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Foreclosure rate falls but market 'still critical'
By Lynn Adler |
May 14, 2010, Friday
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Print Edition
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FORECLOSURE activity in the United States fell in April as lenders repossessed homes at a record pace but started far fewer new actions against struggling homeowners, signaling a plateau in loan failures, RealtyTrac said yesterday.
No meaningful improvement is likely this year, however, with mortgage modifications and high unemployment only delaying the inevitable for most of these borrowers, the Irvine, California, real estate data company said.
But nationwide April foreclosure filings - notices of default, scheduled auction and bank repossession - fell 9 percent from March and 2 percent from a year ago.
This was the first year-over-year drop since RealtyTrac began tracking annual foreclosure rates in January 2006.
"What we're really seeing is the effect of lenders slowing down the initial notices of default while they are processing what's already in the pipeline," said Rick Sharga, senior vice president at the data company.
Lenders filed default notices on 103,762 properties in April, down 12 percent in the month and 27 from a record 142,000 one year ago.
Banks, meantime, took control of 92,432 properties in the month, a record, up 1 percent from March and 45 percent from a year earlier.
With notices on 333,837 properties, one in every 387 US housing units got a foreclosure filing in April.
"The housing market is still in critical condition but is stable," Sharga said.
Borrowers are increasingly tapping federal programs that encourage lenders to alter loan terms to help owners stay in their homes.
Still, the overwhelming majority will wind up in foreclosure, he said.
Delinquent
A record 2.8 million US properties got a foreclosure notice in 2009, according to RealtyTrac.
"We still have over a million properties in foreclosure, we still have about 5 million seriously delinquent loans and we're ultimately going to have to work through all of those, so we're not out of this yet," Sharga added.
Foreclosure auctions were scheduled for the first time on 137,643 properties in April, a 13 percent drop from a record 158,000 in March but a 1 percent rise from a year ago.
But the data firm sees "numbers staying at a high level."
No meaningful improvement is likely this year, however, with mortgage modifications and high unemployment only delaying the inevitable for most of these borrowers, the Irvine, California, real estate data company said.
But nationwide April foreclosure filings - notices of default, scheduled auction and bank repossession - fell 9 percent from March and 2 percent from a year ago.
This was the first year-over-year drop since RealtyTrac began tracking annual foreclosure rates in January 2006.
"What we're really seeing is the effect of lenders slowing down the initial notices of default while they are processing what's already in the pipeline," said Rick Sharga, senior vice president at the data company.
Lenders filed default notices on 103,762 properties in April, down 12 percent in the month and 27 from a record 142,000 one year ago.
Banks, meantime, took control of 92,432 properties in the month, a record, up 1 percent from March and 45 percent from a year earlier.
With notices on 333,837 properties, one in every 387 US housing units got a foreclosure filing in April.
"The housing market is still in critical condition but is stable," Sharga said.
Borrowers are increasingly tapping federal programs that encourage lenders to alter loan terms to help owners stay in their homes.
Still, the overwhelming majority will wind up in foreclosure, he said.
Delinquent
A record 2.8 million US properties got a foreclosure notice in 2009, according to RealtyTrac.
"We still have over a million properties in foreclosure, we still have about 5 million seriously delinquent loans and we're ultimately going to have to work through all of those, so we're not out of this yet," Sharga added.
Foreclosure auctions were scheduled for the first time on 137,643 properties in April, a 13 percent drop from a record 158,000 in March but a 1 percent rise from a year ago.
But the data firm sees "numbers staying at a high level."
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