Puerto Rico Foreclosures hit all time High

by the LendingLies team

An average of 14 families lose homes every day to foreclosure in Puerto Rico, more than double the rate a decade ago as the island faces a real-estate crash worse than the one that sparked the Great Recession on the U.S. mainland. Families across Puerto Rico are moving in with relatives, becoming homeless or simply fleeing to the U.S. mainland with destroyed credit records as the island’s government struggles to restructure a portion of its $73 billion public debt and help the economy emerge from a decade-long recession.

Puerto Rico is a U.S. territory of 3.4 million people and local courts oversaw foreclosures on nearly 33,000 homes from 2009 to 2016, according to government statistics. A record 5,424 homes were foreclosed last year, up 130 percent from nearly a decade ago, when the government first began tracking those numbers.

However, the actual number of foreclosures is much higher because the statistics do not include an estimated 20,000 loans in default or close to default that local banks have sold to companies outside Puerto Rico since 2009. Those cases are largely handled in federal court and no one compiles statistics.

There are now 17,000 homes that are now in the process of foreclosure.  Nonprofit organizations struggling with dwindling budgets amid the island’s economic slump say the jump in foreclosures has led to a surge of Puerto Ricans seeking help amid a deep economic crisis.

The number of people in Puerto Rico who have become homeless because of job loss or eviction has increased in recent years, with a total of more than 4,400 homeless people reported last year, a nearly 10 percent increase from 2009, according to U.S. Housing and Urban Development. More than half the homeless people interviewed for a 2015 Puerto Rico government survey held every two years said they were homeless for the first time.  In fact, the crisis in Puerto Rico may be worse than on the Mainland during the height of the foreclosure crisis according to Attam Data Solutions who analyzes U.S. housing data.

The problem in Puerto Rico also has been more persistent, with foreclosure rates above the 1 percent benchmark level for nearly seven years. In comparison, hard-hit U.S. states like Nevada were above that level for only five years.

And unlike the U.S. mainland, where the housing crisis was set off by the collapse of a price bubble, experts say the high level of foreclosures in Puerto Rico comes mostly from the island’s long economic slump, which has produced an unemployment rate of 12 percent but may be at 20 percent or higher.  Thus, it is not only risky loans that were issued but an underlying weak economy.  The states are starting to see a weakening economy that could also hasten an upsurge of new foreclosures.

About 60 percent of foreclosed homes in Puerto Rico have been abandoned, and by comparison, only 30 percent of foreclosed homes were abandoned in the U.S., mostly in areas hardest hit by the recession.

Banks in Puerto Rico have sold more than 70 percent of their mortgage portfolio on the secondary market according to Puerto Rico’s Association of Banks.  With banks unwilling to carry the risk, Puerto Ricans have few options to finance homes.

As of last year, Puerto Rico’s six commercial banks still had more than 3,800 repossessed homes on their books worth $338 million. To avoid even more foreclosures, local banks since 2009 have implemented more than 176,000 alternatives to foreclosure worth $19 billion, including modifications, restructurings and refinancing.

If you live in Puerto Rico and are facing foreclosure please contact us at info@lendinglies.com or

Get a consult! 202-838-6345
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.

One Response

  1. After everything crashes I may look at PR as a place to live if they can get their crime under control… Caribbean with US territory status… doesn’t get any better

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