Florida Foreclosures Lead Nation

Foreclosures spiked in Florida and around the South Florida housing market in February, according to the Palm Beach Post.

In Florida, 19,144 homes entered foreclosure in February, the most of any state, a study by RealtyTrac confirms this week.

Florida mortgage delinquencies topped California, which had 16,273, and Texas, which had 12,386.

Florida’s once-sunny housing market made up 15 percent of the nation’s 130,786 foreclosures in February.

Furthermore, Florida’s foreclosure rate of one filing for every 278 households trailed only Colorado and Nevada.

Palm Beach, Martin and St. Lucie County likewise saw considerable spikes in the number of foreclosures from a year ago, according to RealtyTrac.

• In Palm Beach County, 1,317 homes went into foreclosure, nearly double January’s 680 and well above the 765 in February 2006.
• The 228 foreclosures in St. Lucie County were down slightly from January but triple the February 2006 number.
• Martin County had 62 foreclosures, up slightly from January and from February 2006.

The recent spike in Florida mortgage foreclosures comes on the heels of a slump in home sales that started in late 2005. With home prices dipping, rates on Florida mortgages (ARMs) rising, speculators who hoped for easy riches “flipping” homes reeling, people have to change their expectations.

“It’s no secret that Florida had a disproportionate number of speculators buying homes they never intended to use,” said Brad Hunter of Metrostudy Corp. in West Palm Beach. “We’ve known for some time now that those people were going to lose their homes.”

Jack McCabe, a Deerfield Beach-based housing consultant, predicts a surge in mortgage defaults due to a variety of factors. The bad credit Florida mortgage market has imploded and borrowers face mortgage lenders who are demanding bigger payments as “teaser rates” expire.

“These adjustable-rate mortgages are now hitting their first adjustment period,” McCabe said. “We’re going to see a high degree of foreclosures. This is really just the start of it.”

The consensus is that Florida foreclosures are squeezing speculators who hoped to turn a quick profit, not homeowners who are being kicked out of primary residences.

Even so, the rising foreclosures could add to a glut of unsold homes. New home sales in the U.S. unexpectedly fell last month to the lowest level in almost seven years, and the supply of unsold homes climbed to the highest in 16 years.

Although the rising tide of foreclosures is bad news, one expert said vulture investors have been poised to take advantage of the rise in foreclosures. He predicted that the interest from bargain hunters would actually help boost prices of foreclosed properties.

Despite Florida home loan rates remaining low, demand has remained tepid at best so far in 2007. That’s a clear sign that whatever slump we’re in might not be over yet.

SOURCE: Palm Beach Post