According to the foreclosure market report – released by RealtyTrac – there was a marginal rise in foreclosure activity for Oct 2013, with a higher number of residential properties entered the foreclosure process from the prior month. Nevertheless, on a year over year basis, foreclosure activity continued to decline.
According to this leading online marketplace of foreclosure properties, foreclosure filings were up 2% from Sep 2013 but down 28% from Oct 2012. This brought the aggregate number of properties receiving default, auction or repossession notices to 133,919 in October.
Foreclosure starts grew 2% from Sep 2013 but fell 34% from Oct 2012 to 58,939 properties in October. This was the 15th consecutive month of falling foreclosure starts on an annual basis. However, foreclosure starts increased in 22 states from the prior month.
Additionally, scheduled judicial foreclosure auctions (NFS) increased 10% from the prior month and 7% from the prior-year month. Moreover, this was the 16th consecutive month of rising NFS on an annual basis.
However, bank repossessions (REOs) were down 1% from Sep 2013 and 29% from Oct 2012 with 37,775 properties. On an aggregate, REO activity rose in 15 states on an annual basis.
According to the trend so far, this year is expected to end with nearly 480,000 completed foreclosures, down approximately 28% from the 2012 level. Further, foreclosures are now expected to normalize – around 50,000 foreclosures per month – very soon. This will, in turn, help to limit the adverse impact of foreclosures on property values.
Further, as the major mortgage servicers – JPMorgan Chase & Co. (JPM - Free Report) , Bank of America Corp (BAC - Free Report) , Citigroup Inc. (C - Free Report) , Ally Financial Inc. and Wells Fargo & Company (WFC - Free Report) – continue to adjust to the new regulations related to foreclosure filings and also clear their pipeline of foreclosed properties, foreclosure activity is expected to rise in judicial states.
Though the foreclosure crisis can be said to be nearly over, its effects are expected to linger for some time. Hence, there are chances of volatility in foreclosure activities in the coming months as the backlog in judicial states continues to enter the market.
Moreover, the stabilizing housing sector, increase in jobs, and affordable mortgage rates will likely make homeowners avoid foreclosures. Additionally, given the lower number of properties entering the foreclosure procedure, this will eventually lead to further rebound in housing sector.