National foreclosure rates are now as low as they were back in 2006, but not everywhere is experiencing this relief. Some states — including Florida — are seeing a drastic increase in home foreclosure rates. Some experts believe that rising foreclosure rates in the state could be related to so-called underwater homes, which are valued at less than the homeowner’s current mortgage balance.
Florida experienced a 35 percent increase in foreclosures on condos and single-family houses. The nationwide rate is down to a mere 0.5 percent, though, which is the lowest it has been since before the Great Recession. So why are Floridians struggling so much more than the rest of the United States? Although a busy 2017 hurricane season certainly contributed to the issue, it is not the only reason.
One expert noted that a rise in foreclosure rates typically indicates that the housing market is starting to get stressed. A 2018 report showed that just over 10 percent of U.S. properties with mortgages are seriously underwater. These properties have a market value that is 25 percent less than the loans currently leveraged against them. When these properties hit the market, the homes around them lose value, putting more homeowners into difficult positions.
Facing home foreclosure is a troubling experience, but most homeowners have options. Loan modifications are usually an excellent choice for those who are hoping to stop foreclosure and keep their property. However, this does involve notifying the lender of an issue with payment and negotiating new terms for the mortgage, so working with an experienced professional is usually a good idea.