Make us your home page

Florida's soaring mortgage payment default rate tops national average

WEST PALM BEACH — More than half of Florida homeowners in foreclosure have not made a mortgage payment in at least two years. That's higher than the national average and one indication of why banks are paying borrowers up to $20,000 to execute a short sale.

A new report from Jacksonville-based LPS Applied Analytics found that as of September, 56 percent of Florida's mortgages in foreclosure are 24 months or more behind in payments, compared with 39 percent nationwide.

About 84 percent of Florida foreclosures are more than 18 months in arrears.

Considering recent figures that estimate the time from initial filing to auction at 676 days in Florida, LPS senior vice president Herb Blecher said he's not shocked by the mounting late payments.

In January 2010, just 19 percent of Florida's foreclosures were 24 months or more delinquent.

Blecher said the longer delinquency rates are more evidence of a foreclosure bottleneck that could hinder a housing recovery.

"The longer the homes are out there and the borrower isn't paying, the more properties will tend to deteriorate," Blecher said. "It's on the high end in Florida because inventories are bigger and foreclosure processing is slower."

Florida's courts are mired in an estimated 350,000 foreclosures. Cases continue to be delayed as lenders and bank lawyers sort through last fall's robo-signing scandal.

The lengthy delays could be a boon for some struggling borrowers as banks look for alternatives to languishing in foreclosure court, said Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach.

Last month, Bank of America quietly began a Florida-only campaign that gives homeowners up to $20,000 for a short sale rather than letting their homes linger.

Wells Fargo and JPMorgan Chase have similar short-sale programs, sometimes called "cash for keys."

"I think the banks are finally starting to see that foreclosures are a very long, dragged-out process and it's to their advantage to do a short sale," McCabe said. "They don't want to incur the expense of a vacant home. They're cutting their losses."

Another benefit to living mortgage free for two years or more is a bump in expendable cash to buoy the economy, said William Stronge, a senior fellow at the Economic Development Research Institute in West Palm Beach.

Florida's soaring mortgage payment default rate tops national average 11/03/11 [Last modified: Thursday, November 3, 2011 10:56pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Palm Beach Post.

Join the discussion: Click to view comments, add yours