There comes a point when you have to foreclose.

This Wall Street Journal article discusses the differences between California and Florida's foreclosure market. The article reports that while California sales are increasing in part to the investor purchasing foreclosures, in Florida the same can not be said. Florida seems to be experiencing a backlog.

While the article places some of the blame on Florida foreclosures having to run through our judicial system I think there may be another culprit, the short sale phenomenon.

Lenders, Realtors and home owners are often caught in a 3-6 month dance of trying to get the lender to accept a partial payoff in hopes of avoiding foreclosure. For the traditional home owner this process can have positive effects. A short sale can keep a home owner's credit from being totally trashed which will keep open the possibility of the individuals ability to obtain a new home loan once they have their financial situation in order. While this is going on, lenders are pushing back the foreclosure process.

I believe we need to stop some of this madness. I am all for helping the traditional homeowner who got caught with a high adjustable mortgage or who has seen their financial situation change drastically and are now in need of assistance. But for the rest, let's foreclose.

I am hearing disturbing rumors of some home owners seeking a short sale on their home so they can buy a better home also being offered as a short sale. Is this right? Or how about the individual who cashed out all of their equity to purchase a second home or luxury item and now seek have this debt erased via the short sale route? Should we continue to delay the foreclosure process for an investor who had no business investing in the first place?

In my opinion the answer is no. Lenders need to follow through with their foreclosure proceeding and get these homes back out on the open market for real home buyers and real investors to pick up at a fair price. Doing this will stimulate the real estate market in Central Florida ultimately leading it back to a healthier place.

There comes a time when a foreclosure is needed. Now is that time.

Related Florida real estate views:

Appraisal problems add to the frustration

Foreclosures for sale: Million dollar houses

Real estate agents would be wise to pick short sales over long sales.


- Greg Staker - Watson Realty Corp. - 407-304-0255