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Report: City's Home Prices Staying Low

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By SHANNON BEHNKEN

sbehnken@tampatrib.com

Published: April 2, 2009

TAMPA - The city has a 99.7 percent chance of seeing lower home prices through 2010 as more people lose jobs and decide not to buy homes, according to a report released Wednesday by Walnut Creek, Calif.-based PMI Mortgage Insurance Co.

Meanwhile, unrelated to the report, Florida Attorney General Bill McCollum said the state's housing crisis is a breeding ground for mortgage fraud. State agencies, he said, must do a better job working together to investigate and prosecute fraud.

The PMI report showed that Tampa is among the top 10 cities with the highest probability of lower prices in 2010. Four other Florida cities - Miami, Fort Lauderdale, Orlando and Jacksonville - made the list. All 10 cities have a 99 percent chance of falling home sales.

Others cities in the top 10 are Los Angeles, Riverside and Santa Ana in California; Las Vegas; and Phoenix.

PMI is the second-largest U.S. mortgage insurer and prepares such reports to gauge its risk of defaults. Borrowers must take out mortgage insurance if they don't pay at least a 20 percent down payment or have that much in equity.

Ten or 11 of the 50 biggest U.S. metropolitan areas have more than a 75 percent chance of lower home prices in two years, according to the report. Six others have more than a 50 percent chance.

Some areas fared much better because values did not rise as high during the housing boom.

Areas with the least chance of lower prices, according to the report, include Pittsburgh; Cleveland; Columbus, Ohio; Dallas; Houston; and Memphis, Tenn.

On the mortgage fraud front, Florida's attorney general said the economy and large-scale housing bust is fueling more mortgage fraud, and state agencies are overwhelmed.

They also are still investigating incidents that occurred during the housing boom, McCollum said.

As more homeowners fall into foreclosure, he said, and more companies are emerging to take advantage of them.

McCollum said mortgage fraud has become a crisis. He held a meeting Wednesday with representatives from state law enforcement and investigative agencies. They agreed to meet again in a couple of weeks to step up plans to battle mortgage fraud.

One of the most prevalent types of complaints is foreclosure rescue fraud. In these cases, McCollum said, companies charge fees to help homeowners avoid foreclosure and then do nothing. A new law in 2008 prohibits mortgage rescue companies from requiring upfront fees and other such business practices. But though it's illegal, some companies still require upfront fees, McCollum said.
Mortgage fraud topped the list of complaints logged by the attorney general's office in 2008, he said. The state has pursued civil and criminal action against dozens of companies and individuals accused of mortgage fraud.

If you think you have been a victim of mortgage fraud, you can report it to the attorney general's mortgage fraud hot line at 1-866-966-7226.

Information from The Associated Press was used in this report. Reporter Shannon Behnken can be reached at (813) 259-7804.

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