Although many Florida residents may feel relieved with the news that the number of foreclosures were at a 3 ½-year low in January, many warn that the relief may only be temporary.
According to RealtyTrac, a California based data tracking company, foreclosures significantly decreased during the month of January in Florida. Florida has ranked as one of the top five states with one of the highest volumes of foreclosures in the nation for months now, but last month the state dropped to a ninth-place ranking. The number of Florida homes that received a notice of mortgage default fell by an astonishing 69 percent.
However, almost 105,000 homes in Florida are owned by banks now, and repossessions were four times higher this January than in January 2010. Why are the number of foreclosures so low, yet the number of repossessions so high? Why are economists cautious about viewing the decline in foreclosures with a positive outlook?
A chief economist in Palm Beach Gardens commented that “putting a positive spin on these numbers is putting blinders on.” Some believe that foreclosures are being prolonged because of the exposure of robo-signing cases last year. After thousands of complaints from consumers arguing that banks and lenders were practicing unethical and illegal foreclosure practices, state attorneys across the nation began to closely investigate the claims.
In the fall of 2010, lenders did confirm that some of their employees had been illegally signing foreclosure documents for homeowners, claiming that the homeowners were aware and notified of the documents. The robo-signing debacle sparked regulators to review the practices banks and lenders were employing during foreclosure processes, and many foreclosures were put on hold during the last two months of 2010. Economists believe that lenders have not yet ironed out the wrinkles, and it may still take some time before lenders are back on track with foreclosures.
The Palm Beach Post: “Foreclosure crisis: Dip in filings doesn’t mean worst is over,” Kimberly Miller, 10 Feb. 2011