The Florida real estate foreclosure nightmare is still not over, although Arizona has now surpassed them in the first few months of 2008, according to RealtyTrac. There are many factors that have contributed to the Florida real estate foreclosure nightmare: adjustable rate mortgages, an over-inflated housing market, and the loss of jobs in a recession. These factors have contributed to one of the worst foreclosure markets in the United States.
Even now, banks may feel like throwing up their hands in despair than trying to work out yet another foreclosure problem, seeing that those that could refinance have already done so. With the economy taking a nosedive, temporary solutions that stall foreclosure may not be enough to stall the process long enough to get the homeowner time to regroup and get back on their feet. No one seems to know how long the economy will be in the dumps, but the glut of foreclosed homes in the Florida real estate foreclosure nightmare continues to contribute to the problems there.
The Adjustable Rate Mortgages
Many of the adjustable rate mortgages taken out to finance homes in the Florida area reset, and even more are due to reset in the near future. These loans were sold to customers on the premise that they could refinance should the need arise, but with too many foreclosed homes on the market, the prices of the remaining homes have depreciated. This has left homeowners with a Floridian real estate nightmare that just gets worse over time.
Their homes may be worth far less than what they paid for them, if they bought at the height of the housing bubble, and this makes it impossible for them to refinance without making up the difference. Added to that are the potential fees associated with early refinancing and most loan modifications are not within reach of Florida homeowners. This has led to massive Florida real estate foreclosures around the state.
Fallout From Foreclosures
As the foreclosures affected prices, the economy began to sputter reigniting more woes in the Florida real estate foreclosure drama. Housing constructs slowed down and workers were laid off. People moved away to areas with better job prospects leaving jingle mail behind for lenders. The loss of revenue from residents affects small businesses and can cause jittery employers to lay off in anticipation of worse times.
Without a job, with rising prices, and falling home values, Floridians are left to wonder whether foreclosure isn’t the lesser of all evils. At the point where it became impossible to modify the loan or pay for it even if it was modified, most borrowers simply gave up and moved out.