South Florida Foreclosure Filings Drop 7% in January

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(MIAMI, FL) -- According to a new report from Condo Vultures, lenders initiated 7 percent fewer foreclosure actions in South Florida in January 2010 on a year-over-year basis, with total filings slipping for the month below 5,800 in the tricounty region.

By comparison, in January 2009 there were nearly 6,200 foreclosure actions - also known as Lis Pendens or Notices of Default - filed in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties. In January 2008, there were nearly 4,100 actions filed, according to a report prepared using the Condo Vultures foreclosure database.

"President Obama's loan modification program to keep people in their homes combined with a newfound willingness of lenders to work with borrowers appears to be slowing South Florida's foreclosure spiral downward," said Peter Zalewski, a principal with Condo Vultures, a Bal Harbour, Fla.-based real estate consultancy firm. "It is unclear if this sudden decrease in foreclosure actions in South Florida is a trend or just an anomaly due in part to the December holidays. If this does prove to be a trend, which would mean South Florida may not eclipse the psychological threshold of 100,000 foreclosure actions in a year."

Zalewski is scheduled to discuss South Florida's foreclosure trends in 2010 along with banking analyst Ken Thomas, who is a lecturer at the University of Pennsylvania's Wharton Business School, at the upcoming Condo Vultures seminar scheduled for Feb. 16 at the Miami Marriott Biscayne Bay Hotel just north of Downtown Miami.

Based on January's foreclosure actions, South Florida is starting the year on pace for about 69,000 filings. In January 2009, South Florida was on pace for 74,000 foreclosure filings before ultimately experiencing just over 97,000 filings for the year. By comparison, in 2008 lenders filed 76,000 foreclosure actions in South Florida, more than double the 33,000 foreclosure actions filed in 2007, according to the report.

To repossess a South Florida residence, a lender must undertake a lengthy and costly legal process that can take up to a year.

Lenders normally plan for a six month to nine month process that will cost between $40,000 and $80,000 per property. In addition to that, many lenders do not even file the initial foreclosure paperwork until a borrower is at least 90 days late on regularly scheduled mortgage payments.

Once a lender finally does repossess a property, the bank inherits the responsibility of settling up outstanding liens on the property that live on after the foreclosure, such as property taxes, past-due condo association maintenance fees, and open permits.

On a county-by-county basis, two of the three counties experienced decreases in foreclosure actions while the third experienced a more than 75 percent increase in the number of actions initiated.

Miami-Dade County, where Aventura, Coral Gables, and Miami Beach are located, experienced a 33 percent drop in foreclosure filings in January 2010, slipping to less than 1,400 compared to about 2,050 in January 2009. A year earlier in January 2008, there were 897 foreclosure actions filed in Miami-Dade County, according to Condo Vultures report.

Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, experienced a 23 percent decrease in foreclosure actions, slipping to less than 2,250 filings in January 2010 compared to more than 2,900 actions in January 2009. A year earlier in January 2008, there were slightly more than 1,700 foreclosure actions filed in Broward, according to the report.

Palm Beach County, where Boca Raton, Delray Beach, and West Palm Beach are located, experienced a 76 percent spike in foreclosure filings in January 2010, surpassing 2,100 actions. In January 2009, there were 1,206 foreclosure actions filed in Palm Beach County, down from 1,471 foreclosure actions filed in January 2008, according to the report.

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