Florida was unprepared for the high amount of foreclosures that it has experienced in the last three years. With exceedingly high unemployment and the imminent foreclosures that follow, many areas in Florida are experiencing foreclosure rates above 50% and it is having rippling effects throughout the system.
South Florida has perhaps been hit the hardest. Foreclosure rates in Miami-Dade exceed 50% and there have been no signs of this trend stopping. At this time, foreclosures take over 20 months to process in the state of Florida, the U.S. average is only 16 months.
The extraordinary amount of time it takes for foreclosed homes to reach the market in Florida causes many other problems. Homeowners that live in high-foreclosure neighborhoods have watched their home values plummet and undesirable creatures occupy the vacant properties. Neighborhoods that was once very desirable to live in now look abandoned and run down. The decreased values and lack of curb appeal has made these available homes even harder to sell once they hit the market.
Florida requires that all foreclosures come before the court for approval. This requirement has clogged up the court system and led to many documents being filed incorrectly with the court. Lenders, in an effort to move things along, have admitted to falsifying documents in an effort to push the case through. Judges, overburdened by the case load, have admitted to blindly approving foreclosures in an effort to clear their docket.
The state of Florida gave the court system a large grant in the beginning of 2010 to use toward clearing up the foreclosure back log. With this grant, the court system brought back judges and rented office space just to deal with foreclosures.
Once a property is foreclosed upon, an auction date is set to sell the property. Most foreclosure sales are held at the county court house. However, the unbelievable amount of properties needing to be sold led to a back up again. Recently the Miami-Dade area switched its auctions to an online forum which enabled it to move more Miami foreclosures on to the market faster.
Another crisis that is a direct result of the high foreclosure rates in Florida is the low amount of property taxes being collected. Many home owners realized that they were paying taxes on a home valued at twice or three times the amount it was currently valued. These home owners have requested appraisals and, once appraised, their tax burden is adjusted. The amount of appraisal requests have created a back log in this department also, with many home owners waiting a year or more to have their property appraised. The reduction in property taxes has left many area governments strapped for cash.
Real estate speculators believe that the sate has not seen the worst of its real estate problems yet with Florida foreclosures. The state continues to suffer record high unemployment, and requests for foreclosure hearings have not slowed down. Bank of America, which has more bad loans in Florida than any other lender, has announced it has hired more people to handle this ongoing problem.
Home owners that are trying to save their homes face many delays and problems. One home owner recently interviewed stated that it took her 18 months of fighting to become approved for a loan modification. Other problems with the Home Affordable Modification Program are the fact that many people simply do not qualify under their guidelines.
Florida non-profit agencies have been overwhelmed with requests for mortgage assistance. These companies, designed to help a small amount of people, are receiving thousands of requests each month. Many residents have run out of places to turn for help and simply await the final eviction notice.
The Florida real estate market will take many years to recover. When the rest of the country is well on their way to recovery, Florida will still be sorting out a very large real estate mess.
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