Banks Repossess 4,000 South Florida Homes Per Month

Fri, Jul 16, 2010


By: Carrie Bay

Banks took back an average of 4,000 South Florida properties each month during the first half of 2010, according to a new report from the locally based real estate consultancy Condo Vultures LLC.

The region’s repos represent an 83 percent year-over-year increase for the tri-county area of Miami-Dade, Broward, and Palm Beach.

Miami-Dade led the surge, experiencing a 125 percent spike in REOs on a year-over-year basis. Palm Beach experienced a 112 percent jump while Broward’s repossessions increased 42 percent, according to the report based on Circuit Court records from each county.

At the current rate, Condo Vultures says nearly 50,000 homes will be repossessed in South Florida this year, which would significantly outpace the modern-day high of 30,400 repossessions that lenders took control of in 2009. Banks repossessed nearly 26,250 properties in 2008 after taking title to 10,100 properties in 2007, Condo Vultures reports.

“South Florida’s real estate market is at a crossroads,” said Peter Zalewski, a principal with the Bal Harbour, Florida-based Condo Vultures. “The number of bank

repossessions in 2010 is higher than at any time in at least two decades. This additional bank-owned inventory will undoubtedly be coming onto the resale market in the near future as discounted REO product.”

Zalewski continued, “The flip side is, the number of new foreclosure filings in South Florida is down 34 percent in the first half of the year, putting the region on pace for less than 70,000 actions in 2010 compared to 97,000 in 2009.”

Despite the spike in repossessions, REOs still represent only about six percent of the 67,000 residences on the resale market in the tri-county South Florida region as of July 12, according to Condo Vultures.

Market conditions aside, the company says one key reason the number of bank repossessions has increased this year is the implementation of a new online auction technology being used by the South Florida circuit courts to clear the backlog.

The online system now allows hundreds of properties to be auctioned off more efficiently, industry watchers said. Before the software was adopted independently in the first quarter of this year, each of the three South Florida counties fulfilled the last step in the foreclosure process by holding courthouse auctions as many as five days a week in attempt to clear the glut of foreclosed properties.

With the new improved online auction process, lenders are taking title to properties from defaulted borrowers at a much quicker pace.

“The unknown is how many of the more than 240,000 foreclosure filings initiated in South Florida since January 2007 are going to end up as bank repossessions,” Zalewski said. “Right now, the ratio for repossessions-to-foreclosure-filings is about 38 percent and climbing.”

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