I saw the big title in the newspaper today. There had been 656 foreclosure lawsuits filed in Lee County in October, the lowest range in a lot more than three years, according to statistics released Monday by the South West Florida Real Estate Investment Association.
It was a rare ray of hope in a grim situation: The Lee County and Cape Coral foreclosure rate is normally within the top five metropolitan areas nationwide, with only Las Vegas consistently worse.
October’s variety is down 31 % from September’s 953. Yes, you read me: 31% less than the month before. The pace hasn’t been this slow since quite a long time. 555 had been filed in February 2007 as the wave of mortgage failures that followed the housing boom was just obtaining under way.
Experts stated that the decline likely was part of a long-term downward pattern — but that’s not all.
Foreclosures possibly plunged at least in aspect since for the past month, some banks have been holding off on foreclosures whilst they sort out issues including who truly owns the note and whether attorneys basically read all the paperwork, but the holding was only for 1 week and from 2 banks, including a major one though: Bank of America.
But the recent lender troubles alone couldn’t have caused a drop as sharp as October’s. Bankers “did knock some things out, but in the totality with the trend, no. 10 to 20 percent of your mortgages might be affected,” but not enough to account for the whole drop.
County Clerk of Court Charlie Green said that whatever the trigger, the downward pattern has helped whittle away at a daunting backlog of foreclosures within the court system: Public auctions disposing of properties are now outnumbering new filings.
Only about 14,700 cases are from the pipeline now, Green mentioned, down practically half from the 26,000 when the difficulty peaked at the end of 2008.
Still, he cautioned that there’s a substantial “shadow inventory” of houses that banks are selecting not to foreclose on. “I believe we’re clearing some out, but the banks are holding back.”
But we don’t really know how many far more. Next month will give us a better indication as to whether or not it was a normal trend or lenders stopping until they figure out what the issue with their process was.”
Also the pace of foreclosure doesn’t occur in a vacuum: if the winter tourist season is strong, it will reduce unemployment and keep far more people financially able to keep their homes, which is the case in South West Flroida, which include Cape Coral.
I think it will be only in April, May, June of next year that we’ll see how this season’s sales and the economic effect of your season influenced foreclosures.
A big builder in Cape Coral, stated that whatever the short-term pattern, foreclosures can’t sustain themselves at that pace. It’s going to sooner or later start slowing up. And I think it is happening right now.
Also, the issues with the foreclosure process have made some prospective buyers skittish about buying a previously mortgaged house.
However, while I find it easier to sell to prospective renters a house where owners are living in than a foreclosure, that non distresses market has a hard time to compete with the foreclosures. Plus, new potential buyers have still a hard time to accept the fact that most of the time, there is a multiple offer situation on every foreclosed properties, ending by an accepted offer above the asking price. Often, those buyers go through a 3 step buying process. The first is the below asking price period where the buyer experience the frustration of being outbid. Then there is the full price offers period of time, which is usually shorter than the first one. Most of the time, the buyers learned their lessons and go the third period, the above asking price offers moment where they finally get a property under contract.
It’s now even more difficult with the decrease of the number of foreclosure and with a possible increase of pricing, even for foreclosures.
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