MANATEE — Lenders continue to initiate foreclosures at an elevated rate in Manatee County despite government efforts to keep people in their homes.
Mortgage lenders and servicers filed 540 foreclosure lawsuits in Manatee County Circuit Court last month, six more than they filed in September, court records show. The number of October filings was the third-highest monthly total in 2009, which is on pace to break last year’s record of 5,592 filings.
That’s despite the federal “Making Home Affordable” mortgage-relief program, designed to help delinquent homeowners avoid foreclosure by modifying their loans.
After a weak start in March, the program had reached one in five eligible U.S. homeowners by the end of October, the Treasury Department said Tuesday. But it’s just one in eight in Florida, possibly because of high numbers of investor-owned properties that don’t qualify for the program.
A local attorney who represents homeowners in foreclosure cases said the program has been ineffective for another reason.
“They (lenders) say they’re making offers, but they’re not good-faith offers,” said Dawn Bates-Buchanan, managing attorney of Gulfcoast Legal Services Inc. in Bradenton.
She said in one case, a lender made this offer to one of her clients who couldn’t make his $1,370 monthly mortgage payment: Agree to pay $1,525 a month for three months and $17,000 in the fourth month. If the borrower made the three $1,525 payments on time, that would make him eligible for a permanent loan modification and the lender would consider waiving the balloon payment.
“No one in their right mind would agree to that,” Bates-Buchanan said.
Government officials say they are pressing mortgage companies hard to improve their performance. Still, many housing advocates have been disappointed with the $50 billion plan’s progress and say that getting a loan modification remains a battle.
Most of the more than 650,000 U.S. borrowers enrolled in the program so far have been signed up for preliminary trial modifications for up to five months. To make the change permanent, though, they must complete a big stack of paperwork and show they can make their payments on time.
“We’re seeing some early indications that the servicers haven’t done enough to get all the documents in,” said Michael Barr, an assistant Treasury secretary.
Thus, Bates-Buchanan and others expect local foreclosure filings to remain elevated as the area’s unemployment rate continues climbing. Manatee County’s jobless rate rose to 12.7 percent in September, the highest since the state started keeping records in 1974.
The Herald’s analysis of October foreclosure filings also showed:
n 73 percent of property owners were underwater or owed more than what their property is worth.
n 47 percent of the properties had homestead exemptions.
n The Serenata Sarasota condominium complex near Tuttle Avenue in southern Manatee County had the most foreclosure filings with 66, all but two of them owned by the developer. Greenbrook Village had the second-most, with 17, followed by 13 in Lakewood Ranch Country Club Village.
n Among homeowners, eight were from foreign countries: two each in Canada and the United Kingdom, and one each from the Czech Republic, Germany, Luxembourg and the West Indies.
— The Associated Press contributed to this report.
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