Florida Foreclosures Activities Contradicts National Trend

Across the U.S., foreclosure activity during the month of June fell to its lowest level in nearly 8 years. Not since July 2006– just before the market crash– has the pace of foreclosed homes moving through the court system been so low, according to RealtyTrac. Forecasts call for the downward trend in foreclosures to continue through the first half of 2015.

Based on the data, 107,194 homes have entered the foreclosures pipeline—properties at some stage of the foreclosures process. This represents a 2% drop from the previous month. Overall, the activity level involving foreclosed homes have dropped 16% on a year-over- year basis. This includes initial foreclosure notices, foreclosure auctions and bank repossessions.

National Foreclosures Data

Foreclosures activities have declined on a year-over-year basis for 45 straight months. According to a statement released by RealtyTrac’s vice president Daren Blomquist , “Over the next six to nine months, nationwide foreclosure numbers should start to flat line at consistently historically normal levels.”

Plummeting foreclosures have played a significant role in the reduction in the inventory of homes, especially in the price range for most first-time home buyers and real estate investors that flip houses. In turn, your homes on the market have been instrumental in pushing up home prices. Higher home prices and rising interest rates have combined to slow down the housing market recovery.

Here are some statistics from the RealtyTrac report:

  • Mortgage lenders received title to 26,889 properties –bank owned home in June
  • REOs declined 5 percent over May—the lowest level since June 2007
  • Bank owned homes dropped 24 percent on a yearly basis
  • Total of 46,743 homes scheduled for foreclosure auction– 13 percent decrease from last year
  • Initial foreclosure notices decrease to 47,243–18 percent less than previous year

During the first half of 2014, the numbers show that foreclosure activity in the 212 month of metropolitan areas failed 79%. This represents a 23% decline on a yearly basis.

Florida Foreclosures Sets New High

Florida continued to have the nation’s highest foreclosure rate, followed by Illinois, New Jersey and Nevada. In Florida, government foreclosures held by Fannie Mae and Freddie Mac reached touch a new high at the end of March– moving past the old number established at the end of 2010. 

Housing analysts are not really concerned with this data. Economist Tom Lawler attributes this to Florida’s judicial foreclosure law, which requires lenders to go through the courts in order to foreclose on properties. A lot of foreclosure activity in the state was derailed by the “robo-signing” the fiasco revealed in late 2010. This event uncovered attempts by banks to forge document in an effort to move along the foreclosure process.

This led to a moratorium on foreclosure proceedings because lenders were forced to delay the process in order to get the documentation right. Subsequently, government entities Fannie Mae and Freddie Mac saw a drop in their foreclosed homes inventory from 28,000 in October 2010 to 12,000 the following year.

Housing analysts believe the increase in the number of foreclosures has more to do with badly delinquent mortgage finally moving through the pipeline after the lifting of the moratorium.

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