Lis pendens down by 41 percent in July
In a possible indication that the foreclosure cycle has already reached its peak in Florida, July was the fourth straight month in which fewer homes than last year made their entry into the state’s foreclosure pipeline, according to data from RealtyTrac released today.
Lis pendens, the initial default notices that mark the beginning of the foreclosure process, were down 41 percent statewide last month from July 2009, RealtyTrac said — a trend that held in each of South Florida’s three counties.
Broward County, which ranked highest in the tri-county region with a foreclosure rate of one in every 125 homes, saw 2,351 homes hit with default notices during July, a 47 percent decrease from the same period last year. Miami-Dade County, with its one-in-every-138-homes foreclosure rate, had 3,100 homes enter the pipeline by way of lis pendens last month, down 40 percent year-over-year. There were 1,448 lis pendens filed in Palm Beach County, which has a foreclosure rate of one in every 170 homes, for a 34 percent decrease from July 2009.
The drop in lis pendens is a rare piece of good news for South Florida’s battered housing market, said Daren Blomquist, a spokesperson for RealtyTrac.
“We’re having fewer properties entering the foreclosure pipeline, and that will translate to fewer properties actually being in foreclosure in the next few months,” he said.
Still, South Florida has a long way to go: the national average foreclosure rate is one in every 397 homes, and Blomquist cautioned that it’s too early to claim that the worst is over for the region.
Florida as a whole had the nation’s third-highest foreclosure rate, with one in every 171 homes statewide receiving some type of foreclosure filing — including default notices, scheduled auctions and bank repossessions — in July. The state accounted for 16 percent of all foreclosure filings in the U.S. during the month, though it saw a 9.7 percent decrease in foreclosure activity year-over-year.
And while default notices have been on the decline in South Florida, the area’s bank repossessions have been on the upswing.
Palm Beach saw a 413 percent year-over-year increase in REO filings, to 559 from last July’s 109. Meanwhile, there were 1,645 REOs in Miami-Dade last month, up 131 percent from 711 last year at the same time. And Broward County saw a 20 percent year-over-year increase in REOs to 1,604 from 1,337.
RealtyTrac observed a similar trend nationwide, where overall foreclosure filings declined by nearly 10 percent year-over-year.
“Declines in new default notices, which were down on a year-over-year basis [in the U.S.] for the sixth straight month in July, have been offset by near-record levels of bank repossessions, which increased on a year-over-year basis for the eighth straight month,” said James Saccacio, CEO of RealtyTrac.
“Lenders are still dealing with [a] backlog [of foreclosure cases],” Blomquist noted. “That’s why we’re seeing the increase in REOs.”
Since each county differs in its capacity to handle foreclosure cases that are already in the pipeline, the South Florida data has displayed a “rollercoaster, see-saw pattern” over the past few months, Blomquist said, particularly in the later stages of the foreclosure process.
“Anecdotally, the big delays are happening between that initial lis pendens and then the subsequent foreclosure filings,” he said, adding that it could take until the end of the year or into next year before we start seeing consistent decreases in bank repossessions.