Puerto Rico Facing Possible ‘Avalanche’ of Foreclosures, Report Says

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As if the people of Puerto Rico haven’t been through enough recently. In the wake of devastation brought by Hurricane Maria last September, many islanders are now bracing for another pending crisis—foreclosures—according to a report in The New York Times.


This “housing meltdown,” the newspaper says, could be significantly bigger than the foreclosure crises seen on the mainland U.S. following the global economic crash a decade ago.

The Times noted:

About one-third of the island’s 425,000 homeowners are behind on their mortgage payments to banks and Wall Street firms that previously bought up distressed mortgages. Tens of thousands have not made payments for months. Some 90,000 borrowers became delinquent as a consequence of Hurricane Maria, according to Black Knight Inc., a data firm formerly known as Black Knight Financial Services.

Puerto Rico’s 35 percent foreclosure and delinquency rate is more than double the 14.4 percent national rate during the depths of the housing implosion in January 2010. And there is no prospect of the problem’s solving itself or quickly.

Worrying about making lending payments may not seem like a priority right now as hurricane victims continue to deal with the storm’s aftermath, the report notes. Additionally, about 100,000 Puerto Ricans are believed to have left the island to live on the mainland. And a government-imposed moratorium on foreclosures that provided temporary relief is set to expire in a few months.

All of this could spell trouble. Home prices had already fallen by 25% over the past decade, before the storm hit, according to the Times. And Hurricane Maria likely will force prices down even more. Those who could be most affected by foreclosures are elderly homeowners.

José González-López, 73, told the newspaper he feels “harassed” by Finance of America, which has dragged him into foreclosure court three times in the past two years. Another source for the story said Finance of America also had sued her parents, both in their 80s, twice.

Read the entire story.

Weekend Editor, Splinter