Housing Recovery Delayed as Foreclosures Stall

By Kevin Chiu

As many as 1-million homes that should have been foreclosed in 2011 will be delayed until 2012 stalling a housing recovery in the U.S. as Las Vegas Ghost Town lenders work through problems with foreclosure procedures, lawsuits and other legal problems, according to RealtyTrac.

The foreclosure tracking firm reported that a total of 1,170,402 residential properties were served with foreclosure notices of one form or another during the first six months of the year, which represents a 25% drop in filings from the prior six months, but means little in the big picture of things.

“It would be nice to report that foreclosure activity is dropping as a result of improvements in the economy or the housing market,” said James Saccacio, CEO of RealtyTrac. “Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn’t appear to be the case.”

Formal foreclosure filings were made on 222,740 homes and other residential properties in June, an increase of nearly 4% from the previous month, but a drop of 29% from a year earlier. Filings dropped for the ninth straight month as a result of the robo-signing scandal and lawsuits filed against banks and mortgage servicing companies dealing with forged paperwork delaying or cancelling foreclosure filings.

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Three states, California, Florida and Arizona posted the highest foreclosure filing numbers for the first half of the year. California properties saw a total of 263,500 notices posted during the first half of the year. Florida placed second with 113,641 filings during the same period. Arizona was third with 77,525 foreclosure notices of some form during the first half.

Almost 5% of all housing units in Nevada received at least one foreclosure notice in the first half of the year, producing the highest foreclosure rate for the state in the nation, a figure that has distinguished the state for years in the foreclosure crisis.

Arizona garnered the nation’s second highest foreclosure rate in the country during the period with 1 in 36 homes receiving a notice in the first half of the year. Utah placed third, followed by Georgia, Idaho, Michigan and Florida.