Treasure Coast Foreclosure Filings Take Off
Foreclosure filings in the Treasure Coast more than tripled in August, as the worst housing slump in 16 years continued to send shock waves across Florida mortgage borrowers.
The grim numbers released Friday came in the wake of a report the day before by the Mortgage Bankers Association that documented record delinquencies and foreclosures across the country.
The trade group reported 5.2 percent of all Florida mortgages were delinquent by the end of the second quarter, up from 4.4 percent at the end of the first quarter.
In Martin County, there were 79 foreclosure filings last month, up from 25 in August 2006, the county clerk’s office said. In St. Lucie County, foreclosures soared to 524 filings last month from 116 in August 2006.
“We had 26 boxes of foreclosures come in the other day - all from one lawyer’s office,” said Angela Caquias, who handles foreclosures for the county.
In Palm Beach County, Florida mortgage lenders foreclosed on 1,210 homeowners last month, compared with 435 in August 2006, according to the county clerk’s office. The August foreclosures were up from 1,197 filings in July.
The problem is national, where more than half of 1 percent of all mortgages were in foreclosure in the second quarter, according to the MBA. Housing industry news has buffeted the stock market almost daily as the depth of the subprime mortgage problem has played out. More than 100 lenders have shut their doors.
August’s job report, released Friday, showed a decline in new jobs for the first time in four years. Even retailers have felt the pinch. Delray Beach-based Office Depot significantly lowered its earnings expectations Thursday, sending its share price down sharply for two consecutive sessions.
Analysts point to a cliche - “it’s a vicious circle” - as one reason for soaring foreclosures. Rising payments on millions of adjustable rate Florida mortgages push more homeowners into foreclosure… which adds more homes to the inventory of unsold properties for sale… which pushes prices down… which makes it even harder to avoid foreclosure.
Earlier this week, ACORN - the Association of Community Organizations for Reform Now - released a study that showed minority borrowers in Palm Beach County were more than twice as likely to get subprime loans, which have higher interest rates, than are whites. More often than not, such loans were ARMs, which reset with even higher rates.
More than two-thirds of subprime ARMs have prepayment penalties, the study said, making it more difficult to avoid foreclosure. For a $100,000 loan at 11 percent interest, the penalty would be more than $5,000.
Investors are a major cause of the surge in foreclosures, analysts say.
“Owners of condos who speculated pre-construction are trying to dump them at their sales price,” said real estate lawyer John Pankauski from his office in West Palm Beach. “Investors will have to realize that to get rid of their condos — and to stop paying real estate taxes and maintenance fees - they will have to take a hit.”
Buyers have dried up, however, because of tougher credit practices and “the fact that the housing boom has run its course,” he said.
At the Southeast Building Conference this summer in Orlando, Moodys.com chief economist Mark Zandi said Palm Beach County and the Treasure Coast have two big problems: too much inventory and low affordability. He said then that the bottom of the housing market was at least a year away.
“You have a lethal combination of higher mortgage payments, lower house prices, a weaker job market and more cautious lenders,” Zandi told Bloomberg News this week. “That is a very noxious mix, and it is the reason for this surge in foreclosures.”
