The number of distressed Florida homes in May dropped by 14 percent over the year due in part to the decline in Pinellas foreclosures.
In May, foreclosure filings in Pinellas dropped by 24 percent compared to filings one year earlier, offsetting the increases in filings in other Tampa Bay counties. The 12-percent drop in filings in Sarasota also helped, based on foreclosure numbers released by RealtyTrac.
Foreclosure filings in the counties of Hernando, Hillsborough and Manatee all increased year-over-year by an average of 3.6 percent. Foreclosure filings in Pasco County slowed by 4 percent, but its foreclosure rate was still among the highest in Florida. Similarly, filings in Polk County dropped by two percent, but its rate of foreclosure ranked 16th on the county rate chart.
Pinellas and Sarasota were the Tampa Bay counties that contributed to the year-over-year drop in Florida foreclosures. However, despite the decrease, Florida still posted the third-highest foreclosure rate among states. It contributed nearly 51,000 foreclosure filings to the nationwide total, accounting for 15.7 percent of the almost 323,000 foreclosures posted across the country.
To further cut down the pace of Pinellas foreclosures, the joint court system of Pinellas and Pasco launched a mediation program to help distressed homeowners negotiate an affordable repayment scheme with their lenders.
Based on court records, there are currently about 33,000 mortgage foreclosure cases that need to be processed in Pinellas and in Pasco, and more cases are expected to be filed if there is no effort to intervene. If troubled homeowners are not helped, more homes are repossessed, property values fall down further and property tax revenues are cut down. Also, neighborhoods full of vacant homes eventually fall into blight.
Under the mediation program, which is being set up in all Florida county courts under an order from the state Supreme Court, lenders are required to participate in the mediation if the borrower requests for one.
In the Pinellas-Pasco area, the requested mediation starts with the selection of a certified mediator by nonprofit Mediation Managers. During mediation, the lender and the homeowner discuss viable options for preventing foreclosure, such as mortgage modification or short sales. Financial counseling will also be provided to borrowers so they can make the best decisions for themselves and their families.
The one unpleasant thing, however, in the mediation program is the mediation fee, which is $750. If the mediation turns out in favor of the borrower, the lender will pay the fee, but if it does not, the fee will be rolled into the final foreclosure judgment amount.
A number of housing advocates lauded the statewide mediation program, but most others are doubtful about the real intentions of some participating lenders. Nevertheless, it is hoped that the program can help slow down further Pinellas foreclosures.