Foreclosures in Orlando on the Rise… Again


Residential foreclosures in Orlando increased by sixty percent in the first quarter of 2019 when compared to the year before. What’s crazy is that foreclosures are decreasing in most of the US.

In the first quarter of 2019 banks foreclosed on a whopping 2,049 homes throughout Orange, Osceola, Seminole, and Lake counties. That’s a staggering increase when you compare it to the number of foreclosures in the first quarter of 2018 which was only 1,280.

Foreclosures were on a steep decline since the market crash of 2009 when plunging home prices made it very hard for homeowners to cover their mortgage payments. In the worst part of the housing crisis, over twenty thousand homes went into foreclosure every quarter. However, since 2015 -2016 Orlando foreclosures were seen less and less.

I believe that it was a perfect storm of skyrocketing home prices combined with Orlando’s lower-than-average wages that hurt the Orlando real estate market. Even more so than other major US cities.

Nationwide, foreclosures dropped by 15% year after year and are currently at their lowest level since 2008. In Orlando, home prices have experienced an increase of over 7% per year since 2014 according to the data from the Orlando Realtor Association.

The rising home prices make it easier for people to avoid foreclosure since Orlando homeowners can sell for enough to satisfy their mortgages.

As an Orlando real estate broker, I always try to stay in tune with what’s happening in my area. Although foreclosures in Orlando are on a steady rise, I don’t think we’re anywhere near the next crash.

There are still many homeowners who bought a decade ago and are currently upside down with their mortgage. However, with rising rent prices they’re better off to continue paying the mortgage… even if they owe more than the home is worth.

Interest rates remain low as well, as the average rate in March was just 4.2 % according to the Orlando Realtor Association.

The mortgage industry today is much different than it was in the early 2000s. Lender guidelines are much tougher and the popular “jumbo loans” are much harder to get approved for as well.

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Banks Can Take Your Assets After Foreclosure!

Stop Foreclosure Before It Starts

Are you behind on your mortgage and worried that the lender might go after your other assets if your home gets foreclosed on?

Unfortunately, it can happen if you live in Florida. This scenario can occur in an instance where if the bank is unable to recoup the full amount of the loan especially if it’s a large loan.

With such a large number of Orlando foreclosures still looming many homeowners are wondering if their lender can garnish their salary or personal bank accounts.

The problems that can crop up from a typical foreclosure sale don’t usually occur until after the sale has taken place and the bank ends up with the short end of the stick.

Here in Florida lenders can go to the court for a “deficiency judgment” in order to try and collect the rest of the money that is owed after the foreclosure. With a deficiency judgment in their possession, banks can go after your personal assets like a car or a boat. However, if the asset isn’t yet paid off, then the lender will have to settle for the second position after the lender for the car or boat, etc.

Florida lenders don’t usually go after a person’s assets following a foreclosure sale especially if they don’t see much to tap into.The truth is that collecting judgments is extremely time-consuming and can be quite costly to the bank.

Banks will pay more attention to homeowners with homes that are worth millions of dollars because the larger the loan the bigger the loss. In these cases, the lenders will check the borrower’s bank accounts especially if the accounts are with the same bank. Depending on the situation, banks can move to freeze or garnish these accounts. Banks will also go after businesses that default on large commercial properties.

Just When You Thought It Was Over

There’s another risk that exists for smaller borrowers that may occur down the line. Many times, banks end up selling off these types of judgments to investors or collection agencies for pennies on the dollar. These agencies hire people that are dedicated to hound people any way they can for a settlement. Since judgments are valid for up to twenty years, it gives them more than enough time to come after the borrower for the balance due.

Avoiding A Deficiency Judgment

The best way to avoid a deficiency judgment is for people to deal with their mortgage problems head-on. take action! If a borrower has the chance to pursue a short sale with their lender then they should do it. Not dealing with the problem is the absolute worst thing that someone can do to themselves. It’s like having a financial ticking time bomb on their hands. Borrowers are soo much better off working with the bank as opposed to avoiding them.

Hire A Short Sale Expert

It’s extremely important that the short sale payoff be recorded as a “full payoff”. To ensure that things are done correctly, enlist the help of a short sale expert. Find a short-sale realtor in your area that has a high closing ratio. Avoid realtors that aren’t experienced in the short sale arena or that have only done a few. Selling a home is one of the most, if not the most important transaction of a person’s life so it’s crucial that they find the best-qualified realtor for the job.

 

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