Florida Bank-Owned Homes Surged in Number before Foreclosure Freeze

Published by nora | Filed under Market Trends, Miscellaneous, Mortgage / Finance, Real Estate

Despite efforts to help distressed homeowners, more homes in Florida became bank owned in September and in the July to September quarter compared to previous periods. Even the suspension of foreclosures by GMAC and JPMorgan Chase in 23 states including Florida in the last week of September did not have a substantial reduction effect on the total of homes added to REO lists.

Banks took back 36,041 homes in Florida in the third quarter, 3,174 units more than in the second quarter. Of these, 13,243 units became bank owned in September and 12,329 units were added to bank owned lists in August. These figures showed that bank repossessions in Florida rose by 9.7 percent over the quarter and rose by 7.4 percent over the month.

Compared to other states, Florida was still second to California in numbers of REOs and in total default and foreclosure filings in September and in the third quarter. Florida’s foreclosure rate was still the second-highest in September and the third highest in the third quarter behind Nevada and Arizona.

The top ten states with the highest number of homes that became bank owned in the third quarter were:

1. California       46,682 homes
2. Florida           36,041 homes
3. Michigan        18,402 homes
4. Arizona          18,324 homes
5. Texas             15,953 homes
6. Georgia          15,639 homes
7. Illinois            13,640 homes
8. Ohio               11,171 homes
9. Nevada          10,350 homes
10. Washington     7,212 homes

A total of 157,026 homes in Florida were notified of default or foreclosure in the third quarter, a sharp rise of 12 percent from the second quarter. Of these units, 59,514 were notified in September, also marking increases from the previous periods, 4.6 percent from August and 8.1 percent from September 2009.

Nationwide, total default and foreclosure filings surged over the quarter by nearly four percent to 930,437 in the third quarter, with 347,420 filings made in September. Of the 930,437 distressed units, 31 percent were already REOs, 40 percent were for foreclosure sales, and 29 percent were still in the default phase.

According to RealtyTrac which provided the foreclosure figures, the increase in foreclosure filings in September resulted from the completion of foreclosures previously delayed by modification programs. Filings, however, are expected to fall in the next quarter because of the foreclosure freeze started by GMAC. As of the middle of October, three more big banks, namely JPMorgan Chase, Bank of America and PNC Financial Services, have joined efforts to suspend and review their foreclosures. The freeze is expected to escalate as state attorneys have started calling for suspension of foreclosures in their areas.

All 50 state attorneys general, including Florida Attorney General Bill McCollum, who previously launched investigations on four law firms accused of defective foreclosures, have already joined the Mortgage Foreclosure Multi State Group. This group was formed to address the practice of signing affidavits without checking the accuracy of documents, which came to be known as robo-signing. These efforts by lenders and states are expected to cut down foreclosure figures in the fourth quarter.