Sarasota-Bradenton Housing Market Among Foreclosure Hotbeds

The Sarasota-Bradenton-Venice housing market sits in the top third of the 100 communities with the nation’s highest foreclosure rates.

The area had one foreclosure action - a default notice, auction sale notice or bank repossession - for every 94 homes in the first half of the year.

That put Sarasota-Bradenton-Venice at No. 31 on RealtyTrac’s list.

Experts do not expect the number of Florida mortgage foreclosures to fall until the region and the nation work their way through the risky loans that home buyers and investors took out during the real estate boom of the past several years.

Florida - with Miami at No. 7 on the list - and places like Las Vegas were favored playgrounds for speculators during the housing run-up. They are the same places now feeling the greatest pain.

“Everyone knows Florida was hot during the boom, and so was Vegas,” said Nancy Detert, a former Florida mortgage broker now running for state Senate. “The hotter the market, the more likelihood for foreclosures.”

The main culprits were bankers who offered complicated Florida home loans and 100 percent financing to people who could not afford it.

“The loan products banks were offering was almost like putting cheese in a rat trap,” she said. “The loans caused people to bite. But when the market turned, it snapped their necks off.”

Charlotte County-North Port was not on RealtyTrac’s list because the company looked only at the nation’s largest metropolitan areas.

Florida, California, Michigan, Nevada and Colorado dominated the upper end of the list.

Stockton, Calif., had a staggering rate of foreclosure during the first half of 2007, with one for every 27 households.

It was followed closely by the Motor City - Detroit-Livonia-Dearborn, Mich. - with one for every 29, and Las Vegas with one for every 31.

The highest-ranked Florida home mortgage destination was Miami, in seventh place with one foreclosure action for every 46 households.

Other Florida communities on the list were:

• Fort Lauderdale at No. 11, with one for every 50 households
• Jacksonville at No. 21, with one for every 73
• Tampa-St. Petersburg at No. 24, with one for every 79
• Orlando at No. 33, with one for every 98
• Palm Beach County at No. 39, with one for every 102

Detert said foreclosures have been driven by so-called “piggyback loans” that entailed bankers offering 80 percent loan-to-value on the first mortgage and 20 percent on the second.

“These programs are fine for getting people into home ownership,” Detert said. “That’s a good American value. But when they’re used to help people buy two or three houses, that’s not good. No one is going to feel sympathy for the bank or the borrower in that situation.

“It’s just a crazy market,” Detert said. “Banks should have known better.”

What is further compounding the problem is that home mortgage companies are becoming increasingly reluctant to lend, said George Huhn, a Venice real estate agent and foreclosure specialist.

That not only hurts homeowners trying to qualify for a Florida refinance, but also drives buyers out of the market.

Continue reading this Sarasota Herald-Tribune article on the challenges faced by the Sarasota-Bradenton area in regards to foreclosures …