Foreclosures Post First Annual Decline in Three Years

By:
Kirk Haverkamp | May 13, 2010
Foreclosures posted their first annual decline in at least three years in April, providing a hopeful sign that the nation’s housing crisis is bottoming out.
 
A total of 333,387 homes were subjected to foreclosure filings during the month, according to figures released today by the foreclosure marketing firm RealtyTrac, representing a 2 percent decline from one year ago. It was the first annual decline the company as reported since it began tracking such data in January 2006.
 
April’s total also represented a 9 percent drop from March, which had seen a sharp spike in foreclosure activity.
 
At the same time, actual bank repossessions hit an all-time high in April, even as newly issued default notices took a big drop.
 
 “There were two important milestones in the April numbers that show foreclosure activity has begun to plateau — but at a very high level that will not drop off in the near future,” said James Saccacio, RealtyTrac CEO, referring to the declining annual rate and the divergence between default notices and repossessions.
 
 “We expect a similar pattern to continue for most of this year, with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties,” he added.
 

Repossessions up, but defaults down

 
The overall foreclosure total reported each month includes three types of foreclosure actions: notices of default, scheduled foreclosure auctions and actual bank repossessions. Bank repossessions totaled 92,432 in April, a 1 percent increase from March and the most ever reported in a single month and an increase of 45 percent from April 2009.
 
 At the same time, 103,762 properties received new default notices, representing a decline of 12 percent from the month before and 27 decline from one year ago. The diverging trend shows that fewer homes are entering the foreclosure process, even as more homeowners are actually losing their homes and exiting the process.
 
April’s decline in total foreclosure filings followed an increase of nearly 19 percent in March, to 367,056 properties, the highest ever recorded in the monthly report. The April total was equal to one U.S. home in 138 receiving some type of foreclosure filing.
 

Foreclosures concentrated in five states

 
Five states accounted for more than half of the nation’s foreclosure activity - California, Florida, Michigan, Illinois and Nevada. California continues to lead the nation in total foreclosures, although the 69,725 properties subject to foreclosure actions in April represented a 25 percent decline from March and an annual drop of 28 percent from one year ago.
 
Nevada had the nation’s highest foreclosure rate, as it has for 40 consecutive months, with one home in 69 subject to foreclosure. The rate represented a 10 percent increase from the previous month, although is relatively unchanged from the April 2009 level.

 

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