Many Factors Behind Foreclosures

This past Tuesday, Florida Realtors released a report showing that rather than just loss of a job or a bad loan, there is usually more than one factor pushing Floridians into foreclosure.

Foreclosed homeowners' problems are generally more complex, said Joel Searby of Strategic Guidance Systems, which conducted the study, "The Face of Foreclosure: Florida,'' for Florida Realtors, the trade association for 115,000 real estate professionals in the state.

Joel Searby states:
"Contrary to what some researchers have argued, many Florida homeowners were not driven into foreclosure by simply being trapped in bad loans, or losing their jobs or taking pay cuts. What we found in talking with people who've gone through foreclosure is that there's a `plus one' factor,'" meaning job loss coupled with other circumstances such as divorce or health problems usually led to homeowner distress.

The study also found that foreclosure touched homeowners across a broad range of incomes and demographic backgrounds.

The report looked at statewide foreclosure filings between March 2006 and February 2009, and compiled demographic information about affected homeowners from public records and personal interviews.

Researchers focused on five of the most active foreclosure markets, including Miami, which topped the list of Florida cities for foreclosure filings during that three-year period.

One section of the report highlighted the relationship between the unemployment rate and foreclosures filings in Miami, which began to see joblessness increase steadily in May 2007. Foreclosures and the unemployment rate have more or less risen in tandem for much of the past three years in South Florida.

Here are other findings:

• More than 20% of homeowners who were foreclosed upon had household incomes ranging from $50,000 to $75,000. Another 20% had incomes in excess of $100,000.
• One in four Floridians facing foreclosure were college grads. Another 30% had at least some college education.
• 92% of foreclosed-upon Floridians were married homeowners, and 8% were single. Nearly two-thirds of Florida foreclosure cases involved families with children.
•  35% of those in foreclosure had lived in their homes for 10 years or more. More than 40% had lived in the homes fewer than 5 years.

Read more: Miami Herald