Indicating a revival of the housing market, the foreclosure market report – released by RealtyTrac – revealed that the overall foreclosure activity in Feb 2013 showed a downward trend on-year-over year basis. As per this leading online marketplace of foreclosure properties, foreclosure filings plunged 25% from Feb 2012 but increased 2% from Jan 2013. This brought the aggregate number of properties receiving default, auction or repossession notices to 154,281.
Foreclosure starts – default notices issued and foreclosure auctions (depending on the state’s foreclosure procedure) – declined 25% from Feb 2012 but rose 10% from Jan 2013 to 71,488 properties in the reported month. Bank repossessions (REOs) plunged 29% from the prior-year month and 11% from the last month to 45,038 properties. This was the lowest level since Sep 2007.
The top 10 states with the highest foreclosure rates were Fla., Nev., Ill., Ohio, Wash., Md., Ariz., Ga., Utah and Mich.
Moreover, the drop in overall foreclosure activity was a result of the switching of mortgage servicers and the government to other options to prevent foreclosures. Yet, the dip is expected to be at an uneven pace, as processes that are being used in handling these vary from state to state.
Foreclosure activity is expected to rise in the judicial states as the states have substantial backlogs to clear. Further, as the major lenders – JPMorgan Chase & Co. (JPM - Analyst Report), Bank of America Corporation (BAC - Analyst Report), Citigroup Inc. (C - Analyst Report), Ally Financial Inc. and Wells Fargo & Company (WFC - Analyst Report) – adjust to the new rules set under the National Mortgage Settlement as well as several other state laws, foreclosure activity is bound to rise in the following months.
Yet, we believe that the stabilizing housing sector is likely to aid homeowners to avoid foreclosures in the near term. Also, the rate at which properties are entering the foreclosure procedure is expected to trend down gradually, lifting the housing prices going forward. Moreover, the housing market will get an opportunity to regain a strong foothold if there are sufficient buyers for these properties.