Bank repossessions of South Florida properties dropped by more than half in the third quarter of 2011 on a year-over-year basis compared to the same July through September period in 2010, according to a new report from CondoVultures.com.
Lenders repossessed an average of 90 properties per day in the tricounty region of Miami-Dade, Broward, and Palm Beach in the third quarter of 2011 compared to 191 daily repossessions in the same quarter in 2010, according to an analysis of Clerk of the Court records from the three South Florida counties.
“Lenders are reportedly looking at a time span of nearly two years to repossess a South Florida property,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. “In real terms, this means that a lender that files a notice of default against a borrower today will probably not repossess the property until 2013. Once a lender does finally obtain ownership, the bank is typically faced with additional expenses before the South Florida property can be resold to recoup some of the loss.
“Given this reality, it is understandable why lenders are not enthusiastic about repossessing a South Florida property from a borrower in default.”
Another factor contributing to the slowdown in bank repossessions in South Florida is the administrative irregularities tied to “robo-signer” and “foreclosure freeze” controversies that first surfaced in September 2010. The administrative controversies have raised questions with lenders, regulators, the courts, borrowers, and investors about the predictability of repossessed properties, industry watchers said.
For the year, lenders have taken back more than 26,700 South Florida properties in the first nine months of 2011. A year earlier in 2010, lenders repossessed a total of nearly 41,500 South Florida properties during the same period, according to the report based on the Condo Vultures® Foreclosure Database™.
At the current 2011 pace, lenders are on track to repossess about 35,600 South Florida properties, which would rank as the second most active year since the real estate crash began.
By comparison, lenders repossessed 54,400 South Florida properties in the year 2010, 30,400 properties in the year 2009, and 26,200 properties in the year 2008.
In the first year of the South Florida real estate crash, lenders repossessed less than 10,100 properties in Miami-Dade, Broward, and Palm Beach counties.
Overall, lenders have taken back nearly 147,900 South Florida properties since the downturn began.
It is unclear if the bank repossessions will continue to decline in the months ahead.
For the first time since the “robo-signer” controversy surfaced a year ago in September 2010, lenders are once again filing an increasing number of foreclosure actions – or Lis Pendens – in South Florida, according to a recent CondoVultures.com report.
More than 9,700 notices of default – the first step in the foreclosure process – were filed against properties in Miami-Dade, Broward, and Palm Beach counties in the third quarter of 2011.
In previous quarters, 8,900 filings were initiated in the fourth quarter of 2010, 6,800 actions in the first quarter of 2011, and less than 7,200 in the second quarter of 2011, according to the report.
Compare this to the third quarter of 2010 when more than 13,900 foreclosure actions were filed just as the “foreclosure freeze” was starting to make national headlines with allegations of “foreclosure mills” operating in South Florida.
Despite the increasing number of foreclosure filings in the tricounty area, the year 2011 is on pace to register the fewest number of foreclosure filings since the South Florida real estate crash began in 2007.
In the first nine months of 2011, lenders have initiated less than 24,000 foreclosure actions, putting the region on pace for less than 32,000 filings for the year.
In the first year of the South Florida real estate crash, lenders filed 33,200 foreclosure actions in 2007.
During the next couple of years in South Florida, lenders initiated 75,700 actions in 2008 and 98,300 actions in 2009, respectively.
Overall, lenders have initiated more than 285,000 foreclosure actions in South Florida since 2007.
Condo Vultures® LLC is a real estate consultancy and marketing company based at 1005 Kane Concourse, Suite 205, Bal Harbour, Florida, 33154. You can reach Condo Vultures® LLC at 800-750-0517.
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