Posted on 03/05/2009 11:56:40 AM PST by Oldeconomybuyer
Florida leads the nation in the number of homes delinquent or in foreclosure according to a fourth quarter survey by the Mortgage Bankers Association.
The survey found that 20.1 percent of mortgages on Florida homes were delinquent or held in foreclosure. Nationwide, more than 11 percent of American homeowners are either delinquent or in foreclosure.
The survey covered 85 percent of the country’s residential mortgages.
In the fourth quarter, 11.1 percent of Florida residential mortgages were past due by at least 30 days – with 4.4 percent past due more than 90 days.
Nationwide, the number of borrowers at least one month behind in their payments – but not in foreclosure – rose to nearly 8 percent during the fourth quarter. That is the highest rate of delinquency ever recorded by the survey, which began in 1972. It reflects a record 13 percent jump compared to the third quarter.
Nearly 9 percent of Florida residential mortgages were held as foreclosure inventory at the end of 2008 – the highest rate in the nation. An additional 2.4 percent of Florida residential mortgages started foreclosure during the fourth quarter.
Not surprisingly, subprime loans were the worst performing mortgages in Florida, with more than half of them in trouble. Their past-due rate was 23.1 percent, and 26.9 percent of them were held in foreclosure inventory.
About 16 percent of residential mortgages in Florida are subprime.
Prime adjustable-rate mortgages (ARMs) are an even bigger category, comprising 18.4 percent of Florida residential mortgages. This includes payment option ARMs and loans with teaser interest rates that later increased. Florida prime ARMs had a 13.4 percent past-due rate, and 3.6 percent were taken in foreclosure.
“Subprime ARM loans and prime ARM loans, which include Alt-A and pay-option ARMs, continue to dominate the delinquency numbers,” MBA chief economist Jay Brinkman said in a statement. “Nationwide, 48 percent of subprime ARMs were at least one payment past due and, in Florida, over 60 percent of subprime ARMs were at least one payment past due.”
Federal Housing Administration mortgages in Florida were also problematic, with 16.5 percent of them past due and 4.7 percent of them counted as foreclosure inventory.
This trend should continue through most of 2009, since the last subprime ARMs that reset with adjustable rates after two years were written in the first half of 2007, he noted.
Brinkman said the cause of future delinquencies would shift from the structure and underwriting quality of loans to economic strain placed on borrowers by job and income losses.
Hurricanes 2004-5 created market shortage, helped inflate prices.
Insurance doubled and tripled for primary residences
Second homes, non owner occupied homes became almost uninsurable for a while...and it being uninsured or uninsurable makes it almost impossible to sell
Increased prices meant taxes increased and insurance increased
So....when the monthly payment goes up by hundreds and when it becomes impossible or rent the property...it can become impossible to maintain property in Florida.
About time somebody quotes these statistics accurately!! Virtually everybody else in the media keeps putting Las Vegas at the top of the foreclosure list because we have a higher ‘percentage’ based on our much, much, much smaller state. Florida has like 5 or 10 times more foreclosures than Nevada.
Via Las Vegas. And go grab that Miami Beach real estate now before things turns around and you have to pay Euro-trash prices for it again.
It sounds bizarre to say but all that building which occurred in the last few years which is now sitting vacant is an asset which these cities are thrilled to have because they will creating the tax base of the future. When builders lose their shorts building giant skycraper-shaped penises as monuments to themselves and the people who wanted to speculate by buying them, they leave an asset which later investors and homeowners will come to enjoy at a price which is finally reasonable or just downright a steal. And those cities will finally rake in all the tax dollars from the real estate being used and their downtowns will have another resurgence from the occupancy of those buildings.
Same thing happened in Miami in the 80s when the Cartel built craploads of projects and entire subdivisions with their drug money and then abandoned it when Bush 41 busted Noreiga and everybody else by the end of the decade. Miami got to use all that development later to create the South Beach lifestyle and all those buildings got occupied by new tenants who started building a tax base. It’s a gigantic gift to a city when you come in and build gigantic structures and then lose your own money doing it. Somebody else gets to utilize it without having to have had the money to build it and the economy goes on. It’s called creative-destruction. Unless you are talking about stock/commodity trading, almost all economy infusions leave assets behind when a venture fails which end up being cheap infrastructure to those who come behind them. When an airline goes under, the planes down disappear or explode spontaneously. They get bought at auction prices by companies like RyanAir, JetBlue or Southwest and become a cheap way to get into the airline industry which otherwise would have been too pricey to get started in.
Adam Smith would be thrilled to see that his theories were still holding water hundreds of years later. And Marx would still be spinning in his grave that we allow people to ‘fail’ in capitalism while still having other people becoming ‘rich’. But hey, Marx was a gigantic tool like Keith Olbermann so who cares!!
It would be interesting to see how many of these foreclosures are homes that are not owner-occupied.
Which means they have 5 or 10 times more reparations to be paid..
Florida is the poster child for the service economy. That’s why I got the hell out of that state after getting my degree from UF.
Boy, statistics are used creatively to shape opinion. These numbers lead people to envision all these beautiful middle class homes in distress.
What we need to know is what are these delinquent mortgages like? What is the distribution of amounts, and types of properties. There are so many parks in Florida with average home prices in the thousands of dollars, (Not hundreds of thousands). What is the normal delinquency rate? Are these properties being abandoned because of high taxes and insurance rates? Are people taking advantage of the financial mess to become squatters in the anticipation that they will be overlooked in the mess or better yet, bailed out (by you and me!)?
I’m not worried as I understand that many of the foreclosed properties are being occupied by those having genuine need.
In my neighborhood there are two examples, from a development constructed in 2006.
One, a single family home purchased for $700,800 in February 2007 is available for a short sale price of $310,000 from the successor to HomeBanc - who issued mortgages of $570K as a 1st and $70K as a 2nd. The buyer, and investor from AZ who has rented the house out since purchasing it - put $60K down at the time of purchase.
The second, same development, a 3 story townhouse completed in late ‘06, purchased in February 2007 for $457K, is on the market now for $200K, after a foreclosure was filed in October 2008 and an order for sale issued in mid-December. No one bought at the auction and it knocked back to the bank. In the foreclosure claim you can see a first for $350K a Second for $53k and a home equity line of credit for $68K.
And that’s just what I am aware of within a dog walk from my home.
My project there completed and I was offered a promotion to another state.
What choice is there....look for work in a service economy or take the promotion?
But then it became impossible to keep my place rented...and two mortgages were too much for me.
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