Foreclosure Actions On Rise A Year After Robo-Signers First Surfaced Published on 10/5/2011 6:24:00 AM
For the first time since the "robo-signer" controversy surfaced a year ago in September 2010, lenders are once again filing an increasing number of foreclosure actions - or Lis Pendens - in the tricounty South Florida region, according to a new report from CondoVultures.com.
More than 9,700 notices of default – the first step in the foreclosure process – have been filed against properties in Miami-Dade, Broward, and Palm Beach counties in the third quarter of 2011, according to an analysis based on the Condo Vultures® Foreclosure Database™.
In previous quarters, 8,900 filings were initiated in the fourth quarter of 2010, 6,800 actions in the first quarter of 2011, and less than 7,200 in the second quarter of 2011, according to the report based on Lis Pendens filings recorded with the Clerks of the Court in all three South Florida counties.
Compare this to the third quarter of 2010 when more than 13,900 foreclosure actions were filed just as the “foreclosure freeze” was starting to make national headlines with allegations of “foreclosure mills” operating in South Florida.
“The lenders are going back to work when it comes to foreclosure filings,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. “For several months, lenders were riding the brakes as they examined their internal policies and procedures related to the repossession process. A year later, the banks appear poised to upshift into a higher gear as it pertains to initiating foreclosure actions against borrowers in default in South Florida.
"The unknown is whether various state and federal government agencies - that are threatening lawsuits - will reach a compromise with the banks regarding the foreclosure freeze."
Despite the increasing number of foreclosure filings in the tricounty area, the year 2011 is on pace to register the fewest number of foreclosure filings since the South Florida real estate crash began in 2007.
In the first nine months of 2011, lenders have initiated less than 24,000 foreclosure actions, putting the region on pace for less than 32,000 filings for the year.
In the first year of the South Florida real estate crash, lenders filed 33,200 foreclosure actions in 2007.
During the next couple of years in South Florida, lenders initiated 75,700 actions in 2008 and 98,300 actions in 2009, respectively.
In the first nine months of 2010, lenders were on pace to file nearly 65,000 foreclosure actions in South Florida before administrative irregularities – dubbed robo-signers – in the repossession process surfaced in late September of last year.
For the year 2010, lenders ended up filing 57,600 foreclosure actions as 8,900 actions were initiated in the fourth quarter of last year.
Overall, lenders have initiated more than 285,000 foreclosure actions in South Florida since 2007.
On a county-by-county basis in the first nine months of 2011, Broward – where Fort Lauderdale, Hollywood, and Pompano Beach are located – leads the region with nearly 9,500 foreclosure actions filed through Sept. 30, according to the report.
Miami-Dade – where Aventura, Miami Beach, and Sunny Isles Beach are located – ranks second in 2011 based on nearly 8,400 foreclosure actions being filed this year.
Palm Beach – where Boca Raton, Delray Beach, and West Palm Beach are located – ranks third with more than 5,800 foreclosure filings in 2011, according to the report.
Federal regulators have previously requested proposed "mortgage servicer settlement" plans that are expected to detail how the nation's largest residential lenders involved in the foreclosure freeze intend to deal with the administrative irregularities that have brought the market to a standstill, according to MarketWatch.com.
Even if the regulators can negotiate acceptable "mortgage servicer settlement" plans, it is unclear whether investors will be satisfied enough with the title guarantees to once again begin purchasing bank-owned properties on a widespread basis, industry watchers said.
Set against the foreclosure-freeze uncertainty, shortsales are gaining popularity with lenders faced with portfolios of distressed residential real estate.
Unlike foreclosures that can take more than 18 months to complete at significant out-of-pocket costs to the lenders, shortsales can be transacted in less than six months with expenses typically limited to the outstanding principal and associated fees.
Often times, shortsales generate higher average prices as distressed borrowers have incentives to maintain their properties in hopes of being relieved of a large chunk of their unpaid balances at the time of the sales.
Investors are growing more willing to pursue shortsales as lenders have accelerated the process, reducing the necessary due diligence period by as much as half, industry watchers said.
Buyers have purchased more than 8,400 condos and townhouses - an average of more than 935 units per month - as shortsales in the tricounty region of Miami-Dade, Broward, and Palm Beach between January and September of 2011, according to a new CondoVultures.com report.
Condo Vultures® LLC is a real estate consultancy and marketing company based at 1005 Kane Concourse, Suite 205, Bal Harbour, Florida, 33154. You can reach Condo Vultures® LLC at 800-750-0517.
Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports to stay informed on the latest market trends and to find out about our various Condo Vultures® Seminars. Looking for a property at a deep discount? Take a peek at the Vultures Database™ or view our Video Library. Looking for bulk projects direct from developers or lenders? Visit the Condo Vultures® Bulk Deals Database™. Our new books, the Official Condo Buyers Guide to Miami™, Official Condo Buyers Guide To South Beach™, Official Condo Buyers Guide to Sunny Isles Beach™, Official Condo Buyers Guide to Downtown Fort Lauderdale and the Beach™, Official Condo Buyers Guide to Hollywood / Hallandale Beach™, Official Condo Buyers Guide to Downtown West Palm Beach™, and Official Condo Buyers Guide to Boca Raton / Deerfield Beach™, are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.
© Copyright 2011. Condo Vultures® LLC. All Rights Reserved.