Is The Foreclosure Slowdown Ending?

The foreclosure slow-down which started in late 2010 with the unfolding of the robo-singing scandal has begun to reverse in a majority of major cities. The latest RealtyTrac report for the first quarter of 2012 shows that foreclosure activity increased from the previous quarter in 114 of the nation’s 212 metropolitan areas with a population of 200,000 or more.

Once robo-signing and note ownership questions wind their way through various courts then it can be expected that the number of foreclosure actions will greatly increase. Foreclosures on hold for months and years will go forward as quickly as they can be processed or turned into short sales. The number of distressed properties available for purchase will grow, thus holding down home prices in the short term — if not forcing them lower in major foreclosure centers.

“First quarter metro foreclosure trends were a mixed bag,” said Brandon Moore, chief executive officer of RealtyTrac. “While the majority of metro areas continued to show foreclosure activity down from a year ago, more than half reported increasing foreclosure activity from the previous quarter — an early sign that long-dormant foreclosures are coming out of hibernation in many local markets.”
RealtyTrac — the leading online marketplace for foreclosure properties — says first quarter foreclosure activity increased from the previous quarter in 26 out of the nation’s 50 largest metro areas, led by Pittsburgh (up 49 percent), Indianapolis (up 37 percent), Philadelphia (up 30 percent), New York (up 24 percent), Raleigh, N.C. (up 23 percent), and Virginia Beach, Va. (up 22 percent).

Also from RealtyTrac:

The biggest quarterly decreases in foreclosure activity among the 50 largest metro areas were in Portland, Ore. (down 28 percent), Las Vegas (down 26 percent), Providence, R.I. (down 24 percent), Salt Lake City (down 22 percent), Boston (down 21 percent), and San Jose, Calif. (down 21 percent).

Foreclosure activity down on annual basis in 64 percent of metros Despite the quarterly increase in more than half of the metro areas tracked in the report, first quarter foreclosure activity was still down compared to the first quarter of 2011 in 135 out of the 212 metro areas (64 percent).

Thirty-three of the nation’s 50 largest metro areas posted year-over-year decreases in foreclosure activity, led by Las Vegas (down 61 percent), Seattle (down 53 percent), Austin, Texas (down 51 percent), Salt Lake City (down 49 percent), and Buffalo, N.Y. (down 47 percent).

The biggest annual increases in foreclosure activity among the 50 largest metro areas were in Orlando (up 52 percent), Indianapolis (up 41 percent), Hartford, Conn. (up 38 percent), Miami (up 37 percent), and Philadelphia (up 33 percent).

Top 20 metro foreclosure rates

Stockton, Calif., posted the nation’s highest metropolitan foreclosure rate in the first quarter. One in every 60 housing units in the Stockton metro area had a foreclosure filing during the quarter — more than three times the national average. There were a total of 3,912 Stockton properties with foreclosure filings in the first quarter, down 13 percent from the fourth quarter of 2011 and down 19 percent from the first quarter of 2011.

Nearby Modesto, Calif., posted a foreclosure rate that was fractionally lower than the foreclosure rate in Stockton — giving Modesto the nation’s second highest metro foreclosure rate. Ten other California cities joined Stockton and Modesto among the nation’s Top 20 metro foreclosure rates: Riverside-San Bernardino (No. 3), Vallejo-Fairfield (No. 4), Merced (No. 5), Sacramento (No. 6), Bakersfield (No. 7), Visalia-Porterville (No. 10), Fresno (No. 12), Oxnard-Thousand Oaks (No. 14), Chico (No. 18), and Santa Rosa-Petaluma (No. 20).

Reporting one in every 82 housing units with a foreclosure filing in the first quarter, the foreclosure rate in the Las Vegas-Paradise metro area dropped to eighth highest nationwide thanks to a substantial drop-off in foreclosure activity. A total of 10,192 Las Vegas properties had a foreclosure filing during the quarter, down 26 percent from the fourth quarter and down 61 percent from the first quarter of 2011.

A total of 20,787 properties in the Phoenix-Mesa-Scottsdale, Ariz., metro area had a foreclosure filing in the first quarter, down 5 percent from the previous quarter and down 43 percent from the first quarter of 2011. That gave Phoenix the nation’s ninth highest metro foreclosure rate for the quarter: one in every 87 housing units with a foreclosure filing.

Other metro areas with foreclosure rates among the Top 20 included Atlanta (No. 11), Miami (No. 13), Orlando (No. 15), Rockford, Ill., (No. 16), Chicago (No. 17), and Prescott, Ariz. (No. 19).

Top foreclosure rates among 50 largest metros

The Riverside-San Bernardino metro area in Southern California registered the highest foreclosure rate among the nation’s 50 largest metropolitan areas: one in every 62 housing units with a foreclosure filing during the quarter — more than three times the national average.

Seven other metros among the nation’s 50 largest registered foreclosure rates that were more than twice the national average: Sacramento, Calif. (one in 77 housing units), Las Vegas (one in 82 housing units), Phoenix (one in 87 housing units), Atlanta (one in 90 housing units), Miami (one in 95 housing units), Orlando (one in 101 housing units), and Chicago (one in 107 housing units).

Report Methodology

The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the quarter — broken out by type of filing. Some foreclosure filings entered into the database during a quarter may have been recorded in previous quarters. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default —Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the quarterly report, if more than one foreclosure document is received for a property during the quarter, only the most recent filing is counted in the report. The quarterly report also checks if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report does not count the property in the current quarter.

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