Florida Mortgage Defaults Add Up Along Treasure Coast
The number Treasure Coast residents falling behind on their monthly Florida mortgage payments has soared in the past year, raising fears that many of the delinquent property owners will lose their homes to foreclosure this year and next.
According to Realestat.com, a Plantation-based firm that compiles housing statistics, St. Lucie County had 151 property owners with late payments in March, up from 52 a year earlier. Martin County’s late payments climbed to 37, up from the seven recorded in March 2006.
Marc Thomashaw, a vice president for Realestat.com, said the spike in delinquent mortgage payments was a direct effect of exotic Florida mortgages and 100 percent financing offered by subprime lenders outside the state.
“When you look at the 2006 figures and what we have today, you see a preponderance of increased pre-foreclosure activity,” Thomashaw said. “This means that more homes will get auctioned on the county steps.”
Thomashaw added that he expects the numbers will continue to rise because many homeowners have overextended their budgets which could lead to more foreclosures in the next two years.
“Who knows how bad it’s going to get,” said Richard French, a manager with SunTrust Mortgage and president of the Broward County chapter of the Mortgage Bankers Association. “It’s a little scary to think about.”
Escalating home values from 2000 to 2005 caused buyers to overextend themselves. Many took out short-term, adjustable-rate mortgages and are seeing their loan payments spike as interest rates rise. Higher property taxes and insurance premiums also are putting homeowners in peril.
“I would also fault the people that bought second homes and didn’t need them,” said Brad Hunter, director of West Palm Beach-based Metrostudy, a housing research firm. “Some people bought with the thought of wanting to make a killing and flip the house for $100,000. Now they realize they aren’t going to sell for a profit.”
Don Santos, past president of the Treasure Coast Builders Association and president of Santos Construction, said the situation is due to the poor lending decisions of the subprime market and local people losing jobs in the construction industry.
Late home Florida mortgage loan payments in both counties increased in each of the first three months of 2007. The rise “bodes ill for actual foreclosures down the road,” said Mike Larson, an analyst with Weiss Research in Jupiter.
Nationwide, the number of homes entering foreclosure in the January-March period doubled from a year earlier, according to California-based Foreclosures.com.
Homeowners with late house payments typically are behind at least three months and have been notified by their lenders that they intend to take back the properties. In recent years, some of those owners avoided foreclosure by refinancing or simply selling the homes — but refinancing isn’t as easy because lenders are tightening credit standards.
