South Florida Foreclosure Filings Drop 49% in May

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According to a new report by Condo Vultures, the number of foreclosure actions initiated in South Florida in May 2010 plummeted 49 percent on a year-over-year basis to less than 4,250 in the tricounty region.

Foreclosure filings - the first step for a lender in the process of repossessing a property through the court system - are down by 50 percent in Miami-Dade County, 55 percent in Broward County, and 36 percent in Palm Beach County, according to the report based on lis pendens filing in the Clerk of the Court for all three counties.

"For at least the last two quarters, lenders have been making a sincere effort with borrowers - especially primary users - to modify mortgages or short-sale properties in hopes of avoiding foreclosure," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based Condo Vultures, LLC. "Lenders have finally realized that the price that can be obtained for a bank-owned property is virtually the same as for a short sale where the borrower is able to sell at a price that fails to repay the mortgage. The difference is, a short sale is becoming relatively immediate while the foreclosure process in South Florida takes an average of 18 months and costs about $100,000 per property.

"The unknown is trying to model out how many exotic mortgages that are coming due this year will be modified versus put into foreclosure proceedings."

Lenders filed 97,000 foreclosure actions - also known as notices of default or lis pendens - in the tricounty South Florida region in 2009. That was up from 76,000 foreclosure filings in 2008, and 33,000 in 2007, says Condo Vultures.

In the first quarter of 2010, South Florida foreclosure filings slipped by more than 20 percent on a year-over-year basis.

In May 2010, lenders initiated about nearly 1,000 foreclosure actions in Miami-Dade County, about 2,000 in Broward County, and 1,300 in Palm Beach County.

Compared that to a year ago in May 2009 when lenders filed 1,900 actions in Miami-Dade, 4,450 in Broward, and 2,000 in Palm Beach, according to the report.

Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, is home to 47 percent of all of the foreclosure actions filed in the month of May 2010. A year ago in May 2009, Broward was home to 53 percent of the region's foreclosure filings that month, according to the report.

Palm Beach County, where Boca Raton, Delray Beach, and West Palm Beach are located, represents 30 percent of the foreclosure filings initiated in May 2010. A year ago, Palm Beach County was home to 24 percent of the foreclosure filings launched in South Florida in May 2009, according to the report.

Miami-Dade County, which is home to Aventura, Coral Gables, and Miami Beach, accounts for about 23 percent of the notices of default filed in May 2010. A year ago, Miami-Dade was home to 23 percent of the region's foreclosure filings, according to the report.

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