Through New Hardest Hit Fund Data, Help Share the Word Foresees a Financial Loch Ness Monster Lurking in the Underwater Housing Market in Florida

The recovery of the housing market is necessary for the stabilization of the American economy. The recovery will not happen if there is a foreclosure crisis lurking under the housing market. Underwater homeowners in Florida facing a temporary economic hardship need to know about the $1,057,839,136 that has been dedicated to Florida specifically for foreclosure prevention from the Hardest Hit Fund (HHF).

  • Share on TwitterShare on FacebookShare on Google+Share on LinkedInEmail a friend

Help Share the word

"There still remains a tremendous awareness gap for the Hardest Hit Fund in the state of Florida." - Sergio C. Muñoz, Help Share the Word

Irvine, Calif. (PRWEB) December 12, 2012

Help Share the Word foresees a financial Loch Ness Monster lurking in the underwater housing market in Florida.

The recovery of the housing market is necessary for the stabilization of the American economy. Unfortunately, while many trends continue to show foreclosures declining, other data indicates that the recovery will continue to linger if there is an unseen foreclosure crisis lurking under the housing market.

Help Share the Word, a leading consumer advocate for foreclosure prevention, has analyzed data from the Third Quarter Hardest Hit Fund report to the United States Treasury along with unreleased data on the housing market from RealtyTrac. What was found was somewhat startling. The data indicates that homeowners whose homes are underwater, meaning their loan is greater than their value, are at greater risk for foreclosure in the future. That, coupled with other hardships such as unemployment or reduced income (underemployment), is a recipe for another foreclosure tipping point. In Florida alone, 58% of all homes are underwater.    58% is a significant number. With more than half of Florida's market alone underwater, it is clear indication that the crisis may not be over.

One solution that underwater homeowners in Florida facing a temporary economic hardship need to know about, is the more than a Billion Dollars that has been dedicated to Florida specifically for foreclosure prevention from the Hardest Hit Fund (HHF).    

High Level Demographics from the Hardest Hit Fund Report:

  • 90% identify as earning less than $50,000 annual.
  • 71% identify as being underwater on their mortgages.
  • 69% identify as being temporarily unemployed.

High Level findings from the RealtyTrac data:

  • Over 2.4 million Florida homeowners are seriously underwater as of September 2012.These are homeowners with LTV of at least 125%.
  • Over 3.3 million Florida homeowners have an LTV of 100% or higher representing 58% of all outstanding mortgages in FL.

Experts understand that the recovery of the housing market is necessary for the stabilization of the American economy and that the recovery will not happen if there is a foreclosure crisis lurking under the housing market. Help Share the Word interviewed two economists who understand the situation:

“We have never seen anything like the crisis in the Florida housing market before, period. Nevertheless, we have seen housing threats in the middle of the seventies, the early eighties and the early nineties which were very serious but never close to what we are seeing today. The average price of houses has dropped forty percent to what they used to be before the crisis. It is very serious to have 3.2 million homes underwater in Florida because the housing sector is 15% of the economy of Florida. To have such a large percentage of houses in foreclosure and/or affected by short sales or otherwise struggling to keep the owners in residence has kept the economy from growing at more than one or two percent per year.”

  • Dr. Jorge Salazar-Carrillo, Professor of Economics, Florida International University

“If you are able to reduce the number of underwater homes to the number equivalent to a balanced housing market, the economy would begin to function more at its potential. A healthy housing market has a multiplier effect on the rest of the greater economy. One of the reasons why this recession has been followed by such a weak recovery is because usually housing is an early riser. In this particular case, housing was the hardest hit sector and dragged the entire economy into recession, that is why the economy has been so slow to come back to life. It is imperative to have a healthy and balanced housing sector.”

  • Eduardo Martinez, Senior Economist, Moody’s Analytics

The data from RealtyTrac shows a nationwide trend of homeowners in negative real estate investments. Daren Blomquist, Vice President of RealtyTrac, explains the crisis as it affects Florida, “Over 2.4 million Florida homeowners are seriously underwater as of September 2012. These are homeowners with LTV of at least 125%. This figure accounts for 43% of the outstanding mortgages in Florida. If we include homeowners with an LTV of 100% or higher, the number goes up to 3.3 million, representing 58% of all outstanding mortgages. These homeowners are at a higher risk for foreclosure if any other trigger event happens which causes them to struggle with their mortgage payments. Additionally many of these homeowners are opting for short sales as the only way to avoid foreclosure, as evidenced by a 35 percent annual increase in short sales nationwide and a 66 percent annual increase in Florida short sales in the third quarter. Although short sale is a better alternative than foreclosure, it still results in the homeowner losing the home.”

"Being underwater on your mortgage is not a reason for homeowners in Florida to apply for the Hardest Hit Fund," said Sergio C. Muñoz, Senior Vice President of Help Share the Word, "but when coupled with a temporary economic hardship and the inability to modify an underwater loan, the likelihood of foreclosure skyrockets. The simplified popular narrative in the media is that foreclosures are down and housing starts are up but the economy is still weak and there are over three million homeowners in Florida currently underwater. This is what we call a financial Loch Ness Monster. Together, we need to communicate the available policy responses like the Hardest Hit Fund. It is not a case of there not being a response to the danger for homeowners; it does exist and we need to be proactive to the danger."

"The number of applicants to the Hardest Hit fund increased from Q2 to Q3 by 1,378. Additionally, the number of applicants in-process increased from Q2 to Q3 by 1,283," continued Muñoz, "However, there still remains a tremendous awareness gap for the Hardest Hit Fund. If you are recently laid-off, temporary unemployed, underemployed, suffering a family bereavement, going through a divorce or dealing with an unruly medical bill, please visit our web site HelpSharetheWord.org and click-through on the map to Florida to apply for assistance."

About Help Share the Word
Help Share the Word is a nonprofit Public Benefit Corporation and is staffed by volunteers familiar with the foreclosure industry. They do not accept charitable donations, and is designed strictly to provide awareness to troubled homeowners. Visit http://www.HelpSharetheWord.org to learn more.

Media Contacts for Help Share the Word, Professor Salazar-Carrillo and Mr. Martinez:
Sergio C. Munoz
949.398.5523
sergio(at)helpsharethword(dot)org

About RealtyTrac Inc.
RealtyTrac (http://www.realtytrac.com) is the leading supplier of U.S. real estate data, with than 1.5 million active default, foreclosure auction and bank-owned properties, and 1 million active for-sale listings on its website, which also provides essential housing information for more than 100 million homes nationwide. This information includes characteristics, tax assessor records, bankruptcy status and sales history, along with categories of key housing-related facts provided by RealtyTrac’s wholly-owned subsidiary, Homefacts®. RealtyTrac’s foreclosure reports and other housing data are relied on Federal Reserve, U.S. Treasury Department, HUD, numerous state housing and banking departments, investment funds as well as millions of real estate professionals and to help evaluate housing trends and make informed decisions about real estate.

Media Contact:
Jennifer von Pohlmann
949.502.8300 x 139
Jennifer(dot)vonpohlmann(at)realtytrac(dot)com


Contact

Follow us on: Contact's Facebook Contact's Twitter