After seeing months of consistent decreases, May turned out to be a busy month for foreclosure activity.
Foreclosure filings, which include default notices, scheduled auctions, and bank repossessions, were up 9 percent in May from the previous month of April, but still down 4 percent from a year ago, according to RealtyTrac’s U.S. Foreclosure Market Report for May 2012.
Foreclosure filings were reported on 205,990 properties in May after two consecutive months below 200,000, but activity levels were still down on a yearly basis for 20 consecutive months now. In April, foreclosure filings totaled 188,780.
Brandon Moore, CEO of RealtyTrac, said the increase in activity shows the ride to the bottom of the foreclosure cycle will be “bumpy.”
The report also revealed that one out of every 639 homes had a foreclosure filing during the month.
After three straight monthly decreases to a 49-month low in April, bank repossessions (REOs) climbed 7 percent month-over-month, but were still down 18 percent from May 2011. In May, lenders completed the foreclosure process on 54,844 properties.
Foreclosure starts – default notices or scheduled foreclosure auctions, depending on the state – were filed on 109,051 properties in May, a 12 percent monthly increase and a 16 percent jump from a year ago. The annual increase was a first after 27 consecutive months of yearly declines.
“Based on the rise in pre-foreclosure sales we’ve seen so far this year, a higher percentage of these new foreclosure starts will likely end up as short sales or auction sales to third parties rather than bank repossessions going forward,” said Moore. “While pre-foreclosure sales have less of a negative impact on home values than bank-owned sales, they still represent a discounted sale where a distressed homeowner is losing his or her home.”
Moore added that more banks are treating delinquent mortgages with short sales rather than bank repossessions to help minimize losses and also avoid taking on more REOs, which have to then be managed, maintained and marketed for sale.
On a state-by-state basis, foreclosure starts increased over a one-year period in 33 out of 50 states – 17 of the states have a judicial process and 16 states a non-judicial process.
Judicial states with the highest increases in foreclosure starts included New Jersey (118 percent), Pennsylvania (97 percent), Florida (83 percent), Massachusetts (60 percent), New York (59 percent), South Carolina (43 percent), Ohio (32 percent) and Illinois (28 percent).
Non-judicial states that posted the highest increases in foreclosure starts were Tennessee (165 percent), Texas (51 percent), Missouri (35 percent), Georgia (30 percent), and Michigan (24 percent).
Foreclosure activity in Georgia spiked 33 percent from the previous month and 30 percent from a year ago, giving the state the highest foreclosure rate out of all states.
In the previous month, Georgia actually had a lower foreclosure rate than Arizona, Florida, California and Nevada.
Arizona foreclosure activity rose by 24 percent in May month-over-month, giving the state the number two spot for its foreclosure rate. Foreclosure activity for the state, however, was down 29 percent from a year ago.
Even though Nevada saw a 66 percent yearly drop in foreclosure activity, the state still came in third for its foreclosure rate.
California decreased its foreclosure activity by 19 percent on a yearly basis, but still managed to have the fourth highest foreclosure rate.
Illinois, on the other hand, had a 54 percent yearly increase in foreclosure activity; the state had the fifth highest foreclosure rate.
Other states with foreclosure rates in the top 10 category were Ohio, Michigan, South Carolina, and Utah.
Among the metro areas, Riverside-San Bernardino in California came in first for the highest foreclosure rate among the 20 largest metropolitan statistical areas by population. One in every 179 housing units in the Riverside-San Bernardino metro had a foreclosure filing in May, which is more than 3.5 times the national average.
Atlanta came in second for its foreclosure rate, Phoenix third, Chicago fourth, and Tampa came in at fifth.
RealtyTrac is an online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data.
By : Esther Cho , Source www.dsnews.com
