Foreclosures and Short Sales Hit Record Low Since 2009

Distressed property sales continue on a downward trajectory as foreclosures and short sales reach a nationwide low since 2009. In April 2013 foreclosures and short sales decreased to 33 percent from 43.6 percent in April 2012, according to a Campbell/Inside Mortgage Finance HousingPulse Tracking Survey.

However, Floridians should anticipate more of the same. Florida kept its top rank in the foreclosure market in 2012 with 3.11 percent of homes receiving a lis pendens, or an initial foreclosure filing, during the year. Foreclosures are projected to be mainstay into 2013 as courts battle through inundated backlogs. On average, a Florida foreclosure takes 858 days to process, according to RealtyTrac.

Market indicators pointing toward a housing rebound may be skewed by Wall Street mega firms such as Blackstone Group purchasing significant amounts of damaged REOs. Acting through subsidiaries such as Invitation Homes of Tampa, large investment firms purchase hundreds of properties in order to turn them into rentals.   (link to recent article about Blackstone Group). As a result, investor short sale purchases have increased from 31.8 percent in March 2012 to 35.3 percent in March 2013. This high-volume turnaround could be creating an “optimism bubble” in Florida’s housing recovery as first-time homebuyers must compete with the likes of Blackstone Group.

Other indicators, however, point toward a substantiated recovery. A slow yet steady rise in employment and government programs are helping Floridians keep their homes and stall foreclosures and short sales. According to Current Employment Statistics, Florida has netted 119,110 jobs from April 2012 to April 2013. Additionally, state sponsored programs like Hardest-Hit Fund (HHF) will assist troubled homeowners stay in their homes as an alternative to foreclosure or a short sale. The newly minted program by the Florida Housing Board of Directors has allocated $50 million for a Modification Enabling Pilot.

Homeowners who are unemployed or underemployed through no fault of their own may qualify for assistance to receive up to 12 months of monthly mortgage payments, including escrow mortgage-related payments. Qualified applicants must be Florida residents, property owners and received at least a 10 percent reduction in income due to financial hardship. Financial hardship excludes reductions due to deaths, divorce or disability of a borrower. All 67 counties are expected to participate in the program once approved by the state legislature.

Visit HHF’s Web site (www.FLHardestHitHelp.org) and then speak with one of BAH’s seasoned real estate attorneys (link for attorney contact) to understand how to best take advantage of available programs such as Hardest-Hit Fund and chart a long-term plan to protect your investment.