Home mortgage defaults, foreclosures may pop South Florida housing bubble

Mounting mortgage defaults across South Florida threaten to hurt more than just those homeowners who lose their properties to lenders.

Experts say foreclosures could drag down already sluggish housing prices throughout entire neighborhoods.

“Homeowners that are being foreclosed upon aren’t spending their Saturday afternoons mowing the yard,” said Greg McBride, a senior financial analyst at Bankrate.com in North Palm Beach. “So those people who are cutting the grass, trimming the shrubs and fixing the gutters will suffer.”

… The numbers of homeowners defaulting on their mortgages and facing foreclosure are rising steadily across South Florida this year, according to Realestat.com, a Plantation-based company that compiles local housing statistics.

Analysts mostly blame the trouble on unconventional home loans made to risky borrowers hoping to get into houses and condominiums that shot up in value during the housing boom from 2000 to 2005.

Home mortgage defaults, foreclosures may pop S. Florida housing bubble