Industry News

Speculators pushing up foreclosures in West, Florida

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Speculators walking away from adjustable-rate mortgages in the West and Florida helped push the rate of foreclosure starts to a record high in the first quarter, the Mortgage Bankers Association said Thursday. The rate of loans entering the foreclosure process in the first quarter of 2007 was .58 percent, up four basis points from the fourth quarter of 2006 and 17 basis points from a year ago. In presenting the results of its latest National Delinquency Survey, the industry group said the rate of foreclosure starts nationwide would have fallen if not for increases in four states -- Florida, Nevada, California and Arizona. MBA Chief Economist Doug Duncan said foreclosures in those states "are heavily influenced by speculators" with adjustable-rate loans who are "walking away from properties" because they face interest-rate resets. He said speculators in Florida are also facing much higher insurance bills. The states with the largest increases in foreclosure starts were N...