TAMPA — The number of people facing new foreclosures locally and statewide has plummeted recently by more 40 percent by one count, but unfortunately the change seems related to a new law rather than homeowners’ improved fortunes.
RealtyTrac, a real estate marketplace and research firm, on Wednesday said 5,220 Floridians received first-time foreclosure notices in August, down 43 percent from July, when 9,180 people received such notices.
The numbers also fell in the Tampa Bay area, where 1,086 homeowners got hit with such a notice last month, down 25 percent from the 1,452 homeowners hit with foreclosure in July.
RealtyTrac’s numbers differ from the Florida court system’s own foreclosure numbers because of a difference in the way the two parties track first-time foreclosures. The Office of the State Courts Administrator in Tallahassee suggests the number of first-time foreclosure filings in Florida is down even more dramatically.
First-time foreclosure filings fell by 70 percent statewide from June to July and by 78 percent in the Bay area, the state agency said. The state doesn’t yet have figures for August.
In both cases, a new law is behind the steep dropoff, not any major improvement in troubled mortgages.
The Florida Legislature passed a new law in the spring speeding up the foreclosure process in Florida, which can take longer than 800 days from start to finish.
The law requires lenders to prove that they hold the promissory note and that they have authority to foreclose on a property. It’s supposed to prevent a repeat of the foreclosure scandal that blew up nationwide, when certain lenders were using fabricated mortgage documents.
Matt Weidner, a St. Petersburg lawyer who defends delinquent homeowners, said some banks now are having trouble coming up with the required documents. So, while the new law was supposed to fast-track foreclosures, for now it’s slowing them down. Representatives of the Mortgages Bankers Association of Florida and the Florida Bankers Association were not available to comment Wednesday.
“Will they be able to work out a solution? Maybe,” Weidner said. “But, maybe Humpty Dumpty falling off the wall won’t be able to be put back together again.”
Signs are that banks already may be working out some of the glitches from the new law. Some early numbers coming into to the Office of the State Courts Administrator show foreclosure filings seem to be rising again, said Kris Slayden, a staffer at the state agency.