PrintForeclosure activity surged in March to the highest level on record as banks lifted moratoria on filings according to Realty Trac data. Foreclosure filings rose 17 percent in March to 341,180 from February. The March number was a 46 percent increase from a year earlier. Total foreclosure filings for the first quarter of this year registered 803,489, a 24 percent increase from a year earlier and a 9 percent increase compared to the previous quarter.
Five states accounted for nearly 60 percent of the total foreclosure activity in the first quarter. California, Florida, Arizona, Nevada and Illinois accounted for 479,516 properties that received foreclosure filings. These states have experienced the largest home price declines and/or the largest job losses compared with other states.
According to James Saccacio, chief executive officer of Realty Trac, much of the foreclosure activity was in foreclosure actions suggesting that many lenders and servicers were holding off on executing foreclosures due to industry moratoria and legislative delays.
There are a significant number of homes where the owners’ mortgage loan balances exceed what the homes are worth. These homeowners have lost incentive to maintain the monthly mortgage payments, and become delinquent and eventually fall into foreclosure. Home prices continue to fall which portends unfavorably for future foreclosure filings. In addition, the economy continues to shed jobs, exacerbating the foreclosure problem.
Government efforts to reign in foreclosures have not yet been successful. However, we expect recent government programs that motivate both lenders and borrowers to either work out a loan modification or refinance a loan to influence foreclosure filings in a downward direction.
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