Number of homes in foreclosure levels off

The foreclosure crisis appears to be leveling off - and the Cape Coral-Fort Myers area is no exception.

The number of people facing foreclosure nationwide is almost flat from a year ago, according to the latest report from RealtyTrac Inc., a private foreclosure listing service.

A third fewer people are receiving legal warnings that they could lose their homes. And foreclosures are receding in some of the hardest-hit cities.

Cape Coral-Fort Myers, the No. 5 metro area for foreclosure rates, was down almost 19 percent, according to the report.

In a separate report last week, the Southwest Florida Real Estate Investment Association released statistics showing that 847 foreclosure lawsuits were filed in Lee County in May - a three-year low. There were 1,008 in April and 1,823 in May 2009.

Still, the number of foreclosures remains extraordinarily high. Experts caution that a big reason for the stabilization is that banks are letting delinquent borrowers stay longer in their homes rather than adding to the glut of foreclosed properties on the market. New consumer protection laws, which vary by state, have also meant borrowers can spend more time in their homes.

A new wave of foreclosures could be coming in the second half of the year, especially if the unemployment rate remains high, mortgage-assistance programs fail, and the economy doesn't improve fast enough to lift home sales.

"It's not anything like a recovery yet," said Rick Sharga, a senior vice president at RealtyTrac.

RealtyTrac reported Wednesday that almost 323,000 households, or one in every 400 homes, received a foreclosure-related notice in May. That was up 0.5 percent from a year earlier but down 3 percent from April.

But in a sign that the crisis is far from over, the number of homeowners who lost their homes to foreclosure hit a record of almost 94,000 in May. That number may finally peak next year, as lenders try to work their way through millions of delinquent loans.

Economic woes, such as unemployment or reduced income, are the main catalysts for foreclosures this year. Initially, lax lending standards were the culprit. Now, homeowners with good credit who took out conventional, fixed-rate loans are the fastest growing group of foreclosures.

A record high of more than 10 percent of homeowners with a mortgage had missed at least one payment as of the end of March, according to the Mortgage Bankers Association. But the number of homeowners just starting to show trouble is trending downward as the economy improves.

"That's a very good thing," said Thomas Lawler, an independent housing economist in Virginia. But he noted that even with that positive trend, "you are highly likely to see an acceleration in the number of actual completed foreclosures." Courtesy of the Fort Myers News Press. Find more Fort Myers Real Estate information.

Lee County's largest foreclosures enriched few, burned many

They were simply irresistible.

Banks threw money at them and developers paid wildly inflated prices for the land needed to build them.

But they ended in huge foreclosure lawsuits filed by the out-of-town lenders that financed them.

Here are the top three of all time foreclosures in Lee County, all filed within the past year:

• Grosse Pointe Development: A total of $340 million in debt owed to Dutch bank SNSPF Interim Finance B.V. for Tarpon Point in Cape Coral, Bell Tower Park in south Fort Myers and a rock mine in Bonita Springs.

• Oasis: $157 million owed to Bank of America by Miami-based Related Group for the partly completed Oasis high-rise riverfront condominium in downtown Fort Myers.

• Paradise Preserve: $94 million owed to Minneapolis, Minn.-based Marshall Investments Corp. for a failed high-rise and golf course community project in North Fort Myers.

That money is largely gone now: the projects aren’t worth remotely what the lenders are owed, experts say.

“Where’d the money go? The money went to the fortunate guys who got out at the top of the market,” said Jerry McHale, a Fort Myers-based certified public accountant who often works as a receiver taking care of properties in foreclosure.

Paradise Preserve LLC, for example, paid $54 million for the land but never built the three 26-story condominiums, revamped marina and $22 million golf course that developers had envisioned.

Marshall Investments wasn’t the only one to get burned.

Many get burned

Architect Rick McCormack, for example, was never paid for $893,000 worth of work he did on Paradise Preserve.

A major problem with the project, he said, was timing: numerous delays in getting permits and zoning cost precious time as the real estate market started to ebb at the end of 2005.

Banks are more cautious about lending these days, McCormack said, but the people hired to do the work will always be caught when a project goes bad.

The problem, he said, is that subcontractors’ only real protection is to get paid relatively soon after they do the work, but developers want to stretch out payments. Courtesy of the Fort Myers News Press.

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Lee County Foreclosures hit 3 Year Low

Foreclosures in Lee County hit a three-year low in May — but more than half were homesteaded residences.

There were 847 foreclosure lawsuits filed in the county in May, compared with 1,008 in April and 1,823 in May 2009, according to statistics released Monday by the Southwest Florida Real Estate Investors Association.

For the most part, the month’s foreclosures weren’t against the speculators who gambled on skyrocketing prices in the housing boom that ended in late 2005, said association director Jeff Tumbarello.

The speculators fueled the first wave of foreclosures, but now less reckless property owners are feeling the bite, he said: Subprime loans are “fading away” and being replaced with traditional mortgages.

“The homesteads are about 51 percent this month,” he said. “That’s unemployment, that’s recession.”

County Clerk of Court Charlie Green said that’s likely. “I think probably what’s going on is that we’re just plain running out of properties that are going to be foreclosed.”

He hopes as the number falls, he’ll be able to grind away at the roughly 23,000 foreclosures backlogged in the court system.

But don’t assume the numbers reflect an improving situation for the area’s homeowners, said Eddie Felton, executive director of the nonprofit Fort Myers-based Home Ownership Resource Center, which helps people work out mortgage problems with lenders.

Some banks are more receptive than they were a year ago to non-foreclosure solutions for people in trouble with their mortgages, he said.

Other banks are simply not foreclosing on some houses, Felton said. “I got a call recently from somebody who hasn’t made a payment in almost three years” but still isn’t being foreclosed. Thank you to the news press for this article