Foreclosures Booming in First Quarter of 2009
Irvine, CA-Foreclosure activity is picking up again following initiatives by national and state lawmakers to save borrowers and stop massive amounts of properties from moving into foreclosure and REO.
Foreclosure filings were reported on 803,489 properties in the first quarter, a 9% increase from the fourth quarter of 2008 and an increase of nearly 24% from the first quarter of 2008, according to the latest U.S. Foreclosure Market Report from RealtyTrac here.
Filings were reported on 341,180 properties in March, up 17% from February and 46% from March 2008, despite a decrease in bank repossessions or real estate-owned assets, which were down 13% from the fourth quarter of 2008 and 3% from February totals.
Since much of the March activity was in new foreclosure actions, it suggests that many lenders and servicers were holding off on executing foreclosures due to industry moratoria and legislative delays, according to James Saccacio, chief executive officer of RealtyTrac.
"The drop in REO activity can be attributed to these processing delays, rather than to any of the foreclosure prevention programs currently in place," said Mr. Saccacio. "It's very likely that we'll see the number of REOs increase again now that most of the moratoria have been lifted."
On a positive note, he believes demand is up in some of the harder-hit areas, particularly on bank-owned REO properties that first-time homebuyers and investors see bargains in. "But it's unlikely this increased demand will be enough to offset the growing number of foreclosures in the pipeline, accelerated by rising unemployment rates."
Nevada, Arizona and California continued to document the nation's highest state foreclosure rates. One in every 27 housing units in Nevada received a foreclosure filing - more than five times the national average. Filings were reported on 41,296 Nevada properties during the first quarter, up 19% from the previous quarter and nearly 111% from the first quarter of 2008. Bank repossessions in the state were down 3% from the fourth quarter of 2008, but defaults increased 27% and auction sale notices increased 35%.
Arizona posted the nation's second highest state foreclosure rate for the first quarter, with one in every 54 housing units receiving a filing, and California posted the third highest rate, with one in every 58 housing units receiving a foreclosure filing.
Other states with foreclosure rates ranking among the top 10 in the first quarter were Florida, Illinois, Michigan, Georgia, Idaho, Utah and Oregon.
Five familiar states accounted for 60% of the nation's first-quarter total: California, Florida, Arizona, Nevada and Illinois. Combined, these states reported 479,516 properties with filings. California accounted for nearly 29% of the nation's total with 230,915 properties receiving filings in the first quarter.
Despite a 12% decrease from the prior quarter, Florida still reported filings on 119,220 properties, a 36% increase from the first quarter of 2008.
Filings were reported on 49,119 Arizona properties in the first quarter of 2009, and 41,296 Nevada properties received a filing, followed by Illinois, which posted 38,966 properties receiving a foreclosure filing.