Foreclosure filings dropped 5% over the first half of 2010 as lenders continue to delay proceedings to focus on short sale and loan modification efforts, according to RealtyTrac
, an online foreclosure marketplace.
More than 1.6m homes received at least one filing, including default notices, auction sale notices and bank repossessions over the last six months, according to the report. That translates to one in 78 homes. Foreclosure filings remain 8% above the amount issued in the first half of last year.
James Saccacio, CEO of RealtyTrac, said at the current pace, more than 3m properties will receive a foreclosure filing by the end of the year, and lenders will repossess more than 1m of them. According to a report from the Toronto-based Capital Economics
, the weight of the shadow inventory may contribute to a double dip in the housing market. The report found that for every home currently on the market, two homes are waiting to be sold.
“The roller coaster pattern of foreclosure activity over the past 12 months demonstrates that while the foreclosure problem is being managed on the surface, a massive number of distressed properties and underwater loans continues to sit just below the surface, threatening the fragile stability of the housing market,” Saccacio said.
Foreclosure filings decreased 3% in June after another 3% drop in April
. It’s the third straight month of declines. Foreclosure filings were down 7% from June 2009. Despite the recent downward swing, June marked the 16th straight month of more than 300,000 filings.
For the second quarter of 2010, foreclosures dropped 4% from Q110 and remained 1% above Q209. As default and auction notices fell, REOs increased 5% from the last quarter and 38% from Q209. It’s the most REOs measured in a quarter since RealtyTrac began publishing the reports in January 2005.
“The second quarter was a tale of two trends,” Saccacio said. “The pace of properties entering foreclosure slowed as lenders pre-empted or delayed foreclosure proceedings on delinquent properties with more aggressive short sale and loan modification initiatives. Meanwhile the pace of properties completing the foreclosure process through bank repossession quickened as lenders cleared out a backlog of distressed inventory delayed by foreclosure prevention efforts in 2009.”
Nevada continued to hold the highest foreclosure rate in the country. Nearly 6% of all Nevada properties, which equals one in 17 homes, received at least one filing in the first half of 2010.
Arizona holds the second highest. There, 3.36% of its units received a filing, equaling one in 30 homes. Florida was third with 3.15%.
More than 340,000 properties in California received a filing in the first half of 2010, the state holds the highest foreclosure volume. Florida was second with more than 277,000 properties.
Write to Jon Prior