Firm Registers an Industry-wide Drop in Foreclosures

Foreclosures dropped 11% nationally to 205,031 in the second quarter as moratoriums, bailouts, reforms, and negotiations helped some strapped homeowners hang on to their properties, according to Foreclosures.com's latest index. In the Northeast, 32% fewer homeowners lost their properties to foreclosure. Across the country, pre-foreclosures fell 10% in the second quarter to 494,078, with the biggest quarterly drop — 42% — in the Midwest. June's 61,573 foreclosures, as measured by the number of REO filings, dropped 13% from May, and more than 24% from February's high. Pre-foreclosures in June (132,529 filings) fell 24% from May, and were off nearly 35% from March's high. "These huge drops — double-digit in many parts of the nation — are a sigh of relief for the economy and housing markets as they bump along toward recovery," says Alexis McGee, president of Foreclosures.com. "Despite higher unemployment rates, industry and government stimuli are making a difference." In the Midwest, for example, foreclosures have slowed in part due to an Illinois moratorium. June REOs in Illinois were off nearly 45%, yet pre-foreclosures in the state were up more than 88% in June over May. "This year's second quarter REO numbers also were up nearly 17% from 2nd quarter 2008. When this and other moratoriums expire we'll likely see more uptick in foreclosures and pre-foreclosures as homeowners run out of options." She said now is the time for homebuyers and investors to press banks to unload their REO inventory.