MANATEE -- After taking a roller coaster ride in 2011, foreclosures in Southwest Florida opened the year with mild improvements.
Home defaults eased slightly over the month in Manatee and Sarasota as banks showed increased willingness to approve short sales. Recent job growth also helped recession-battered homeowners catch up on delinquent mortgages.
Despite the monthly progress, the totals in both counties remain scaled back from last January when foreclosures briefly flirted with three-year lows as a result of government sanctioned moratoriums among the nation’s top lenders.
A similar jump statewide marked the first time monthly foreclosures in Florida rose from the previous year’s pace since the robo-signings.
Experts predict the numbers will continue their modest rally through the year, which ultimately will become vital to eat away at existing home inventory and provide price stabilization.
“There’s still some (foreclosures) in the pike, but not like what it’s been the last few years,” said Lee Forbes, broker-owner of Forbes Property Group in Bradenton. “The numbers have taken a dip, but I don’t expect it to drop off too much more.”
Manatee County reported 659 total foreclosures in January, a 3 percent decline from December. That tally, however, represents a 3 percent increase from the same time last year, according to figures released Wednesday by RealtyTrac, which records default notices, scheduled auctions and bank repossessions.
In Sarasota, the county saw its foreclosures slide 12 percent from December to reach 539 last month. But that count also was up 22 percent from a year ago, the report shows.
Some industry experts fear the threat of foreclosure and pending defaults remains as high as ever -- an indicator often referred to as shadow inventory.
They say banks, which have been slow to react in the process, are to blame. A foreclosure from start to finish now takes more than 800 in days in Florida.
Knowing that, mortgage brokers are becoming more willing to let underwater borrowers pursue a short sale, an option now popular for buyers as well.
“We are seeing a lot of people that really want to do short sales,” Manatee Association of Realtors President Leslie Wells said. “The other side of that is they’re starting to move quicker.”
The new mortgage settlement reached earlier this month also will likely cause foreclosures to climb, experts say.
The refinance deal provides clearer guidelines for lenders to follow when foreclosing on a home, which should allow them to push through some of the backlogged cases from last year, said Joseph Lehn, a Sarasota foreclosure attorney.
“This is just the calm before the storm,” he said. “I don’t think it’s the economy improving. We’re still seeing foreclosures. Banks have just been holding off.”
Similar to what transpired locally, the state’s 24,783 foreclosures in January were essentially flat from December and up 14 percent from the same time a year ago, according to RealtyTrac.
Florida has the country’s sixth highest foreclosure rate, trailing only Nevada, California, Arizona, Georgia and Michigan.
Nearly 211,000 foreclosures were reported across the nation in January. That was a 3 percent increase from the previous month but still down 19 percent from January 2011. One in every 624 U.S. housing units had a foreclosure filing during the month.
Many states, including Florida, have proposed legislation now in the works that would expedite the foreclosure process. The Sunshine State version, on its way to the House Judiciary Committee, also would likely push a foreclosure uptick, experts believe.
“We continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw,” RealtyTrac CEO Brandon Moore said in a statement. “We expect to see somewhat uneven trends in local and regional foreclosure numbers going forward as lenders work through these additional legislative and legal roadblocks.”
Josh Salman, Herald business writer, can be reached at 941-745-7095.