Broward, Palm counties see 42% increase in foreclosures

More than 100,000 homeowners in Broward and Palm Beach counties faced foreclosure last year, up 42 percent from 2008, RealtyTrac Inc. said Thursday.

The outlook for 2010 appears just as grim as residents struggle to make mortgage payments amid job losses and salary cuts.

Broward County had 69,633 borrowers in some stage of foreclosure in 2009, compared with 47,387 in 2008. Broward had Florida’s fifth-highest foreclosure rate, at one in every 12 properties.

In Palm Beach County, 30,870 homeowners received a default notice during 2009, compared with 23,399 in 2008. One in every 21 Palm Beach County homes was in some stage of foreclosure.

For the year, Palm Beach, Broward and Miami-Dade counties had the nation’s 10th-highest foreclosure rate among metro areas with populations of 200,000 or more.

“There are not any indications that the foreclosure picture will be any different in 2010 than it was in 2009,” said Greg McBride, senior financial analyst with in North Palm Beach. “The unemployment rate doesn’t do justice to the number of people working part time instead of full time or those who have been re-employed at a significantly lower rate of pay.”

Florida had the nation’s third-highest foreclosure rate, with 6 percent of the homes receiving a filing during 2009. Only Nevada and Arizona were worse.

Nationally, about 2.8 million foreclosures were filed last year, up 21 percent from 2008 and 120 percent from 2007, RealtyTrac said. The Irvine, Calif.-based firm tracks default notices, scheduled foreclosure auctions and bank repossessions. Not all homeowners who get notices lose their properties.

RealtyTrac expected foreclosure filings to hit 3.5 million for the year, but the pace slowed in the second half of 2009. The firm attributes that to a backlog of properties that lenders have yet to repossess.

Another factor in the slowdown: Lenders placed troubled borrowers in trial loan modifications.

To get the three-month trial modifications, borrowers don’t have to qualify financially. But for permanent adjustments, they must fill out paperwork, and that’s when lenders determine that many homeowners don’t have the income to justify the mortgage modifications. The properties then fall into foreclosure.

“It’s like if you’re jumping through hoops, the first hoop is really, really big, but the last hoop is really, really small,” said Chris Lafakis, an economist for Moody’s in West Chester, Pa. “Most people can’t jump through the last hoop.”

An increasing number of homeowners don’t care about modifying mortgages and instead are walking away from properties because they have no immediate hope of regaining equity lost through steep declines in home values.

“At best, they’re ambivalent and at worst they’re totally opposed to saving the property from foreclosure,” said Daren Blomquist, a spokesman for RealtyTrac.

For people who want to avoid losing their homes, the government’s Home Affordable Refinance Program will be a key, Bankrate’s McBride said.

HARP allows homeowners to refinance into fixed-rate loans at today’s low interest rates. To be eligible, the loan-to-value ratios on borrowers’ first mortgages must be 125 percent or less.

The program is set to expire in June, and not enough people know about it, McBride said.

“This is the Rodney Dangerfield of government housing programs,” he said. “The word has to get out.”