Foreclosures Fall, Optimism Rises

Written by: Steve Cook   Thu, March 11, 2010 Beyond Today’s News, Foreclosure Situation

For the second time in three weeks, a major national report on foreclosures and delinquent mortgages suggest that the flood of foreclosures that washed over the housing markets in 2009 is ebbing and may even be at an end.

Foreclosure notices fell 2 percent last month and were only 6 percent higher than they were in February 2009, the smallest annual increase since January 2006, according to RealtyTrac.

Last month, when the Mortgage Bankers Association’s National Delinquency Survey found that in the fourth quarter of 2009 the delinquency rate on residential properties fell 17 basis points from the third quarter of 2009 MBA’s Chief Economist Jay Brinkmann made news with his optimism.

“We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007, continued with the meltdown of the California and Florida housing markets due to overbuilding and the weak loan underwriting that supported that overbuilding, and culminated with a recession that saw 8.5 million people lose their jobs,” he said.

Today James J. Saccacio, chief executive officer of RealtyTrac, was less sanguine.

“This leveling of the foreclosure trend is not necessarily evidence that fewer homeowners are in distress and at risk for foreclosure, but rather that foreclosure prevention programs, legislation and other processing delays are in effect capping monthly foreclosure activity – albeit at a historically high level that will likely continue for an extended period,” said Saccacio.

Metro areas in the Sun Belt states of Nevada, Florida, California and Arizona continued to dominate the top 10 highest foreclosure rates among metropolitan areas with a population of 200,000 or more, but activity trends in these areas varied considerably.

The Las Vegas metro area documented the highest metro foreclosure rate, with one in every 90 housing units receiving a foreclosure filing during the month, despite a 9 percent decrease in foreclosure activity from the previous month.

Six of the other metro areas in the top 10 – all in California or Arizona – also reported decreasing foreclosure activity from the previous month. The biggest monthly decrease among the top 10 was in the Phoenix metro area, where foreclosure activity dropped nearly 18 percent.

In contrast, the two Florida metro areas in the top 10 both posted substantial monthly increases in foreclosure activity. The Cape Coral-Fort Myers metro area saw a 31 percent increase in foreclosure activity from the previous month, giving it the second highest metro foreclosure rate – one in every 92 housing units receiving a foreclosure filing. An increase of nearly 66 percent in foreclosure activity from the previous month helped boost the foreclosure rate in Port St. Lucie to sixth highest.

Leave a Reply