Orlando foreclosed homes continued to grow compared to foreclosures in October last year, based on a report on metro area foreclosures from a California-based real estate company.
With a foreclosure rate of one residential unit out of every 117 units in default or in foreclosure, Orlando ranked ninth in a listing of the 203 biggest metro areas in the U.S. based on rates of foreclosure activity.
More than 7,500 housing units in Orlando received delinquency or foreclosure notices, seven-percent up from just above 7,000 notices filed in October last year. When compared to the previous month however, filings dropped slightly as Orlando posted more than 7,600 notices in September.
One of the reasons for the continued rise in foreclosures in the Orlando metro area compared to last year is the failure of short sales. Short sales can help distressed homeowners avoid foreclosure and keep their credit scores from getting worse. But the difficulty of real estate agents and homeowners in completing short sales have been contributing to the increase in foreclosed homes in Orlando.
According to members of the Orlando Regional Realtor Association, advising distressed homeowners to sell their homes in a short sale to avoid foreclosure and finding buyers to acquire these homes are not very difficult. What is difficult is the process of convincing banks to accept the purchase offers, and when they do accept the offers, they do not have the staff to process the papers.
According to experienced realtors, foreclosure sales take about 5 weeks to complete and conventional house sales take about 7 weeks. Short sales take the longest time - more than 10 weeks. In January, short sales can be completed in 7 weeks, but now, as more troubled families turn to short sales to avoid foreclosure, banks now do not have the personnel to look into the short sale offers.
Short sales take too long some realtors have even declared them as not profitable in terms of the time and effort they invest into short sale negotiations. The same level of effort and time they invest in selling foreclosures, new homes or existing homes could net more, but they still are willing negotiate short sales if the sellers or buyers are also committed.
According to lawyer Justin Clark, who has negotiated hundreds of short sales over the past few years, the short sale process is easier for homeowners who have no second mortgages.
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