There was a spate of foreclosure activity in Jul 2013 as
lenders in certain judicial states continued to clear their
backlogs. The foreclosure market report - released by RealtyTrac
- depicted a rise in overall foreclosure activity from the prior
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According to this leading online marketplace of foreclosure
properties, foreclosure filings were up 2% from Jun 2013 but down
32% from Jul 2012. This brought the aggregate number of
properties receiving default, auction or repossession notices to
130,888. The primary reason for the monthly rise was an increase
in foreclosure starts and bank repossessions (REOs).
Foreclosure starts - default notices issued and foreclosure
auctions (depending on the state's foreclosure procedure) -
jumped 6% from Jun 2013 but declined 38% from Jul 2012 to 60,601
properties in the reported month. Foreclosure starts increased in
26 states on a monthly basis and in 15 states on a yearly basis.
Additionally, REOs were up 4% from Jun 2013 but down 31% from Jul
2012 with 36,964 properties. In the aggregate, REO activity rose
on a monthly basis in 29 states and on an annual basis in 18
As per the trend so far, this year is expected to end with the
lowest number of REOs since the last 6 years. This will, in turn
aid in limiting the adverse impact of foreclosures on property
Notably, foreclosure-related problems continue to shift towards
judicial states. The top 10 states with the highest foreclosure
rates are Florida, Maryland, Ohio, Connecticut, New Mexico,
Illinois, Nevada, Georgia, South Carolina and Utah. Of these, the
first 6 are judicial states.
The foreclosure crisis is still far from over. 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 expected to rise in the near term.
Moreover, rise in foreclosure activity is expected to 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. However, foreclosure activity is
expected to remain volatile, as the processes being used in
handling these differ from state to state.
The housing market will witness resurgence if there are
sufficient buyers for foreclosed properties. 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