The Housing Bubble

The Sacramento Bee reports from California. “Capital-area home sales remained in the winter doldrums during February, with escrow closings still well below 3,113 sales reported in February 2006, itself a gloomy month for sales. Last month, 2,534 homes changed hands in Amador, El Dorado, Nevada, Placer, Sacramento, Sutter, Yolo and Yuba counties, reported DataQuick.”

“An 18.6 percent decline from last year’s sales levels, that compared to a 19.8 percent fall in the six counties of metropolitan Los Angeles and a 7.9 percent drop in the nine-county Bay Area, according to DataQuick.”

“The new statistics arrive as homeowners are setting the stage for the new real estate season in the capital region, by putting up more for-sale signs. TrendGraphix reported 11,410 existing homes for sale at the end of February in El Dorado, Placer, Sacramento and Yolo counties, the highest February number in nearly 15 years.”

Inside Bay Area. “Homes sales in the Bay Area continued a slowing pattern for the 25th consecutive month. A total of 6,305 new and resale houses and condominiums changed hands in February. Last month’s sales volume was the lowest February since 1996, when 5,940 homes were sold.”

“The median price was $620,000. The Bay Area median price peaked last June when it reached $648,000. ‘To some extent, today’s market is the result of buyers and sellers locking horns, refusing to give in to the other side’s idea of what a house is worth,’ said Marshall Prentice, DataQuick president.”

“Another factor driving the slowdown, according to Prentice, is that lots of people bought a few years ago when the market was hot. ‘They rushed to buy sooner than they would otherwise have, and that stole demand from today. It’s tough to quantify, but we think it helps explain the slowdown,’ he said.”

The Ventura County Star. “Ventura County’s median price for new and existing homes and condominiums was $584,000 in February, down from $605,000 a year ago. Sales totaled 737 last month, a 16.4 percent decline from 882 in February 2006, according to DataQuick.”

“The slowdown has been tough on the real estate industry. Real estate professionals are working twice as hard for fewer sales, said (broker) Gustavo Ramirez in Oxnard.”

“Countywide, there are about 20 to 25 properties pending daily, he said, ‘which, if you think about it, really isn’t much, considering what it was a year or two ago, when properties were hitting the market and selling within a few hours.’”

The Salinas Californian. “The number of foreclosures in Monterey County surged by more than 150 percent over the past year. The month of February saw 62 foreclosures in the county, a roughly 400 percent increase over the same month in 2006, which saw 12 foreclosures, according to the Monterey County Recorder’s Office.”

“In February, the median price for a single family home in Monterey County was $657,000 — down from $700,000 the same month last year, according to the Monterey County Association of Realtors. In north Salinas, the median price last month was $568,000, compared with $665,000 the year before.”

“‘Buyers have time to look around (and) take their time,’ said Lucy Jensen, a Soledad-based real estate agent. ‘The days of the buying frenzy are gone.’”

“Subprime lending is especially prevalent in Salinas, where the median home price is about $550,000, but the median household income is less than a 10th of that. Nationally, subprime lending accounts for about 10 percent of home loans. One local real estate agent said that figure could be as high as 70 percent in Salinas.”

“‘These are just foreclosures waiting to happen,’ said Ariel Torres, an agent in Salinas.”

“Torres said the practice of 100 percent financing, in which a homebuyer doesn’t have to put any money down, has worsened the effects of subprime lending. ‘With 100 percent financing, it opened the floodgates, so that every buyer with any whim of buying can buy a house,’ he said.”

“The attribution of the problems to predatory real estate agents and lenders has not helped bring buyers back to the market, local experts say. ‘With all the bad press we received, rightfully or wrongfully, our buyers have gone away,’ said Jensen. ‘They’re terrified by everything they’re reading.’”

The LA Times. “Orange County last month posted its first year-over-year decline in median home price in more than a decade. Since October, the median price of resale homes, the largest housing segment there, had been declining, DataQuick analyst Andrew LePage said. The overall median stayed positive because of price growth in new homes.”

“‘What’s surprising is how long it took Orange County’s all-home median to go negative,’ he said. ‘It was only a matter of time.’”

