Posted By: Tom Hustler

There's new evidence that many people are stuck with homes that they can't afford.
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A report just released ranked Florida No. 1 in the Southeast for foreclosures, WESH 2 News reported.

The report was released Monday on Foreclosures.com, and it put Florida at No. 2 in the nation, right behind California.

Most of the trouble in Florida is in the southern part of the state.

Nationwide, the report showed a more than 19 percent increase in foreclosure rates.

The report blamed adjustable rate or interest-only loans for much of the trouble. The rates are fine for the beginning of the term, but payments are adjusted up in most cases, beyond affordability.

Combine that with lax credit practices of many lenders and the current slowdown in home appreciation, and there's a lot of overextended homeowners with one option -- foreclosure.

RealtyTrac, another firm that watches these trends, said Orlando's foreclosure rate has actually decreased slightly during the last quarter. Some experts said this may be a sign the Central Florida market is stabilizing.

The Orlando market is on track for its second best year ever when it comes to home sales. Last year was the best.

Right now, sales are down about 10 percent from last year.

To comment on this story, send an e-mail to Tom Schaad.

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