BRADENTON, Fla. - As Florida looks to trim the state budget once again, Gov. Charlie Crist and representatives of leading lending organizations on Monday announced a voluntary plan to provide foreclosure relief for the next 45 days.
According to RealtyTrac, Florida had the nation's third-highest foreclosure rate in October with 166,600 households affected.
Crist encouraged lenders to actively negotiate with property owners to help them stay in their homes and temporarily suspend foreclosures on homestead property, which applies to homeowners whose primary residence is in the Sunshine State.
Alex Sanchez, president and chief executive officer of the Florida Bankers Association, and Aletta Shutes, executive vice president of the Florida Credit Union League, joined Crist in appealing to their members to voluntarily cease filing new foreclosure petitions and scheduling foreclosure sales for homestead properties during the 45-day period.
"I applaud these bankers and lenders for giving people hope during this challenging economic time," Crist said in a statement.
The ailing real estate market, rising unemployment, and foreclosures are taking a toll on Florida's economy.
At least one state official is urging a special session of the Legislature to be called to deal with the continuing decline in revenue supporting the budget.
The call for a special session came after state economists predicted Nov. 21 that general revenue collections for fiscal 2009 are now expected to be $1.4 billion, or 6% less than what they just estimated in August.
Economists also dropped revenue estimates for fiscal 2010 by $2.3 billion from what they thought collections would be just four months ago, primarily blaming the prolonged economic problems on the credit markets and recession.
"The revisions to the forecast are primarily attributable to three persistent economic shocks," state economists said in a report. "First, the virtual shutdown of the credit market will constrain the housing market, consumer expenditures, and business investment until the credit market thaws. Second, the spread of the national recession to a global recession will have spillover effects on business expenditures in Florida, in addition to dampening tourism and export growth."
State-levied sales taxes - the primary revenue source for the budget since Florida does not have a state income tax - have been hard hit.
Economists said that in addition to the decline in home prices, worsening job losses and the drop in asset values are undermining consumer and business confidence and reducing discretionary spending. Purchases in the tourism and auto sectors fell sharply in October, they noted, warning that declines in other areas are expected.
"Sharp declines in tourism, consumer spending, and corporate earnings demand that our state quickly reevaluate expenditures," said Florida's elected chief financial officer, Alex Sink, who called for a special legislative session. "During the last 12 months, Florida has lost more than 156,000 jobs and our unemployment rate of 7% is significantly higher than the national average."
Crist cited the state's budget problems as well as its rising unemployment rate and foreclosures in a letter he sent yesterday to President-elect Barack Obama concerning the need for a national economic recovery package.
The governor asked Obama to support Medicaid funding adjustments for Florida and said the state "deserves its fair share" of federal transportation funds to upgrade infrastructure. He urged Obama to support passage of the Colombian Free Trade Agreement, which would increase exports from Florida.
Crist also invited Obama to Florida for an upcoming launch of the space shuttle, which is nearing retirement, and to discuss "the future of our nation's space program."