According to a new report from Condo Vultures, lenders have initiated more than 250,000 foreclosure actions - also known as Lis Pendens or notices of default - against properties in the tricounty South Florida region since 2007.
The South Florida region reached the 250,000 foreclosure filings threshold on Friday, Aug. 27, when lenders initiated a combined 248 actions against properties in Miami-Dade, Broward, and Palm Beach counties, according to Condo Vultures.
"To reach 250,000 foreclosure filings since the real estate crash began in 2007, lenders have had to file an average of nearly 200 actions per day in the South Florida region," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based Condo Vultures LLC.
"If current trends continue, South Florida foreclosure filings would have hit their peak in 2009 when more than 97,000 actions were filed in a single year. In the first seven months of 2010, foreclosure filings are down 35 percent compared to 2009, putting the region on pace for less than 70,000 actions this year.
"Compare that to 2008 when lenders filed about 76,000 foreclosure actions in South Florida."
Lenders initiated nearly 39,400 foreclosure filings in South Florida between January and July of 2010, down dramatically from 61,000 filings during the same seven-month period in 2009, according to the report which relies on Clerk of the Court records in Miami-Dade, Broward, and Palm Beach counties.
The shear cost of the foreclosure process compared to short selling a property is a key reason for the drop in total filings, according to Condo Vultures.
At the start of the housing crash in 2007, lenders estimated the typical foreclosure would take about six months to repossess a property at a cost of about $40,000 in the loss of debt service, damage, court courts, and attorneys' fees.
By 2009 as the foreclosure filings were spiking, the process extended out to an average of 18 months with an estimated cost of at least $100,000 per repossession, says Peter Zalewski.
In the end, repossessed properties sell for about the same price as short sales, which are quicker and cheaper to complete.
Of the 250,000 foreclosure filings to date, only about 40 percent - or 100,000 - of the actions have resulted in bank repossessions.
Bank repossessions are increasing rapidly this year with the adoption of a new online auction technology being used by the South Florida circuit courts to clear the backlog. The online auction technology now allows hundreds of properties to be auctioned off more efficiently, industry watchers said.
Before the online auction software was adopted independently in the first quarter of this year, each of three South Florida counties fulfilled the last step in the foreclosure process by holding courthouse auctions as many as five days a week in attempt to clear the backlog of properties. The problem was, only so many auctions could be held each day despite the best efforts by the court officials.
With the new improved online auction process, lenders are taking title to properties from defaulted borrowers at a much quicker pace but still not as fast as before the South Florida real estate crash, industry watchers said.
Halfway through the third quarter, lender have already repossessed more than 9,300 properties in the tricounty area. At this pace, nearly 18,000 properties could be repossessed between July and September 2010, according to the report.
This comes after lenders repossessed 15,100 properties in the second quarter of 2010, representing a 152 percent increase compared to the 6,000 properties repossessed during the same three month period in 2009, according to the report.
In the first quarter of 2010, lenders repossessed nearly 9,200 properties, representing a 25 percent increase over the 7,300 properties taken back between January and March 2009, according to Condo Vultures.