Florida Foreclosure Listings Still Surging Dramatically

by on States

Florida foreclosure listings are still surging dramatically. In May, bank owned listings spiked by 81 percent over the year to a total of 10,941 repossessed homes. The REO number also marked an increase of 18 percent from April and a sharp jump of 27 percent from March.

The rates of increases in Florida were far higher than those of the entire nation, as foreclosure homes for sale nationwide increased by only one percent over the month and jumped by 44 percent over the year to 93,777 REO units.

Florida accounted for 11.7 percent of the total number of homes that were repossessed nationwide in May and posted the second highest number of REO units, behind the 15,946 total posted by California.

Among the reasons for the continued surge in lender repossessions in Florida despite the slowdown of foreclosures in other states are tax lien foreclosures. These result from tax liens that were bought by investors and not paid by homeowners within the legal period for repayment. Last year, $1.8 billion in tax liens were sold in Florida and many properties covered by these liens entered Florida foreclosure listings. RealAuction.com, the firm that handles online tax auctions for counties in Florida, said that the state was the largest property tax lien market in the country last year.

Investing in tax liens in Florida has become popular because of the higher interest rate that investors can add to the tax liens. Many homeowners are not able to pay the taxes after they are bought by investors because oftentimes the taxes suddenly spike to about ten times their original amounts because of the high fees and interests that investors add.

Aside from repossessions and tax liens, the number of properties that can be bought through foreclosure short sales also increased in Florida in May to nearly 40,000. If these distressed properties are not rescued through modification, short sales or other means, they are expected to eventually get added to Florida foreclosure listings.