During the worst days of the housing crash, 43 percent of Tampa Bay homes were "seriously underwater'' — their owners owed at least 25 percent more than the home's value.
Figures released today show that just 9.4 percent of homes with mortgages now fit that category, according to ATTOM Data Solutions, the California-based company that tracks residential real estate. The Times spoke with Daren Blomquist, the company's senior vice president, about the huge decline and some other trends both positive and worrisome.
Q. Tampa Bay's underwater figure isn't too bad, right?
A. It's slightly below the national average but I would still consider 9.4 percent somewhat elevated. We expect in a normal market to see 5 percent or less of homes underwater but we are continuing to see that number decrease pretty rapidly. A year ago it was 13.8 percent.
Q. So we're not completely back to normal?
A. No, but getting there. Another way we look at this is with median home price data, which is still 7 percent below the previous peak back in the third quarter of 2006. On the other hand, home prices are up 115 percent since then so that's driving the reduction in underwater homeowners as well as increasing the equity rich.
Q. How many Tampa Bay homeowners are equity rich? (Home is worth at least 50 percent more than the amount owed.)
A. It's 23.5 percent compared to a year ago at 22 percent so it's not as dramatic an increase. If we go back to the fourth quarter of 2013, just 13 percent of homeowners were equity rich.
Q. Why aren't the equity rich numbers growing faster?
A. That's a testament to an increasing number of folks who do have equity starting to tap into it a little more so they are not necessarily staying in that equity rich category.
Q. I've heard that some lenders are loosening up? Is that true?
A. It's nowhere near the level of looseness we saw a decade ago during the last housing boom. But one evidence anecdotally is the return of subprime mortgages, which they are now calling "non-prime" mortgages, and I think more companies are doing them. Carrington (Mortgage Services) came out with a big announcement in the last few weeks actively and proudly going into that not-prime space to provide loans for those who might not quality for that top-tier loan.
Q. Does that create some cause for concern?
A. Yes, it does. Carrington could be doing this very well but once the pendulum starts to swing, lenders not so diligent about originating loans will be attracted to this marketplace. There's appetite for a little more risk in this market.
Q. Any other evidence that lenders have loosened up?
A. We're seeing in our own data a somewhat surprising increase in foreclosure starts in the first quarter. A lot of that increase is due to FHA loans originated in 2014, so as early as 2014 we were starting to see some loosening especially for FHA borrowers, which tend to be lower- credit borrowers. (The increase in foreclosure starts) showed up in some places we'd expect, like Rust Belt cities, but then we also saw it in places like Austin, with a 30 percent increase; Dallas, Reno, Las Vegas, Charlotte. All of those are poster-child markets of this housing boom. They've done very well, but there have been some increases in foreclosure starts. (Tampa Bay has shown a decrease.)
Q. Anything else to keep an eye on?
A. On the grapevine, we're hearing a little more about people interested in mortgage-backed securities. That's one of the hallmarks that helped inflate the housing bubble last time around. Mortgage-backed securities were sold in very opaque ways that masked the true risk behind the loans. They aren't inherently a bad thing but the way they were utilized in the last housing boom became a bad thing.
Contact Susan Taylor Martin at email@example.com or (727) 893-8642. Follow @susanskate.