“Eddie Oruna and Kerman Rogers are sub-prime borrowers, who bought a three-bedroom home in Chino Hills in 2002 and then financed it to the hilt. The interest rate on their two loans recently jumped more than 2 percentage points, and they’re struggling to make monthly payments.”

“Just 13% of mortgages are sub-prime, but if too many in the sub-prime sector default and sell at a discount or are pushed into foreclosure, the market will be flooded with inexpensive real estate — diluting housing prices overall and possibly crimping the entire economy.”

“For Oruna and Rogers, there’s a sense of urgency. ‘We are really on the edge right now,’ Oruna says. ‘We don’t really know what to do.”

The North County Times. “For the third time in seven months, the median price of a single-family home selling in North County has declined when compared to prices last year.”

“The median price slid to $615,000 in February, a decline of 3.2 percent from $635,000 the same month in 2006, according to the North San Diego County Association of Realtors.”

“Single-family-home sales also declined 11 percent from 563 in February 2006 to 501, the report shows. At the same time, inventories began to rise again last month after falling through autumn and early winter.”

“There were 4,931 houses for sale at the end of February compared to 4,657 the previous month.” “‘A bubble has to come to an end, just like every pyramid scheme has to come to an end, because you’re running on fumes,’ econimst Christopher Thornberg said. However, he said it will take a big economic blow to burst the bubble.”

“Foreclosures countywide nearly tripled from 4,541 in 2005 to 13,246 in 2006, according to RealtyTrac.”

“It is difficult to predict at this point, said Heather Benson, president of the North San Diego County Association of Realtors, how the subprime market’s troubles will affect home values. ‘We’re going to have to wait and see,’ she said.”

The Orange County Register. “ACC Capital Holdings, the Orange-based parent of Ameriquest Mortgage Co., said it is laying off workers today ‘across all lines of business’ and combining some of its operations to cut costs amid a downturn in the subprime mortgage industry.”

“The company declined to say how many workers are being laid off. Employees said the number in Orange County was at least 100, and possibly many more than that.”

From Reuters. “Only a few weeks ago, a borrower in Southern California could qualify for 100 percent financing for a house, with no proof of income or assets. Now, the lending spigot is dry.”

“‘Everybody is running scared,’ said Yamila Ayad, a San Diego mortgage broker. ‘I have been getting these flashes across my screen: This product is going away,’ she said. ‘They have retracted the products.’”

The Argus. “In the Oakland metropolitan area about 11 percent of outstanding mortgages in December 2006 were subprime, with 12 percent of those borrowers at least 60 days late on their payments.”

“Homeowners like Juanita Wallace may be affected. Wallace is an retired Gilroy homeowner who said she’s not sure her current loan was subprime, because she says she has excellent credit. But her loan has many characteristics of those subprime borrowers typically get, including a hefty penalty if she refinances within the first two years; and a negative-amortization ‘teaser’ rate of 1.75 percent that’s causing her loan balance to grow with each passing month.”

“Her home of 35 years would have been paid for by now if she had not refinanced three times to remodel and pay debts. ‘Here I ended up owing $590,000 on it,’ she said with a rueful laugh.”

The Journal Sentinel reports from Wisconsin. “An ugly surprise reported Tuesday by the Mortgage Bankers Association was that Wisconsin, long known for superior bill-paying performance, had a foreclosure rate worse than the nation’s - 1.42% of all loans in the fourth quarter.”

“It was all too easy for Jason St. Martin of Franklin to get a $600,000 loan in the summer of 2005. ‘I’m a teacher. There’s no way that I could have afforded a $600,000 loan for two years,’ St. Martin said.”

“He used the loan to commission two ’spec homes,’ houses that, once built, he intended to sell at a profit. But things went wrong, and he wound up with two half-built houses in a market flooded with inventory - and $535,000 still due.”

“His foreclosure process started last week.”

“Critics here said that only a sea change in lending practices will stanch the flow of defaulting borrowers.”

“‘This is the result of aggressive and predatory lending. It happened because lenders lowered their standards and lent money to people who never had the ability to pay it back,’ said Todd Esser, a consumer bankruptcy attorney in Milwaukee. Years ago, he said, ‘you couldn’t imagine a loan being made where the banker didn’t actually see the collateral. Now they’re throwing money at people - no collateral, no security. You don’t even need proof of income.’”

