Contributing to a rise in foreclosures and late payments on loans in Florida are the inflationary pressures, adjustable rates and other factors.

Florida's rise in delinquent mortgages when compared to a year ago mirrors national patterns. Now, foreclosures remain near historic lows in the state. For instance, in 2002 the Miami-Dade County Clerk recorded more than 14,500 foreclosure cases.

The soaring popularity of adjustable rate mortgages in recent years is one potential problem being anticipated. As home values leaped ever upward, the low initial rates of ARMs -- typically considerably below that of fixed-rate loans -- made houses more affordable to buyers. At 5 %, for instance, a $250,000 mortgage with a 30-year term costs $1,342.05 a month, according to a mortgage calculator on Bankrate.com.

At 6 % the payment rises to $1,498.88. If rates rise to 7 %, the payment leaps to $1,663.26. However, Florida homeowners have several factors working in their favor. The labor market remains white-hot, for instance, with unemployment in Miami at just 3.5 % and 2.8 % in Broward.

Doug Duncan, chief economist of the Mortgage Bankers Association, said that in prior quarters they have indicated a number of factors, including the aging of the loan portfolio, increasing short-term interest rates and high-energy prices, which are putting upward pressure on delinquency rates. Historically, waves of foreclosures can wreak havoc on the nation's banks.

By M. Sese
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