National mortgage-foreclosure activity in April decreased 5 percent from March and was down 14 percent from April 2011, according to a report by RealtyTrac released Thursday. One in every 698 U.S. housing units had a foreclosure filing during the month.
Maine’s foreclosure rate of one of every 6,332 units placed it among the lowest in the country, and considerably lower than nearby states New Hampshire (one of every 846) and Massachusetts (one of every 887).
RealtyTrac chief executive Brandon Moore attributed the drop in part to an increase in short sales, which are becoming a more common alternative to foreclosure among distressed properties. In a short sale, the bank agrees to accept less than what the seller owes on their mortgage.
“More distressed loans are being diverted into short sales rather than becoming completed foreclosures,” Moore said in a statement. “Our preliminary first-quarter sales data shows that pre-foreclosure sales — typically short sales — are on pace to outnumber sales of bank-owned properties during the quarter in California, Arizona and 10 other states.”
After three straight monthly increases, U.S. foreclosure starts — which include default notices or scheduled foreclosure auctions, depending on the state — decreased 4 percent from March to April. A total of 97,665 properties started the foreclosure process for the first time during the month, down 2 percent from April 2011.
“It is surprising the numbers are staying as low as they have this year,” said Daren Blomquist, vice president of RealtyTrac, noting that many analysts expected a wave of new foreclosures in the wake of a landmark settlement between the government and big banks over fraudulent foreclosure practices. That wave hasn’t come, at least on a national level, for several reasons, Blomquist said. For starters, the numbers are down in California, which represents about 20 percent of the foreclosure activity in the entire country.
Still, he said the overall decrease is “masking” the fact that foreclosures actually are up in places such as Florida, New Jersey and Indiana, among other states. Despite the overall decrease in foreclosure starts, 26 states posted monthly increases in foreclosure starts.
Despite the lower-than-expected activity, Blomquist said he thinks that the number of foreclosures will still rise this year.
“At the end of the day, 2012 is going to be bigger than 2011,” he said, adding that he did not expect “normal” levels of foreclosures to return until at least 2014.
Eleven of the nation’s 20 largest metro areas documented annual increases in foreclosure activity, led by the Florida cities of Tampa (59 percent) and Miami (38 percent), RealtyTrac reported.
Among the 20 largest metro areas, cities posting the biggest annual drops in foreclosure activity included Seattle (54 percent), Phoenix (44 percent), San Francisco (34 percent), Washington (30 percent), Riverside-San Bernardino, Calif. (30 percent) and Los Angeles (28 percent).
Maine has fared well throughout this entire collapse in housing. The bad news is that there is still an incredible amount of “over-hang” (properties that should be foreclosed but the banks don’t want too much inventory on the books). There are still as many as 5 million homes that are pending foreclosure. The banks are trying to slow play the foreclosures so they don’t belly up.
Stories like this are dangerously misleading. They are intended to get people back to investing in homes and real estate. The market has a ways to fall and the number of foreclosures is vastly underestimated.
Real estate is still not an appreciating asset. It may not be for another decade or more.
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