Foreclosures in Broward County down 67 percent last year.

The nation continues to face a “highly dysfunctional foreclosure process,” particularly in Florida and other states in which judges must approve repossessions, according to RealtyTrac Inc., an Irvine, Calif.-based firm that lists foreclosed properties for sale.

Although foreclosures declined sharply last year in South Florida and across the country, filings are expected to increase in 2012 before the housing meltdown reaches bottom.

The slowdown last year was largely due to the “robo signer” controversy that began in September 2010, as a Sun-Sentinel article explains. After bank employees admitted they signed off on thousands of foreclosures without knowing the details, lenders were more cautious about filing cases, though have recently appeared to put the problem behind them and started filing more foreclosures late last year. That trend is likely to continue, though RealtyTrac don’t foresee a return to peak levels of 2009 and 2010.

Foreclosure filings last year fell 63 percent in Florida and 34 percent across the nation.  Broward County had 20,511 properties that received at least one foreclosure notice last year, down 67 percent from 2010, according to RealtyTrac, and Palm Beach County had 18,269 properties with at least one foreclosure notice, a 58 percent decline from the year before.

Since the beginning of 2007, 358,304 Florida properties have been repossessed by lenders, including more than 75,000 in Broward and Palm Beach counties, RealtyTrac said.

Deerfield Beach housing analyst Jack McCabe predicts more foreclosure pain ahead. Citing a figure from research firm CoreLogic showing 530,000 seriously delinquent Florida mortgages that may soon face foreclosure, McCabe states that many of those homes will be repossessed and resold at a discount, hurting home prices across the board.

However, Mike Larson, a housing analyst for Weiss Research in Jupiter, said he doesn’t anticipate a flood of foreclosures hitting the market at one time.

He pointed to a pilot program being considered by the Federal Reserve that would keep bank-owned homes off the market by encouraging bulk sales to investors, who would then rent them. Larson said the government and lenders seem content to deal with the foreclosure problem “in dribs and drabs” that won’t cause prices to plummet. But that approach will delay the recovery and keep prices down over a longer period, he said.

Lewis Goodkin, a longtime housing analyst in Miami, agrees that lenders won’t inundate the market with foreclosures in 2012. That would weaken prices, creating more “underwater” mortgages and jeopardizing other loans that aren’t yet delinquent.

“Dumping stuff on the market doesn’t end problems – it just continues them,” said Goodkin.