Once again, Tampa Bay has a front seat on the foreclosure train.
The number of bay area properties receiving a notice of default, scheduled auction or bank repossession jumped nearly 38 percent from January to February, according to a RealtyTrac report released today.
Year over year, the jump was a nation-leading 64 percent; Miami placed second with 53 percent.
The numbers offer both good news and bad.
The bad: The days of living free of house payments could be waning for thousands of Floridians who have dodged eviction because of long delays in the courts or because their lenders were involved in the robo-signing scandal.
The good: The housing market cannot fully recover until the backlog of distressed properties is cleared.
"We can't keep this hanging over the housing market's head," said University of Central Florida economist Sean Snaith. "Banks will start pushing more aggressively to clear the backlog."
Lenders delivered initial default notices to 1,951 bay area homes last month.
Foreclosure activity skyrocketed 71 percent from January to February in Hillsborough and 1,484 percent in Hernando County. Filings dropped less than 6 percent in Pinellas and Pasco counties.
Hillsborough's increase did not surprise Circuit Judge Herbert Baumann Jr.
Of filings in the last three February's, the fewest came in February 2011 after lenders stalled foreclosure cases across the country, the judge said. He expects the filings to increase more.
"We are nowhere near where we were at from 2008 through 2010," Baumann said.
Nationally, filing activity dropped by nearly 2 percent last month and represented a decrease of about 8 percent from February 2011.
But repossessions and scheduled auctions pushed up the Sunshine State's foreclosure activity more than 6 percent from January to February and more than 40 percent from February 2011, the report said.
The surge comes five weeks after the nation's top lenders reached an agreement with federal and state officials who had been investigating controversial allegations that lenders used robo-signers and false documentation to speed up the foreclosure process.
After the allegations came to light, banks stalled many foreclosures in the fall of 2010. The delay has enabled hundreds of thousands of homeowners across the country to skirt evictions and continue living in their homes without making mortgage payments. Those days could be over.
"The foreclosure and mortgage settlement filed in court earlier this week will help pave the way to a properly functioning foreclosure process by providing a clear road map for necessary foreclosures," said Brandon Moore, CEO of RealtyTrac. "That should result in more states posting annual increases in the coming months."
St. Petersburg lawyer Matt Weidner, a critic of how lenders have handled foreclosures, said the uptick came too quick to be attributed to the accord between banks and government regulators.
"At some point, the floodgates had to open," he said. "The banks have been sitting on these houses and waiting" for the paper work issues to clear.
Notices for scheduled auctions and bank repossession accounted for about 55 percent of the 4,295 filings last month in the bay area, the report said. Those filings indicate banks are attacking a glut of homes near the end of the foreclosure process.
Experts had predicted that a flood of homes hitting the market from the "shadow inventory" would further depress selling prices. But with the unsold inventory of homes being nearly at record lows in the bay area, experts say the market can absorb the extra bank-owned properties.
Century 21 Beggins Enterprises in Apollo Beach recently analyzed foreclosure filings in Hillsborough County for the last three months in order to market short sales to homeowners. The firm found that the majority of the distressed properties were already listed for sale.
"People are trying to do the right thing by selling their house to avoid the foreclosure," said owner Craig Beggins.
His agents sold 197 homes last month compared with 125 in February 2010. With a dwindling supply of homes being listed for sale, the market needs a surge of bank-owned homes to appease buyers, he added.
"This is good news," Beggins said. "We need the inventory to balance out the market. We are hurting for listings."
As distressed properties clear the market and prices start to rise, nondistressed homeowners will put their homes for sale with the hope of attracting higher prices.
Scott Brown, chief economist with Raymond James in St. Petersburg, said the housing market will improve as banks decrease the supply of distressed properties. He believes the surge might be connected to the bank settlement and predicted more bumps in the coming months.
"They could be playing catchup," Brown said. "This is something that bears watching as we move forward."
Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him at Twitter at twitter.com/markpuente.