“Subprime lender Jim Howe in Racine, said most defaulting borrowers he sees are people who bought and borrowed beyond their means. ‘It’s not the lenders. They’re just going by their (regulatory) guidelines and doing what they can do,’ Howe said. ‘Now you’ve got the people who got the loans not living up to their obligations.’”

The Herald News from Illinois. “Foreclosures and late mortgage payments are hitting high marks in Will County and across the country. In Will County, foreclosures in 2006 reached 3,226, the highest in at least four years and a 30 percent jump from the number of foreclosures in 2005, according to the Recorder of Deeds office.”

“Will County had the highest foreclosure rate in the Chicago area for most of 2006 and again in January. The rising foreclosure rates have been fueled by ’subprime’ loans that pumped up the real estate market in recent years, making mortgages available to borrowers with high credit risks.”

“‘A lot of these programs, quite honestly, instead of helping people have really hurt them,’ said Tom Mulvey, VP at Dow Mortgage, a Joliet company that does not deal in subprime loans.”

“All Chicago-area counties had higher foreclosure rates than the national average, according to RealtyTrac.”

The Press & Argus from Michigan. “The home of recently divorced state Rep. Chris Ward is in the process of bank foreclosure. According to a legal notice, Ward and his ex-wife owe $158,292 on their home in Brighton Township. County records put the value of the property at less than $100,000.”

“The Wards are not alone in Livingston County. In the first two months of this year, 138 foreclosures have been filed with the Register of Deeds. During the same period in 2006, 72 were filed. And in the same two months in 2005, only 31 were filed.”

From Action News 24 in Pennsylvania. “It appears Erie County has an increasingly high rate of home foreclosures and sheriff sales. In 1996, the annual number of foreclosure and sheriff sales went from 113 to 268 in 2000… and then up to 636 in 2006, according to the Erie County Sheriff`s Department.”

“‘It appears to be the affordability of housing has changed and I`m not so sure its the pricing of the house. I think its the income levels of the individuals and that is a concern.’ said John Stolar, Senior VP of National Bank of Pennsylvania.”

“The county has processed 376 Sheriff`s sales already this year. This could mean good news for home buyers looking for a bargain, as high foreclosure rates tend to drive down housing prices.”

From WCCO 4 in Minnesota. “The number of people who are behind on their mortgage payments is at nearly 5 percent and the number of foreclosures is also at a record high.”

“Homeowner Tom McClaughlin is familiar with foreclosures. McClaughlin refinanced his mortgage but with bad credit, his only option was a high interest loan with payments higher than his first mortgage that he couldn’t afford. ‘Ended up making the worst mistake of my life,’ said McClaughlin.”

“McClaughlin said it was something he couldn’t afford but the broker falsified his income so he’d qualify. ‘They did that just so I could get the loan,’ he said.”

“Minnesota Attorney General Lori Swanson said falsifying income is a common practice. ‘In some cases brokers will make up jobs that people don’t have or extra income that they really don’t have,’ said Swanson.”

“She said some brokers don’t care if homeowners default since they will sell the mortgage anyway. ‘Putting people from product to product, refinancing them in order to make a commission and not really caring about what’s in the best interest of the consumer,’ said Swanson.”

The Star Tribune from Minnesota. “The subprime mortgage crisis, which already has shaved billions of dollars off the value of U.S. stocks, is starting to hit home for some Minnesota workers and borrowers.”

“Bloomington-based Residential Capital, one of the country’s biggest mortgage lenders, said Tuesday that it lost $651 million in the fourth quarter because of bad subprime loans and that it might need to cut some of its 1,900 jobs in the state.”

“Edina-based Maribella Mortgage, which once employed 125 workers, will shut its doors today.”

“In the fourth quarter last year, delinquent subprime mortgages in Minnesota jumped to 14.1 percent of the total, from 10.9 percent during the same period of 2005, according to the Mortgage Bankers Association.”

“The most obvious effect from the submarining of subprime has been in the stock market, where some subprime lenders have fallen like dominoes, triggering fears of a broader financial crisis.”

