By Tamara Lush, Associated Press
CAPE CORAL, Fla. (AP) — Across the nation, troubled homeowners have cheered the news that some banks are slowing the foreclosure process to review questionable documents. Then there are places like Lee County, Fla., where not everyone is applauding.
Foreclosures became so common here that they spawned a cottage industry. Real estate agents had homes to sell, landscapers and plumbers had work to do, and furniture stores and restaurants benefited, too.
So in October, when some big banks suspended foreclosures in states like Florida where lenders need a judge's approval to foreclose, some local businesses became alarmed. Foreclosures had become good for business.
The situation created a Catch-22 for Lee County. Hundreds of homes were seized every month, some possibly with flawed foreclosure documents. A slowing of foreclosures helps guard against wrongful evictions. Yet until the resale of foreclosed homes picks up, many local businesses may struggle.
Jason Ruggles, a foreman for B. Perez Landscaping in the Lee County city of Fort Myers, said he has cleaned and cultivated greenery at only a handful of foreclosed homes for banks and new owners in the past month. Without a pipeline of foreclosed homes with new owners, business has all but halted.
"Now, we have to search for work," he said. "Sometimes we have to underbid for a job, and we're doing fliers now. We don't like to look needy, but we have to do something."
In other places clobbered by the real estate bust — Las Vegas, parts of Arizona — foreclosure sales have become a rare bright spot in otherwise bleak economies. Now, as the pace of foreclosures slows, many local economies could, too.
In October, the number of U.S. homes repossessed by lenders fell 9% — the sharpest monthly drop this year, according to RealtyTrac Inc.
The slowdown occurred as lenders suspended tens of thousands of foreclosures after allegations that bank employees signed but didn't read foreclosure paperwork. In Lee County, foreclosure filings last month numbered 565, the fewest in any month since 2007.