Plateau for Foreclosure Filings?
Irvine, CA-New data indicate the overall amount of foreclosures, defaults and bank repossessions may have reached a plateau where higher delinquencies are in part balanced out by decreases in REO filings and REO sales at market-adjusted prices.
Foreclosure filings, default notices and bank repossessions decreased nearly 1% compared to July, according to the RealtyTrac August 2009 U.S. Foreclosure Market Report. Compared to the same month in 2008, however, it remains up by 18%.
"The August report demonstrates that there is still an ample supply of properties filling the foreclosure pipeline even while the outflow of bank-owned REO properties onto the resale market is being more carefully regulated," says RealtyTrac CEO, James Saccacio. "After hitting a high for the year in July, REOs dropped 13% in August, but we also saw a record high number of properties either entering default or being scheduled for a public foreclosure auction for the first time."
As expected, the foreclosure activity story remains regional.
RealtyTrac said that of the six states that account for 62% of all foreclosure activity Nevada remains at the top with a filing for one in every 62 housing units in August.
Yet, if compared to the same month in 2008 the number of properties receiving foreclosure filings in Nevada is 53% higher, and it saw a higher than the national average decrease of 8% compared to July 2009. Second in line is Florida with a filing for one in every 140 housing units.
Regulatory changes also are affecting the foreclosure market in a significant way.
In Michigan a total of 9,789 new default notices were added to the total number of filings reported in August because a new state law requires lenders to file a separate public notice of default before scheduling a foreclosure auction. The new law helps increase both accuracy and transparency in data reporting.
A common denominator appears to be the fact that decreases in REO inventory and the number of new REO filings are not yet enough to change the overall status of those markets that remain at the top of the foreclosure rankings.
For example, Nevada was the state with the fourth highest total number of properties receiving a foreclosure filing in August despite a 24% decrease in REO filings compared to July 2009.
Similarly, in Illinois REO filings decreased 15% from the previous month while the total number of properties receiving foreclosure filings in August remains the sixth highest in the nation.