“Doug Winter, senior VP for Countrywide Home Mortgage in Plymouth, said that it’s getting more difficult to find mortgages for people who are good credit risks, but who have complex tax situations or other complicating issues.”

“‘Those loans have really come under scrutiny, and the availability of these products have pretty much gone away,’ Winter said.”

“ResCap executives also said the company will stop selling some of the riskiest subprime products, such as loans that require little or no documentation of the borrower’s income. It will also reduce its subprime mortgage investments by nearly half, to $28 billion by the end of the year.”

“ResCap also left the door open to layoffs. ‘We continually monitor our staffing levels in light of our business needs,’ it said in a prepared statement.”

“While the number of borrowers defaulting on their mortgages is rising, the situation is being exacerbated by Wall Street lenders, who are pulling their backing from subprime lenders, said Amy Crews Cutts, deputy chief economist for Freddie Mac.”

“‘I’ve never seen this situation before,’ she said. ‘There’s no way to model it.’”

“Crews Cutts said that, during credit cycles such as the one we’re in now, it’s not unusual for default rates to be in the 10 to 15 percent range. ‘It’s a very interesting situation that we’re in right now,’ she said. ‘How bad are subprime delinquencies going to get? It’s unknowable at this moment.’”

Some housing bubble reports from Wall Street and Washington. “Pulte Homes Inc., the fourth- largest U.S. homebuilder, said the housing market is unlikely to have a quick recovery as buyers wait out the drop in prices. ‘We’re not projecting anything to bounce off the bottom at this point,’ CFO Roger Cregg said at a UBS conference in London. ‘There’s been a lot of buyers that have moved to the sidelines.’”

“‘We don’t think it’s repeatable,’ Cregg said of the high profit and sales of 2004 and 2005 for builders.”

From MarketWatch. “Cregg, when asked about the prospect for M&A activity this year, said given the uncertainty in the housing market, ‘valuations are questionable during a time like this.’ Since it’s unclear how much land on the balance sheets will be impaired, there’s a feeling that ‘maybe you shouldn’t do anything here.’”

From Bloomberg. “MGIC Investment Corp., the largest U.S. mortgage insurer, was the top gainer in the Standard & Poor’s 500 index on Feb. 6, the day it agreed to buy No. 3 mortgage insurer Radian Group Inc. for $4.9 billion.”

“In the five weeks since, it has become the 10th-worst S&P performer.”

“‘There’s investor fear that credit quality in mortgages is deteriorating,’ said Mark Patterson, a managing director at NWQ Investment Management Co. L.L.C., of Los Angeles. It was the largest shareholder of Radian and second-biggest investor in MGIC as of December.”

“‘A number of subprime lenders had eased underwriting standards considerably, but there’s scant evidence that’s going to affect the mortgage insurance industry,’ said Patterson at NWQ Investment. ‘What matters is the economy: Do people have jobs? And those issues are fine.’”

From Reuters. “Some with connections to the mortgage industry (see) job losses ahead. That was potentially good news for recruiters with the right clients, said head hunter Jimmy Donaldson, who said his firm was getting interest from mortgage professionals looking to switch industries.”

“‘Everybody’s going down, not just New Century,’ he opined.”

“‘I didn’t know they had problems. I’m just grateful I didn’t have stock,’ said a woman who read about New Century in the morning paper and was concerned for people inside the company as well as investors and borrowers. She said her name was Donnie Lynch. ‘Lynch like hanging. Like what they might do there,’ she added, gesturing at New Century’s low glass tower.”

“New Century Financial Corp., the largest independent U.S. subprime mortgage lender, said yesterday that Barclays PLC has demanded that it immediately buy back about $900 million (U.S.) of mortgage loans.”

“On Monday, New Century said it had less than $60 million of cash on hand. It has said lenders might force it to repay more than $8 billion it doesn’t have.”

The Associated Press. “Financial services company National City Corp. on Wednesday said it has not been able to sell some $1.6 billion in nonconforming loans amid a downturn in the market for mortgage loans made to borrowers who do not qualify for conventional loans.”

