Charlotte County home foreclosure filings soared back to the normal rates in August despite the federal and state COVID-related moratorium.
There were 33 foreclosures filed in August with county’s circuit court, according to its monthly report. That’s up from two in July. Since the first moratorium was issued in April, foreclosures locally have been in the low single digits, which is way below last year’s rates. Foreclosures had waned in Charlotte County since the recession, and had reached an average rate of 30 a month in 2019. Peak years were 2007-2013 when monthly averages ranged from 108 to 441.
How can foreclosures go up if there’s still a moratorium?
Local real estate agent Cynthia Logan believes Gov. Ron DeSantis’ August moratorium law gives lenders more options than the April moratorium.
And lenders appear to be using those options, she said.
“I’ve had an uptick where I’m doing more evaluations,” she said of her specialization in selling foreclosed properties.
The blog from a Cape Coral law firm, Henderson Franklin, explained the new options for Florida lenders with non-paying borrowers.
Lenders can now begin foreclosure proceedings, although they cannot complete them during the moratorium. That means lenders are setting up the foreclosure in courts, but not taking final steps.
Logan believes that most lenders do not want to foreclose, particularly on people affected by the pandemic.
“Some people, their whole world has been turned upside down,” she said of restaurant workers and others still unable to work at the level prior to the pandemic.
Of lenders, she said, even as they submit foreclosure filings, most want to find a way for people to stay in their homes.
“We still think they’re going to be very active in pursuing options including forbearance and mortgage modifications,” she said.
Another change to the state moratorium is that mortgage holders must do more to prove that their finances have been adversely affected by the pandemic. That means more paperwork for the banks. It means people who can’t pay their mortgage for reasons other than the pandemic are no longer protected.
None of the moratoriums give renters or borrowers a break on back rent or mortgage. Many local governments, including Charlotte County, have federal and local funds to help these people. The county was one of the first in the state to design and staff an application system for households affected by the pandemic. Using county and donated funds, the county was handing out back rent and mortgage payments to eligible families even before federal aid came through.
The state moratorium runs through Oct. 1, while the federal moratorium on federally insured mortgages runs through Dec. 31.