Foreclosure Filings Down for Third Straight Month

October marked the third month of decline in foreclosure filings. A total of 332,292 new filings were made in the month of October, a 3% drop from September. However, October’s tally for 2009 is still 19% higher than October 2008, and with a recent increase in unemployment, with the nationwide unemployment reaching 10%, it appears that the 3 month slide may only be temporary.

In addition, a large part of the decrease can be attributed to the way the Banks and Courts are approaching the foreclosure process. The Courts realize that, with the number of foreclosures at an all time high, something must be done to ease the burden on the court system. Several different factors are behind the recent decrease in new filings.

First, the White House’s initiative to create an incentive for more loan modifications, or the “Obama Plan”, as it is often referred, has begun to have slightly more success than at the outset. Initially, the Obama Plan had underwhelming results, with only a few thousand homeowners out of hundreds of thousands of applicants actually realizing any relief. Now, the Banks are more likely to help the homeowners achieve loan modifications. However, this often acts as a short-term salve, and in Florida in particular, where over half of the homeowners who signed loan modifications have re-defaulted on their modified loans, the loan modifications have not had the success they were expected to have.

In addition, more jurisdictions are requiring that the Banks and homeowners go into mediation at the outset in an attempt to resolve the debt dispute. Mediations are an excellent method to have the parties sit face-to-face in an attempt to work out the issues, but far too often, mediations end in an impasse, as the Bank representatives use mediations as an attempt to obtain the borrower’s financial information for a loan modification, and many homeowners require a better resolution than a loan modification to save their home.

In short, while there may be a short-term decline in new filings, the current foreclosure climate will stick around for the next few years, at the least, especially considering the recent increase in unemployment. Hopefully, new legislation will be passed to provide greater relief to homeowners in distress, but in the meantime, The Ticktin Law Group will continue to defend Florida homeowners against the banks and their predatory lending practices, so that we may help them keep their homes!

READ the AP Press Article from November 12, 2009.