Posted Jun 15, 2007 11:20 pm CDT
Although South Florida is still a bit below the national average for the total percentage of mortgages in foreclosure, that may not be true much longer. The number of foreclosure lawsuits filed to force non-mortgage-paying owners from their properties has doubled and tripled in some counties, compared to last year.
Low-income and minority neighborhoods have been hit hardest by the tidal wave of foreclosure litigation, because homeowners there have little financial leeway and, often, less favorable terms, such as variable interest rates, on subprime loans, reports the Miami Herald. The article blames aggressive lending and speculation by investors for much of the foreclosure problem.
As values were rising, homeowners were tempted to dip into their equity and take out bigger mortgages. Now, values are falling, interest rates are rising, and folks living on the edge financially can’t afford to make higher payments on variable-rate subprime mortgages.
In the Bunche Park neighborhood, for instance, there are piles of belongings outside numerous foreclosed homes. Among Miami-area counties, “[r]oughly 23 percent of loans in Miami-Dade are subprime, and 18 percent in Broward,” the Herald writes. “In areas such as Miami Gardens, home to Bunche Park, it’s more like 66 percent.”
Throughout the country, foreclosures hit record highs during the first quarter of 2007, and Florida and California were among the key states leading this trend, Reuters reported this week.