Ballooning foreclosures tax court clerks, judges
palmbeachpost.com
By Sarah Prohaska
Palm Beach Post Staff Writer
Sunday, March 04, 2007
FORT PIERCE — For months, a ceaseless routine has gripped the St. Lucie clerk of court's civil office: New mortgage foreclosure lawsuits arrive in unprecedented numbers - huge stacks, some a foot or 2 tall. But as soon as one stack is processed and emptied from the in-box, another dozen or more foreclosures show up the next day.
On really busy mornings, process servers drop off banks' boxes filled with these documents, which set into motion a process that often means homeowners who haven't paid their mortgages will lose their homes.
The clerks who process the cases shake their heads when they think back to the days when maybe two or three mortgage foreclosure lawsuits arrived each day. They don't have to stretch their memories much: That was only about a year and a half ago.
But now, it's a different scene inside the clerk's circuit civil division across the street from the St. Lucie County Courthouse. As 2006 unfolded, the number of new St. Lucie mortgage foreclosure filings surged upward, culminating in a yearly total of 1,329 cases. That's a more than a 170 percent increase from 2005's total of 485 cases, according to the clerk's office.
Take this snapshot: On Wednesday, the last day of February, the St. Lucie clerk's office received 30 new foreclosure cases. That single day accounted for more cases than the office received in the entire month of October in 2004, according to the office's records.
The trend is playing out across the nation, but some analysts say markets such as St. Lucie County, which enticed a lot of speculative buyers during the sizzling real estate boom a few years ago, are experiencing the biggest increases in delinquencies and foreclosures.
Martin County's total new foreclosure filings rose 99 percent last year, but its numbers were much lower than St. Lucie's. Martin had a total of 253 cases in 2006, compared to 127 the year before.
Palm Beach County's total increased by more than 58 percent last year, to 4,830 new cases.
St. Lucie officials offer several reasons why the real estate boom has given way to a foreclosure boom:
• The slowing housing market, where owners are realizing their homes are not worth what they thought they were or the homes were over-appraised;
• Adjustable-rate mortgages, which drew in buyers with initial low interest rates that recently have increased substantially;
• Rising insurance rates and property taxes.
Those are the catalysts, many say, for the record number of lawsuits banks have filed to recover their money - and the fallout in St. Lucie, and many other Florida counties, has landed squarely on the clerk office's doorstep.
"In all the years I've done this, I've never seen this many foreclosures," said Nancy Bennett, supervisor of St. Lucie's circuit civil clerks division, who has worked in the office for more than 20 years. "It has never been like this."
St. Lucie adds a clerk
These days, the clerks in charge of opening new lawsuits in St. Lucie can spend an entire day working only on foreclosures. Their boss, Clerk of Court Ed Fry, said he scrambled during the past three months to find money in his budget for a new full-time position in the civil division because of the glut of new foreclosure cases in the last six months.
"In 2005, we had about 40 to 50 new foreclosure cases a month. Now it's 200," Fry said. "It's really had a huge impact on our office."
Foot traffic though the office also has increased with the foreclosure numbers, as most of the homeowners who have been served with papers try to figure out the process by themselves. Bennett starts preparing for foreclosure court days in advance and has had to come in on Saturdays to make sure each file is in order.
"It's almost an overload for the clerk," Bennett said as she sorted through boxes of cases to prepare for last week's foreclosure court.
In Palm Beach County, as foreclosure rates soared, Chief Judge Kathleen Kroll also became overwhelmed. She usually hears cases as a part-time duty folded into her many others.
Kroll said she fell farther and farther behind in January and asked another judge with a relatively lighter load to take over hearing the cases.
Circuit Judge Jeffrey Colbath hears them, but also on a part-time basis, juggling them with other family and probate cases. For the first two months of this year, the number of new filings has nearly tripled to 1,469, compared with the same months in 2007.
Kroll said it seems that Palm Beach County's part-time foreclosure division can't last forever.
Clerks in Martin County have noticed an increase in their foreclosure filings as well, although their rates today barely rival St. Lucie County's numbers from 2005. The increase hasn't put a significant strain on the court system, but with the housing market cooling in Martin County, court officials say they expect to see increasing numbers of filings.
St. Lucie Circuit Judge Ben Bryan, who handles St. Lucie's foreclosure cases along with all other civil cases, said he spent about two hours a month handling foreclosures during the past few years. Now, he spends about 15 hours a month.
The paperwork for foreclosures is voluminous, and it doesn't end in the courtroom: the number of days the clerks have scheduled for foreclosure auctions also is rising St. Lucie County. For most of the past two years, auctions to sell foreclosed houses usually consumed from one to four days of the month. But in January and February this year, auctions took place on seven and eight days.
When the big real estate boom was at its height about three years ago, Bryan said his mortgage foreclosure cases dropped off.
"We kind of got spoiled then," Bryan said. "Back then, most people were able to sell their property, and they could get substantially more than their mortgage and pay it off. That worked wonderfully well for a while. Now people go to try to sell, and it's a big problem."
Court dockets bulging
Inside Bryan's courtroom last week, tall stacks of files sat on his bench as he spent three mornings in a row dealing only with the more than 170 foreclosure cases set for hearings.
Many homeowners do not show up in court to contest the bank's filings, meaning those cases work their way though the system mainly on paper, and the home eventually ends up on the auction block.
For case after case on Tuesday morning, Bryan ended a hearing, where only a bank's lawyer showed up, saying: "Sell it on the fifth day of April." That was until all the April public auction dates filled up by the middle of the week, and he had to start setting May auction dates.
Bryan estimates homeowners show up for about 20 percent of his cases, many times asking for more time to try to either sell a home or work with the bank. Last week, his hearings included:
• Parents trying to help save their son's home;
• A woman whose bank filed for foreclosure while she's fighting for an insurance settlement;
• A man who was caught unaware by a large increase in his monthly payment because of an adjustable interest rate;
• A couple whose home went into foreclosure while they were divorcing.
"Some come to try to work something out," Bryan said. "Most are just frustrated because they thought their home was worth something more. I think everyone in the system is doing their best to protect the people who are having their house foreclosed on, and the lenders who have a right to get their money."
Judging from experts' forecasts, it's likely that Bryan and other foreclosure judges will not see a slowdown any time soon. Analysts say new filings will continue to climb in 2007, which has already started to show in the record number of new filings in January and February in both Martin and St. Lucie counties.
Some housing experts forecast the worst is yet to come as more adjustable-rate mortgages reset this year.
St. Lucie's clerk of court said he hopes those forecasts don't play out. "My wish is that this slacks off not only for us, but also from an economic standpoint and for the community's sake," Fry said. "But we'll do what we need to get the work done." |
