Foreclosures Continue to Plague Lake County
TAVARES - More than 5,800 properties in Lake were tagged for foreclosure last year, the worst one-year total in the county's history.
Banks, mortgage companies and other lenders filed foreclosure notices against 5,874 properties in Lake in 2009, the fourth-consecutive, record-bad year for the county, according to figures compiled by the Orlando Sentinel and confirmed by the Lake County Clerk of Courts.
Those numbers likely will translate into another painful budget year for local governments, said Frank Royce, chief deputy property appraiser, who has informed area finance directors to expect 10 to 15 percent less in tax revenue.
"It's unfortunately going to be worse than last year," Royce said.
Interim County Manager Sandy Minkoff has warned county commissioners that property values would likely plunge further – depressing tax-revenue projections – and that any recovery would be slow.
Minkoff said a 15-percent reduction in property values would translate into a loss of about $13.5 million in property-tax revenue.
Royce said the foreclosure epidemic has had a "snowball" effect on the county's economy – as so-called "short sales" continue to dominate the real-estate market and commercial businesses struggle to stay profitable.
A short sale, also known as a distressed sale, is the sale of a home at a price less than the amount owed to the bank. Lenders sometimes agree to a short sale – which generally results in a modest financial loss – rather than allow the property to fall into foreclosure, which can cost the bank not only lost income but lawyer fees.
"They're affecting the true real-estate market," Royce said of short-sales and foreclosures.
But there is a silver lining in the gloomy economic cloud. Foreclosure filings increased at a slower rate in 2009, a signal that the crisis has begun to slow and that a modest rebound might even be around the corner.
In 2009, lenders foreclosed of 5,874 properties in Lake, an increase of 22 percent over 2008. By comparison, lenders foreclosed on 4,801 properties in Lake in 2008, an increase of 130 percent over 2007.
Statistics compiled by the Orlando Regional Realtor Association, which includes sales figures and other data from Lake transactions, also showed a significant increase in activity in December with nearly 2,200 sales.
But the figures also showed bank-owned homes and short sales accounted for two of every three sales.