There was a significant fall in foreclosure activity for Aug
2013, with a lesser number of residential properties entering the
foreclosure process. The foreclosure market report - released by
RealtyTrac - depicted the foreclosure activity for the said month
to be the lowest in nearly 8 years.
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According to this leading online marketplace of foreclosure
properties, foreclosure filings were down 2% from Jul 2013 and
34% from Aug 2012. This brought the aggregate number of
properties receiving default, auction or repossession notices to
Foreclosure starts - default notices issued and foreclosure
auctions (depending on the state's foreclosure procedure) - fell
8% from Jul 2013 and 44% from Aug 2012 to 55,775 properties in
Aug 2013. Foreclosure starts decreased in 38 states (both
judicial and non-judicial) on a yearly basis, while 17 states
reported a rise in the same.
However, bank repossessions (REOs) were up 6% from Jul 2013 but
down 25% from Aug 2012 with 39,277 properties. On an aggregate,
REO activity rose in 26 states on a monthly basis and in 23
states on an annual basis.
According to the trend so far, this year is expected to end with
nearly 490,000 completed foreclosures, down approximately 26%
from the 2012 level. Further, foreclosures are now expected to
normalize - around 52,000 foreclosures per month - very soon.
This will, in turn, help to limit the adverse impact of
foreclosures on property values.
Notably, foreclosure-related problems continue to shift toward
judicial states. The top 5 states with the highest foreclosure
rates are Nevada, Florida, Ohio, Maryland and Delaware. Of these,
the first 4 are judicial states. Also, as the major mortgage
JPMorgan Chase & Co.
Bank of America Corp
), Ally Financial Inc. and
Wells Fargo & Company
) - adjust to the new regulations under the National Mortgage
Settlement along with several other state laws, 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. Moreover, with
continued rise in home prices and a decrease of underwater
borrowers, this trend of fall in foreclosure activities will
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.