Foreclosures for sale continue to rise in Florida as more homeowners default on their home loans.
In April, although new foreclosure filings dropped in Florida, the number of bank owned homes increased from 8,643 housing units in March to 9,259 units, a surge of 7.13 percent.
Based on a study by credit information analyst TransUnion, Florida posted the second highest rate of mortgage default in the first quarter this year, behind only Nevada. In Florida, 14.65 percent of all mortgaged homes were delinquent by more than two months, just behind the 15.98-percent share of delinquent mortgages in Nevada.
What is troubling for Florida is that the delinquency pace surged in sharp contrast to the drop of the national mortgage default rate to 6.77 percent over the quarter. The national default rate has been rising over the 12 consecutive quarters before the January-March quarter this year.
Also, the percentage of bank owned foreclosures for sale in April as a proportion of total foreclosure filings increased despite the drop in total filings. In April, 19.14 percent of total filings were REO units, an increase from 14.63 percent in March. Some real estate professionals interpret this as a reflection of the increased efforts of banks to complete foreclosures more quickly.
As maintenance and holding costs increase, banks need to put troubled properties into the market immediately in order to cut down their REO holdings. Other analysts contended that the failure of homeowners with modified mortgages to get permanent modification partly drove the surge in distressed homes for sale in April.
Although Florida was among the states with the biggest number of trial and permanent modifications in the April HAMP report, there were still a substantial number of modified mortgages which failed to move on to permanent modification status.
In addition, among the 4 states that have been dominating mortgage default and foreclosure charts over the past two years, Florida is the one still posting default rate increases. If this delinquency rate does not get aggressive intervention, foreclosures for sale in Florida will continue to surge.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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