Bank Repossessions Increase By 35% In South Florida Market In Q3 2013 Published on 10/13/2013 9:44:00 PM
Bank repossessions increased 35 percent on a year-over-year basis to nearly 9,800 properties in South Florida - the epicenter of Florida's highrise condo crash - in the third quarter of 2013 compared to the same July through September period of 2012 in the tricounty region of Miami-Dade, Broward, and Palm Beach, according to a new report from CondoVultures.com.
The South Florida region has now experienced nearly 220,000 lenders repossessions - or court-ordered foreclosure sales - since the real estate crash began in 2007, according to an analysis based on Clerk of the Court records in Miami-Dade, Broward, and Palm Beach counties.
"Bank repossessions are on pace to reach nearly 40,000 properties in the South Florida region in 2013," said Peter Zalewski, a principal with the Greater Downtown Miami-based real estate consultancy Condo Vultures® LLC. "The increased pace of bank repossessions in South Florida could continue for several more quarters following new Florida legislation aimed at accelerating the foreclosure process. The unknown is whether the existing National Mortgage Settlement Agreement - implemented in February 2012 to incentivize lenders to work with borrowers in default to reach resolution - will be canceled out by the new Florida foreclosure legislation."
CondoVultures.com is scheduled to profile condo trends in the third quarter of 2013 in the 10 largest coastal markets in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties beginning the week of October 14, 2013.
The Condo Vultures® Market Intelligence Report™ is scheduled to publish a 10-part weekly series that analyzes the markets of Greater Downtown Miami, South Beach, Bal Harbour / Surfside / Bay Harbor Islands, Sunny Isles Beach, Aventura, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Pompano Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island.
With the current foreclosure pace, the repossession activity of nearly 28,500 properties in South Florida in the first nine months of 2013 represents a nine percent increase on a year-over-year basis compared to nearly 26,200 repossessions in the same January through September period in 2012, according to government records.
In the first nine months of previous years in South Florida, lenders - and to a lesser extent other parties such as condo associations - forced a change in ownership of about 26,700 properties in 2011, nearly 41,500 properties in 2010, and more than 21,500 properties in 2009, according to government records.
As of October 13, 2013, nearly 1,750 bank-owned South Florida condo and townhouse units are on the resale market at a median asking price of about $111 per square foot in the tricounty region of Miami-Dade, Broward, and Palm Beach, according to an analysis by the licensed Florida brokerage Condo Vultures® Realty LLC.
The bank-owned condos and townhouses represent about nine percent of the total number of units on the resale market in South Florida, according to data from the Florida Realtors association data.
Additionally, more than 1,400 South Florida condo and townhouse units are being marketed as shortsales on the resale market at a median asking price of about $94 per per square foot in Miami-Dade, Broward, and Palm Beach as of October 13, 2013, according to an analysis by the licensed Florida brokerage CVR Realty™.
The condo and townhouse shortsales represent about seven percent of the total number of units on the resale market in South Florida, according to the data.
The available resales only reflect condos and townhouses that are being marketed on the Southeast Florida MLXchange.
Administrative irregularities in the repossession process - dubbed the "robo-signer" controversy - first surfaced in late September 2010, creating a "foreclosure freeze" that prompted many lenders to slow the number of defaults being initiated against borrowers in South Florida between October and December 2010 compared to the same three-month period in 2009.
The slowdown in the foreclosure filing process continued throughout 2011.
In February 2012 after months of negotiations, the nation's five largest mortgage servicers cut a deal with the federal government and the attorneys general from 49 states to provide at least $25 billion in relief to borrowers.
The National Mortgage Settlement Agreement incentivizes the mortgage servicers to consider various options – including principal reductions, mortgage modifications, and shortsales - before filing to foreclose on borrowers who owe more than their residences are worth currently, according to the agreement.
Even before the concerns about the legality of thousands of bank repossessions surfaced in the second half of 2010, lenders had already started to slow their foreclosure efforts due to the rising costs and difficulty involved with repossessing properties from borrowers in default.
With more than 380,000 notices of default filed against borrowers in South Florida between 2007 and the third quarter of 2013, the state court system was overwhelmed with foreclosure actions, according to the Condo Vultures® Foreclosure Database™.
It is important to note there are various stages to a residential real estate transaction in South Florida.
A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.
As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled.
The CondoVultures.com new condo sales report is based on completed transactions where a deed is recorded and taxes paid as a result of the sale.
Condo Vultures® LLC is a real estate consultancy and marketing company based in the 225 Midtown Building at 225 NE 34th St., Suite 209B, Downtown Miami, Florida, 33137. Condo Vultures® LLC can be reached at 800-750-0517.
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