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Record number of foreclosures in Monroe

January 5, 2011 by · Leave a Comment 

Pocono Record Writer
January 04, 2011

Monroe foreclosures hit a new high last year, continuing a troublesome trend that began in the middle of the past decade.

Monroe County racked up 2,029 new foreclosure filings in 2010. That followed three successive years in which foreclosures set new county records.

But foreclosures jumped 6 percent last year, the smallest growth since 2006, when the rate jumped by more than 50 percent. Still, market professionals think it will get worse before it gets better.

“I don’t think we are topped out on foreclosures,” said Vickie Brockelman of Commonwealth Real Estate Your Way in Mount Pocono. “I think we will see another peak.”

The change, according to Brockelman, is in the types of homes going into foreclosure now. Foreclosures centered on homes below $200,000 during the current cycle. But now the larger, higher priced homes built during the 2005-06 bubble are going into foreclosure.

“In a lot of them, the owners have tried to sell but the prices are too high,” Brockelman said. “We’ll see them (become available) in the first quarter. There will be some good deals out there.”

Last year, according to Brockelman, many distressed higher-end homeowners tried to move their homes through short sales. That’s when a homeowner gets the lender to agree to accept less than the total amount due on a mortgage so the home can be sold at a lower price.

Many of the homes still didn’t sell, and now the banks are putting them in foreclosure.

And because of the influx of higher-priced homes into the foreclosure picture, Brockelman believes the 2010 foreclosure record will be short-lived.

“We haven’t seen a decrease in the number of calls from banks looking for us to do BPOs (broker’s opinion of value),” she said. The opinions are a leading indicator of foreclosure actions.

“No, we haven’t peaked out. I think it’s going to increase,” said George Hanzimanolis, former president of the National Association of Mortgage Brokers and president of Bankers First Mortgage in Tannersville.

The banks, he said, decided for a time in 2010 to hold off on foreclosures because there were too many homes on the market. That may have resulted in a slowing of the foreclosure growth rate last year.

But it takes about two years from the time a bank institutes a foreclosure and the time it occurs locally, with notice requirements and an 18-month backlog at the sheriff’s department.

“When the homeowners get to the 22nd month, we see a lot of them filing for bankruptcy, which stops the foreclosure,” Hanzimanolis said. “Then they back out of the bankruptcy a few months later, and now the bank has to get back in line for another 18 months.”

Hanzimanolis thinks there will be another two years of rising foreclosures before inventory even starts to go away and we see any improvement in the real estate market.

While foreclosures are still increasing, home sales in some areas in the county have done better than others.

“(Non-foreclosure) sales have improved in certain pockets of the community,” according to Joan Fitzgerald of Joan Fitzgerald Real Estate in Stroudsburg and Canadensis. But she doesn’t see it as an indication of an upswing: “I think there is too much to sell.”

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