The Good News: Delinquent mortgages dropped by more than 23-percent. The Bad News, we're still number two in the nation in delinquent mortgages. WWL went to real estate economist Wade Ragas for answers.
"What's happening is a series of linked events have produced a sharp drop in affordability of housing in South Louisiana, if you recall we have terrible hurricanes in Lake Charles and Southeast Louisiana," Ragas says. "We've had households get pummeled by very high interest rates that have begun to turn up in the housing markets in the last six months or so. We've had the affordability of housing begin to drop, both through rising in price and rising insurance rates."
Ragas says the combination of higher mortgage rates and conflicts with insurance companies over repairs have caught homeowners in a tight spot of making payments on policies and mortgages.
"Changes in the FEMA rules have prevented people from getting money to repair their houses. They're living in houses that are unfit in many cases to be occupied. And if you don't have the money and you have a mortgage that comes due every month, you find pretty quickly you're upside down."
Ragas says Southern Louisiana needs a year without a hurricane to recover and solve the insurance imbroglio over pay outs and coverage and so folks can get their homes fixed and get back to concentrating on paying their mortgages.
"Hurricanes began the chain of events, and then, the federal insurance issue. Many cases have left people with unsolvable, unaffordable insurance and then that got caught up in the national issue where we're having a problem with affordability of housing due to rising costs of mortgages."
