ORLANDO, Fla. – May 29, 2009 – The faltering economy and falling home prices plunged an additional 99,000 Florida borrowers into foreclosure in the first three months of the year, bringing the total number of home loans in some stage of the foreclosure process to 374,134.
With 11 percent of its home loans in foreclosure, Florida ranked first in the country for defaults and was the only state in double digits. The rate was up roughly 2 percent from the previous quarter, according to figures released Thursday by the Mortgage Bankers Association.
As job losses mounted and incomes dwindled, more and more homeowners fell behind on their loans, with payment problems socking greater numbers of previously credit-worthy borrowers who have traditional mortgages.
The delinquency rates for loans 30 days or more past due stood at 10.67 percent in Florida, or about 378,000 of some 3.54 million loans.
The rate dipped slightly from the previous quarter, but that is always the case at the start of the year, said Jay Brinkmann, chief economist for the MBA. The rate nationally was 9.12 percent. Florida’s crisis is particularly acute because of the staggering run-up in real estate values during the housing boom. People rushed to get loans to buy property that, in many cases, they could not afford. When prices collapsed, homeowners were stuck, unable to sell or refinance. Others were caught in adjustable-rate mortgages with payments that soared.
With Florida home values continuing to fall, Brinkmann predicted foreclosures would continue to rise through the rest of the year. A large oversupply of new property makes stabilizing home prices in the state likely a distant prospect.
“It’s going to take getting demand even with supply just to put a floor under prices. Even then, it may not get it up to a point where it gets buyers back above water,” Brinkmann said.
At the end of March, roughly 71 percent of owners who bought in Miami-Dade and Broward counties in the past five years were underwater, or owed more than their homes were worth, according to Web-based real estate services firm Zillow.com.
Analysts have said so-called negative equity is one of the biggest reasons why borrowers fall into foreclosure – if they need to sell, they can’t, at least not for enough to cover the debt, or they choose to throw in the towel, thinking it’s better to take their losses and rent.
While most lenders have established loan modification programs and are helping borrowers reduce their monthly payments through things like interest rate reductions and extended terms, many homeowners are falling back into default. A recent study by Fitch Ratings projected that as many as 75 percent of subprime loan modifications would fall behind by 60 days or more within a year. Brinkmann said that so-called redefaults could show up in the new foreclosure statistics: “There may be repeat visitors coming back into the numbers.”
Copyright © 2009 The Miami Herald
No comments:
Post a Comment