PrintA study seeking in-depth information on the causes of foreclosures in Florida sponsored by Florida Realtors found that most foreclosures are the result of a combination of factors: living costs, depressed income, health issues and other factors, not a single cause like unemployment or risky loans.
Among the most important findings of the Face of Foreclosure project is what John Sebree, Florida Realtors vice president of public policy, referred to as the “plus one” effect.
“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,” Sebree said. “In most cases, it was a combination of rising living costs, unemployment or decreased pay, health issues and other factors that caused homeowners to get into trouble. Simple answers and trite political responses just don’t tell the whole story.”
According to the report, studies of several cities that bore the brunt of the housing crisis, such as Miami, Tampa, Orlando and Cape Coral, found direct correlations between rising unemployment rates and the growth of foreclosure notices in 2008 and 2009. However, the real story of multiple factors emerged in personal interviews with many individuals and families experiencing foreclosure in Florida.
Emotional testimonies of families facing foreclosure reaffirmed Florida Realtors’ findings, according to the report. Respondents to the Face of Foreclosure survey project discussed the continual growth of housing costs as a percentage of income, with some respondents stating that housing expenses took up as much as 75 percent of their monthly income. Respondents also confirmed that job losses, unexpected medical expenses and growing family expenses worsened their economic situation.
“Floridians of all incomes and social backgrounds have felt the effects of the foreclosure crisis,” “By looking to the root causes of foreclosures among individuals and families who have actually experienced it, Florida Realtors lead the way in the fight to restore confidence in real estate and get homeowners back on their feet,” said Sebree.
“These deeply personal statements from real Floridians show that the pain of the foreclosure crisis is not confined to lenders, builders or businessmen, but also affects many hard-working people trying their hardest to make things right,” Sebree said. “Florida Realtors will continue to work alongside Florida homeowners to make sure that they have the representation and knowledge they need to get through the foreclosure process, so they emerge from it in a better place to succeed and provide for their loved ones.”
The Face of Foreclosure Florida report will be available on Florida Realtors® website at www.floridarealtors.org, under the “Research” tab. For questions about the Face of Foreclosure project, please contact Joel Searby with Strategic Guidance Systems at (352) 372-1711.
Florida Realtors®, formerly known as the Florida Association of Realtors®, serves as the voice for real estate in Florida. It provides programs, services, continuing education, research and legislative representation to its 115,000 members in 67 boards/associations. Florida Realtors® Media Center website is available at http://media.floridarealtors.org/.
Strategic Guidance Systems conducted the research for the Face of Foreclosure project, which was launched in July 2009.
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