In the third quarter, failing Florida economy helped push 90,000 more homes into foreclosure, amid mounting job losses and falling home prices, according to an industry report released Friday.
The Mortgage Bankers Association reported at the end of September, Florida foreclosures stood at 7.32%, representing 261,027 homes. The percentage of all homes in foreclosure in Florida easily outranked those of other states. Nevada's rate of 5.58 was second highest.
Jay Brinkmann, MBA chief economist says ''Florida has lost 156,000 jobs [this year], the highest in the country, and that now is clearly driving problems in Florida in addition to some of the overbuilding issues we saw there''. He noted that speculation and poor underwriting had contributed to both Florida and California's high rates.
The Labor Department reported on Friday, that employers slashed 533,000 jobs from their payrolls in November. Brinkmann said the unforeseen figure has thrown economists for a loop and many would be forced to chuck their forecasting models out the window when it comes to predicting a bottom in the mortgage market.
Unemployment ''is going to have such a major impact on mortgage performance,'' Brinkmann said.
As home prices stabilized and after interest rate resets on most subprime adjustable-rate loans have taken place, many had thought that Florida foreclosures would begin lessening in the third quarter of 2009.
About 575,000 homes nationally, entered foreclosure in the third quarter, with more than one in six in Florida, on track to hit roughly 2.2 million foreclosures by the end of the year, Brinkmann said. In addition, 6.99% of all loans were either 30 days or more past due. In Florida the percentage was up from 7.86% the previous quarter 9.11%.
Huge Collapse
Over the past two years, Foreclosure figures have shown the dramatic crash of Florida's housing market. The total percent of Florida homes in foreclosure was 0.6 percent, in the third quarter of 2006. It rose to 2.19 % in 2007. It's now 7.32 percent, the highest in the country. The figure does not include homes that have already been repossessed by lenders through the courts.
On Thursday, in testimony to Congress, Neel Kashkari, interim assistant secretary for the Financial Stability Department of the Treasury, said HOPE NOW estimates that nearly 2.7 million homeowners have been helped by the industry since July 2007 and that lenders were helping some 225,000 homeowners a month avoid foreclosure.
The numbers have not resulted in a dramatic drop in foreclosures. New filings in the third quarter fell to 1.07 from 1.08 in the second quarter nationally, though not in Florida.
Things Worsen Across Board
Brinkmann said conditions in Florida are worsening. All loan types showed higher delinquency rates than the previous quarter, compared to other states where certain categories are leveling out or falling slightly.
Florida borrowers who fall behind on their payments by 30 days or are more than twice as likely to enter foreclosures as borrowers elsewhere; another sobering indicator of the market conditions.
The so-called roll rate from delinquency to foreclosure is 65% in Florida compared to 30 % nationally. Brinkmann suggests it is probably far higher since the national average had been heavily skewed by roll rates in California and Florida.
Florida ranked sixth in percentage of borrowers 30 days or more past due on payments, however, and second in the number of new foreclosures started during the period, the MBA data showed.
The Mortgage Bankers study tracks 45.5 million loans, representing about 85 percent of first lien mortgages.
Contributed by MLR Realty
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