Florida is No. 1 in Home Defaults;
Banks Turn to 504 Loans to Strengthen Portfolios

Florida led the United States in housing defaults and foreclosure filings last month, while homeowners nationwide are falling behind on their payments 33% faster than they did last year, according to California-based RealtyTrac. Banks, however, are finding they are able to add good loan-to-value transactions to their portfolios by utilizing the 504 Program for commercial real estate loans.

The Sunshine State reported 19,144 houses entering the foreclosure process in February, followed by California and Texas. Broward County had 2,061 homeowners in some stage of foreclosure last month, up from 1,212 in February 2006, notes RealtyTrac. Palm Beach County had 1,317 homes in the foreclosure process in February, compared with 765 a year ago.

“Banks that use the (504) program are benefiting from a long established product that has a proven track record in maintaining a balance in their portfolios” said Todd Kocourek, President and CEO of Florida First Capital. “The 504s that these banks have previously made will help them to ride out market fluctuations” Kocourek said. “With 50% loan-to-value ratios the 504 is among the most secure investments a bank can make.”

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