Orlando Area Real Estate News

Archive for March 26th, 2008

The largest indication that the region’s and the state’s mortgage despair is far from over is the recent spike in the number of property owners defaulting on their home loans. In the seven counties surrounding Orlando, the number of monthly loan defaults recorded in court has jumped from 611 in January to 3,181 in August. Statewide, monthly loan defaults increased from 2,919 in January to 18,676 in August. According to Mortgage Bankers Association data, in Florida, one in every 33 homeowners with an adjustable-rate loan was in foreclosure as of June, compared with less than one in every 100 homeowners with a fixed-rate loan. Florida buyers who used sub prime loans to finance their purchase have been 10 times more likely to lose their property than homeowners with conventional-rate loans, according to MBA data. Even some homeowners who built up some equity are losing their dwellings because they took out second mortgages to pay such things as credit-card debt buy new toys and finance things that were once considered out of reach. Whatever the reason for falling behind, a homeowner who misses three monthly payments faces added bills that include lender’s fees, court costs and other expenses. The average $1500 monthly payment once missed will increase and compound monthly. By the third month as much as $5500 depending upon applicable surcharges, late fees and interest. Most homeowners do not seek financial assistance until it is too late. Options exist and lenders are readily available but, if notified too late they are more than likely to not comply.

Nearly twice as many people face losing their homes in Central Florida this year compared with 2006 mostly due to the high volume of investors that purchased property and adjustable rate mortgages. The hardest hit county in the area is Osceola, with more than triple the number of defaults compared with 2006. All other counties in the Central Florida region have more than doubled. Communities with widely divergent income are affected and the aspects of the communities also vary. The ZIP codes most-affected range from Taft and south Poinciana, to Windermere and Davenport. Public auctions are becoming more popular as Single-family homes Dominate as 9 out of every 10 homes are up for bid. You may wonder what is going on with condominiums well they are running a distant second, with about one in every 20 defaults comparatively. Experts say the blame lies on builders for overbuilding, investors trying to make a quick dollar, a flood of amateur real estate agents ill advising buyers, buyers over extending themselves, faulty loan practices, and too many resort-home subdivisions. Now, with home prices dropping, many first-time owners have no equity with which to refinance their mortgages, and investors who had hoped for a quick and lucrative resale cannot sell for what they must repay. More than 12,000 homeowners in a seven-county area throughout Central Florida have started the foreclosure process by getting behind on their payments and going into default. This is up by more than 85% compared to the year prior.