The rate of foreclosures across the nation has dropped. RealtyTrac, a real-estate research group that studies foreclosures across the country, reports that the national rate dropped by 16 percent between September of 2011 and September of 2012. Unfortunately, the housing market in Florida is not following this trend.
According to the report, Florida continues to see high increases in foreclosureactivity. The most recent statistic puts Florida at a 24 percent increase; resulting in the eleventh month in a row the state reported an increase. This jump means the state now has the highest foreclosure rate in the nation for the first time since April of 2005.
Reasons behind the increase
Housing experts blame the recent increase in foreclosures on the fact that Florida is a judicial foreclosure state. This means a lender is required to prove that a borrower is in default in court before moving ahead with a foreclosure. As a result, the process can take a longer period of time than that used in a non-judicial foreclosure state. The experts speculate that the court systems were overwhelmed and are now catching up, causing a sudden increase in foreclosures.
Additional factors contributing to the increase include a spike in homeowner associations foreclosing on homes, according to a recent article in the Orlando Sentinel. Real estate experts note that state law allows homeowner associations to foreclose on homeowners who fall behind on association fees. It appears that these associations are more actively utilizing this legal right than they were in the past.
The article also discussed a link between the increase and hedge funds purchasing properties. The fact that hedge funds are purchasing properties may give banks an incentive to push properties through the foreclosure process in an attempt to find a hedge fund buyer.
Foreclosure, the process that allows a lender to repossess a homeowner’s property, can be avoided. Some common options include:
- Taking advantage of loan modification opportunities
- Looking into assistance from government programs
- Avoiding foreclosure prevention companies
In some cases, it is possible to refinance or extend the terms of the mortgage with the lender. This can provide the borrower with an opportunity to catch up on missed payments and may lead to a more affordable monthly payment. As a result, it is important to contact the lender when payments become unmanageable to discuss possible options.
If the lender is unwilling to discuss a possible change of terms to the mortgage, there are government programs available that may offer assistance to help avoid foreclosure. These programs include the Making Home Affordable Program, designed to help lower monthly payments and secure a lower rate for the loan. Additional programs are also available that provide income based repayment options and assistance for second mortgages.
It is also important to be wary of foreclosure scams. Some companies get homeowner’s to unknowingly sign over the title to their home. Because of these scams, and the complex nature of foreclosures, those fighting a foreclosure in Florida should contact an experienced Florida foreclosure defense attorney to review their situation and help better ensure that their legal rights are protected.