Florida Mortgage Delinquencies Rise in Marion County
As delinquency and foreclosure rates nationally hit record highs, Marion County’s number of foreclosure filings jumped almost 33 percent in February from the same period last year.
There were 142 foreclosure filings in the county last month, compared to 107 in February 2006, according to numbers from the Marion County Clerk’s Office. In January, there were 141 filings, up from 99 in the same month last year, for a 42 percent increase.
And amid a Florida housing market that’s full of unsold homes, investors are gearing up like never before to swoop in on foreclosure properties, said Heath Fleming, owner of Fleming Mortgage Services in Ocala.
“I’m seeing that a lot of people, investors, are positioning themselves to be liquid so that these people will have the funds to step in and purchase these foreclosure homes,” Fleming said.
A number of factors have contributed to the increase in late payments and foreclosures. During a once red-hot housing market, lenders doled out bad credit Florida mortgages to “subprime” borrowers. Now many are stuck with mortgage payments they can’t make.Delinquency and foreclosure rates were considerably higher for higher-risk subprime borrowers, especially those with adjustable-rate mortgages, according to the MBA report. The rate of all subprime loans starting the foreclosure process at the end of last year was 2 percent, the highest in three years.
Also, when the housing market was at its zenith, speculators bought homes in droves and then looked to sell them quickly - an activity called flipping - in hopes of making a quick profit. But speculators aren’t nearly as active. In the fourth quarter of 2006, home flips - homes resold within a six-month period - accounted for 2.82 percent of all resales in Marion County, according to HomeSmartReports.com, a California-based company that tracks real estate sales and values nationwide. That’s down from 4.45 percent in the last quarter of 2005.
Now those speculators are stuck with homes they can’t afford or unload. As a result home prices have dipped.
In Ocala, the average median sales price for an existing home dropped 4 percent in January, from $166,200 to $159,600, according to the Florida Association of Realtors.
“When home price appreciation slows, the foreclosures tend to rise,” said Darren Blomquist, communications marketing manager for RealtyTrac, a California-based national tracker of foreclosures.
Nationally, foreclosures were up 42 percent in 2006 from 2005 while Florida only saw a 2-percent increase, according to RealtyTrac. That could be because Florida mortgage holders are typically among the top borrowers in foreclosure activity, Blomquist said.
“In 2005, Florida already had a strong foreclosure rate,” Blomquist said.
Fleming said with the glut of inventory on the market and home prices continuing to fall, the number of foreclosures will likely continue to increase.
“We’re still in the very, very early stages of this,” said Fleming, who believes it will be “two to three years” before the local housing market correction is over.
SOURCE: The Star-Banner
