The judicial process makes Florida “unique” among the four sand states, and has resulted in a buildup of distressed property, Yun said in a phone interview. Almost 20 percent of outstanding Florida loans were more than 30 days delinquent or in foreclosure in November, the largest share of non-current mortgages in the nation, according to data provider Lender Processing Services.

Judicial States

Almost 12 percent of Florida loans were in foreclosure, also the biggest portion among U.S. states, Jacksonville, Florida-based LPS said Jan. 11.

Like Florida, six other judicial states ranked among the top 10 for non-current mortgages, with New Jersey second with almost 17 percent of its loans either delinquent or on properties already taken back by lenders; New York fifth at almost 14 percent; and Illinois, Maryland, Louisiana and Connecticut ranking seventh through 10th. The U.S. average in November was 10.6 percent, according to LPS.

Even with Florida’s top share of non-current mortgages, the number of those loans declined by 13 percent from a year earlier, outperforming other judicial states and pointing to an eventual resolution of the foreclosure crisis, LPS’s Blecher said.

High foreclosure totals have U.S. homebuilders, hedge funds and private-equity firms positioning themselves for the recovery. Florida, along with Texas, California and Las Vegas, presented “extremely high-margin opportunities” for land purchases in the fourth quarter, Lennar Corp. President Richard Beckwitt said during the Miami-based builder’s Jan. 15 earnings call.

Homebuilder Sentiment

Homebuilder sentiment is at the highest level since June 2006, fueled by conditions in the western and southern U.S., Barclays analyst Cooper Howes said in a note yesterday. Builders broke ground on more houses than forecast in December, capping the best year for the industry since 2008, the Commerce Department reported today in Washington.

Rising prices and a declining supply of distressed homes are primary reasons for the optimism, Tayon said.

Blackstone Group LP is buying foreclosures in Atlanta, Chicago, Las Vegas, Phoenix, Northern and Southern California; Miami, Orlando and Tampa, Florida -- where prices fell so far that they “overshot,” said David Roth, managing director at Blackstone overseeing single-family home rentals.