For the first time in nearly two years, Florida took a top ranking nationally for foreclosure activity, coming in second only to Illinois.
Florida overtook the western states of Arizona, California and Nevada, which had traded the first place and runner-up spots since December 2010, according to a new report released Wednesday by the Irvine, Calif.-based RealtyTrac. The last time Florida ranked second was October 2010.
A 26 percent increase in new foreclosure filings in August from the same time in 2011 helped push the Sunshine State to No. 2. The jump, which included a 35 percent increase in new filings in Palm Beach County, could be attributed to the National Mortgage Settlement, experts said.
Banks likely held off filing some of their foreclosures until the February settlement spelled out new requirements on how to handle home repossessions, said RealtyTrac Vice President Daren Blomquist.
But Florida's backlog of about 377,700 foreclosure cases in the court system as of June also contributed to the ranking, Blomquist said. According to RealtyTrac, it takes an average of 861 days -- more than two years -- to foreclose on a home in Florida. About 25 states don't require a court to sign off on a foreclosure.
"Foreclosure activity in most non-judicial states stayed on a downward trajectory in August, with a few exceptions," said Blomquist, noting that bills passed to slow the foreclosure process in some states may be leading to bigger decreases. "Those states, though, were already showing decreases before this slate of legislation was passed."
Nationwide, overall foreclosure activity decreased 15 percent from August 2011 and stayed steady from July.
RealtyTrac measures three types of foreclosure filings -- initial filings, notices of auction and final repossession, which occurs after the foreclosure auction.
Bank repossessions were up 12 percent in Florida in August from last year, but down 16 percent from July. They were down on both measurements nationally and in Palm Beach County.
Malcom Harrison, a Wellington foreclosure defense attorney, said he's seen new foreclosure filings jump from about 30 per day in Palm Beach County to an average of about 65.
He believes banks are moving through their foreclosure backlog now because the $25 billion national settlement absolved them from some civil litigation.
"They are full steam ahead," said Harrison, adding that the new filings are "cleaner". "The bank lawyers are making many fewer mistakes, which means that these new cases should pass faster through the system."
Lenders are also making an effort to complete foreclosure alternatives as part of the settlement. One of Harrison's clients got a letter this week from Bank of America forgiving a second mortgage worth $570,100.
"My clients are receiving these on a regular basis," Harris said about principal balance reductions. "I have seen a lot forgiven, but nothing like this."
A report released Wednesday by CoreLogic found that 42 percent of Palm Beach County homeowners with mortgages owed more on those loans than their homes were worth during the second quarter of the year. That's a decrease from 43.7 percent in the first quarter.
What that means to a full housing recovery is unclear.
Mark Vitner, a senior economist with Wells Fargo, said Florida was the epicenter of the housing bubble and will simply take longer to rebound.
"Getting past the housing bust is a bigger hurdle for Florida and that's in a large part due to the way the state deals with foreclosures, but also just simply because how big the problem is," he said.
Most Popular Stories
- SEO Traffic Lab Celebrate Wins at Digital Marketing Event 'Internet World 2013' in London
- Social Media Initiatives Should Follow Customers' Lead
- Apple CEO: Offshore Units Not a 'Tax Gimmick'
- U.S. Senate Accuses Apple of Large-scale Tax Avoidance
- UTEP Water Recycling Project Wins Venture Titles
- Marketo Makes a Mint in IPO: Stock Shoots Up More than 50 Percent
- Bieber Booed at Billboard Awards
- Crude Oil Up, Gasoline Down
- Austin Startup Compare Metrics Raises $3.5 Million for Expansion
- Why So Many Top 'Car Guys' Are Actually Women