The Housing Bubble

The Sun Sentinel reports from Florida. “Florida has the nation’s highest foreclosure rate for the third month in a row, according to RealtyTrac. Florida had 29,612 filings last month, up 20 percent from a year ago. Still, the number was less than half of the state’s peak: 64,588 filings in April 2009. Deerfield Beach housing analyst Jack McCabe said banks will step up efforts to complete short sales with distressed homeowners and unload foreclosed homes and non-performing mortgages to investors in bulk. What’s more, McCabe said, there are 550,000 Florida homeowners who haven’t received default notices even though they’re at least 90 days delinquent.”

“‘It’s not that the foreclosure problem has gone away,’ he said.”

The Star Banner. “The Ocala area had the dubious distinction in November of having the second highest foreclosure rate among metropolitan areas throughout the United States. The rate was the highest it has been in the past 28 months, according to RealtyTrac. Judy Ray, president of the Ocala/Marion County Association of Realtors, said the area’s foreclosures are linked to the community’s unemployment rate. ‘There are people who can’t find jobs, companies closing,’ Ray said. ‘I know people who haven’t made a (mortgage payment) in two or three years.’”

“In addition, Ray thinks that following the problems with robo-signing, banks held off foreclosing, until now. ‘There are limits for the banks. They put up with it, but that’s changing,’ Ray said. ‘And you had to be five, six months behind before the banks even took notice.’ As for the future, Ray said, ‘It’s going to stay the same. They’re not going to go away. I see more bank foreclosure filings.’”

The Tampa Bay Times. “Tampa Bay foreclosure filings jumped 40 percent over November 2011, with more than 2,000 new foreclosures and 1,000 repossessions. And in the three circuit courts governing Hillsborough, Pinellas, Pasco and Hernando counties, court data show that the number of open foreclosure cases dropped less than 1 percent between July and November, evidence of a backlog 70,000 cases deep.”

“Hillsborough Circuit Judge Herbert Baumann said case managers there are actively digging up stalled foreclosures, including some more than four years old, to push to resolution. ‘We need to go case by case and give everyone a chance to come in and explain what’s going on,’ Baumann said. ‘It’s not something we’re going to be able to dramatically reduce in a short period of time.’”

From Florida Today. “Merritt Island bankruptcy attorney Carole Bess said people involved in the housing industry have known that the waves of foreclosures weren’t done because mortgage companies were spacing out the process. ‘I think the market may have bottomed out, but we’re going to see some foreclosures of homes where the decision to abandon them was made a long time ago,’ Bess said. ‘It’s just taken a longer time to have the fallout.’”

“Banks, which have foreclosure backlogs of up to two years, are finally moving on defaulted properties and arranging short sales, said Cocoa Beach Realtor Tim Harber, 2012 president of Space Coast Realtors. ‘It’s people who have had a short sale that has been pending forever that are finally moving forward,’ Harber said. ‘I’m not seeing an increase in the number of homeless people.’”

“John Tuccillo, chief economist for the state association, Florida Realtors, said Florida has suffered more than the rest of the nation during the housing collapse and that suffering will continue. ‘We were overextended more than other places, and because of that our numbers are up and high. We are in fact still struggling with the issues that were created during the market downturn. It’s updating, but it’s not going to go away,’ Tuccillo said.”

The Florida Courier. “The tough housing market is expected to continue to be a drag on the state’s tax collections even after the economy begins to pick up in future years, according to forecasters. And forecasters also anticipate slow growth in property values over the next two or three years, with things picking up to somewhere around 3 percent a year. The lag is caused by a surge in foreclosure filings that have swamped the courts; properties that go into foreclosure now take as much as two and a half years to go from filing to the market.”

“Many of the foreclosures that happened as the housing crisis was roiling Florida still aren’t showing up in the numbers. ‘The worst years are really ahead of us in terms of hitting the marketplace,’ said Amy Baker, coordinator for the Legislature’s Office of Economic and Demographic Research.”

“She suggested during the meeting that foreclosures could still be putting pressure on property tax revenues as late as the 2016-17 budget year. After the meeting, Baker told reporters that more homeowners could also use short sales to try to get rid of homes instead of going through foreclosure. ‘At some point we think short-sales in Florida are going to pick up,’ she said. ‘They haven’t yet.’”

“Since 2007, distressed homeowners have dodged massive bills due to a tax-time saving grace: The debts they were ‘forgiven’ in foreclosures, short sales or principal reductions were also scrubbed from their dues to Uncle Sam. But that tax break is set to expire Dec. 31. Brad Bates and his wife are racing to sell their Meadowlawn home for $100,000 less than the couple owes the bank. Sell by the end of the month, and the couple could see their mortgage debt erased. Any later, and the Bates would face a different kind of debt: a tax bill soaring more than $25,000.”

“‘We’re not wealthy people,’ said Bates, 58, a retired Air Force air traffic controller. ‘That would probably force us … to file for bankruptcy.’”

“To avoid the tax, homeowners can file bankruptcy or prove to the IRS they are insolvent, with debts outweighing all they own. St. Petersburg tax problems and bankruptcy attorney Larry Heinkel said, ‘Almost everyone who is facing a short sale or foreclosure is also insolvent, so it isn’t the end of the world if the short sale doesn’t occur by month’s end.’”

“But the Florida Realtors say the expiration would discourage homeowners from selling in the first place, crimping buyers’ options and bringing ’short sales to a standstill,’ said VP of public policy John Sebree. The Realtors have called for lawmakers to extend the break, saying, ‘Homeowners shouldn’t be forced to pay tax on money they’ve already lost with cash they never received.’”

“Karen Kirchmann said she knows that agony well. After 14 months of trying to sell her and her husband’s Clearwater home, the bank finally agreed to a price $40,000 less than they owe. The couple found a buyer and wrangled a Dec. 28 closing date, but Kirchmann hears the clock ticking. Selling by the end of the year will save the couple the hardship of a $10,000 tax bill. ‘I’m beside myself. I’m exhausted,’ she said. ‘I’m expecting they’re going to screw me once and for all, at the finish line, when there’s nothing I can do.’”

From AOL Real Estate. “Although there’s no hard data on the rate of violent incidents between process servers who deliver foreclosure notices and homeowners who receive them, some who represent the servers say there’s a strong consensus that the housing crisis has aggravated the situation. Foreclosure filings more than quadrupled between 2006 and 2010, skyrocketing from 718,000 to 2.88 million nationwide, according to RealtyTrac.”

“One process server who’s observed an increase is William Greenberg, who’s delivered foreclosure paperwork for 25 years. He reports being physically attacked by an angry homeowner this year — in Florida. The property owner, an attorney, knocked him to the ground, grabbed his neck and ripped off his server badge after he tried to present him with foreclosure documents, Greenberg said. ‘It scared the hell out of me,’ the 60-year-old added. ‘I didn’t know what he was going to do. It was like he had rabies.’”

“Greenberg, who serves documents in the counties of Palm Beach, Broward and Miami-Dade, said that because of the foreclosure epidemic such incidents are much more common than they used to be. He said that he serves ‘10 times’ as much foreclosure paperwork now than he used to. But Greenburg said that the sky-high number of foreclosures isn’t the sole reason behind the rising aggression that he sees toward process servers. He thinks that borrowers are also generally more hostile than they used to be.”

“‘Now it’s different. Now they are pissed off,’ he said. ‘They’re looking at us as if we’re the ones that are the problem.’”