The never-ending oil spill in the Gulf of Mexico may further exacerbate matters for struggling Florida homeowners, according to Fitch Ratings.
On an aggregate basis, more than 81 percent of all home loans in the state are underwater, and the average loan-to-value (LTV) is a staggering 138 percent, meaning many loans are probably beyond the point of no return.
Additionally, nearly 40 percent of Florida borrowers owe more than 150 percent of the current value of their homes, making strategic default quite likely.
Taking into account that terrible negative equity, “further economic stress brought on by the Gulf oil spill and declines in the tourism and fishing industries would be likely to further increase default rates,” said Fitch Managing Director Roelof Slump, in a release.
Florida already ranks the worst for mortgage delinquencies across all loan product types, which Fitch attributes to a large concentration of non-prime loans, such as Alt-A and subprime mortgages accounting for 85 percent of outstanding mortgages.
More findings from Fitch:
– 80% of Tampa MSA borrowers underwater, current average LTV 126%
– 90% of Cape Coral/Fort Meyers MSA underwater, current average LTV 188%
– 85% of Miami and Orlando MSAs underwater, current average LTV 150% and 140%, respectively
– 60+ day delinquency rates range from 46%-58% in these MSAs
Florida accounts for 10 percent of the securitized non-agency mortgage loans in the United States, but 16 percent of all 60+ day delinquencies, the worst default ratio of any state.