Since the beginning of the recession, Florida has continually been one of the hardest hit states, filing record numbers of foreclosures over the past two years. However, new numbers indicate that Florida’s fate could be changing. According to recent reports, home mortgage lenders in the tri-county South Florida area have filed 49 percent fewer foreclosures involving homeowners in the second quarter of 2010 than during the same period in 2009.
In the first six month of 2010, an average of 190 foreclosure actions were initiated by mortgage lenders each calendar day. According to foreclosure analyst Alberto Tarafa, these are promising numbers. “Even though that number may appear to be high, it should be compared to the average of 288 foreclosure actions that were filed in 2009 and the 209 actions per day in 2008.”
However, Tarafa says that true recovery still has a long way to go. “Before the real estate crash, mortgage lenders were filing an average of less than 50 foreclosure actions per each calendar day,” he said.
If these numbers stay steady, fewer than 70,000 South Florida homeowners will go through foreclosure in 2010, which is a significant drop from 2009’s record high of 97,000.
Experts cite new government directives requiring lenders to work with homeowners in default prior to filing foreclosure. In addition, lenders are becoming more open to the short sale, which occurs when a home is sold at an amount that is less than the remainder of the mortgage. Commonly, the price realized at a foreclosure sale is equal to or less than a short sale, and if lenders accept a short sale, they can avoid foreclosure costs.
According to Tarafa, the new numbers could mean recovery is on the horizon. “We’re at a crossroads now in the South Florida real estate market,” he said. “It remains to be seen if we’ll experience another flood of foreclosures.”
Source: StockMarketsReview.com, “South Florida Foreclosure Filings See a 49% Drop in Second-Quarter,” September 16, 2010