It seems that Florida's foreclosed homes list will continue to be burdened with distressed properties despite the progress made towards economic recovery and stabilization of the housing market.
Last month, an increasing number of homeowners in Florida were reported defaulting on their mortgage payments, prompting industry experts to fear another flood of foreclosures.
Notwithstanding the rising number of mortgage defaults, indications of recovery were noted in several areas in Florida. In Tampa Bay, the number of foreclosure filings dropped by 14 percent compared with July. The continuing drop in foreclosure filings has been noted for many months this year.
According to industry experts, buyers have been grabbing foreclosure houses which greatly help in slowing down the three-year decline in home prices.
A recently released market data showed that the number of foreclosure cases in Florida increased by 10.5 percent to 62,401 in August from 56,486 total foreclosure filings in July.
More than 50 percent of the foreclosure rate increases were posted in Orlando and its suburban areas while the remaining numbers were shared by Miami and Jacksonville.
Last month, Tampa Bay posted foreclosure filings on 5,180 properties, a drop from July's 6,767 but higher compared with 5,298 cases filed in August 2008. Month-to-month foreclosure filings also declined in the counties of Hillsborough, Pinellas and Pasco but jumped in Hernando County.
The biggest decline in foreclosure filings were reported in Sarasota-Bradenton and Cape Coral-Fort Myers. These areas started to see their foreclosure home list rose in 2005. Industry experts noted that Florida areas that showed a decline in foreclosure filings are those where buyers flocked to take advantage of deeply discounted foreclosed homes.
Nationwide, the foreclosure activity remained flat for the last two months. However, industry experts feared future rise in foreclosures. One of their concerns that may trigger another flood of foreclosures is the option adjustable-rate mortgage (ARM) with a combined value of $189 billion.
Holders of ARMs have the option to pay less than the standard monthly payment. According to market data, 46 percent of ARMs borrowers are one month or more behind on their mortgage payments. Experts said that over 1 million ARMs are scheduled to reset with high interest payments from now to 2011.
For now, the housing market is enjoying improved sales as first-time homebuyers grab properties on foreclosed home list before the expiration of the $8,000 federal tax credit.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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