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Rockefeller And The Foreclosure Disaster We Are In

Posted on | October 18, 2011 | No Comments

John D. Rockefeller is quoted as saying, “Every right implies a responsibility; Every opportunity, an obligation, Every possession, a duty.”  A major possession when having attained the American Dream, is the single family home and over the past three years we have seen a massive number of  foreclosures which certainly rocks the definition of “duty”.  These foreclosures have had a serious ripple effect throughout our day to day lives and from reading the news reports related to law suits filed against banks for improper foreclosure proceedings and a host of other effects on families and the housing industry, it’s safe to predict that we have not seen the end of this mess nor the re-definitions of the word “duty”.

In the metro Jacksonville housing market, foreclosure activity fell by more than 50 percent in the first half of 2011 compared to the first half of 2010.  These numbers were reported by RealtyTrac.  Foreclosure activities include default notices, scheduled auctions and bank repossessions  Additionally though, the latest numbers from the Jacksonville business journals are reporting that single family home foreclouses are increasing by 22 percent from the second quarter to the third quater of 2011.  Actual numbers put the total at 4,517 homes that received notice of foreclosure in Northeast Florida in the third quarter compared to 3,694 in the second quarter. The counties included in this Northeast Florida report were Baker, Clay, Duval, Nassau and St. Johns. In 2010, there were 15,286 filings in those five counties. The 168 filings in Clay County represented the biggest year-over-year drop at a 69 percent decline. Statewide in Florida, there were 67,886 foreclosures in the third quarter, which is a 14.5 percent increase over the 59,277 foreclosures in the second quarter but a 56.8 percent decline from the 157,026 foreclosures in the third quarter 2010.

Nationally, reported single family home foreclosures have declined 34.4 percent from the third quarter of 2010.  Ten states account for 70 percent of U.S. foreclosure activity reported in April. Florida had the second highest state total of 19,649 filings in April, although filings dropped 59 percent compared to April 2010.  Foreclosure filings have been on a steady year-over-year decline since February and can be measured at a 62 percent decline from May.  Foreclosure “processing delays” are the main reason for these year-over-year declines.  Foreclosure processing delays in Florida “continue to mask the true face of the foreclosure situation,” RealtyTrac CEO James J. Saccacio told the Business Journal in June. In union with Saccacio, Penny Schmidt, an attorney and foreclosure expert with the Jacksonville Mediation Center, said experts indicate 2011 could be the biggest year for Florida foreclosures yet because of the paperwork delay issues.

Two other issues have contributed to a lag time in foreclosure filings. Penny Schmidt went on to say that many Florida lenders have recently fired a few of their biggest law firms, leading to a standstill in foreclosure filings across the state.  “Without a lawyer, they couldn’t get into mediation or anything,” Schmidt said. “Replacement counsel takes a while, but once that’s rectified and new counsel is acquired, the floodgates will open.”

The other major holdup is a result of the glut of foreclosure proceedings flooding the statewide forclosure system. Schmidt stated “Reams of mishandled paperwork are floating through the foreclosure system, and many cases have been temporarily placed on the back burner because of the poorly handled paper trails.”  Once these issues are rectified, Schmidt expects the foreclosure number to take a massive jump across the state. This statement is fortified in falling property prices statewide over this past Spring and Summer.

On the bright side, according to some recent studies, Jacksonville, Naples and Orlando were the three single family home markets with the greatest decrease in inventory between April and May, according to an Altos Research Mid-Cities report released in June 2011. Additionally, Trulia, inc. identified these Florida real estate markets as “very attractive to international buyers moving to the U.S.”.  Trulia’s report said that buyers from abroad spent $41 billion on the U.S. real estate market in the past year, and $13 billion in Florida alone.
Knowing the numbers and tracking the trends, it is clear and simple to understand that the majority of the U.S. population has been affected by the recession, but perhaps none more so than the segment of the economy tied to real estate. Property values have plummeted almost 20 percent over the past several years and more than 3 million foreclosures occurred between 2007 and 2010. The ripple effect impacts most, if not all, industries with no end in sight. As the most recent RealtyTrac Inc. report states, one in 542 homeowners received a foreclosure filing notice in March. Even though this number is at a 36-month low, the numbers have been impacted by a restructuring of foreclosure filing proceedings and the legal “slow down” within the foreclosure “paperwork machine”, effectively freezing the process for homeowners, investors, and single family home purchases for months and months.

John D. Rockefeller once said that “Depressions will come and go; prosperity has always returned and will return again.” The recent economic crisis has shown improvement and increased activity in recent months and financial quarter in Florida, causing some to speculate that the economy is on the rebound.

 

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