Foreclosure Crisis
6:00 am
Wed January 2, 2013

Florida's Mortgage Mess: Among The Worst In The U.S.

Florida's mortgage issues are widespread.
Credit Jeff Turner /Flickr
Florida's foreclosure crisis isn't over, but there are resources.

For the last three months, Florida has led the nation in the number of homes in some stage of foreclosure.

But that is only the tip of the iceberg. Since the start of the recession, the foreclosure crisis has been a horror story for the Sunshine State.

Imagine if every single home in Orlando and its suburbs had been foreclosed. The picture of boarded up houses would be staggering. That’s actually how many homes were foreclosed on in Florida from 2007 until the end of October 2012. More than 400,000 homes.

Now a different image: In Broward County alone, 59,000 homes were foreclosed upon. So, picture every house in the cities of Naples, Fort Meyers and Sarasota combined – abandoned. Every single one.

The Feedback Loop

Barry Zigas, the Director of Housing Policy with the Consumer Federation of America, says Florida was among the hardest hit by the foreclosure crisis in the country.

“That’s partly because of the popularity of living there, it’s partly because of how much of the economy was built on construction, so you had a kind of never-ending feedback loop,” Zigas says.

Zigas says the surge of speculative investors who pumped up the condo market was another major factor in the beginning.

“But that causes property values to drop everywhere and that puts all homeowners in jeopardy and of course one of the longer lasting consequences of this market failure and the collapse of the housing boom has been an extended period of unusually high unemployment and under-employments and of course that has also been driving people to the brink of financial ruin,” she explains.

"[The foreclosure crisis] is partly because of the popularity of living there, it's partly because of how much of the economy was built on construction, so you had a kind of never-ending feed-back loop." --Barry Zigas

The Mortgage Bankers Association says Florida has double the national average of mortgages that are currently delinquent. At eight percent, that figure doesn’t count those already in foreclosure. Nor does it count those who owe more than the house is now worth, but have been making their payments anyway.

Where To Turn?

Marla Popkin is a 51-year-old Occupational Therapist in Miami who’s been paying her mortgage faithfully. But work has been very thin the last couple of years.

“I cashed out an annuity a couple of months ago, so I’ll get taxed on that,” she says.

Her mortgage payments are just under $2,000 a month.

“I have like $6,000 left to my name and I’m trying to decide – like today, I had the real estate agent up – should I try to rent it, you know," she says. "Should I sell it?”

A number of resources have cropped up in the past few years to help people in trouble with their mortgages.  There are 15 different federal programs alone.

Among the major banks, Wells Fargo has run a series of Home Preservations Workshops across Florida recently, inviting customers with troubled mortgages to come to a local hall, learn about all the options, federal and otherwise, and usually have a positive answer within an hour.

“Modification is the one most probably widely understood," says Michelle Grier, who helps run the Wells Fargo workshops. "But there are others like a repayment plan, a forebearance, a refinance… We don’t want the house to go into foreclosure.”

Mary Haggins of Riviera Beach was one of those who got a modification to her mortgage at a West Palm Beach workshop. 

“Originally, I was working and then I got a pay cut," she explains. "I lost my job. Then I got sick, had a heart attack and my daughter and I, we’ve been struggling to, you know, get ourselves back on the right track and it’s been a long, long trying road.”

Mary and her daughter are back working now.  Those who are out of work or are under-employed due to no fault of their own must turn to the Hardest Hit program.

If you are facing similar problems, there are resources at your disposal:

  1. The United States Department of Housing and Urban Development (HUD) offers a series of online tips and resources to avoid foreclosure.
  2.  The Florida Housing Finance Corporation maintains a calendar of foreclosure counseling events and a list of approved foreclosure avoidance counselors.
  3. There is also a toll free number for HUD. It's 888-995-4673
  4. It is important to only use non-profit counseling services recommended by the HUD or by the Florida Housing Finance Corporation.
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