South Florida is still slammed with foreclosures!
Today, Realtytrac announced that South Florida’s foreclosure debacle led the nation in the third quarter, with 58,624 homes in some stage of default.
The number of filings in Palm Beach, Broward and Miami-Dade counties rose 25% from the second quarter and 9% from the third quarter of last year.
South Florida counties had the seventh-highest foreclosure rate in the July-through-September period, with one in every 41 homes receiving a filing. Nationwide, one in every 139 homes is in the foreclosure process.
Lawyers and analysts expect mortgage defaults to increase once big lenders lift foreclosure freezes that began in the past month over concerns about paperwork errors.
The main causes of foreclosures are high unemployment, exotic loans made during the housing boom and falling property values that mean borrowers now owe more than their homes are worth.
Many homeowners who are “upside down” or “underwater” on their mortgages are choosing to abandon the properties because they have no hope of earning back their equity in the next few years.
Mike Larson, a housing analyst with Weiss Research in Jupiter, states: “For homeowners who are upside down, relief is not going to come soon enough.”
RealtyTrac measures the nation’s 206 largest metro areas. It records three types of filings: default notices, scheduled foreclosure auctions and bank repossessions. Nearly a quarter of the filings in South Florida from July through September were scheduled auctions in Palm Beach County. Lawyers say the county is serious about moving cases through the court system and setting dates for the homes to be repossessed by lenders. RealtyTrac claimes that Palm Beach, Broward and Miami-Dade counties also led the nation in foreclosure activity during the first half of 2010, with 94,466 homes getting a notice.
Analysts think the foreclosure crisis is likely to continue until job growth improves.
Jerry Tepps, a foreclosure defense attorney in Plantation thinks that in order to address the avalanche of defaults, lenders must do a better job of approving loan modifications and short sales. An even better solution: Reduce loan balances, something banks have been reluctant to do, Tepps said. He states: “If the banks want to get this sorted out and get people back on track, they need to be much more aggressive in negotiating with homeowners.”
But the reality is, the federal government doesn’t want lenders reducing mortgage balances or approving loan modifications in massive numbers, said Anthony Sanders, a professor of real estate finance at George Mason University. He concludes: “If the banks granted all the loan modifications and principal (mortgage) write-downs that we would like, the banks would cease to exist. Sad but true.”
