Miami Foreclosures Still High Despite More Modifications

by on cities

Despite the increase in loan modifications and the sharp decline in foreclosure activity in South Florida, the number of Miami foreclosures in April was still relatively high.

There were 5,689 houses in Miami-Dade County that were repossessed or purchased through public foreclosure auctions in April, down substantially by 36 percent from filings in March and down by 48 percent from total filings in April last year. The number, however, was still high compared to homes that entered home foreclosure auctions or became bank owned foreclosures in other major cities in April.

Similarly, default filings in Miami-Dade also decreased by 68 percent from April last year and by 54 percent from March to a total of 2,615 filings, marking significant rates of declines.

Compared to the other counties in South Florida, Miami-Dade was second in foreclosure rate in April, posting a rate of one foreclosure filing for every 122 houses in the county. A total of 7,134 homes in Miami-Dade were put into the foreclosure process during the month.

Florida officials, nonprofits, counselors and legal organizations have been trying to help more troubled homeowners to save their homes, but the great majority are still unable to prevent their properties from being foreclosed upon and repossessed.

The South Florida area was even ranked fifth among metro areas in the nation based on number of homeowners helped under the Home Affordable Modification Program. As of April, a total of 13,059 homeowners in South Florida were given permanent loan modifications, accounting for more than 37 percent of the 36,130 distressed homeowners who received permanent loan modifications statewide.

The number of successfully modified mortgages, however, represented only a small percentage of the overall number of Miami foreclosures currently being sold off or posted for scheduled auctions.

Treasury officials explained that there were significant numbers of mortgages in trial modification which failed to reach permanent modification status because of documentation problems. Oftentimes, they said, the verbal statements given by borrowers do not jibe with tax documents, payroll numbers and other proofs of income.

Bank of America had the lowest rate of conversion from trial to permanent modification status despite having 477,500 delinquent home loans as of the latest Treasury report. Its conversion rate was only 25 percent.

In contrast, Ocwen Financial Services and HomeEq Servicing both posted an 83-percent conversion rate, the highest rate posted by a mortgage lender participating in the federal program.

The Treasury Department said that over 1.7 million are eligible for the HAMP scheme, but only 299,092 had been successfully modified so far. What is also discouraging was the cancellation of 277,640 trial loan modifications and 3,744 permanent modifications.

Counselors and volunteer lawyers who have been helping troubled homeowners get mortgage modifications are getting frustrated and discouraged as they now feel their efforts are wasted.

In April, the pace of foreclosures in Florida declined by double digits, but Florida still ranked third in rate of foreclosure among the states. Similarly, the pace of Miami foreclosures also declined, but they contributed significantly to the still high ranking of Florida in foreclosure charts.