South Florida Mortgage Loan Holders Struggle with Rising Payments

The number of South Florida mortgage holders facing foreclosure has spiked in 2007, but many people behind on their house payments are resolving their debts before losing the properties, new figures from Realestat.com show.

Although homeowners are avoiding having lenders take their homes, they’re burdened by the region’s soaring housing costs, experts say.

“There’s still a risk of a major increase in people losing their homes,” said Marc Thomashaw, a Realestat.com vice president. The housing squeeze is going to get worse before improving, he added.

Escalating home values from 2000 to 2005 caused buyers to overextend themselves. Many took out short-term, adjustable-rate Florida home loans and are seeing their monthly payments balloon as interest rates rise. Increases in property taxes and insurance rates also are making it difficult to pay the monthly mortgage.

“These are not bad people,” said Louis Spagnuolo, a senior mortgage banker for Home 123 in Boca Raton. “But a lot of them are on fixed salaries, and they can sustain only so many price increases.”

The Mortgage Bankers Association on Tuesday said late mortgage payments nationwide shot up to a 3/1/2-year high in the fourth quarter of last year, while new foreclosures surged to a record high as borrowers with weak credit had trouble keeping up with their monthly bills.

The number of late payments in the Broward County housing market hit 983 in February, a 333 percent increase over the 227 last February, according to Realestat.com, a Plantation-based company that compiles local housing statistics. But Broward had only 315 foreclosures last month, compared with 206 in February 2006.

Last month, the Palm Beach housing market had 733 property owners with late payments, up 382 percent over the 152 last February. But the foreclosures increased at a more modest clip: 141 in February, compared with 115 a year ago.

Both counties saw similar trends emerge in January.

People facing foreclosure typically are behind on their Florida mortgage loan payments at least 90 days and have been notified by their lenders that they intend to take back the properties, experts say. Many of those homeowners are refinancing the loans or cutting other deals with lenders to keep their homes.

Honey Hartman, 67, of Hollywood is facing a mortgage crunch. A huge property tax increase this year pushed her monthly mortgage payment to $770, which exceeds her income of $643.

She negotiated with her lender to cut some of the added costs, and her two grown children are helping her make up the rest of the shortfall. Hartman expects she’ll ultimately have to sell her two-bedroom home and leave South Florida. “I’m in dire straights,” she said.