During the first quarter, foreclosures have jumped sharply across the nation’s top urban markets, according to a PropertyShark.com report released to CNBC.In Miami, foreclosures are up nearly 31%, in Los Angeles 24%, and in New York City, up 56%, the website said. Properties in the borough of Queens accounted for the bulk of the New York foreclosures, jumping 91% alone.Miami experienced the highest quarterly foreclosure rate per household. In Miami-Dade County, there were 987 residential auctions in the first quarter, which translates into 127 foreclosures per 1,000 households. Miami typically has foreclosure rates higher than the national average because it attracts investors that buy into properties before they’re developed with hopes of flipping them later at a profit. Now that prices have peaked in urban markets, investors are left holding properties that they need to unload in a soft housing market. In addition to investment speculators, many subprime borrowers have overextended themselves with creative financing or little money down on homes they couldn’t really afford.
And it’s not likely to stop soon:
Jim Moore, a mortgage broker in Grand Rapids, Michigan who also writes about mortgages for Miamibeach411.com, said he recently completed a $3 million refinance on a second home for a borrower who was out of work. “This wasn’t even a no-documentation loan,” says Moore. “This was a no-income loan, and the lender knew it.”