Bradenton.com: Florida (again) leads in foreclosures, Obama pledges more aid

Florida (again) leads in foreclosures, Obama pledges more aid
By DUANE MARSTELLER
dmarsteller@bradenton.com

MANATEE — The federal government plans to pump more foreclosure-prevention money into Florida, which continues to have the highest rate of people falling behind on their mortgages.

President Barack Obama announced a $1.5 billion aid plan Friday for Florida and four other states hard-hit by high foreclosure and unemployment rates. The announcement came hours after the release of a report that said one in four Florida mortgages are at least 30 days’ delinquent.

“This fund is going to help out-of-work homeowners avoid preventable foreclosures,” Obama said during an appearance in suburban Las Vegas. “It will help homeowners who owe more than their homes are worth find a way to pay their mortgages that works for both the borrowers and the lenders alike, and will help folks who’ve taken out a second mortgage modify their loans.”

The extra money will come from the bank-bailout fund and go to housing agencies in five states where home prices have plummeted at least 20 percent from their peak: Arizona, California, Florida, Michigan and Nevada.

Those agencies can use the money to financially assist unemployed homeowners and those who owe more than their houses are currently worth, the White House said. An estimated 45 percent of Florida homeowners with mortgages are “under water,” behind only Nevada’s 65 percent and Arizona’s 48 percent, according to First American CoreLogic.

That would be a change for the Florida Housing Finance Corp. and the Housing Finance Authority of Manatee County, which primarily sell revenue bonds to underwrite mortgage loans issued by participating lenders to qualifying homebuyers. The state agency also recently began offering financial counseling to distressed homeowners.

“This (new program) would be the first time that we would be able to provide financial support to homeowners facing foreclosure,” spokeswoman Cecka Green said. “This would be the first real financial help we could offer.”

The cash infusion is the latest effort to fix the Home Affordable Modification Program, the Obama administration’s signature mortgage-relief plan. It has been widely criticized as ineffective: Of the more than 1 million homeowners who’ve applied for the program since it began a year ago, only 116,300 have gotten permanent reductions in their payments, according to a recent Treasury Department report.

Details — how much money Florida will get, how it will be disbursed and who would be eligible to receive it — will be worked out in the coming weeks, the White House said.

The state could use the money: It continued to lead the nation in mortgage foreclosures and delinquencies in the fourth quarter of 2009, the Mortgage Bankers Association said Friday.

One in five Florida mortgages were at least 90 days’ past due or already in foreclosure during the October-December period, the group said in its quarterly delinquency report. In all, 26 percent of Florida mortgages were at least 30 days’ past due.

Nationally, 15 percent of mortgages were at least a month behind — setting a record for the 10th consecutive quarter.

But the latest report had a glimmer of hope: a drop in the percentage of borrowers who missed just one payment, a strong indicator of future defaults and foreclosures.

That figure was 3.63 percent in the October-December quarter, down from 3.79 percent in the previous quarter.

It was a surprise, as the figure typically rises in the fourth quarter because of higher heating bills and holiday spending.

“We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures,” said Jay Brinkmann, the mortgage bankers’ chief economist. “The continued and sizable drop in the 30-day delinquency rate is a concrete sign that the end may be in sight.”

Duane Marsteller, transportation/growth and development reporter, can be reached at 745-7080, ext. 2630.