Foreclosure activity fell 35% in July compared to last year, hitting a 44-month low, according to foreclosure data firm RealtyTrac
The number of foreclosure filings – which includes default notices, auctions and bank repossessions – hit 212,764 in July, down 4% from June.
Irvine, Calif.-based RealtyTrac added that one in every 611 housing units experienced a foreclosure filing last month.
At the same time, REOs in the states of New York, Massachusetts, Georgia, Virginia and Illinois grew more than 20%.
RealtyTrac attributes the drop in foreclosures to delays caused by government and judicial interventions in the housing market and expects housing market troubles will plague the nation well beyond 2012.
"This string of decreases was initially triggered by the robo-signing controversy back in October 2010, which forced lenders to substantially slow the pace of foreclosing, but the downward trend in foreclosure activity has now taken on a life of its own," said James Saccacio, CEO of RealtyTrac. "It appears that the foreclosure processing delays, combined with the smorgasbord of national and state-level foreclosure prevention efforts — including loan modifications, lender-borrower mediations and mortgage payment assistance for the unemployed — may be allowing more distressed homeowners to stave off foreclosure."
Several states still account for the majority of the foreclosure activity, with 73% of foreclosures occurring in either California with 56,193 properties facing a foreclosure filing last month, followed by Florida (22,377 foreclosure filings), Georgia (11,461), Michigan (10,894), Illinois (10,627), Arizona (10,098), Nevada (9,930), Ohio (8,376) and Wisconsin (4,534).
In responding to the report, Rebecca Walzak, president of Walzak Consulting
out of Florida said, “While I agree that the options provided to distressed homeowners is allowing more to remain in their homes, it is apparent that the overall number of borrowers that are escalating to default and foreclosure is also decreasing. It may be that this information is telling us that the greatest foreclosure issues--related primarily to poor quality originations, products and underwriting-- are behind us."
Write to: Kerri Panchuk