Florida Foreclosure Rate Highest in the U.S. For 3rd Month in a Row: Many Florida Home Owners Are Still Fighting the Banks in Foreclosure Defense under Florida Law (Including Tools of Short Sales and Loan Modifications)

Posted By on December 13, 2012

Real estate market analyst RealtyTrac has released its U.S. Foreclosure Market Report™ for November 2012 and once again, the experts find that Florida has the highest foreclosure rate in the country – and Florida has had the most mortgage foreclosures out of any state in the United States for the third month in a row.  Florida home owners and Florida foreclosure defense lawyers probably aren’t surprised at this news.  Still, it’s somewhat shocking to read in print that the South Florida Business Journal has nicknamed the State of Florida as “the foreclosure capital of America,” and from the numbers established in the new RealtyTrac report, that is a sad nickname that looks to be hard to shed for Florida in the near future.

According to the November 2012 Realty Trac report:

  • Florida posted the nation’s highest state foreclosure rate for the third month in a row, with one in every 304 housing units with a foreclosure filing in November, followed by Nevada, Illinois, California and South Carolina.
  • One in every 304 Florida housing units had a foreclosure filing in November — more than twice the national average. A total of 29,612 Florida properties had a foreclosure filing in November, up 3 percent from the previous month and up 20 percent from November 2011.
  • Florida cities accounted for seven of the top 10 foreclosure rates among metropolitan statistical areas with a population of 200,000 or more. The Florida metro of Palm Bay-Melbourne-Titusville led the way, with one in every 158 housing units with a foreclosure filing in November — more than four times the national average.
  • Other Florida cities with top 10 metro foreclosure rates were Ocala at No. 2 (one in 210 housing units with a foreclosure filing); Jacksonville at No. 4 (one in 253 housing units); Miami-Fort Lauderdale-Pompano Beach at No. 5 (one in 260 housing units); Sarasota-Bradenton-Venice at No. 8 (one in 277 housing units); Port St. Lucie at No. 9 (one in 278 housing units); and Gainesville at No. 10 (one in 283 housing units).
  • Seven of the top 10 highest metro foreclosure rates nationwide were in Florida, led by Palm Bay-Melbourne-Titusville. The other three metros in the top 10 were in California.

Larry Tolchinsky’s Tip:

Florida foreclosures on homes throughout the Sunshine State have been breaking records for a long time now, but here in the Miami-Dade / Broward County area, foreclosure defense lawyers are well aware of how the foreclosure filings have been stacking up down at the local courthouses. After all, Florida is a state where foreclosures must be done through the court system (other states do not require this, they are “non-judicial” foreclosure states) and the amount of activity by banks and lenders trying to foreclose on homes and condos is easy enough to see: it’s all down at the clerk’s office, in the public dockets.

However, there’s more to this story than the big number of Florida foreclosures and the Florida foreclosure rate. There’s also the reality that Florida home owners and mortgage borrowers are working hard and fighting to find another way to resolve their delinquencies and mortgage issues other than a foreclosure: there are things like mortgage loan modifications and short sales that are happening with successful endings much more now than in the past.

Consider this information that is also important to note from the RealtyTrac report: states where foreclosure-related sales accounted for at least 20 percent of all sales were the following, and Florida is number two in the country for these foreclosure-related home sales:

  • Nevada (31 percent)
  • Florida (26 percent)
  • Illinois (24 percent)
  • Michigan (24 percent)
  • Colorado (20 percent).

There’s more to learn from the numbers in this new report.  Here’s the take of Daren Blomquist, RealtyTrac vice president, on short sales now and into 2013 (quoting from their report press release):

“The shift toward earlier disposition of distressed properties continued in the third quarter as both lenders and at-risk homeowners are realizing that short sales are often a better alternative than foreclosure,” said Daren Blomquist, vice president of RealtyTrac. “However, the scheduled expiration of the Mortgage Forgiveness Debt Relief Act at the end of this year could stifle this trend toward short sales. If that law expires as scheduled, homeowners who agree to a short sale could see their income tax jump significantly because the portion of the unpaid loan balance not covered by the short sale proceeds will be considered taxable income in many cases.

“The prospect of being taxed on potentially tens or hundreds of thousands of dollars in additional income may motivate more distressed homeowners to forgo a short sale and allow the home to be foreclosed,” continued Blomquist. “Additionally, if the mortgage interest deduction is eliminated due to the fiscal cliff quagmire, it would give many underwater and otherwise distressed homeowners one less reason to hang on to their homes.”

Bottom line, the banks are foreclosing on homes in Florida with a ferocity. It’s been happening and it’s not big news to those down here in the trenches.  Home owners know it, buyers know it, foreclosure defense attorneys are keenly aware of what’s happening in the foreclosure system as are the banks and their lawyers.

The thing to remember is that it’s not a simple matter today to foreclose on a piece of Florida real estate.  There may be title issues.  There may be documentation issues.  There may be instances of fraud or negligence, as well.  Many things work together to make each foreclosure case its own animal, worthy of individual consideration.

Just because a lot of foreclosure filings are happening here doesn’t mean that all those zany legal issues have disappeared.  They haven’t.

Similarly, a high number of foreclosure filings means that foreclosure defenses include things that sidestep a foreclosure judgment: short sales and loan modifications must be evaluated with a higher likelihood for success than even as little as six months ago.  These are good things to consider even as banks appear to be filing more and more lawsuits for foreclosure.

Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at info@hallandalelaw.com, or (954) 458-8655. If you have a specific situation, please call or email Larry because he can’t answer specific fact questions in general comments. He’s happy to take your call.

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