South Florida Mortgage Lenders Continue to Scale Back

The dramatic collapse of the nation’s mortgage markets has hit home in South Florida, with almost 800 people losing their jobs.

According to the South Florida Sun-Sentinel, financial industries have cut more than 2,800 positions since the beginning of the year.

That’s a sharp retreat from the boom years between 2000-2005, when Florida mortgage companies grew quickly as they sold adjustable-rate and interest-only mortgages to consumers trying to get into homes.

With declining property values and rising Florida mortgage rates leading to mortgage defaults and foreclosures, demand for those loans has dried up and lenders are trimming payrolls or shutting down.

“The layoffs impacted an industry that expanded like wildfire in recent years,” said Alex Garcia, vice president of 1st Interstate Mortgage in Delray Beach.

As Florida mortgage companies scale back, potential borrowers across the region are left with fewer choices for home loans.

Surviving Florida mortgage lenders are swamped, and it’s taking longer to process consumers’ mortgage applications.

Gene Petrino, president of Midas Mortgage in Pompano Beach, said companies that remain in business face big backlogs.

“Some loans are falling through because of that,” he said.

Lenders are tightening credit standards, turning away borrowers without sufficient incomes, down payments or credit ratings.

Sergio Grady, 59, is trying to apply for Florida refinancing on his house.

But his mortgage broker told him one application with a potential lender hit a snag because Grady is a telephone operator for a Fort Lauderdale hotel, not a higher-paying concierge.

“He said, ‘Well, we’re going to have to go somewhere else,’” Grady said. “The bank is asking for me to show more money.”

With borrowers struggling to get mortgages, fewer prospective buyers will be looking for homes and condos Florida home sales are expected to remain weak at least into 2008 because of the mortgage mess.

Continue reading this South Florida Sun-Sentinel article on the hard times faced by Florida mortgage companies …