Foreclosures on the rise again in Manatee

jsalman@bradenton.comJuly 12, 2012 

MANATEE -- Home defaults in Manatee are again on the rise, fanned largely by new foreclosure starts, which grew to the most in more than two years in June.

Lenders that were holding back on the amount of homes they repossess are once again handing out default notices. The resurgence comes in the wake of a $25 billion fraud settlement reached earlier this year that gives banks clearer guidelines for processing cases and defined penalties for any mistakes.

That deal has paved the way for another wave of foreclosures to sweep through the market. Lingering uncertainty in the economy also hasn't helped, with new hiring stalling in Manatee and Sarasota in May.

Many experts predicted the uptick would come, but because just two months ago Manatee's foreclosure activity slipped to a six-year best, nobody's quite sure what to make of Southwest Florida's foreclosure roller coaster.

"We have had this start and stop process with distressed housing, and along the way we have seen some economic progress being made, but the recovery has been weak," said Sean Snaith, an economist with the University of Central Florida. "A lot of factors have interfered."

Manatee logged 948 total foreclosures in June, swelling 204 percent from May and 179 percent from the same time last year, according figures released Wednesday by RealtyTrac, which records default notices, scheduled auctions and bank repos.

June had the highest number of total foreclosures in

Manatee dating back to November 2010.

Initial foreclosure filings soared over the 185 in May and 159 from a year ago to reach 506 last month, an indication that more trouble may be on the way.

In Sarasota, foreclosure activity eased 22 percent from both the month prior and June 2011, with 545 total cases recorded.

Sarasota's 320 initial foreclosure filings were down slightly from May, but remained above the 302 reported during the same time last year.

Foreclosures in both counties had been slowly climbing for much of the year, with banks reclaiming control of shadow inventory, or properties more than 90 days delinquent that have yet to begin the foreclosure process.

From January to July, foreclosures rose in both Manatee and Sarasota compared to the first six months of 2011.

Even despite last year's monumental slowdown, threats of foreclosures remain as high as ever, showing the economy hasn't loosened much grip on the area's workforce, said Joseph Lehn, a Sarasota foreclosure attorney.

"The banks seem to have their stuff together, and they're moving right along," Lehn said. "There's still a lot of foreclosures out there. They're coming."

Law firms are beginning to pick up the cases that were dismissed when foreclosure mills like the one run by embattled Florida attorney David Stern were shut down last year.

Other lending giants like Bank of America, that also faced foreclosure moratoriums from the robo-signing issues, are beginning to churn more cases again, Lehn said.

New foreclosure starts across the country rose from the previous year's pace for the first time since the fourth quarter of 2009.

More than 311,000 U.S. properties started the foreclosure process during the second quarter.

Throughout Florida, foreclosure activity jumped 23 percent from the first half of 2011. The Sunshine State has had the nation's fifth highest foreclosure rate so far this year, or one foreclosure for every 65 housing units, according to RealtyTrac.

The good news is banks have showed an increased willingness to approve short-sales and loan modifications -- keeping foreclosure inventories at bay and helping home prices stabilize some.

Those distressed properties that continue to hit the market are selling rather quickly -- attracting multiple offers, said Diane Fogo-Harter, a Realtor with Michael Saunders in Lakewood Ranch.

"There's a preconceived notion you will get a deal with a foreclosure, so the demand is high," she said. "For somebody that's ready to buy and needs to be in a home, these properties remain hot on the market."

Josh Salman, Herald business writer, can be reached at 941-745-7095. Follow him on Twitter @JoshSalman.

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