'Too Big to Fail' Banks Represent 29% of All South Florida Foreclosure Filings Since 2007 Peak

---

According to a new report from Condo Vultures, JP Morgan Chase, Bank of America, Citibank, and the rest of the 10 largest banks in the United States represent at least 29 percent of the 250,000 foreclosure filings initiated in the tricounty South Florida region since the real estate crash began in 2007.

The concentration is even greater if the foreclosure filings of several failed banks - such as the former Wachovia and Washington Mutual - are statistically credited to the top 10 financial institutions that absorbed the troubled lenders, according to Condo Vultures.

"Many people realize that the South Florida foreclosure epidemic is hurting the bottom line of the state-chartered banks that made a business out of lending in their own backyards," said Peter Zalewski of Condo Vultures LLC. "Our research shows that the South Florida foreclosure problem is also impacting the ledgers of the nation's largest banks. The clear advantage that the large banks enjoy  is the capital ability to better absorb a repossession."

Of the top 10 largest banks based on Federal Deposit Insurance Corp data, Wells Fargo Bank has filed the greatest number of foreclosure filings with more than 21,000 actions combined in Miami-Dade, Broward, and Palm Beach counties, according to the report.

U.S. Bank is a distant second with more than 13,000 filings in South Florida. HSBC Bank USA ranks third with more than 11,000 fillings to date, according to the report.

Rounding out the top five are Bank of America and JP Morgan Chase with about 9,500 foreclosure filings each.

The South Florida region reached the 250,000 foreclosure filings threshold on Friday, Aug. 27, when lenders initiated a combined 248 actions against properties in Miami-Dade, Broward, and Palm Beach counties, according to the report.

Broward County, where Fort Lauderdale is located, has endured nearly 110,000 foreclosure filings - also known as Lis Pendens or notices of default - in the last 3.5 years since prices started to plummet, according to the report.

Palm Beach County, where Boca Raton, Delray Beach, and West Palm Beach are located, has endured 74,500 foreclosure filings, or 30 percent of the South Florida regional total, since the crash began.

Miami-Dade County, where Key Biscayne, Miami Beach, and Sunny Isles Beach are located, has experienced 65,500 foreclosure filings, or 26 percent of the South Florida regional total, since 2007.

To reach 250,000 foreclosure filings, lenders have filed an average of nearly 200 foreclosure actions per day in the South Florida region since 2007, a year in which only 33,000 actions were filed.

Since that year, lenders filed more than 76,000 foreclosure filings in 2008 before the activity spiked to more than 97,000 actions in 2009.

In the first eight months of 2010, lenders are on pace to file less than 70,000 actions for the year, according to the report which relies on Clerk of the Court records in Miami-Dade, Broward, and Palm Beach counties.

The shear cost of the foreclosure process compared to short selling a property is a key reason for the drop in total filings.

At the start of the housing crash in 2007, lenders estimated the typical foreclosure would take about six months to repossess a property at a cost of about $40,000 in the loss of debt service, damage, court courts, and attorney's fees.

By 2009 as the foreclosure filings were spiking, the process extended out to an average of 18 months with an estimated cost of at least $100,000 per repossession, according to Condo Vultures.

Of the 250,000 foreclosure filings to date, only about 40 percent - or 100,000 - of the actions have resulted in bank repossessions as lenders work with primary users to modify mortgages in an attempt to keep people in their homes, according to a recent CondoVultures.com report.

In Broward, some 38 percent of the foreclosure filings have resulted in bank repossessions compared to 66 percent in Miami-Dade and 21 percent in Palm Beach, said Condo Vultures' Peter Zalewski.

---