Slow Florida foreclosure process can delay home price increases
Florida remains the leader in the nation’s foreclosures, and is also the state where home repossession takes the longest, lingering the court system for an average of 31 months. Some consumer advocates say this lengthy process is meant to benefit homeowners who are struggling with financial challenges.
This could give them time to put together more options before losing their homes – such as short selling their property or restructuring their debt through Chapter 13 bankruptcy. 24 states, including Florida, require a court process before a foreclosure is finalized. This ensures mortgage lenders have the necessary documents in order and can prove to a judge they have the right to foreclose before turning families out of their homes.
However, others claim that slower foreclosures are actually hurting the housing market. Abandoned homes lose their value the longer they sit vacant, ultimately costing more to repair before going back up for sale.
Zillow, an internet-based real estate tracker, has released an analysis that showed more home price increases in many of the states with faster foreclosure processes. Some lawmakers believe home prices will recover faster if the foreclosure process weren’t so stalled in the courts.
It isn’t only the process of repossession that sets the trend for home prices nationwide; financial experts say a combination of factors, such as job growth and unemployment, also have an impact. For now, Florida’s home prices continue to be affected by the state’s slow foreclosure process. Consulting with a bankruptcy lawyer could benefit homeowners no matter how fast or slow the foreclosure process is, especially if they would prefer to stop foreclosure and work out alternate forms of debt relief that will allow them to keep their homes.
Source: FloridaToday.com, “Is Fla. policy hurting home prices?,” Patrick Peterson and Wayne T. Price, Feb. 22, 2013