Palm Beach County foreclosures soar
Article Courtesy of The Palm Beach Post
Published September 14, 2006
Foreclosure rates in Palm Beach County soared in August to more than four times the national rate - and rose a sobering 266 percent compared with the same month last year, a study released today shows.
The foreclosure report by RealtyTrac provides grim evidence that local homeowners are suffering from a multitude of ills as the five-year housing boom comes crashing down: creeping mortgage costs, soaring insurance premiums, rising property taxes, stagnant home prices and a growing inventory of houses for sale.
Meanwhile, Florida's foreclosure activity surged to its highest level all year as a statewide housing slump takes hold, making Florida foreclosures last month the third-highest in the nation.
In Palm Beach County, 2,241 homes entered some state of foreclosure in August, a 226 percent increase over the same month a year ago, when 688 homes entered foreclosure, according to the report.
The county's foreclosure rate ranks third in the state, according to Irvine, Calif.-based RealtyTrac, which maintains an online database of foreclosed properties throughout the country.
Statewide, 16,533 homes entered some stage of foreclosure in August, more than any other state in the country and a jump of more than 50 percent over the previous month, RealtyTrac said.
Florida's rate of one foreclosure for every 442 households is the third-highest in the nation.
On a year-over-year basis, the most accurate comparison because it eliminates seasonal differences, August foreclosures in Florida represented a 62 percent increase over August 2005, when 10,175 homes entered foreclosure, the report shows.
Today's foreclosure report comes on the heels of a Business Week investigation published in the current issue that shows 24 percent of all purchase and refinance mortgages in Palm Beach County are "option ARMs," or option adjustable-rate mortgages.
Only pricey Naples has a higher percentage of such mortgages, which Business Week calls the riskiest loan product ever created.
"The homeowner at risk of losing his or her home through default or foreclosure is most likely someone who opted for an option adjustable rate mortgage, or no-money-down loan product, any time after the fall of 2004," said Wanda Alexander, chief executive of Horizon Consulting of Falls Church, Va., and a member of the Foreclosure Economic Advisory Council.
In the Treasure Coast, the foreclosure rate for August was considerably less dire. In Martin County, one in every 1,091 homes entered some stage of foreclosure last month, on par with the national rate of one in every 1,003 homes.
Sixty Martin County properties entered some stage of foreclosure in August, according to RealtyTrac, an increase of 50 percent compared with the 40 homes that entered foreclosure in August 2005.
Martin County's foreclosure rate ranks 23rd in Florida.
In St. Lucie County, one in every 707 homes was in some stage of foreclosure, the report shows, with 129 homes entering the process in August, the 12th highest rate in the state.
RealtyTrac reports include all three stages of foreclosure: pre-foreclosure (notice of default and lis pendens); foreclosure (notice of trustee sale and notice of foreclosure sale); and real-estate-owned transactions (properties that have been foreclosed on and repurchased by the lender).
Also, the delinquency rate for mortgage loans on one- to four-unit homes in Florida stood at 3.6 percent for the second quarter, the Mortgage Bankers Association said. Nationwide, the rate was 4.4 percent, down 2 basis points from the first quarter and up 5 basis points from a year ago.