South Florida Mortgage Defaults, Foreclosures Drop

The number of foreclosures in the South Florida housing market was nearly the same from the first to the second quarter, but declined from May to June, with Miami-Dade County seeing the biggest drop-offs.

Data from Mt. Pleasant, Pa.-based Default Research show there were 6,630 foreclosures in South Florida in the second quarter. That’s down slightly from 6,673 foreclosures in the first quarter.

In June, there were 2,175 foreclosures in South Florida, down 8 percent from 2,357 foreclosures in May. However, the June total of Florida mortgage defaults in the area was up a staggering 167 percent from the 818 foreclosures in the same month last year.

“Even though the foreclosure rates have stabilized somewhat in the second quarter, you can see for-sale signs about as much as palm trees in Florida right now,” said Serdar Bankaci, president and chief executive officer of Default Research. “Many investors who jumped into the speculation market got burned and are just walking away from their properties.”

Lee County was the state’s hardest hit by foreclosures in the second quarter, with a 28 percent increase.

The news got a little better for Miami-Dade County. It experienced a region-leading 2,827 foreclosures in the second quarter, but that was down 5 percent from 2,966 foreclosures in the first quarter. Its 692 foreclosures in June were down 40 percent from the 1,150 foreclosures in May. That’s still well above the 417 foreclosures in June 2006.

The Broward County housing market had mixed results. It recorded 2,260 foreclosures in the second quarter, a 6 percent decline from 2,400 foreclosures in the first quarter. But it led the region in June with 905 foreclosures, up 33 percent from 680 foreclosures in May and up sharply from 246 foreclosures in June 2006.

Palm Beach County had fewer foreclosures than its neighbors to the south, but it’s catching up quickly. It had 1,543 foreclosures in the second quarter, up 18 percent from 1,307 foreclosures in the first quarter. The county had 578 foreclosures in June, up 10 percent from 527 foreclosures in May and a surge from 155 foreclosures in June of last year.

Bankaci said the struggling South Florida mortgage loan market has put a dark cloud over the whole country.

“Since what happens in housing has a far-reaching effect, and South Florida is a huge market, the financial markets have been rattled,” he said. “A dramatic tightening of lending standards has shaken consumer confidence. For that reason, every bit of data is scrutinized for hints of whether a recovery is near or more trouble lies ahead.”