Recovery Pushes Foreclosures Lower 3 Months

By Mike Colpitts
In a sign the U.S. housing market is on the road to recovery, foreclosures dropped for the third month in a row in April, despite a traceable increase foreclosure for sale in repossessions along the eastern U.S. coast. Initial notices of default were filed against 188,780 residential properties, the lowest since July 2007.

Final bank repossessions (REOs) dropped for the third straight month in April, down 7% from March. Lenders completed foreclosures on 51,415 residential properties during the month, down 26% from a year ago.

April foreclosure activity was down 14% from one year ago, with one in every 698 U.S. housing units being slapped with a filing. However, some regions of the country are experiencing an increase in foreclosures.

“Rising foreclosure activity in many states and local markets in April was masked at the national level by sizable decreases in hard-hit foreclosure states like California, Arizona and Nevada,” said Brandon Moore, CEO of RealtyTrac. “Those three states and several other non-judicial foreclosure states like them, more efficiently processed foreclosures last year, resulting in fewer catch-up foreclosures this year.”

An increase in bank assisted short sales, in which mortgage holders sell for less than what they owe on a home are also increasing as part of the nation’s five biggest banks robo signing agreement with 49 state attorney generals.

Formal repossessions of homes in the 24 states with non-judicial foreclosures and the District of Columbia were down 29% from a year ago. More populous states like Arizona, California and Nevada drove the decline. Activity in the 26 states with judicial foreclosures fell 15% from April 2011.

Despite the drop in foreclosure starts, 26 states posted monthly gains, and 27 states saw year-over-year increases in foreclosure starts. States with the largest annual increases include New Jersey (180%), Utah (179%), Indiana (49%), Pennsylvania (44%), Florida (43%) and Michigan (42%).

Eleven of the U.S. largest metro areas experienced annual increases in foreclosure activity during April, led by the Florida cities of Tampa and Miami. Other major cities with increases included St. Louis (29%), Chicago (26%), Philadelphia (24%) and Atlanta (21%).