's office recorded 11,768 lis pendens filings, in the first three months of the year, which include initial Florida foreclosure filings but also liens by condo and homeowner associations. This was nearly half the number filed for the entire year in 2007. In Broward, the number was 10,797.
In Miami-Dade County, 4,478 were filed in April and 3,837 in Broward.
The figures, from an area that once saw fastest home price appreciation, and new construction and heavy speculative buying during the boom years and represent the continued fallout in markets.
The foreclosure rate has risen nationally to 2.47 %, affecting about 1.1 million homeowners of all first mortgages at the end of the first quarter, compared to 1.28 % during the same period a year ago, again the highest rate since 1979.
One economist recently said Economy.com, said “the most recent spike in the numbers represents a third wave of property owners who are being socked by deteriorating home prices amid a softening labor market.
The first wave, he said, consisted of over-extended investors who went belly-up in late 2006 and early 2007 when the market began to slow, putting an end to easy flipping.
The second occurred when mortgage payments on adjustable-rate mortgages and other exotic loans began to reset. Aggressive action by the Federal Reserve has abated the problem, Lafakis said.
``Today when you get an ARM reset, the mortgage payment doesn't go up at all or it's much less severe than the resets of homeowners at the end of 2007.''
He said current conditions are affecting a different, larger swath of homeowners, as seen in rising delinquency rates among more credit-worthy, or prime, borrowers.
In Florida, at the end of the third quarter, 2.51% of all prime loans were in foreclosure, compared to 0.44% last year.
Florida, South Florida, in particular, is contending with a large number of subprime loans, made to borrowers with weak credit histories.
According to Moody's Economy.com, at the peak of the lending boom in 2006, Miami ranked first among metropolitan areas for the largest percentage of the troublesome loans.
According to the MBA report, more than 34%of 547,868 subprime loans in Florida were past due or in some stage of foreclosure.
Contributed by MLR Realty
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