Foreclosure filings spike in Southwest Florida

Foreclosure filings jumped sharply over the year in Southwest Florida, a sign that some homeowners are still struggling to pay mortgages nearly a year after the impact of Hurricane Irma.

The Sarasota-Manatee region recorded 123 foreclosure filings in July, double the 62 posted one year earlier, according to a new report from real estate researcher ATTOM Data Solutions.

But those starts of the foreclosure process — known as lis pendens filings in judicial foreclosure states like Florida — were even with June's total, pointing to some leveling off in the number of homeowners who are delinquent on their mortgages.

Sarasota ranked 56th among the 219 largest U.S. metro areas, with one in every 1,637 homes in some stage of foreclosure, including scheduled auctions and bank repossessions, ATTOM said.

But even with the increase, fewer than 1 percent of the homes in Sarasota-Manatee were stuck in the foreclosure mill, well below the peak during the recession era when the region had one of the highest foreclosure rates in the nation.

Analysts have blamed the number of foreclosures in Florida on Irma's passage late last September, saying the storm disrupted homeowners' ability to pay their loans.

Florida reported a 35 percent increase in foreclosure starts over the year, by far the highest rate among the 21 states with growing foreclosure activity last month.

"Gradually loosening lending standards over the past few years have introduced a modicum of risk back into the housing market, and that additional risk is resulting in rising foreclosure starts in a diverse set of markets across the country," said Daren Blomquist, senior vice president with ATTOM. "Most susceptible to rising foreclosure starts are affordability-challenged markets where homebuyers are more financially stretched and markets with some type of trigger event such as a natural disaster or large-scale layoffs.”

Other data crunchers have pointed to the ongoing impact of Irma, which put thousands of homeowners out of work, stopping their paychecks and their ability to cover their mortgages. Some lenders agreed to work with those borrowers on late payments and not go straight to foreclosure. Other homeowners, whose properties incurred extensive and uninsured damage, simply walked away.

Data provider CoreLogic recently reported the mortgage delinquency rate in Sarasota-Manatee hit 4.0 percent in May, higher than 3.4 percent a year ago but improving from 4.4 percent the month before.

“Serious delinquency rates continue to remain lower than a year earlier except in Florida and Texas, the hardest-hit states during last year’s hurricane season,” said Frank Martell, president/CEO at CoreLogic. “We have observed continued challenges for families to make mortgage payments in regions impacted during the 2017 hurricane season."