“The company has written down the fair value of those loans by $11 million through February and said further write-downs are likely.”

The Orange County Register. “Impac Mortgage Holdings, an Irvine-based investor in mortgages, said Wednesday the percentage of late payers in its portfolio doubled last year, raising concern that a lending crisis that began with subprime borrowers may be expanding to those with better credit profiles.”

“Borrowers who missed at least two monthly payments accounted for 6.2 percent of Impac’s mortgage holdings Dec. 31, up from 3.1 percent a year earlier. That translates to $1.36 billion in problematic loans, nearly double the year-ago figure.”

“New sales of collateralized debt obligations (CDOs) have surged 90 percent in the first two months of 2007, compared with the year-earlier period, some of which may be due to managers rushing to get some deals to market in February because of weakness in subprime mortgages.”

“‘We have heard of some CDO warehouses liquidating and/or taking mark-to-market losses in transactions in their ramp-up phase,’ Morgan Stanley analysts wrote.”

“Lawyers for investors hurt by the meltdown of mortgage lenders that cater to risky borrowers are likely to file a wave of class-action lawsuits against the lenders and possibly their auditors and bankers as well.”

“Gerald Silk, a partner at plaintiffs’ firm Bernstein Litowitz Berger & Grossmann LLP in New York, said investors will probably zero in on the companies’ internal controls and whether there were deliberate misstatements in their financial filings. Under the 2002 Sarbanes-Oxley corporate reform law, top corporate officers must certify financial statements.”

“‘There is no question that there are lots of bells and red flags as to where were the third parties and what was their role in this,’ he said. ‘What about the auditors? What about the banks. These are questions that the investors that bring these cases are going to have to really work hard to figure out.’”

“‘We are considering litigation, no question,’ he said. ‘We have already had numerous discussions with some very, very large pension systems throughout the country on this.’”

“House prices could tumble 10% this year and force the United States into recession if a credit crunch taking shape in the mortgage market gathers steam, Merrill Lynch said in research notes this week.”

“Merrill said the biggest concern is that tighter lending standards in the mortgage market, even if confined to lower-quality borrowers, will constrain overall housing demand and hamper recovery in the struggling housing market.”

“‘It is not inconceivable (given what is happening now to mortgage originations) that we end up with something closer to a 10% decline in home prices this year,’ Merrill Lynch said.”

From CNN Money. “Ohio’s attorney general joined officials from other states, barring troubled subprime mortgage lender New Century Financial Corp. from operating in the state.”

“‘If nothing else, this debacle underscores the need for us to drive New Century and unscrupulous operators out of our state once and for all,’ said Attorney General Marc Danny. ‘And we are also demanding that this company be held accountable for all its misdeeds,’ he said.”

“Earlier this week, regulators in Massachusetts, New York, New Jersey and New Hampshire issued cease-and-desist orders against the subprime lender, barring it from taking new loans in their states.”

“U.S. Senate Banking Committee Chairman Christopher Dodd said on Wednesday regulators bear some responsibility for problems in the subprime mortgage sector and he plans to call them before the committee for questioning.”

“‘That’s what’s made me angry here — that the regulators apparently have not been doing as good a job as I think they should have been doing,’ Dodd told reporters. ‘But we’ll know the answer to that question as we bring them before the committee,’ he said.”

“The goverment is preparing to punish some subprime mortgage lenders under investigation for discriminatory practices. Rep. Carolyn Maloney of New York, a committee member, is proposing legislation that would impose restrictions on banks and other mortgage lenders.”

“They would be required, for example, to evaluate a borrower’s ability to repay an adjustable-rate mortgage over the entire term of the loan, not just at the start, when much lower rates are in effect.”

From Peter Schiff. “Those who believe that the subprime market is unrelated to the broader economy do not understand that…it’s just that the subprime sector, being one of the most vulnerable spots, is where the problems are first surfacing.”

“The bottom line is that far too many Americans, not simply those with low credit scores, have borrowed more money than they are realistically capable of repaying.”

“The fix now being suggested by some members of the U.S. Congress demonstrates how Washington completely misunderstands market dynamics. Washington fails to grasp that a return to traditional lending standards would precipitate a return to traditional prices, which are way below current levels.”

