Recent reports by RealtyTrac and Condo Vultures indicate the foreclosure crisis is still haunting Broward, Miami and other South Florida areas… but perhaps, not as much as it did in 2009.
In the second quarter of 2010, RealtyTrac – a California based research firm – reports that Florida is rated the 10th highest for foreclosures, in the company of Arizona, California and Nevada.
The Miami metropolitan area alone has nearly 4 percent of its homes in the foreclosure process, and Orlando is rated 8th in the nation.
Dealing with massive backlogs
The Florida courts have been overwhelmed trying to deal with a massive backlog of cases.
Broward County is currently seeing approximately 500 new foreclosure cases filed each week. Of those, more than one-third are not occupied by homeowners and remain vacant and susceptible to vandalism.
The county recently introduced mandatory mediation in hopes of thinning out its backlog of more than 50,000 cases. Palm Beach later followed suit and started a mediation program of its own.
Thanks to a mandate passed by Florida’s Supreme Court, you can expect more state courts to institute mediation programs similar to Broward County’s. However, the mediation programs are mandated for homes that owners reside in and not investment properties.
While lenders cannot be forced to restructure home loans, they are encouraged to communicate and hopefully reach an agreement that allows the homeowner to remain in the property.
Is the market recovering?
Despite the seemingly dismal news, a recent report by Condo Vultures indicates that the current foreclosure rate in South Florida is down nearly 50% compared to this time last year.
From April to June of 2009, banks commenced more than 28,000 foreclosure actions, compared to approximately 14,500 from April to June of 2010, according to the report.
The drop in foreclosure filings can be attributed to two primary factors. One, the costs associated with repossessing a property versus a short sale, is significantly more. Lenders are more inclined to agree to short sales whenever possible.
Two, the recent law changes mandating mediation of properties under homestead exemption has increased the time necessary to complete the foreclosure process because lenders now have to work with homeowners. The process that once took a couple of months to complete, can now take several months to years to finalize.
If you are dealing with foreclosure, contact our real estate lawyers today. You can use this form to email or call us at (954) 779-7009.
Sources: Realty Trac, Condo Vultures
Homeowners are not the only people affected by the rising foreclosure rates.
Florida’s commercial real estate market began its downward spiral a couple of years ago and continued through 2009 with slight signs of improvement. As the vacancies continue to rise, so does the rate of loans in default and the number of distressed commercial properties.
