Indicating a continuous strengthening of housing prices, the
foreclosure market report - released by RealtyTrac - depicted a
marginal rise in overall foreclosure activity in May 2013.
According to this leading online marketplace of foreclosure
properties, foreclosure filings were up 2% from Apr 2013 but down
28% from May 2012.
This brought the aggregate number of properties receiving
default, auction or repossession notices to 148,054. The primary
reason for the monthly rise was an increase in bank repossessions
(REOs), which was up 11% from Apr 2013 but down 29% from May 2012
with 38,946 properties in May.
In aggregate, 33 states reported a monthly rise in REO activity.
Further, from Apr 2013, REO activity rose 9% in non-judicial
states and 13% in judicial states.
) was the lone mortgage servicer - among the 5 banks involved in
last year's national mortgage settlement - to report lower
repossessions in May. The other 4 banks including
JPMorgan Chase & Co.
Bank of America Corp
), Ally Financial Inc. and
Wells Fargo & Company
) recorded a rise in repossessions.
Moreover, foreclosure starts - default notices issued and
foreclosure auctions (depending on the state's foreclosure
procedure) - jumped 4% from Apr 2013 but declined 33% from May
2012 to 72,938 properties in the reported month. Foreclosure
starts increased in 26 states on a monthly basis, while 14 states
reported the rise on a yearly basis.
The foreclosure problem continued to shift toward judicial
states. In the reported month, Florida, Ohio, Maryland, South
Carolina and Illinois had 5 of the top 6 foreclosure rates
countrywide. In the second position, Nevada was top-ranked among
the non-judicial states.
Rise in foreclosure activity is expected continue as mortgage
servicers are more confident of getting higher value for
foreclosed properties, given the increasing demand for these as
well as rise in home prices. Further, according to the
S&P/Case-Shiller index of values in 20 cities, the U.S. home
prices rose almost 11% in the year through Mar 2013, marking the
biggest yearly gain since Apr 2006. However, foreclosure activity
is expected to remain volatile, as the processes being used for
handling these differ from state to state.
Nevertheless, the stabilizing housing sector, increase in jobs,
and low mortgage rates will likely make homeowners avoid
foreclosures. Additionally, the rate at which properties are
entering the foreclosure procedure is expected to eventually
slacken, leading to further rise in housing prices.
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