South Florida Bank REO Inventories Shrink 24% Since Foreclosure Freeze Began

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According to Miami-based Condo Vultures, the total residential resale inventory in the tricounty South Florida region fell for the fourth straight week, suggesting that the foreclosure freeze related to administrative irregularities is continuing to impact home resales.

Resales in Miami-Dade, Broward, and Palm Beach counties on a week-over-week basis decreased by  0.7 percent as of Oct. 25, and 2.8 percent since Sept. 27 to 67,270 residences, according to the report based on Florida Association of Realtors data.

In Miami-Dade County, the number of condos and single-family houses for resale fell 3.5 percent from Sept. 27 to 24,801 residences while Broward County's resale inventory dropped 3.7 percent to 20,375 homes during the same four-week period. Available inventory fell 1.3 percent in Palm Beach County since Sept. 27, according to the report.

Meanwhile, the number of REOs on the market in South Florida plummeted 23.8 percent - or more than 1,150 single-family houses, condos, and townhouses - since Sept. 27, 2010, according to a new Condo Vultures report. The foreclosure freeze moratorium began later that same week.

GMAC Mortgage, JPMorgan Chase, and Bank of America have ordered a foreclosure moratorium on cases that might have been done improperly, potentially reopening cases for months if not years. PNC Financial Services Group also announced on Oct. 8 that it would halt foreclosures for a month while it reviewed its documentation, according to the Miami Herald and the New York Times.

While the bank actions offer a temporary reprieve for embattled homeowners, the timing could impede the housing recovery in South Florida, a region hamstrung with distressed inventory that has recently seen declines in foreclosures.

The loan default amount in the tricounty region decreased 38 percent in the third quarter of 2010, compared to the same period in 2009, according to Condo Vultures.

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