Foreclosures Drop But on Pace to Hit Record

By Mike Colpitts

Foreclosure filings dropped a slim 2% in February, but are still on pace to hit a new record volume for 2012, despite an increase in short sales short sale by lenders on homes in default of their mortgages, according to RealtyTrac.

February foreclosure activity in the 26 states with judicial foreclosures rose 2% from January and was up 24% from a year ago as banks picked-up the pace to take back properties that are in default. Foreclosures were slowed in states that require banks and mortgage servicing companies to complete foreclosure proceedings through the courts as a result of the robo signing scandal, in which as many as 4.5 million homes may have been illegally foreclosed.

“February’s numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed,” said Brandon Moore, CEO of RealtyTrac. “Although national foreclosure activity was pushed lower by decreases in a handful of larger states, 21 states posted annual increases in foreclosure activity, the most states with annual increases since November 2010.”

Led by cities in hard hit Florida, ten of the nation’s 20 largest metropolitan areas saw year over year increases in foreclosure activity during the month. Tampa experienced a 64% rise in foreclosed residential properties, while Miami, where home and condo resales are at record levels experienced a 53% hike.

Cities with the highest foreclosure rates in the top 20 urban areas were Riverside-San Bernardino in Southern California, Atlanta, Phoenix and Miami.

Default notices, the first step in the foreclosure process increased at least 20% on a year-over-year basis in a dozen states, including Hawaii, Maryland, Connecticut, South Carolina, Indiana, Pennsylvania and Florida. State attorneys general have filed lawsuits against major lenders in New York, California and Nevada in the past few months, further slowing the pace of foreclosures in those states.

Nevada reached a 58 month low in foreclosures during February, but still posted the country’s highest state foreclosure rate for the 62nd straight month. One in every 278 Nevada residential housing units had a foreclosure filing during the month.

California had the nation’s second highest state foreclosure rate even though activity hit a 51-month low. A total of 48,422 California properties had a foreclosure filing during the month, representing one in every 283 housing units.