Foreclosure Outlook Grim – a Tsunami coming
By: Gulf Coast Business Review
Lisa Goodner, Florida courts administrator, says residential mortgage foreclosures in Florida will double to roughly 365,000 in state fiscal year 2011-12, which begins July 1. Another expert predicts “a tsunami” of commercial foreclosures.
The residential mortgage numbers are expected to fall to 170,000 this year, as lenders have put a hold on many foreclosure holdings, what Goodner says amounts to a moratorium on filings. Goodner, and representatives from the attorney general’s office and the Florida Bankers Association, testified Feb. 24 to the Florida House insurance and banking subcommittee.
According to Goodner’s presentation, as of last June 30, the number of residential mortgage foreclosures reached 462,339. At year-end, the backlog dropped to 351,768.
Scott Palmer, chief of the mortgage fraud task force in the state attorney general office, testified that, “Florida leads the nation in the percentage of homeowners who are delinquent on their loans.” Palmer also told the committee, “The foreclosure process is really in complete disarray.” Palmer called for simplifying the loan modification process.
Virginia Townes, general counsel to the Florida Bankers Association, also testified that community banks will bear the brunt of commercial foreclosures. She says commercial mortgage loans have “layers of complexity” compared to the relatively straightforward nature of residential mortgage foreclosures.
“We are seeing a tsunami of commercial foreclosures that will take up three to four times the time it takes court to process a residential mortgage foreclosure,” Townes told the committee. “It may spell the death knell of our community banks.”
Townes added that she anticipates that commercial foreclosures will be, “ … incredibly more damaging to our recovery than the severe impacts of the residential mortgage foreclosure crisis.”
To deal with the problem, Townes suggested legislators focus on incentives to work out commercial loans, saying, “We need to be very careful as a government … to not to over-regulate this area.”
Mark Stopawww.stayinmyhome.com
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