Foreclosure activity nationwide declined in April, its incidence down both from March levels and from foreclosure activity a year earlier according to RealtyTrac's Monthly U.S. Foreclosure Market Report.
RealtyTrac reported that 333,837 properties nationwide were subject to one of three forms of foreclosure filings in April, a 9 percent decline from March and 2 percent lower than activity in April 2009. One in every 387 U.S. housing units received some type of foreclosure filing during the month.
The specific foreclosure metrics in decline are encouraging though; default notices, an early step in the foreclosure process, are off 27 percent year over year while the final step of the foreclosure process, bank repossessions, set a new monthly record. A dramatic drop in initial filings and surge in bank repossessions may indicate the system is beginning to work through the problem.
RealtyTrac’s report incorporates documents filed in all three phases of foreclosure:
- Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current.
- Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and
NFS); If the borrower does not catch up on their payments the lender will file a notice of sale (the lender intends to sell the property). This notice is published in local paper and contains information pertaining to the date, time and subject property address.
- Real Estate Owned or REO properties : "REO" stands for "real estate owned" and typically refers to the inventory of real estate that banks and mortgage companies have foreclosed on and subsequently purchased through the foreclosure auction if there was no offer higher than the minimum bid.
Notices of Default and Lis Pendens were received on 103,762 properties, a decrease of 12 percent from March, and as noted above, down 27 percent from one year earlier.
Foreclosure auctions were scheduled for the first time on 137,643 properties, a decrease of 13 percent from the peak that occurred in March when more than 158,000 auctions dates were set, but up 1 percent from April, 2009.
Bank repossessions (REOs) were carried out on 92,432 properties in April, up only 1 percent from March but 45 percent above the number seen one year earlier. While April figures were only slightly above the previous high mark of 92,182, set in December 2009, this was still a record month for bank repossessions.
James J. Saccacio, chief executive officer of RealtyTrac remarked on this pattern, saying, "There were two important milestones in the April numbers that show foreclosure activity has begun to plateau - but at a very high level that will not drop off in the near future. April was the first month in the history of our report with an annual decrease in U.S. foreclosure activity. Secondly, bank repossessions, or REOs, hit a record monthly high for the report even while default notices dropped substantially on a monthly and annual basis. We expect a similar pattern to continue for most of this year, with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties."
READ MORE ABOUT THE TIMING OF BANK OWNED REAL ESTATE LIQUIDATION AND ITS IMPLICATIONS ON THE HOUSING RECOVERY
As usual Nevada, Arizona, and Florida topped the list of states with high foreclosure activity. This was the 40th straight month that Nevada had the dubious distinction of being number one. One in every 69 housing units in the state received a notice in April, more than five times the national average, and there appears to be no end in sight. Overall activity increased 10 percent since March and REO activity was up 57 percent. There was virtually no change in activity since one year ago.
Even though Arizona moved from third to second place on the list of distressed states, overall activity was actually down 15 percent from March. One in every 169 housing units, more than twice the national average, received a notice. Activity was down about 1 percent from April 2009.
Florida posted the nation's third highest foreclosure rate, with one in every 182 properties receiving a foreclosure filing despite monthly (18 percent) and annual (25 percent) decreases in activity.
It is worth noting that California is appearing to stage a real turnaround. Falling activity in that state, where foreclosure activity was off 25 percent from March and 28 percent from April 2009, was one factor pushing Arizona into second place on the list. 69,725 housing units received notices in California, still putting it in fourth place on the list.
Other states with foreclosure rates ranking among the top 10 in April were Idaho, Michigan, Illinois, Georgia, Utah, and Colorado.
In sheer numbers, five states account for more than half of all foreclosure activity in the country; California, Florida, Michigan, Illinois, and Nevada had a total of 172,369 of the 333,837 filings in the nation.
RealtyTrac is an Irvin California based company which bills itself as the leading online marketplace of foreclosure properties. Its monthly report provides a count of the total number of properties with at least one foreclosure filing entered into its database during the month by type of filing. Data is collected from more than 2,200 counties nationwide, representing more than 90 percent of the U.S. population.
