Quotes of the Day

If Gov. Charlie Crist has his way, Floridians in foreclosure will be in their homes for the holidays. Crist is readying a proposed moratorium on foreclosures through the holidays and into next year.

"His main purpose is to make sure Floridians can remain in their houses," the governor's spokesman, Sterling Ivey, told=2 0TIME. "He's talking about Floridians who are working and trying to make ends meet every day. Not those who bought five homes during the housing bubble." (Read Will E-Retailers Have a Letdown?.)

Details of the plan are sketchy, but Ivey says the Governor favors the approach taken by California Gov. Arnold Schwarzenegger — a proposed 90-day freeze that could conceivably give struggling homeowners the ability to renegotiate their loans to more favorable terms. However, the California plan, as envisioned by Schwarzenegger, would require banks to put in place a 90-day moratorium, while Crist is said to angling for voluntary participation by banks (California's legislature has yet to approve Governor Schwarzenegger's plan.) It remains unclear whether Crist will seek or even needs legislative approval for his plan, especially if the banks agree to the moratorium on their own. According to Ivey, Crist could make an announcement on his foreclosure plan as early as this week.

The help comes none too soon, as the Florida housing market, particularly in the tri-county area of Miami-Dade, Broward and Palm Beach counties, founders under the weight of tens of thousands of foreclosures. And the problem is only getting worse. (Read Exclusive Mutual Funds Reopen for Business.)

One indicator of the severity of the crisis is the number of homes ending up in the hands of banks, which really don't want to be in the real estate business. These properties are known as "real estate owned" or REOs, which is typically a house or condo that gets repossessed by the lender, usually after failing to sell at a foreclosure auction.

The number of REOs is skyrocketing. The first three quarters of 2008 show a spike of 190% in REOs in the South Florida tri-county area, according the real estate consultancy firm, Condo Vultures of Bal Harbour. The number of Miami-Dade properties turned over to lenders by the courts so far this year is 8,656. That's up 188% from last year's total of 3,009 during the first three quarters. Similar spikes occurred in Broward County, with a 215% hike, from 2,339 to 7,370. Palm Beach County saw an increase of 145%, jumping from 1,197 to 2,934.

Still, those numbers are just a portion of the overall foreclosures in South Florida. Peter Zalewski, founder of Condo Vultures, projects that nearly 75,000 properties in the tri-county area will slip into foreclosure this year, up from 33,154 last year.

"Foreclosures more than doubled in '08 compared to '07, year over year," Zalewski says. Creeping unemployment, tight credit and property devaluation, where the home is worth less than the amount owed on the mortgage, all tend to indicate the problem will only get worse. "Short of a government intervention, I would envision that we continue to grow higher and higher and higher," he predicts. "I wouldn't be surprised if we approached 100,000 [foreclosures"] in 2009, short of government intervention."

The governors are stepping up to ease the problem before it gets too far out of hand, Zalewski says. "That's why you're seeing the Charlie Crists of the world and the Arnold Schwarzeneggers of the world try to take steps to impose moratoriums on foreclosures, because the problem is so overwhelming," he says, adding that a 90-day moratorium should provide homeowners with the chance to refinance their loans and will dovetail with the incoming Obama administration, which holds out hope of providing financial relief to Main Street USA. (Read Four Steps to Ending the Foreclosure Crisis).

The moratorium ultimately may help the banks, particularly if it decreases the number of REOs they must contend with. By staving off foreclosures the banks also benefit when it comes to condos because in Florida the lender has to settle up condo fees for the past six months when they take a property into receivership.

The Schwarzenegger plan would give banks and mortgage servicing companies an out. If they don't want to wait the 90 days, they could agree to temporary interest-rate cuts to reduce the homeowner's monthly payments to an affordable amount. The idea is to make it possible for homeowners to pay their mortgages rather than writing off their debt as bad loans.

About the only bright spot with the current housing crisis is that the median cost for housing is dropping. The Greater Fort Lauderdale area shows a drop in its median condo prices, from $160,000 last year to $115,000 today, according to the Realtor Association of Greater Fort Lauderdale. That's good for those who have money in their pockets or access to credit. While homes in the area may be more affordable, some potential buyers are having trouble coming up with the money to purchase them. But for now, Florida's governor would be happy to help homeowners find a way to afford what they've already bought.

See "Four Steps to Ending the Foreclosure Crisis".

See TIME's Pictures of the Week

• Siobhan Morrissey / Miami
• Governor Crist scrambles to sign on banks for a ninety day moratorium on home foreclosures