Government

Foreclosures Down in Florida, But Cases Linger in Courts

Controversy leads to slowdown; courts still dealing with glut of cases
By: Gray Rohrer | Posted: December 17, 2010 4:05 AM

Foreclosure filings in Florida fell 42 percent in November from the previous month, with one in every 267 housing units receiving a filing last month, according to a report released Thursday by Realty Trac, a California-based company that tracks foreclosed properties.

The filings reflect a 38 percent year-over-year decrease, but the drop in foreclosures may not mean a relief in the housing crisis.

Nationwide foreclosure filings also fell 21 percent from October, but that was due mainly to the “robo-signing” controversy that led some mortgage lenders to slow down or stop foreclosures in recent weeks.

“While part of the decrease can be attributed to a seasonal drop of 7 to 10 percent that typically occurs in November, fallout from the foreclosure robo-signing controversy forced lenders and servicers to hit the pause button on many foreclosures while they scrambled to revamp their internal procedures and revise or resubmit questionable paperwork,” said James Saccacio, CEO of Realty Trac.

It was discovered in October that mortgage companies in several states were using law firms that acted as “foreclosure mills,” pushing foreclosure papers through the courts rapidly without carefully reviewing the cases. In some cases, papers were backdated and signatures forged.

Now, lawyers are increasingly asking for stays during foreclosure court proceedings to review the process more thoroughly. But that is sure to add to the backlog of foreclosure cases in Florida’s courts. As of June 30, there were more than 462,000 cases stuck in the courts.

Judge Jennifer D. Bailey, who sits on the 11th Judicial Circuit in South Florida, told state senators last week that the stays were wasting valuable court time, and warned that lengthy delays and worries over fraudulent practices could generate confusion over who owns a given property and lead to a weakening or a loss of faith in property law itself.

The drop in November foreclosures is likely only a brief respite, and could lead to another build up of foreclosures that will hit the courts in 2011. Bank of America, one of the mortgage lenders caught up in the robo-signing scandal, announced last week it would resume foreclosure proceedings after pausing them to review its filing practices.

Still, the dip in foreclosures allowed Florida to drop to fifth among all states in foreclosure rates, down from second in October. Port St. Lucie ranked 10th among metro areas with a foreclosure rate of one in every 173 housing units, but was the only Florida city in the top 10. The state had three metro areas in the top 10 in October, including the Cape Coral-Fort Myers metro area, which ranked second.

Reach Gray Rohrer at grohrer@sunshinestatenews.com or at (850) 727-0859.


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