Underwater mortgages dropping in SWFL

FORT MYERS, Fla. – Ellen Boliek remembers the feelings she had when her rental home was underwater by nearly $100,000.

“When I talked to that attorney, and he said ‘you just have to stop paying,’ it was gut-wrenching. I felt like a criminal,” said Boliek.

She used her savings to cover her losses in a short sale, and walked away.

“Get rid of the emotional part, and think about, if I was a business person, this is a really bad investment. How long am I going to keep shelling out all this money?”

Boliek’s home was one of many in Lee County — more than half — that was “seriously underwater” in 2012, according to RealtyTrac. The company, which tracks foreclosed properties nationwide, said recently that only 23.5 percent of area homes are underwater.

Some experts say the drop is a great sign for housing recovery, but others warn that another bust could be on the way.
“Hold on, because values are still is going up. There’s light at the end of the tunnel,” said realtor Marc Joseph.

Joseph cautions companies that hold mortgages could declare a “peak,” and cash out of housing.

“This is tens of thousands of homes, just in the state of Florida, that are going to be put out on the market,” said Joseph. “When everybody starts pushing back and trying to cash out, what do we have? We have a bust.”

“It’s a constant cyclical thing. You have to look at it like you do when you’re dealing with the stock market. It’s going to be a long term investment,” said Sarah Faulkner who is currently looking to sell her home.

Right now, the median sales price for a home in Lee County is $212,000. The peak a few years ago was $317,000 when the bubble burst.