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Almost half of local homeowners owe more than house is worth

MANATEE — Falling home values have left nearly half of local homeowners “under water” on their mortgages, according to a recently released report.

Nearly 47.7 percent of home-owners in the Sarasota-Bradenton-Venice metro area owed more on their mortgages than what their homes were worth as of June 30, First American CoreLogic said in its quarterly negative-equity report. In all, 100,219 outstanding local mortgages were under water.

Another 7,380 mortgages were within five percent of being under water, meaning that more than half of area homeowners with mortgages were either under water or on the brink, the Santa Ana, Calif.-based company said.

Those figures didn’t surprise those in the local mortgage and real-estate industries.

“Actually, I think it’s probably higher,” said Matt Augustyniak, owner of Horizon Realty in Bradenton.

The problem is especially severe in southern Sarasota County and the North Port area, where it’s not uncommon for homeowners to owe more than twice what their property is worth, said Cynthia Riddell, a Sarasota real-estate attorney who frequently represents homeowners in foreclosures, bankruptcies and short sales.

“I’m not surprised the (under water) numbers are that high at all,” she said.

Falling home values are pushing more homeowners under water, especially those who bought during the housing boom. Local home values now are at 2002 levels after falling by more than 50 percent from their 2006 peak, according to Zillow.com.

“That was a crazy time,” Augustyniak said of the 2004-’06 housing boom, “and now we’re coming back down to Earth.”

But he said new appraisal rules are making the problem worse by further driving down home values.

The new rules, which took effect May 1, ban real-estate agents, lenders and mortgage brokers from directly hiring appraisers for pending transactions in which they’re involved.

Instead, independent appraisal-management companies are being used to supply appraisers.

Augustyniak and other critics contend that has led to lower values, which they blame on more appraisers working in markets they’re not familiar with and improperly using foreclosures and other distress sales for comparison.

“These numbers are basically being run down by these new appraisal rules,” Augustyniak said.

“If you reduce the price by $50,000 because the appraisal came in low, you reduce the value in the entire neighborhood by $50,000.”

He said widespread use of home equity lines of credit during the housing boom also is tipping more home-owners under water, and into foreclosure and bankruptcy as well.

Falling home values also are eroding property-tax savings under the state’s Save Our Homes amendment, Manatee County Property Appraiser Charlie Hackney said.

The amendment limits increases in primary homes’ taxable values at 3 percent annually.

In 2007, about $7 billion in Manatee property was subject to the tax cap, Hackney said. Now, it’s about $2.5 billion.

“At that rate, by next year most of the cap savings will be gone,” he said. “Once the cap is gone, they’ll start seeing savings as a result of the decline in property values.”

First American CoreLogic said Florida had the nation’s third-highest under-water rate, at 49.4 percent. Nevada was tops with 65.6 percent, followed by Arizona at 51 percent.

Overall, the U.S. under-water rate was 32.2 percent as of June 30. That represents more than 15.2 million mortgages, the company said.

Duane Marsteller, transportation/growth and development reporter, can be reached at 745-7080, ext. 2630.

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