Florida Home Mortgage Foreclosures Through the Roof in Manatee County

Different houses, in different locations throughout Manatee County, with different owners, all had one thing in common: They officially fell into foreclosure Monday, continuing a record-setting surge.

According to the Bradenton Herald, Florida mortgage lenders filed 573 foreclosure actions in Manatee County Circuit Court through the first four months of 2007, including a record 156 in April, according to the Manatee County Clerk.

At that pace, the county’s annual foreclosure-filing record - 901, set in 2002 - could fall as early as mid-July.

“We used to get, like, five (foreclosures) a day; Now it’s sometimes as many as 15 a day,” Very Reyna, a court clerk who handles foreclosure actions as they are filed, said Tuesday.

“It’s set monthly records already this year, so a record year, I wouldn’t be surprised if that happens.”

While Manatee County’s 97 percent spike in foreclosure activity is high, it’s even worse elsewhere in Florida.

The number of Lee County homes in foreclosure is nearly 1,900 percent higher than at the same time last year, and the numbers in six other counties - including Sarasota - have more than quadrupled. Statewide, the number of homes in foreclosure rose to more than 49,000 as of Monday.

“It’s bad, it really is, and I think it’s going to get worse,” said Ryan Snyder, of the Snyder Law Group, which specializes in real estate law and works with local banks and at-risk homeowners.

Experts said the Florida housing market boom and subsequent bust is behind the surge in foreclosures.

During the boom, Florida housing prices artificially skyrocketed as investors and first-time home buyers flooded the market.

To entice them, lenders relaxed their lending standards and issued more-risky and unconventional loans such as interest-only or adjustable-rate Florida mortgages.

When the market dramatically cooled off, many investors couldn’t sell home for what they had paid for them. Those who took adjustable-rate Florida home loan products began facing substantially higher monthly payments as the initial low interest rates were reset to market rate.

Sometimes, that meant a jump from 1 percent to as high as 8.5 percent.

“It was these specialty kinds of loans that did the most harm,” Snyder said.

“Even the experienced banks were taking Florida home loans that, in hindsight, they know they shouldn’t have. The bottom line is almost everyone is partially guilty. Everybody rode the wave of real estate.”

Ritch Workman, president-elect of the Florida Association of Mortgage Brokers, said the foreclosure spike likely wouldn’t have happened had the boom not fizzled so quickly.

“In the past, you could either sell the house before it went into foreclosure or you could refinance,” Workman said.

“But when you have a decline in values and a slow resale market, you can’t sell or [get a Florida refinance] as easily. When those two avenues are closed or narrowed, you’re going to have an increase in foreclosures.”

The surge in foreclosures hasn’t prompted any proposed remedies in the Florida Legislature, and none is expected as this year’s session is scheduled to end Friday.

But a bill awaiting Gov. Charlie Crist’s signature that would require more financial disclosure to adjustable-rate mortgage borrowers is a good step forward, said Ritch Workman, president of the Florida Association of Mortgage Brokers.

That bill was a reaction to the collapse of numerous sub-prime lenders who specialized in riskier loans, often pushed by Florida mortgage brokers.

“We as an industry have to make sure consumers know what they’re getting into,” he said. “Education is key.”

Both Snyder and Workman said lenders have been willing to work with homeowners facing foreclosure and shouldn’t be seen as the bad guy.

Snyder encourages those having problems making payments to talk to their mortgage company before they get too far behind.

“Be proactive. Pick up the phone and let them know,” he said. “Believe it or not, some of those people behind the phones have the power to extend payment periods or work out a different plan with the homeowner.”

In some cases, Snyder said he tells clients to go through foreclosure to limit their financial losses. As for the future, market-watchers have varying opinions about whether the surge in foreclosures will continue.

“I don’t know how people are surviving,” he said. “Some homeowners are finding themselves in properties that appraised at $100,000 to $200,000 less than what they owe on it.”

SOURCE: Bradenton Herald