Tavares, FL - July 29, 2011 - The press has been reporting reduced foreclosures for Florida and Lake County. For instance, the article below from the local "Right Side of the Lake" blog talked about an improving economy, and cited the following:
- According to RealyTrac, one out of every 167 homes in Lake County is in some form of foreclosure procedure, which is still too high, but foreclosure activity is down 59 percent in the four county Orlando metro area from the previous six months.
You can read the entire article here:
http://lakecountygov.info/2011/07/21/lake-county%E2%80%99s-economy-may-be-turning/
The problem with using statistics or economic data, is that you have to understand how it is calculated. For instance, some US economic data showing improvements have been reported to be modified and manipulated by the White House to distort what is really going on.
But in this case of Foreclosure statistics for Florida and the US, you need to know that due to former Attorney General Bill McCollum's investigations earlier last year, they found that foreclosure processing firms were LYING about conditions they approved in writing as support for foreclosures. As a consequence, the main processors were accused of falsifiying records for banks and owners of foreclosed homes, and the foreclosure PROCESS in Florida ground to a halt as lawsuits were filed, banks were forbidden to process foreclosures, etc.
You can read about that issue HERE as quoted from the Wall St. Journal in Florida Trend:
"Foreclosure filings down across state, nation
Foreclosure activity has fallen throughout the country, slowed by paperwork problems rather than an improvement in the market. During the first six months of 2011, 84% of U.S. cities with populations of 200,000 or higher posted declines in new foreclosure activity, according to a study released by RealtyTrac. Florida has fallen off the leader board almost entirely for foreclosure filings. While Florida cities claimed nine of the top 20 spots for cities with the most foreclosures last year, the only city to make the top 20 so far this year is Cape Coral at No. 12. "Florida is the most visible example of the effect of procedural and paperwork delays on the foreclosure market," said Rick Sharga, senior vice president at RealtyTrac." (See full text below)
The result is that prospective foreclosure cases have been sitting in the pipeline and building up a big backlog. But that doesn't show up in normal statistics reports, thus the media reports that foreclosures are down, when they really still are building up, but just not moving through the pipeline until lawsuits and procedures are resolved.
So, don't always believe data reported by the media if they don't understand or explain the underlying components used for the calculated statistics. Thus, if your Realtor tells you to buy now because foreclosures are down, know the real situation...
vj
Here is the full text of the Wall St. Journal article from HERE:
- July 28, 2011, 2:01 PM ET
Foreclosure Filings Down Across the Country
By Wesley Lowery
- Getty Images
Foreclosure activity has fallen throughout the country, slowed by paperwork problems rather than an improvement in the market.
During the first six months of 2011, 84% of U.S. cities with populations of 200,000 or higher posted declines in new foreclosure activity, according to a study released today by RealtyTrac, a real-estate research firm. Foreclosure activity slowed in 178 of the nation’s 211 metropolitan areas when compared with last year.
Of the country’s 20 largest metro areas, Seattle was the sole market to post an increase in foreclosure activity, with 1 in every 98 housing units receiving a foreclosure filing, up 10 percent from the first half of 2010. “Foreclosures have slowed down not because of a recovery of the market, but simply because of procedural delays,” said Rick Sharga, senior vice president at RealtyTrac.
Florida has fallen off the leader board almost entirely for foreclosure filings. While Florida cities claimed nine of the top 20 spots for cities with the most foreclosures last year, the only city to make the top 20 so far this year is Cape Coral at No. 12. “Florida is the most visible example of the effect of procedural and paperwork delays on the foreclosure market,” Mr. Sharga said. Las Vegas and Phoenix were number one and two on the list.
The foreclosure process has been under scrutiny since the fall when some banks temporarily suspended foreclosures to handle “robo-signing” allegations, in which employees were accused of approving legal documents without properly reviewing them.
As The Journal has reported, banks have dumped many law firms they felt were incapable of handling the large dockets of foreclosures, or were implicated in the robo-signing controversy. And finding new law firms to review foreclosure cases is time consuming, delaying the flow of many of these properties onto the market.
West Coast cities make up the bulk of the list of top metros for foreclosures, with California, Nevada and Arizona accounting for all but four of the 20 cities with the most foreclosures. (RealtyTrac’s report includes documents filed in all three phases of foreclosure: default, auction and real-estate owned.)
In addition to slower foreclosure rates, falling new- and existing-home prices keep some buyers from snagging discounted foreclosure properties. Without being able to get equity on their current homes, many are choosing to stay put.
Home prices remain down across the country, off 4.5% in May when compared with the year-earlier period, according to the S&P/Case-Shiller 20-city index. “Until pricing comes back, the move-up market is dead in the water,” Mr. Sharga said. “Which means fewer people will be purchasing foreclosed properties.”
Visit the WSJ website to see their "heat map" of foreclosures for the country.
vj
