RealtyTrac reports a returning wave of foreclosures is breaking in the struggling U.S. housing market despite banks’ efforts to pursue alternatives. It was once thought that the $25 billion settlement between states and the country’s largest banks for their involvement in unscrupulous foreclosure practices would pave the way for more foreclosures, but the new study reveals that it is a matter of the amount of properties already in the foreclosure process. Foreclosure rates have increased through the first three months of the year and have been pushed higher than expected due to surges in foreclosures in Pittsburgh, Indianapolis, Raleigh and New York. For more on this continue reading the following article from TheStreet.
Big jumps in foreclosure activity in cities like Pittsburgh, Indianapolis, New York and Raleigh pushed the national numbers higher in the first three months of this year, according to a new report from RealtyTrac, an online foreclosure sales and data company.
A majority of U.S. housing markets posted a quarterly increase in foreclosure activity, although the numbers are still down from a year ago.
"First quarter metro foreclosure trends were a mixed bag," said Brandon Moore, chief executive officer of RealtyTrac, adding that the increase in the number of cities seeing a quarterly jump is, "an early sign that long-dormant foreclosures are coming out of hibernation in many local markets."
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Tracking foreclosure activity is a tricky business right now, as the system has been roiled with problems left over from the so-called "robo-signing" foreclosure paperwork scandal.
The five largest banks signed a $25 billion settlement agreement earlier this year, requiring them to do more modifications and write down principal on some troubled loans. While some expected foreclosure numbers to surge, as states that require a judge in the foreclosure process finally start pushing the documents through again, but more recent data has shown the opposite. As banks work on saving more loans or doing foreclosure alternatives, like short sales, deeds in lieu of foreclosure, or deeds for rent programs, the final foreclosure numbers are falling. New mortgage delinquencies are also falling, thanks to a slowly improving jobs picture.
Still, inventories of properties in the foreclosure process are still abnormally high, and some of the usual markets are the culprits. Stockton and Modesto, California still have the highest foreclosure rates in the nation, while Las Vegas dropped to the eighth spot, with foreclosure activity down 61% from a year ago. The Phoenix market is also improving, although still in the top ten list of foreclosure rates.
Just over 7% of U.S. loans were in some stage of delinquency in March, and 4.14% were in the foreclosure process, according to a new report from Lender Processing Services. The delinquency number is down almost 9% from a year ago, but the foreclosure inventory is fairly flat, down 1.6% from a year ago, but up slightly from the previous month. 5.6 million properties are still in some stage of delinquency or foreclosure. These numbers, negative home equity, and still-tight credit are the largest impediments to a robust recovery in the housing market.
This article was republished with permission from TheStreet.