Foreclosures Hit 42-Month Low, REO’s On A Roller Coaster
Also, while the inventory of properties in the foreclosure process has declined steadily over the past six months ” thanks in large part to 16 consecutive months of year-over-year declines in new default notices ” the inventory of unsold bank-owned REOs increased in April and May even as new REO activity slowed in both of those months. That points to continued weak demand from buyers, making it tough for lenders to unload their REO inventory. Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month, according to RealtyTrac®.
Foreclosure Activity by Type
Default notices were filed for the first time on a total of 58,797 U.S. properties in May, a 7 percent decrease from the previous month and a 39 percent decrease from May 2010. Mays total was the lowest number of monthly default notices since December 2006 ” a 53-month low.
Foreclosure auctions were scheduled for 89,251 U.S. properties in May, an increase of 3 percent from the 31-month low hit in April, but still down 33 percent from May 2010. Mays monthly increase followed eight straight monthly decreases in scheduled foreclosure auctions.
Bank repossessions (REOs) decreased on a monthly basis for the second straight month in May, with 66,879 U.S. properties repossessed by lenders during the month ” a 4 percent decrease from the previous month and a 29 percent decrease from May 2010. Since the so-called robo-signing controversy came to light in October 2010, REO activity has followed a rollercoaster pattern, with five monthly decreases and three monthly increases.
Although REO activity in non-judicial foreclosure states overall was down 6 percent from the previous month, some non-judicial foreclosure states posted substantial month-over-month increases in REO activity, including Georgia, with a 79 percent increase, Virginia, with a 36 percent increase, and Michigan, with a 19 percent increase.
Nevada, Arizona, California post top state foreclosure rates
Nevada posted the nations highest state foreclosure rate for the 53rd straight month in May, with one in every 103 housing units receiving a foreclosure filing during the month. Nevada REOs in May were down 21 percent from the record high hit in April, while default notices (NOD) increased 8 percent from the previous month and scheduled auctions (NTS) decreased 1 percent from the previous month.
Scheduled auctions in Arizona increased 4 percent in May from April, helping the state maintain the nations second highest foreclosure rate ” one in every 210 Arizona housing units received a foreclosure filing in May. Arizona REO activity in May was down 8 percent from the previous month but virtually unchanged from May 2010.
California posted the nations third highest state foreclosure rate, with one in every 259 housing units receiving a foreclosure filing during the month. Scheduled auctions in California increased 16 percent from the previous month, while default notices were down 16 percent to a 31-month low and REOs decreased 25 percent from the previous month.
Michigan posted the nations fourth highest state foreclosure rate in May, with one in every 311 housing units receiving a foreclosure filing during the month, and Utah posted the nations fifth highest state foreclosure rate, with one in every 365 housing units receiving a foreclosure filing during the month.
Other states with foreclosure rates ranking among the top 10 were Georgia, Idaho, Florida, Illinois and Colorado.
Five states account for more than half of U.S. foreclosure activity, led by California, where 51,906 properties received a foreclosure filing during the month. A total of 19,192 Florida properties received a foreclosing filing in May, the second highest state total despite a 62 percent decrease from May 2010. Michigan saw the third highest state total, followed by Arizona, and Nevada.
The RealtyTrac U.S. Foreclosure Market Report is the result of a proprietary evaluation of information compiled by RealtyTrac.
RealtyTrac (www.realtytrac.com) is the leading online marketplace of foreclosure properties, with more than 2 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data.
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