North Florida Mortgage Foreclosure Rates Soar

In another sign of the Emerald Coast’s cooling housing market, Florida mortgage foreclosures rates are up significantly throughout Okaloosa, Santa Rosa and Walton counties.

According to Metro Market Trends, a Pensacola company that tracks regional real estate activity, foreclosures are more than five times higher in Okaloosa County so far this year than in all of 2006.

Florida mortgage foreclosures have more than doubled in Walton County and jumped by more than 60 percent in Santa Rosa County.

“A lot of folks got these interest-only loans as a chance to enter into a home,” said Lilly Vining, a Realtor with Coldwell Banker JME Realty. “And then, whammo, their payment rises, and they can’t make that payment.”

Vining said the Florida mortgage loan foreclosures are also the result of many homeowners hoping to make a quick profit.

“I really believe that a lot of foreclosures are the result of purchasing in an inflated market - and the entirely wrong mortgage programs,” she said. “People are not researching these Florida home loans. Just because you qualify now doesn’t mean you’ll be able to pay it in the future.”

The North Florida housing market woes, and the foreclosures that result, mirror what’s happening across the state and the nation.

In April, Florida had the second-largest state total of foreclosures in the U.S. Florida reported 14,318 foreclosure filings in April, or one filing for every 510 homes. The nation reported 147,708 foreclosures in April 2007, or one for every 783.

“I think we’re going to see more foreclosures,” said RE/MAX Realtor Ray DiTirro. “I think it’ll continue for the rest of the summer.”

DiTirro believes the rise in foreclosures is due to buyers jumping into interest-only loans, 100 percent Florida home loans and ARMs.

“These are the people who bought high and had little or no equity in the house,” he said. “I think people got caught in the euphoria.”

That situation has been compounded in Florida as both property taxes and insurance rates have soared, DiTirro added.

As the market absorbs the increase in foreclosures, many investors are sitting back and waiting for the price they want.

Vining said she sees the increased foreclosures as part of the Florida real estate market correcting itself.

“Historically, that’s the huge part of the aftermath of a real estate boom,” she said. “I’m seeing that it’s going to happen a little more before it gets better.”

Vining said she works hard to educate buyers about the ups and downs of the market before they take out Florida mortgages.

“Sellers really need to understand we’re not in an inflated market and haven’t been,” she said. “You’ve got to counsel your buyer. You’ve got to find out everything, not just what you can afford now.”

SOURCE: Northwest Florida Daily News