|
Article
Courtesy of The Palm Beach Post
By Kimberly
Miller
Published
November 21, 2009
Nearly one in five Florida home loans was either seriously behind in payments or in foreclosure during the third quarter of this year, an ominous sign for a nascent economic recovery now bracing for a surge of bank-owned properties.
About 13 percent of the state's more than 3.4 million loans were in foreclosure in the months between July and September, with another 6 percent at least 90 days past due on payments.
Combined, the numbers rank Florida top nationally for delinquent and foreclosed loans, according to a survey released Thursday by the Washington-based Mortgage Bankers Association.
"We think we are seeing a little bit of improvement in the market, but short-term it's going to be pretty bad," said Ken Johnson, a Florida International University professor and real estate economist. "We are trying to find a floor on property prices and to be hit with another wave of foreclosures, it's not clear if we can readily absorb that."
In total, 12 percent of Florida home loans were 30 days or more behind on payments at the end of the third quarter. The national average of delinquent loans is 10 percent; the national average of homes in foreclosure is 4.5 percent.
Nevada, Arizona and California trail Florida on the foreclosure list.
Much of the quarter's problems can be blamed on unemployment, analysts said Thursday, while last year's foreclosures were due more to subprime mortgages.
"Despite the recession ending in mid-summer, the decline in mortgage performance continues," said Jay Brinkmann, chief economist for the Mortgage Bankers Association. "Job losses continue to increase and drive up delinquencies and foreclosures because mortgages are paid with paychecks, not percentage-point increases in GDP."
Florida's jobless rate rose to 11 percent in September from 10.8 percent in August, keeping the state's unemployment at its highest level since 1975. Florida unemployment is forecast to peak at 11.4 percent in the second quarter of 2010, the Florida Economic Estimating Conference said this month.
"A lot of people got really excited during the real estate boom, even if they had jobs paying nothing," said Jordan Wagner, a Fort Lauderdale foreclosure attorney who has seen his business increase steadily since the beginning of the year. "They would buy a house, leverage the equity, buy another house, then buy another one."
The Mortgage Bankers Association report adds to fears that the housing market and broader recovery could be thwarted by the continuing surge in home loan defaults.
After three years of plunging prices, the market started to rebound this summer. Although optimists hope the worst is over, pessimists expect further price declines, saying there are too many foreclosed properties yet to hit the market.
FIU's Johnson said Florida's problems are exacerbated by the high costs of hurricane insurance and property taxes. Also, for the first time since World War II, the state's population is shrinking.
The mix adds to the volatility of Florida's real estate market, he said. Last week, a study by RealtyTrac showed that Florida's October foreclosure numbers were less than the same time last year. Florida still was the third-worst nationally, the report said, but the decrease tentatively supports the idea of a recovery.
"Florida is always going to be the state of extremes," Johnson said. "We're going to be the biggest, the worst, the best, the smallest. If you want normal, unchanging, move to Rhode Island."
For the record, 8.5 percent of Rhode Island home loans are delinquent or in foreclosure.
|