The Real Deal Miami

Miami foreclosures fall, but initial filings increase for ninth straight month

By Alexander Britell | August 10, 2012 09:45AM

While Miami-Dade County foreclosure filings fell by 2.6 percent in July compared to the same period in 2011, initial filings surged last month, according to foreclosure analytics firm RealtyTrac. That’s a sign that banks are continuing to ramp up their foreclosure processing.

Lis pendens filings, the first step in the foreclosure process, increased by 32 percent in Miami-Dade County last month — the ninth straight month in which that number increased year-over-year.

“The trend of foreclosures starts is spreading,” RealtyTrac spokesperson Daren Blomquist told The Real Deal. “We really first noticed it in Florida late last year, and now it’s spreading to other states as well.”

Overall, the Sunshine State saw a 20 percent year-over-year increase in foreclosure starts last month, compared to a 3 percent year-over-year increase in June.

Nationally, activity declined 3 percent in July, the 22nd straight month of reductions.

What’s different in Florida is that the state is not only seeing an increase in foreclosure starts, but also in bank repossessions. There was a 38 percent increase last month in REO activity in Florida.

“It really seems like lenders are aggressively clearing the decks of delayed foreclosures in Florida,” Blomquist said. “Maybe more so than other markets in the country.”

It’s not clear why that’s happening, however, as Florida, a so-called “judicial foreclosure” state — that is, foreclosures are processed through the court system and not administratively — has traditionally been slow-moving in that area.

“My theory is that these REOs that are happening just represent properties where short sales, loan modifications and refinancings have not stuck,” he said. “Maybe homeowners have already given up on these properties and moved on, and these homes are just sitting there.”

The renewed filing push still comes up against an enormous wall. Florida has a backlog of approximately 370,00 foreclosures in the system, Blomquist said. “It’s going to take some time, even at this increased pace,” he said, pointing to a potential time frame of around 31 months at a minimum.