Foreclosure Backlog: Florida’s Biggest Concern

23 June 2008

Author: admin Posted under Foreclosure homes

Ever since the subprime mess erupted, Florida has been on top of the list of states with the highest foreclosure rate. Last month, the state had the second most number of foreclosure filings in the nation.

But unlike California, which secured the top spot, Florida is having a difficult time fueling a foreclosure sale boom. For instance, home sales in Sacramento soared by 76 percent last month. Of course, this surge can be attributed to bargain hunters who are scouring the state for the best foreclosure deals.

Experts think that something is influencing the lack of home sales activity in Florida. Some of them believe that it is possible that most of the mortgages are being worked out and thus, foreclosure home sale remain to be sluggish.

Since the foreclosure process involves several steps, distressed homeowners will try to stop foreclosure until the last minute. Naturally, lenders will be more than willing to work out these mortgage problems, in the hopes of saving on foreclosure filing and holding costs.

The slow foreclosure process in Florida is certainly bad news for residents and investors. One area that is adversely affected by this is home price. As more and more foreclosures remain unsold, home prices can be expected to decline. Sellers, hoping to sell their inventory of repossessed properties, become quite anxious and offer greater incentives and bigger discounts, in order to attract more buyers.

If this situation remains unchanged in the next months, Florida could expect more foreclosure-related problems. As it is, many homeowners are struggling with their mortgage payments because of soaring fuel prices and rising consumer debt.

Those who consider selling their home to stop foreclosure might have to consider a short sale especially since their mortgage debt exceeds their home’s current market value.