The 14 US Housing Markets With The Worst Foreclosure Rates

[Ichingcarpenter]

Looks like Florida leads the way and Detroit is not on the list


remember the worst is at the bottom of the list
example 1 in 200 homes vs 1 in 400 homes.
http://www.businessinsider.com/us-cities-with-highest-foreclosure-rate-2014-2?op=1

[DrDan]

1. areas with lots of seniors trying to survive on SS and dwindling savings

in an era when "safe" investment tools are paying basically zero interest

no surprise the numbers of foreclosures would be high

[melm00se]

2. Florida is so heavily represented

for 2 reasons:

1) the number of vacation/2nd homes in these areas.
2) decreased value of housing (aka underwater homes).

these 2 issues combine to encourage the owners to walk away from houses that are worth much less now than when they bought them and the mortgages are more than the value of the property.

Additionally, Florida is a judicial foreclosure state so the foreclosure process is slower than in other states. so properties stay "in foreclosure" much longer than states with administrative foreclosure process.

[djean111]

3. Yes. Also - the HUGE increase in insurance rates.

After admitting that yes, reserves are at an all-time high, Florida insurers went ahead and raised rates even more, "just in case".
Plus, the federal subsidy for flood insurance expired. Steps are being taken to mitigate this, but when someone owns or buys a home and the flood insurance increase by a factor of 7 to 10 - people cannot pay that, and if you cannot pay your home insurance, and have a mortgage, the house will be foreclosed on. And, of course, the market will be flooded with people trying to sell homes with unaffordable insurance premiums, and other people will avoid homes with unaffordable insurance premiums.

Yes, there is a case for not subsidizing the premiums. But there is a case for not subsidizing ANYTHING, really. And I would bet that corporations can just write off the insurance as a business expense.

Anyway, of course this wallops the Florida real estate market. The huge increases are not just a matter of cutting back on other expenses, they are unaffordable, and there really is not choice but to "make a business decision" (evidently that is only okay for banks and such) and walk away.

Enough walking away, and property values go down and thus income from property taxes goes down.
I do believe this all was planned on from the start, because even in my little middle class subdivision, Wall Street is buying up homes - lots of them - at reduced prices, and I am not even in a flood zone. I expect that properties in possible flood areas will be snapped up - and then the subsidies will be put back in place.

[DrDan]

4. the speed to foreclose in Florida is increasing, however.

The glut of available homes for sale is decreasing, so banks will now foreclose more quickly.

A friend of my son and daughter, a nurse, has just been asked to vacate after 5 years of not paying mortgage payments. But instances like this will be harder to find now.

[L0oniX]

8. Jacked flood insurance is causing massive forclosures.

One of my sailing crew members just lost his home due to flood insurance going up to $6000 a year on a $180k home. That's just the flood insurance.

[Yo_Mama]

5. Foreclosure rates are to some extent dependent on home prices

In the worst markets (such as Detroit), banks sometimes won't foreclose because it will cost them more to do so than they could net. Foreclosures are only done to mitigate loan losses.

In Florida, with the increases in home prices, it is getting more profitable to foreclose and resell. After this winter, I think Florida home prices will get a boost!

[Romulox]

6. In other words, there is an immense "phantom inventory" of bank-owned houses out there.

In the metro Detroit area, it is apparent, for example, that real estate prices are artificially propped up by banks holding back their inventory. Everyone with a 10 acre corn/ hay farm in Michigan thinks they are sitting on a half a million dollars. I keep thinking the other shoe will fall soon enough.

[Yo_Mama]

7. Well, I hope not

but when you have very high vacancy rates, very high tax delinquency rates and low foreclosure rates, it's safe to bet that there's another chapter still to be written in the story.
http://www.detroitnews.com/article/20130221/METRO01/302210375

[Romulox]

10. Not allowing bad debt to clear the market is bad for the overall economy.

Whatever homes in SE Michigan are worth, the money to pay for them will have to come from the local economy. The idea that banks (with the help of Janet Yellin) can beat the basic laws of economics is dubious, to say the least.

[Yo_Mama]

11. Yes it is, but the delinquent taxes have to be cleared too.

That's part of the problem, and it will take a creative solution.

[geek tragedy]

9. foreclosure rates can be a lagging indicator, due to housing price cycles

and the backlog of paperwork created in some states.