Indicating the marginal revival of the housing market, the
foreclosure market report - released by RealtyTrac - revealed
that the overall foreclosure activity in Mar 2013 continued to
show a downward trend. As per this leading online marketplace of
foreclosure properties, foreclosure filings plunged 23% from Mar
2012 and 1% from Feb 2013. This brought the aggregate number of
properties receiving default, auction or repossession notices to
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Moreover, for the first quarter of 2013, foreclosure filings were
down 23% year over year and 12% sequentially, thereby bringing
the total number of properties receiving default, auction or
repossession notices to 442,117. This was the lowest level since
the second quarter of 2007.
Foreclosure starts - default notices issued and foreclosure
auctions (depending on the state's foreclosure procedure) -
declined 28% from Feb 2012 but rose 2% from Jan 2013 to 73,113
properties in the reported month. Foreclosure starts jumped in 12
states from the prior-year month and in 23 states from the prior
Meanwhile, bank repossessions (REOs) plunged 21% from the
prior-year month and 3% from the last month to 43,597 properties
in March. This was the lowest level since Sep 2007. In aggregate,
34 states reported year over year fall in REO activity.
The top 10 states with the highest foreclosure rates in the first
quarter were FL, NV, IL, OH, GA, AZ, WA, MD, SC and CA.
Additionally, the procedure to complete the foreclosure of
properties in the reported quarter took an average of 477 days,
up from 414 days in the previous quarter and a record high since
the first quarter of 2007.
The drop in foreclosure activity is a result of the switching of
mortgage servicers and the government to other options to prevent
foreclosures. Yet, the dip is expected to remain volatile, as
processes that are being used in handling these differ from state
Foreclosure activity is expected to rise in the judicial states
as the latter have substantial backlogs to clear. Further, as the
major servicers -
JPMorgan Chase & Co.
Bank of America Corp
), Ally Financial Inc. and
Wells Fargo & Company
) - 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 near term.
Nevertheless, we believe that the stabilizing housing sector is
likely to aid homeowners in avoiding foreclosures. Further, the
rate at which properties are entering the foreclosure procedure
is expected to slow down gradually, lifting the housing prices
going forward. The housing market will also get an opportunity to
regain a strong foothold if there are sufficient buyers for these