Category Archives: Foreclosure
Florida still tops nation in foreclosures — but 2nd in U.S. for new ones
Florida still accounts for almost a quarter of all foreclosures in the nation but at least the Sunshine State is behind Nevada in foreclosures started in the three months that ended Sept 30, a new survey shows.
Nevada has nearly 2.5 percent of the nation’s new foreclosures, while Florida was second with nearly 2 percent, according to the Mortgage Bankers Association’s quarterly National Delinquency Survey.
In contrast, North Dakota, which has the nation’s lowest unemployment rate, also was at the bottom, having only .35 percent of the U.S. foreclosure starts, the survey showed.
Broward foreclosures: A look at foreclosures by ZIP code for 2008 and 2010
Nationwide, the number of homeowners more than 90 days late with paying their mortgages are down from the recession’s peak, the study found.
And as the economy expands and more people go back to work, the nation’s foreclosures starts should slow even more, said Mike Fratantoni, a vice president of the Mortgage Bankers Association.
Florida should also experience that foreclosure slowdown as forecasts show a modest gains for jobs created in the Sunshine State in 2012.
However, RealtyTrac Inc. showed the foreclosure filings are up in Florida in October and that lenders may be filing old cases that were once put on hold from the robo-signing scandal.
Indeed, Florida still has a mountain of foreclosures to go through — “it is still very large,” Fratantoni said.
That should take years to settle and Florida will struggle years after the nation has recovered from the foreclosure crisis, he said.
Florida’s courts remain clogged with foreclosures, Fratantoni said.
Nearly 14.5 percent of all the state’s mortgage are in foreclosure; the national average is less a third of that, the Mortgage Bankers survey shows.
Foreclosure sales still pummeling home prices
Five years after the subprime mortgage meltdown started to hit, foreclosure sales are still hurting the housing market
NEW YORK (CNNMoney) — Nearly five years into the crisis, foreclosures are still weighing heavily on home prices.
A whopping 46% of homes sold in November were either short sales or REOs — as homes repossessed by lenders are called, according to a survey by Campbell/Inside Mortgage Finance.
One problem: Distressed homes sell for a lot less than homes sold by conventional sellers. The average price for a short sale (when borrowers owe the bank more than their homes are worth) was $209,000 in November. For a regular sale, the average was about $259,000.
The numbers are even worse for REOs, which averaged about $190,000 for properties in move-in condition.
For a damaged REO, the price was just $99,000. That’s a common problem, since homeowners who’ve been foreclosed on don’t typically devote resources to upkeep.
There is no shortage of distressed properties: More than 6 million borrowers are delinquent 30 or more days, according to LPS Applied Analytics. Two million are already in the foreclosure process, and most of these homes will be repossessed or sold as short sales.
10 foreclosed homes for sale by Uncle Sam
“The huge glut of distressed properties coming to market is why there will be no home price rebound this coming year and maybe into 2013,” said Guy Cecala of Inside Mortgage Finance, a publisher of mortgage information and news.
There’s another problem: getting financing for REOs in poor shape can be difficult, according to Cecala. Lenders don’t like to issue mortgages for homes in need of extensive repairs.
And in an insidious twist, as distressed properties are sold, they can also bring down the price of homes that aren’t in trouble. That’s because mortgage appraisers assessing a regular home’s value typically compare it to short sales and REOs in the area.
Home price forecasts: Your local market tracked
Since distressed properties sell for so much less, using them as comparables drags the appraised values of regular homes way down.
“It’s the No. 1 reason why transactions fall through,” said Cecala. “If you can’t get an appraisal to support the price, the deal will won’t close.”
Foreclosure free ride: 3 years, no payments
NEW YORK (CNNMoney) — Delinquent borrowers facing foreclosure are learning that they can stay in their homes for years, as long as they’re willing to put up a fight.
Among the tactics: Challenging the bank’s actions, waiting to file paperwork right up until the deadline, requesting the lender dig up original paperwork or, in some extreme cases, declaring bankruptcy.
Nationwide, the average time it takes to process a foreclosure — from the first missed payment to the final foreclosure auction — has climbed to 674 days from 253 days just four years ago, according to LPS Applied Analytics.
It takes much longer than that in Florida, where the process averages 1,027 days, nearly 3 years. In D.C., foreclosure averages 1,053 days and delinquent borrowers in New York often stay in their homes for an average of 906 days.
And while some borrowers are looking for ways to make good with lenders and get their homes back, many aren’t paying a dime. Nearly 40% of homeowners in default have not made a payment in at least two years, according to LPS.
Many of these homeowners are staying in their homes based on a technicality. There is rarely any dispute over whether or not they have stopped paying their mortgage, said David Dunn, a partner at law firm Hogan Lovells in New York, who represents banks and other financial institutions in foreclosure cases.
“In my experience, they never say, ‘I’m not delinquent’ or ‘I want to pay my bill but I’m confused over who to send it to,’ or ‘Oh my God, you mean I didn’t pay my mortgage?’ They’re not in technical default. They’re in default because they’re not paying,” he said.
Millions eligible for foreclosure review
Ironically enough, the banks have given delinquent borrowers some of the ammunition they need to delay the foreclosure process. During the “robo-signing” scandal in 2010, it was revealed that bank employees signed paperwork attesting to facts they had no personal knowledge of. Now, borrowers are routinely challenging that paperwork.
A Staten Island, N.Y. man who owed $300,000 on his mortgage and hadn’t made a payment in two years, said his attorney used the robo-signing issue to fight his foreclosure.
In his case, the lender’s paperwork included many different papers signed by the same employee. The problem was that the signatures didn’t match. The judge dismissed the lender’s case against the borrower, although it can be re-filed
“It looks like I’ll be in my home for some time to come,” said the homeowner, who asked to remain anonymous. He said he is currently not making any payments on his home.
Sometimes just asking the bank to produce the paperwork that shows it is the legal holder of the mortgage note can stall a repossession, said attorney Robert Brown. Since mortgages are often transferred electronically, the official paperwork often gets misplaced.
10 cheap foreclosed homes for sale by Uncle Sam
“My lawyer asked my bank to produce an affidavit that entitled them to foreclose,” said a client of Brown’s, who lives in Harlem and also asked to remain anonymous. “They couldn’t do it.”
The case was dismissed, without prejudice, though the lender can try again — if it finds the paperwork.
In some of the more extreme cases, borrowers will file for bankruptcy in order to block a foreclosure. In these instances, courts order creditors to cease their collection activities immediately. Home auctions can be postponed as the bankruptcy plays out, which can take months.
The ensuing delays are further harming the housing market. People who stay in homes undergoing foreclosure for years often don’t maintain the properties, causing blight and lowering property values in the surrounding neighborhoods, said Dunn.
Home prices: Your local forecast
Then there are the court costs that lenders bear, which will eventually be borne by home buyers as lenders increase their borrowing fees to cover the increased risk, Dunn said.
David Berenbaum of the National Community Reinvestment Coalition (NCRC), a community activism group, disputes the contention that owners are gaming the system for free rent and hurting the housing market.
“Most people do everything in their power to maintain these homes,” he said. “They take in relatives, get second jobs and even rent out rooms.”
What really needs to be done, he said, is for lenders to work harder to find solutions that allow delinquent borrowers who can afford to make reasonable mortgage payments to keep their homes.
