Task Force Study: Bank Foreclosure List in Florida Surging

by Peter Vernon on States

A look at the foreclosure rate increases in Florida for the last three years would make one conclude that the crisis is not slowing down and will continue to bring more pain to homeowners in the area.

Foreclosure activity in Florida areas of Port Charlotte, Cape Coral and Fort Myers, which are under the jurisdiction of the 20th Judicial Circuit, rose by almost 788 percent from 2006 to last year.

The 12th Circuit Court-covered areas of Arcadia, Sarasota, North Port, Bradenton and Venice saw filings for bank foreclosure list grew by 631 percent for the same period.

These are the results of a study conducted by a task force that advises the Florida Supreme Court on how the state’s judicial system should deal with the foreclosure crisis that is wreaking havoc on the lives of thousands of residents. The report was based on clerk records from each judicial circuit in Florida.

The study noted that areas considered as hot spots during the peak of the housing market are where the foreclosure crisis hit the hardest. Overall, the number of foreclosed houses in these areas surged by almost 360 percent since the collapse of the housing market started in 2006.

The major factors that caused the number of foreclosure properties to rose were speculators who purchased properties in these areas hoping to quickly sell them at a higher price and homeowners who took out adjustable rate mortgages.

Speculators and homeowners who took out loans they could not afford were just a tip of the iceberg. Soon, the problem spread more quickly and with such force, fueled by recession and unemployment, that even creditworthy borrowers who took out fixed-rate loans were not spared.

Analysts said that the market is full of discouraged homeowners who are seeing values of their properties drop quickly every day. Many homeowners are starting to lose the equity on their homes that they prefer to walk away from their distressed properties rather than spend more money by continue paying their mortgages.

Nineteen out of the 20 judicial circuits in Florida experienced a triple increase in repossession filings. The Eighth Circuit counties of Alachua, Bradford, Baker, Levy, Union and Gilchrist experienced a 91 percent increase in foreclosure filings.

The effect of the foreclosure crisis is manageable in areas located in northern interior and the Florida Panhandle.