The next big wave of foreclosures is set to hit south Florida.
According to the Palm Beach Post:
If you think the torrent of foreclosures affecting every city and nearly every neighborhood and street in South Florida is as bad as it can get, here is a harsh new reality:
There's a new wave of foreclosures making its way through the courts that has nothing to do with exotic subprime loans, real-estate flippers out to make a quick buck or people who bought way more house than they could afford.
Now, double-digit unemployment, sagging home prices and a lingering recession are to blame.
The second tsunami of foreclosures is coming,'' said Miami Beach-based John Tur, who teaches people how to invest in real estate. The numbers already are staggering.
During the second quarter of the year, nearly one in four Florida home loans were past due or in foreclosure, making Florida the most delinquent state in the nation, according to the Mortgage Bankers Association. This could delay a serious recovery in Florida, because a market with many foreclosures tends to drive down housing prices.
New foreclosure filings in Miami-Dade, Broward and Monroe counties are on pace to top 120,000 this year. Court clerks say filings could even go as high as 135,000. That's 17,000 to 32,000 more filings than last year.
So what is reality?
Those statistics are played out daily in neighborhoods such as Malibu Bay, a gated community in Homestead where property values have plummeted. A two-bedroom, two-bath home that sold for $242,000 in August 2006, for example, is now listed for $70,000, said Karen Klores, a Realtor at The Keyes Company.
In another effort to prevent further foreclosures, most Florida lenders began in August to require credit scores of 740 to obtain Federal Housing Authority loans, said Valerie Saunders, president of the Florida Association of Mortgage Brokers.
Of 1.1 million loans with adjustable rates in South Florida, 53 percent have already reset. But at the beginning of August, another 22 percent were scheduled to reset in the next two years, according to First American CoreLogic.
The question you should be asking Mr. & Mrs. Seller, is how will this news effect me and my sale?