Foreclosure Epidemic Continues

As a Fort Lauderdale bankruptcy attorney,  I have seen that a major cause of bankruptcies are what I describe to my clients as an epidemic of foreclosures.  (Though perhaps it is better to say that foreclosures are not the cause, but are really a symptom resulting from numerous causes.)

On June 3, 2010, the chief judge of the Broward Circuit Courts,  Judge Victor Tobin, spoke to the South Broward Bar Association and  reported on the effects on the court system of the foreclosure crisis.   Approximately 54,000 pending foreclosures cases in Broward County have created a huge strain on the courts trying to administer these cases.  Though there has been an increase in state funding to help process foreclosure cases,  the new requirement of the Florida Supreme Court for mandatory mediation will cause further delays until that system can be implemented.

On June 5, 2010,  in the Miami Herald Business section, based on an article written by Kimberly Miller and Laura Green of  the Palm Beach Post, it is clear that the foreclosure epidemic is continuing and is  likely increasing.  The article titled “Rise in troubled loans is forecast” reports that 3.5 million homes will go into foreclosure in the next year.  About 44.3% of homes in Palm Beach, Broward and Miami-Dade are underwater, according to a report from Zillow.  The article states that the Mortgage Bankers Association reports that 1 in 5 Florida homeowners are in foreclosure or seriously behind on their mortgage, making Florida No 1 in this dubious category.

Moreover, the article reports what has been expected for some time, that foreclosures will increase not just for low income earners  but for higher earners who had creative negative amortization and adjustable mortgages.  I see this every day in my ft. lauderdale bankruptcy practice.   Even high income earners,  often with reduced income,  can no longer afford their higher mortgage payments.  Others used equity lines and invested in other properties.   As a result, many homeowners have needed to file a  chapter 13 bankruptcy to save their homes or chapter 7 bankruptcy to move on with their lives and surrender the underwater homestead.

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