A Review of Statewide Foreclosure Filings

A brief survey of news articles on foreclosures throughout the state of Florida is likely to leave one overwhelmed with potentially conflicting figures. In fact, many Floridians would probably not be surprised to read an article published by a major media outlet describing plummeting foreclosure rates one minute, and another documenting rising foreclosure rates the next. To better understand foreclosure trends throughout the state of Florida, SGS examined an exhaustive index of three primary indicators of foreclosure issued over a three year period (March 2006 – February 2009).

The first, Lis Pendens, indicates that legal action has been taken on a property. After receiving this notice, it is still possible for the mortgage holder to rectify the delinquent mortgage and avoid foreclosure. The second filing, Notice of Sale, notifies the mortgage holder than the property has been scheduled for foreclosure sale on a specified date. Real Estate Owned (REO) indicates that the bank or mortgage lender now owns the property, most commonly after the property fails to sell at auction.

A brief comparison of Lis Pendens, Notices of Sale, and REO’s sheds some light on one of the possible reasons for large disparities in reports on foreclosures. Since about March of 2007, there has been a growing gap in the number of Lis Pendens issued and the number of homes that eventually went to auction. One must take great care, therefore, in reporting on statewide foreclosure statistics. While reporting the number of Lis Pendens filed may reflect the number of foreclosure proceedings started, it does not necessarily reflect the number of homes that were eventually sold at auction.

Demographic Profiles

By matching foreclosure records to existing demographic data in the Florida Realtors® Datamine, a limited profile of those who have experienced home foreclosure can be explored. It is important to note that the following analysis has three key limitations:

1. It applies only to those receiving at least one foreclosure filing between March 2006 and February 2009

2. It includes only registered voters whose records matched the information on the foreclosure filing

3. It includes only those for whom demographic data is available

The following demographic profiles are useful in helping to understand basic characteristics of many of those experiencing foreclosure in Florida. Additionally, the following information will be useful in the development of more robust studies of home foreclosures in Florida. In order to develop truly representative profiles of all Floridians undergoing foreclosure, however, additional survey research is recommended.

Level of Income

What becomes immediately apparent upon reviewing the annual income levels of those undergoing foreclosure is that the problem is not limited to homeowners with low incomes. Over 20% of all matched records indicated annual incomes of $50,000-­‐$75,000, and an additional 20% of matched records represented those with incomes of $100,000 or more. Home foreclosures are not limited to the wealthy, either. 27% of all matched records represent homeowners with reported incomes of $35,000 or less.

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Florida – The Face of Foreclosure