“However, continuing to look the other way is no panacea either, as the real estate market is already in the process of collapsing under its own weight.”

“It is also typical and very disingenuous for lawmakers to feign outrage and to have waited until a collapse has occurred before taking action. Had the government taken preemptive action with regard to mortgage lending, the real estate bubble never would have inflated to the degree that it has.”

“The main risk is that Ben Bernanke and his buddies at the Fed panic, producing something far worse. Let’s hope that cooler heads prevail.”

The News & Observer reports from North Carolina. “Raleigh Realtor Gary Hooker already has lost three sales to first-time homebuyers since lenders this month began cracking down on easy mortgage money. But his real worry is the effect that tougher restrictions on subprime borrowing may have on the Triangle’s unsteady housing market. Hooker said his clients weren’t able to get mortgages because they could not meet a new requirement for a 5 percent down payment.”

“‘I don’t think we’ve scratched the surface how it will turn out,’ said Hooker. ‘It’s a big deal,’ he said. ‘It’s coming at a time when all regions need it the least.’”

“Up to a quarter of the homes sold in North Carolina in 2006 were bought with subprime loans, according to industry estimates. Today, those loans are being blamed for a record number of foreclosures in the Triangle and the state last year.”

“This month, Advantage Lending in Raleigh said it has turned away about 10 customers because of tighter credit and down payment guidelines. Mark Timberlake, a mortgage broker in Cary, said two potential buyers left empty-handed when they found out they needed big down payments to buy investment homes. Before, he said, they could have borrowed the full sales price. Now they need 10 percent up front.”

“‘There are … people who were able to qualify for loans in the past few years who aren’t going to be able to get loans,’ said John Crawford, a mortgage banker in Greensboro.”

“Della McDowell, a broker in Durham, said that some of the lenders she uses now want borrowers to have at least two mortgage payments in the bank. Others are asking for canceled checks as proof of paying rent on time. Before, lenders would simply call the landlord and get a verbal confirmation, McDowell said.”

“Fremont Mortgage, the second-largest subprime lender in North Carolina, has ended relationships with a third of its mortgage brokers because of high defaults, said Mark Pearce, deputy commissioner of the N.C. Banking Commission. Charlotte-based AmeriTrust Mortgage also closed its subprime unit.”

“Wells Fargo has lowered its maximum debt-to-income ratio from 55 percent to 50 percent, Pearce said. For example, if a home buyer earns $3,000 per month, then his total monthly debt can not exceed $1,500.”

“Robin Green is finding out just how hard. Green fell in love with a $164,000 house. Even though her credit history suffered from large medical bills and a recent bankruptcy, she was able to get a contract on the home. Then Green got a call from her mortgage broker telling her things had changed. She would need to increase her credit score substantially or come up with a 5 percent down payment.”

“‘I was like, ‘Oh my God, I’m not going to be able to get this house,’ Green said.”

The Telegram from North Carolina. “‘Bubbles’ do indeed exist, and our conversations with brokerage firms in the northeast portion of the United States, along the North Carolina, South Carolina and Florida coastal areas, confirm that property values are declining in those areas.”

“One specific South Carolina brokerage firm in the Myrtle Beach area stated that the year 2005 showed an average decrease in value of waterfront properties of 25 percent. The year 2006 was estimated to follow with an additional drop of 10 percent.”

“We cannot confirm these numbers, but the point being made is that real estate buyers or investors are not willing to pay prices that in some cases reflect astronomical equity increases annually.”

The Palm Beach Post from Florida. “Overdue mortgage payments in Florida rose in the final three months of 2006, and soared over the previous quarter, the Mortgage Bankers Association said. Meanwhile, new foreclosures in Florida set a record as borrowers with troubled credit histories fell behind in their payments, the MBA said.”

“Mortgages in Florida overdue for 30 days or more in the fourth quarter of 2006 climbed to a record 4.86 percent of all loans tracked - up sharply from the same period in the previous year, when 4.66 percent of loans were delinquent.”

