Why Florida Foreclosure Rates Highest

Florida Foreclosure

Photo Courtesy of Celiemme via Flickr

A recent national study reported that Florida foreclosure was tops in the United States in foreclosure rates. Anyone who understands these figures may no doubt feel concerned, if not alarmed, for the housing market. The question is, why are foreclosure rates in Florida trending up when it is actually falling nationally? Could it be the approach to handling foreclosures? Faulty or deceptive foreclosure practices? Experts in the industry say the judicial foreclosure process in Florida is far less efficient than it should be for the following reasons:

  • The foreclosure process in Florida takes around 800 days, which is three times longer than the average foreclosure process.This extra long process time has contributed to an ever growing number of foreclosure cases stuck in the review process.
  • Florida’s court system has an overwhelming backlog of foreclosure cases that the state hired retired judges to help out with the foreclosure cases

Process Servers’ Contribution To Florida Foreclosure Rates

As of June 30 this year, there are approximately 462,339 foreclosure cases pending in Florida. According to state investigators, these alarmingly high foreclosure rate allegedly points to:

  • robo-signing foreclosure documents without reviewing for accuracy
  • process servers filing false affidavits
  • homeowners never receiving court summons
  • process servers not taking the required steps to locate borrowers
  • process servers violating rules related to the personal delivery of legal papers
  • process servers are being paid by the piece, hence they rush through the files to earn a higher income.
  • the use of ‘rocket dockets’ by lenders and their attorneys to speed through thousands of foreclosure cases

The Government’s Answer To Florida Foreclosure

Recently, a federal-state agreement with the nation’s five largest mortgage servicers provided an estimated $8.4 billion in relief to Florida homeowners whereby:

  • An estimated $7.6 billion in benefits will be available to Florida borrowers for loan modifications, principal reduction and other direct relief
  • An estimated $170 million will be available as cash payouts to Florida borrowers who suffered servicing abuse and lost their homes to foreclosure from the dates January 1, 2008 through December 31, 2011
  • An estimated $309 million will be allocated for refinancing to Florida’s underwater mortgage borrowers
  • The state of Florida will receive a direct payment of $334 million

Florida foreclosure statistics may not be too promising in the immediate future, but what matters is that the government has been made aware that aside from mere economic reasons, process servers with faulty practices are involved, and that the government is doing something about it.

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