The state of Florida experienced a 42 percent drop in foreclosure activity for the month of November. As promising as this might sound, the decrease was expected and does not signal an improvement for the housing market. Rather, the plummet is attributed to the cessation of foreclosures by some major banks after allegations of robo-signing.
However, according to a RealtyTrac report from last week, an expected seasonal dip also contributed to the decrease. However, this dip is temporary, and the foreclosure numbers are expected to rise for the first quarter of 2011. Still, the robo-signing controversy played the most substantial role in the foreclosure decrease.
According to RealtyTrac spokesman Daren Blomquist, lenders were forced to stop foreclosure actions while they investigated their foreclosure processes after public outrage over robo-signing accusations. Lenders are proceeding much more cautiously, creating a slowdown in foreclosures.
Nationwide, less than 300,000 properties received a foreclosure notice. This is the first time the number has dropped that low since February of 2009. This represents a 21 percent month-over-month decline in foreclosure notices. Further, the decrease was the most substantial decline recorded since January 2005, when RealtyTrac began publishing the U.S. Foreclosure Report.
For University of Central Florida economist Sean Snaith, this is not celebratory news. He said the housing market in Florida will not improve absent the creation of more jobs.
Also, to keep things in perspective, although the number of foreclosures is significantly down, Florida still has the second-most foreclosure filings nationwide with a total of 32,938 filings. Nevada holds the top spot with the highest number of filings for 47 months in a row.
Source: Tampabay.com “Florida foreclosure filings plummet 42% amid robo-signing mess,” Mark Puente, 16 December 2010