Processing delays cut foreclosure activity by 27% in 1Q 2011: RealtyTrac
RealtyTrac's March housing study reports a 15% decrease in foreclosure activity between the fourth quarter of 2010 and the first quarter of 2011, as well as a 27% decline compared to the same period a year ago. The online foreclosure property marketplace cites extended processing timelines as the main culprit for the drag. While the numbers sound encouraging, RealtyTrac Chief Executive Officer James Saccacio said the numbers are artificially manipulated, and the decrease in activity is only temporary. "The nation’s housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low," Saccacio commented. "Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork." More than 681,000 homes, or one in every 191, received a foreclosure filing during the quarter, according to RealtyTrac's data. In March alone, almost 240,000 properties received a filing, up 7% from February but down 35% from the year-ago period. March 2010 marked the peak of foreclosure filings at 367,056 properties. Of the quarterly filings, about 197,000 were notices of default, almost 269,000 were notices of foreclosure sale, and 215,00 properties were actually foreclosed upon. Those figures are down 35%, 27%, and 17% compared to the first quarter of 2010. Nevada posted the highest rate of foreclosure activity with a total 32,000 properties, or one in every 35, receiving a filing. In March, activity jumped 35% compared to the previous month. Las Vegas posted the highest number of filings on the metropolitan level, at 26,275, or one in every 31 homes. Nevada was followed closely by Arizona and California at the top of the foreclosure activity lists. First quarter totals remained below historical levels, down 17% and 22% compared to 2010, respectively; however, bank repossessions spiked 26% in Arizona in March. California foreclosures currently account for 25% of the entire market. Processing delays continued to keep foreclosure activity artificially low, RealtyTrac said, adding that states where a judicial foreclosure process is used accounted for some of the biggest quarterly and annual decreases in the first quarter. Florida's foreclosure activity decreased 47% from quarter to quarter and 62% compared to a year prior. Massachusetts too witnessed substantial declines in foreclosure activity, down 46% between quarters and 62% compared to the first quarter of 2010. Nonjudicial foreclosure states accounted for 19 or the top 20 metro foreclosure rates, RealtyTrac said. Write to Christine Ricciardi. Follow her on Twitter @HWnewbieCR.