“‘As Florida was rocketing up in values, we had lots of investors that bought with the expectation of flipping these homes,’ said Jim Sahnger, VP of Palm Beach Financial Network in Sewall’s Point. ‘Many of these people are now over-leveraged or they’re ‘upside down’ - they owe more than their house is now worth.’”

“The delinquency rate for subprime loans in Florida in the fourth quarter was 12.53 percent, up 139 basis points from the fourth quarter of 2005, the survey showed. The delinquency rate for FHA mortgages, government-backed loans used by first-time home buyers, was 12.74 percent.”

“‘The FHA borrower profile is one with either little or no down payment,’ Sahnger said. ‘As with subprime borrowers … they are often ripe for a fall.’”

The Sun Sentinel. “The number of South Floridians facing foreclosure has spiked in 2007. Many took out short-term, adjustable-rate mortgages and are seeing their monthly payments balloon as interest rates rise. Increases in property taxes and insurance rates also are making it difficult to pay the monthly mortgage.”

“‘These are not bad people,’ said Louis Spagnuolo, a mortgage banker in Boca Raton. ‘But a lot of them are on fixed salaries, and they can sustain only so many price increases.’”

“The number of late payments in Broward County hit 983 in February, a 333 percent increase over the 227 last February, according to Realestat.com. Broward had 315 foreclosures last month, compared with 206 in February 2006.”

“Last month, Palm Beach County had 733 property owners with late payments, up 382 percent over the 152 last February.”

“Honey Hartman of Hollywood is facing a mortgage crunch. A huge property insurance increase this year pushed her monthly mortgage payment to $770, which exceeds her income of $643.”

“She negotiated with her lender to cut some of the added costs, and her two grown children are helping her make up the rest of the shortfall. Hartman expects she’ll ultimately have to sell her two-bedroom home and leave South Florida. ‘I’m in dire straits,’ she said.”

From CBS4.com in Florida. “Foreclosure actions filed against homeowners nearly tripled in Miami-Dade and Broward counties in January and February, compared to the same months last year, according to proceedings filed with the clerks of court.”

“Florida is particularly vulnerable to the risks of so-called subprime loans, which go to borrowers with lesser credit. After California, the state has the second-highest percentage of borrowers with subprime loans, generally recognized as having the greatest risk of default.”

“In Miami-Dade and Broward counties, 23 percent and 18 percent of all loans are subprime, respectively; of those, about 6.7 percent are more than 60 days overdue, according to First American Loan Performance.”

“Alan Rosenthal, who supervises the mortgage litigation practice at Coral Gables-based Adorno & Yoss, said the firm was seeing a ‘huge spike’ in foreclosure cases initiated by lenders.”

“‘I don’t believe we have seen the full impact of these what I call junk loans — the negative amortization loans and all these other weird loans. They are too new,’ he said. And real estate professionals are gearing up for what could be the start of a surge of homeowners desperate to sell.”

The St Petersburg Times. “The developers of Trump Tower Tampa learned Wednesday that they can’t stop buyers from suing to get back deposits on the much-delayed condo high-rise.”

“For Tom Long, the attorney arguing against Trump Tower, the ruling has significance beyond his clients. ‘I think this now, frankly, opens the floodgates to others to demand their money back,’ Long said. ‘It’s a three-year project and they’re at ground zero.’”

“Long said developers, more than $3-million behind in paying contractors, may lack the money to come up with refunds.”

The Tampa Tribune. “Two buyers of a condominium in the stalled Trump Tower Tampa project overcame the first hurdle Wednesday in their quest to get their deposits back.”

“The decision is a ‘fairly critical blow’ for the troubled development and could result in other buyers following suit, said Sander Moody, a professor at the Florida Coastal School of Law in Jacksonville.”

“‘Now, instead of pouring concrete and meeting with lenders, these developers have to pore over documents to hand over in discovery,’ Moody said.”

“The publicity, he said, could make it more difficult for developers to get financing, and Wednesday’s ruling increases the likelihood that developers could settle with the plaintiffs to avoid more lawsuits from other buyers.”

“The plaintiffs in this case put down 20 percent on a $1.4 million condo in August 2005 and contend that it is now impossible for developers to complete the 52-story downtown tower by the December 2008 deadline specified in their contract.”

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