Indicating the marginal revival of the housing market, the
foreclosure market report - released by RealtyTrac - revealed a
consistent fall in the overall foreclosure activity in Apr
2013. According to this leading online marketplace of
foreclosure properties, foreclosure filings plunged 23% from Apr
2012 and 5% from Mar 2013.
This brought the aggregate number of properties receiving
default, auction or repossession notices to 144,790 - the lowest
level since Feb 2007.
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Foreclosure starts - default notices issued and foreclosure
auctions (depending on the state's foreclosure procedure) - fell
28% from Apr 2012 and 4% from Mar 2013 to 70,133 properties in
the reported month. However, foreclosure starts has been steadily
rising in a few non-judicial states including Nev., Wash. and
Ark. since late 2012 with servicers' adjustment to new
regulations enacted to prevent flawed foreclosures.
Given the increase in foreclosure starts in many judicial states,
scheduled foreclosure auctions in judicial states jumped 31% year
over year and 22% from the prior month to the highest level since
Oct 2010. This indicates that servicers are going forward with
the completion of the foreclosure activity through repossession
or sale. However, scheduled non-judicial foreclosure auctions
were down 43% from Apr 2012 and 7% from Mar 2013 to the lowest
level since Dec 2005.
Meanwhile, bank repossessions (REOs) plunged 32% from the
prior-year month and 20% from the previous month to 34,997
properties in April. This was the lowest level since Jul 2007. On
an aggregate, 37 states as well as the District of Columbia
reported year-over-year fall in REO activity.
The top 10 states with the highest foreclosure rates in the first
quarter were Nevada, Florida, Ohio, Illinois, South Carolina,
Connecticut, Maryland, Georgia, Delaware and Arizona.
The drop in foreclosure activity is due to mortgage servicers and
the government switching to other options to prevent
foreclosures. However, the dip is expected to remain volatile, as
the processes being used for handling these differ from state to
Foreclosure activity is expected to increase in the judicial
states, given the substantial backlogs. Further, as the major
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 as
well as consistent job growth and low mortgage rates are likely
to aid homeowners in avoiding foreclosures. Further, the rate at
which properties are entering the foreclosure procedure is
expected to slacken eventually, raising 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