Foreclosure uptick could signal flood of new filings

By Kimberly Miller – Palm Beach Post Staff Writer

Banks are revving their foreclosure engines again with an uptick in Palm Beach County filings last month following steep drops since a new foreclosure law was enacted in July.

A 21 percent jump in initial foreclosure filings was measured countywide in October compared to September, but the number of new cases was still down 53 percent from the same time in 2012, according to the Palm Beach County Clerk.

New cases also increased on a monthly basis statewide with a 36 percent hike from September, but were 35 percent lower than last year.

Florida’s increase in new filings bumped it back into first place for the highest overall rate of foreclosures nationwide after two months as runner-up, according to a national foreclosure report issued Thursday by RealtyTrac.

Palm Beach, Broward and Miami-Dade counties ranked highest in the nation last month among metro areas for overall foreclosure activity, which includes new filings, sale notices and bank repossession.

Foreclosure defense attorneys predicted new filings would increase as banks grew more comfortable with the Florida law, which requires lenders to have specific documents with sworn affidavits when filing a foreclosure. The legislation also allows any lienholder to request a foreclosure be processed more quickly through a special court order.

St. Lucie County saw a 42 percent increase in new foreclosure filings in October from September. Martin County’s new filings dropped 23 percent.

“Any time a new law comes out it takes time for clients to adjust,” said West Palm Beach attorney Adam Seligman, whose law firm represents lenders in foreclosure cases. “In this case, they were trying to decide how the law worked out and now that they see some progress they may be pushing forward.”

But other factors could also be driving the higher foreclosure numbers. A five-year statute of limitations on prosecuting 2008 and 2009 cases that were previously dismissed is running out. At the same time, banks may be trying to cash in on sale prices buoyed by investor demand for distressed homes they can buy, renovate, and rent.

In Palm Beach County, RealtyTrac found notices of a foreclosure sale — the step before auction — were up 65 percent in October from September and 72 percent higher than last year. Statewide, sale notices increased 20 percent from September and were up 32 percent from 2012.

“Rising prices mean more of the loan losses can be recouped, either by selling to an investor at the auction or by repossessing the property and reselling as bank owned,” said RealtyTrac vice president Daren Blomquist.

Brian Korte, a West Palm Beach foreclosure defense attorney, said banks may be trying to get older cases that had been dismissed refiled before the end of the year. Florida contract law says a person has five years to sue on a debt, with the right to collect that money expiring at the end of the time period.

Foreclosures that have been ongoing aren’t affected, but those that were dismissed, possibly because of faulty documents or lack of prosecution, may need to be refiled under the timeline.

Korte said his firm has about 125 cases that he believes are past the 5-year limitation and haven’t been refiled. Some are former cases from the Law Offices of David J. Stern, which closed in 2011 leaving an estimated 100,000 cases abandoned statewide.

“We’re starting to see a lot of inquiries from people with cases that were dismissed in 2010 and now they’re getting letters from a new servicer that could refile the case,” Korte said. “I have at least a dozen Ocwen (Financial) letters this week on cases where the homeowner hasn’t talked with someone in years.”