Article Courtesy of The Orlando
Published September 16, 2011
Just when it may have seemed that foreclosures were diminishing in Orlando and other parts of Florida, an increased number of homeowners got their first notice in August that their bank wants to repossess their house, a new report shows.
Still, Metro Orlando has dropped out of the top 10 metro areas in the country for foreclosure filings, where it was at various times last year, to ranking 46th nationally in August, according to real-estate research firm RealtyTrac Inc.
Even though the metro area's foreclosure filings have dropped more during the past year than those in key metro areas in Nevada, California and Arizona, Central Florida is not "out of the woods" yet, RealtyTrac spokesman Daren Blomquist said Wednesday.
Initial foreclosure filings in the four-county increased to 1,256 in August from 1,055 in July, with similar upticks statewide and nationally for houses just entering the foreclosure process.
"We have seen a pattern in Orlando and other parts of Florida that we haven't seen in other states: Every few months there is a jump in initial-default notices," Blomquist said. "In April we saw a 40 percent jump, and they were down in May. And in June they were up 79 percent, month to month, and back down in July. And now they are up 19 percent [in August].
"They seem to be coming in almost mini-waves of foreclosures," he said. "What it shows is that there is a lot of distressed inventory that the market has to absorb."
Nationally, default notices were filed for the first time on 78,880 U.S. properties in August — a nine-month high and a 33 percent increase from July. That was the biggest month-over-month increase since August 2007. Default notices increased more than 40 percent on a month-over-month basis in New Jersey, Indiana and California. All of those states were still down from a year earlier.
Overall for Metro Orlando in August, the courts recorded 2,250 foreclosure filings of all kinds, a 4 percent decline from July. While the volume of foreclosure activity overall was little changed from the month before, it was down about 60 percent from August 2010.
Blomquist said it isn't clear how many of the houses now entering foreclosure will wind up selling in the private market as short sales. It does appear, he added, that these properties have likely failed to get loan modifications, which means the banks probably want them back.
"The fact that they're being pushed into foreclosure indicates they're not being approved for mortgage modifications," he said. "Now the idea in the industry is not to do a foreclosure and loan modification concurrently. These properties are more destined to foreclosure, for whatever reason — owners may be more underwater, and a short sale is not a viable option."