Florida’s foreclosure rate second highest in the U.S., filings increase as courts open

HILLSBOROUGH COUNTY, Fla. — A moratorium on foreclosures offers protection to families unable to pay their mortgages because of the COVID-19 pandemic. But I-Team Investigator Kylie McGivern found foreclosure filings are on the rise with Florida currently ranked second in the nation.

While some experts say this is different than the Great Recession, others are bracing for another housing crash.

Rick Sharga, the executive vice president of RealtyTrac, which publishes a nationwide database of foreclosure properties, told the I-Team that foreclosures have dropped dramatically because of the protections.

“We’re in a very unusual time right now, because of the enormous efforts that the government and the industry have put in place to prevent foreclosures from happening,” Sharga said.

According to data from RealtyTrac’s parent company, ATTOM Data Solutions, as of September, Florida had the second-highest foreclosure rate in the country behind South Carolina.

“Florida is definitely an outlier. Most states have continued to see foreclosure activity dip. In Florida in July, we saw the numbers go up,” Sharga said.

The I-Team reviewed the data for Florida and found that in August, the number of properties subject to a foreclosure filing was 316% higher than in July. In Hillsborough County, during the same time period, foreclosure filings were nearly double that — a 612% increase.

Sharga said the increase in foreclosure filings in Florida could be a matter of court operations resuming, delays in reporting, or a change in some foreclosure rules.

Still, he said Florida is worth keeping a close eye on.

“There are markets like Orlando, which for all intents and purposes could become ‘ground zero’ in this down-cycle, simply because of its extreme dependence on travel and tourism,” Sharga said.

Lakeland was among the top five metro areas in the country (with a population of at least 200,000) with the highest foreclosure rate in August.

“I don’t anticipate anything like a crash, anything like the bubble bursting like we saw back during the Great Recession,” Sharga said.

Sharga pointed to low-interest rates, a limited supply of housing and buyers bidding against each other.

“I expect to see demand continue to be very strong,” Sharga said. “So that should protect home prices, at least for the near future.”

What Sharga interpreted as an indication of a strong market, Andrew Lyons saw as a red flag.

“We are on the precipice of a disaster right now,” the New Port Richey foreclosure defense attorney said. “I’ve been doing this 25 years, I remember this cycle, when you list it and you’re getting offers that day, that’s not sustainable.”

Lyons anticipates a flood of foreclosures early next year, once government protections are lifted.

“You’ve got unemployment, which is through the roof,” Lyons said. “I think there’s a major crash coming.”

Lyons said he is seeing the uptick in banks filing for foreclosures.

“The mortgage is the last thing that people stop paying. So it’s a very good indicator, when we see mortgages not being paid, how bad things are,” Lyons said. “The only thing that could possibly follow from that is a giant wave of foreclosures. The same problem we had in 2007-08 we’re going to have again.”

Mary Ellen and Richard DiPietra told the I-Team they don’t want to lose everything, not again. The couple’s St. Pete Beach home went into foreclosure in 2007.

“So many memories,” Mary Ellen told the I-Team, looking at the house she thought would be her forever home. “We had seen that as our future. We saw grandchildren coming and playing in the pool.”

Mary Ellen started her own wedding business and married couples on St. Pete Beach after working at the Don Cesar. Richard worked in real estate before their lives unraveled, they declared bankruptcy and lost their home.

“It all happens so quickly, we couldn’t believe it,” Richard said.

Richard’s nightmares from that time have resurfaced during the pandemic.

“That doesn’t really go away. That’ll always come back,” Richard said. “It’s just a reel. You know, a reel of things happening to you that you wouldn’t expect would happen and you’re really almost powerless.”

For Mary Ellen, there was a feeling of déjà vu, she said.

In the beginning of the shutdowns, the food pantries the couple relied on through local churches temporarily shut down. Then, the couple’s homeowner’s insurance threatened to cancel due to a damaged roof. Expenses quickly mounted on the DiPietras’ fixed income.

In order to make sure she had money for food, “I immediately put my mortgage in forbearance,” Mary Ellen said.

Millions of Americans did the same.

In a forbearance plan, monthly payments are reduced or paused in order to ease a temporary financial hardship. But the missed payments add up and are still owed when the grace period ends.

Governor Ron DeSantis let the moratorium on evictions and foreclosures expire Oct. 1, after extending it five times during the COVID-19 crisis.

The governor’s communications director said in a memo, “the state’s mortgage foreclosure and eviction relief was permitted to expire to avoid any confusion over whether the CDC’s evictions order should apply in a particular circumstance.”

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The Centers for Disease Control and Prevention issued a residential evictions hold order in September, for renters who submit a declaration to their landlords saying they can’t pay the rent because of the pandemic. The order will expire Dec. 31, unless it’s extended.

The CDC order does not protect against foreclosures, however. Many homeowners – the 70% with federally insured mortgages – are protected by the Federal Housing Administration’s ban on foreclosures. But that order too is set to expire at the end of the year.

That’s why Attorney Lyons recommends homeowners communicate with their lenders now, rather than wait until the end of forbearance when payments come due.

“Definitely work with the bank or have a professional help you work with the bank. This is a very good time to get it modified if you haven’t paid it in four or six months or so,” Lyons said. “This is going to come to an end.”

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