Florida has been one of the states hardest hit by the subprime crisis and housing market implosion. For the past several years, when reports and figures are issued from government entities on the state of the housing union, Florida is consistently one of the states with the worst figures, whether it's home price decline, overvalued homes, foreclosures, or other statistics.
Refinance at Today's Low Rates!Overall, prices have dropped in Florida between 30 and 40 percent since July of 2005. The depressed market is the site of the longest sale times in the country: it takes longer to sell a house in Palm Beach, Broward and Miami-Dade counties than anywhere else in the nation, averaging 160 days in August. The large inventory of available homes has been boosted by increasing foreclosures.
How was Florida so hard hit? More so than other states, Florida felt the effects of the subprime collapse due to excessively overvalued homes that made borrowers reach beyond their means to mortgage. But there's more. Florida led the nation in mortgage fraud in 2006 and 2007, involving falsified loan applications, false appraisals, illegal payoffs and more. The combination of these two facts meant an exceedingly large pool of borrowers with predatory and/or inappropriate mortgages.
When the subprime market finally began to collapse, taking nationwide housing markets and economic markets along with it, a large number of Floridians were stuck, unable to refinance (refinance mortgage rates) as credit tightened, unable to reach help, and in many cases unable to keep their homes. Some of these borrowers are still waiting for the ax to fall, as ARM adjustments continue into next year.
While the present situation is grim for Florida real estate markets, and many analysts believe it will take another two to four years before the current borrowers are on steady ground and inventories return to normal levels, in many ways the outlook is getting better.
Recent national legislation allowing borrowers to refinance (refinance mortgage rates) into federally-backed mortgages at lower rates (30 year mortgage rates) may provide stressed and desperate borrowers options out of their subprime and adjusting ARM mortgages. On a local scale, the Florida Legislature is setting firm penalties for mortgage fraud, finally raising the specter of punishment for blatant offenders.
At the same time, lenders across the nation and within the state are learning from the mistakes and making more concerted efforts to help their current borrowers and more effectively educate future borrowers. Experts hope that this, combined with the new federal legislation and standards, will lay the foundation for long-term growth in Florida and the rest of the country.
Refinance at Today's Low Rates!