Florida’s foreclosure rate ranked worst in U.S. last year

By on January 18th, 2013

Madison Conner / WUFT News

One in 32 Florida houses had at least one foreclosure filing.

Florida had the highest foreclosure rate last year, according to a Thursday report from RealtyTrac.

One in 32 Florida houses, or 3.1 percent of the state’s houses, had at least one foreclosure filing. That’s a total of 279,230 houses, according to the report from the Irvine, Calif.-based real estate information company and online foreclosed properties marketplace. The next highest was Nevada at 2.7 percent, or one in 37 houses, which held the top spot for the past five years.

Florida is among the 25 states that experienced increased foreclosure activity, according to the report. The Sunshine State’s foreclosures increased 53 percent from 2011 to 2012, but still 42 percent less than the number of filings in 2010.

The increase is mainly due to the slow foreclosure process, not new economic issues, said RealtyTrac Vice President Daren Blomquist. The continuing foreclosures show the economy hasn’t improved enough for homeowners facing delayed foreclosures.

“While the delays might have given some homeowners a chance to avoid foreclosure, the delays simply put off the inevitable for many,” Blomquist wrote in an email.

Florida’s average foreclosure time was the third highest countrywide at 853 days, a little longer than two years, according to the report.

The national average was 414 days, slightly more than a year, which was the longest average recorded in the six years RealtyTrac has monitored the statistic. New York had the longest time with 1,089 days, nearly three years, and Texas the shortest at 113 days, almost four months.

Just an official notice from banks can take months or years to arrive, said Allison Ables, broker and co-founder at Allison Ables Real Estate in Gainesville.

photo provided

Allison Ables, a realtor in Gainesville, said that one option for homeowners facing foreclosure is to rent their homes to avoid it.

Troubled tenants can avoid foreclosure by renting out their property to people who can afford to pay the mortgage, Ables said. They can also short sell their house by asking their bank to forgive paying less of the mortgage if the house is sold for less than market value.

These tenants then typically decide to rent housing and wait two to five years until their credit improves enough to get another loan.

People can decide their best interest is in defaulting on a mortgage anyway because of how long it would take to pay the bank back, she said.

Investors looking to buy property typically wait until after foreclosure auctions, where bank representatives bid to buy back the bank’s house at a preferred price, she said. Once the house is on the market, investors buy directly from the bank.

A RealtyTrac comparison of Florida’s 67 counties showed three in North Florida ranked in the top 10 for most foreclosures last year. Hernando County ranked No. 4 and Pasco ranked No. 5 with 1 in 26 houses facing foreclosure filing. Clay County was sixth with 1 in 27 houses.

No. 1 was Flagler County with 1 in 22 houses foreclosed.

North Florida counties ranking toward the bottom of the list were Sumter, which had the sixth lowest foreclosure rate with 1 in 149 houses, and Suwannee, which ranked 11th with 1 in 121 houses.

The county best off was Taylor with 1 in 611 houses with a foreclosure filing.

Additionally, Florida held 20 percent of the national foreclosure inventory with 305,766 properties in foreclosure or owned by a bank.

The report didn’t surprise Gainesville foreclosure defense lawyer Curtis M. Elmore, who said the city was known for its high foreclosure per capita rate last year.

Elmore and Ables agreed Florida’s numbers stem from major real estate activity in the early 2000s, giving room for the market to crash.

The ease of buying and selling property led to house flipping, leaving some tenants stuck with houses, and many beachfront and vacation properties were eventually foreclosed on, Elmore said.

Foreclosure cases run slow in the state because banks must prove a house’s foreclosure in court, he said. The process lets residents stay in their houses longer, but it may have inflated last year’s numbers because a lot of foreclosures in 2011 couldn’t be filed until the next year.

Additionally, short cuts taken to try to quicken the foreclosure of so many properties have complicated the process further, he said. For example, to make selling bundles of loans easier, banks made copies of tenants’ original documents and then destroyed the originals, which are required by Florida courts.

Elmore said he’s still investigating suspect signatures from the practice of robosigning, where banks hired groups of workers — dubbed “Burger King kids” for how unqualified they were — and give them senior titles to bypass regulation and give these groups authority to sign documents en masse authorizing bank foreclosures.

He said homeowners are in a better position now to fight against foreclosure. Government help is available and banks are being sued for inappropriate practices. In the past, a majority of homeowners’ acceptance of foreclosures allowed banks to easily take short cuts in the foreclosure process.

The attorney spoke well of his clients who are surviving a system he said could’ve clobbered them without a legal representative.

“I’ve been very impressed with the nobility, the stoicism, the self-sacrifice of the homeowners,” Elmore said. “I’ve had very few people who’ve called me wanting a free house.”

Andrew Pantazi contributed reporting.

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