Foreclosures Spike in Tri-County Region

Posted on June 19, 2008
Filed Under Foreclosure Homes | Leave a Comment

In the tri-county region of Manatee, Sarasota and Charlotte foreclosures spiked by 12% during May 2008. Adjacent Fort Myers-Cape Coral recorded the second highest as regards per capita rate in the country with a foreclosure rate of 1:79. In Charlotte and Sarasota the rates were 1:179 and 1:206 respectively. In Manatee it was 1:292. The national rate calculated to 1:483. These were the May 2008 figures as released by RealtyTrac.

Thus the tri-county area is better off than its southerly neighbour but nevertheless the continuous increase in the pace of foreclosures is causing concern for both lenders and borrowers. In May there were 2,161 foreclosure postings – this is inclusive of default, auction and bank repossessions. In April this year the number was 1,934 and a year ago it was 1,432.

Sarasota County, Charlotte County and Manatee County saw foreclosure increases of 19%, 7% and 4% respectively from April this year. May was the third consecutive month that saw month-to-months increases. It was the 29^th consecutive month to witness year-over-year spikes. Defaults jumped by 1% but auctions decreased by 3%. However bank repossessions doubled from the previous year. The banks have in their possession now 700,000 units.

Tramm Dudson a banker from southwest Florida feels optimistic because there are less foreclosures in the initial stages in comparison to the tail enders. This meant that banks are taking on the load. For the foreclosure process to complete its full course the time taken is about six months and the cost for the lender is nearly $3,000. In the instance of a contested case the process might go on for 10 months and cost the bank about $10,000. This is making banks more amenable to out of court settlements. The banks then lose out less than what they would incur if they ran through the full process. The banks only advance 80% of the value of the house. It keeps back 20% to meet expenses like foreclosure and maintenance. Banks are now anxious to sell off units at a heavy discount because of running maintenance expenses. This has created unforeseen opportunities for investors and new nest builders.

One such realtor, Joan Erni says that her firm made its debut in March and has already signed up with 8 local banks to value the units and get them ready to be marketed. One sale has already been transacted and two more are pending. The first one was quickly sold within two days.

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