Foreclosures Set New Record - Barely

U.S. foreclosure rates increased slightly in April, easing what had a series of steady increases over the past year, but still enough to set a new all-time high.

Foreclosure filings were reported on 342,000 U.S. homes in April, according to the real estate data firm RealtyTrac, a 1 percent increase over the previous record in March - still an all-time high but not a major worsening of an already bad market. Foreclosure filings had already increased by nearly one-third over the previous years and April's figures actually represented a moderation of the trend.

Signs point to further increases

Foreclosures could still end up climbing even higher though, as the effects of worsening unemployment works its way through the economy. New jobless claims have been up sharply through the first three months of the year and job losses typically begin to translate into foreclosures about six months later.

"What you're seeing is the inevitable result of severe job losses," Nicolas Retsinas, director of housing studies at Harvard University in Cambridge, Massachusetts, told Bloomberg News. "Until we stem the job losses, we can expect to see continuing foreclosures."

The survey reported that one in every 374 U.S. homes received a foreclosure filing in April, the highest rate since the company began tracking the data in 2005. The report combines a number of different foreclosure activities, from initial filings to bank sales, so the figure does not represent the actual number of homes lost in a given month.

New filings rise

Bank foreclosure sales actually declined in April, to their lowest level since March 2008, possibly because of a self-imposed moratorium in the first two months of the year that saw major lenders refraining from initiating foreclosures. Much of the foreclosure activity in April was new foreclosure filings, according to RealtyTrac CEO James Saccacio, suggesting that lenders and servicers are once again beginning the foreclosure process on delinquent loans.

"It's likely that we'll see a corresponding spike in REOs (new filings) as these loans move through the foreclosure process over the next few months," Saccacio said.

Nevada remained the state with the highest foreclosure rate in April, despite posting a 18 percent decrease from the month before. The survey said there were 16,266 foreclosure filings in the state in April, equal to one of every 68 homes. Foreclosure filings jumped 35 percent in Florida, making it #2 in the April survey with filings on one out of every 135 homes.

Michigan see foreclosures drop

There was good news to be found in places one might not expect. Michigan, whose economy has been dragged down by the woes of the auto industry, actually posted a 12 percent decrease in foreclosures over the previous year. It's overall rate of one foreclosure per every 418 homes is still enough to make it 11th-worst in the nation and could perk up again as job cuts from the Chrysler and potential GM bankruptcies hit the state.

The 10 states with the most properties with foreclosure filings in April accounted for more than 75 percent of the national total, according to the report. California documented the highest total (96,560), followed by Florida (64,588), Nevada (16,266) and Arizona (16,245). The monthly report surveys real estate 2,200 counties each month, counting homes that have at least one foreclosure activity - initial filing, bank sale, etc. - as a single foreclosure.