Wednesday, June 21, 2006

FLORIDA HOUSING BUST INCREASING

There is apparently another factor in the Florida housing crisis, aside from the periodic hurricane cycles. According to a Palm Beach Post story, the ease with which housing loans for rebuilding storm-damages have been obtained has led to a spate of foreclosures and defaults.

Over $106 million in home loans have collapsed in that vicinity during first quarter 2006 alone. This compares with about $68 million in mortgage defaults in the period of 2005. As the article puts it, "Experts say the worst is yet to come," citing a spokesman for the Center for Responsible Lending, a Washington nonprofit that tracks lending practices, as saying, "We know the whale is coming, we just don't know how big the whale is."

It notes the explosion of new brokers and brokerages who obtained Florida licenses during the last housing boom, and helped a number of middle-income buyers to move into half million-dollar homes.

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