RealtyTrac: Big Foreclosure Wave Looms in 2012

Thursday, 15 Dec 2011 07:57 AM

 

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U.S. foreclosure filings fell last month as delinquent homeowners got a holiday break, RealtyTrac Inc. reported.

A total of 224,394 properties received notices of default, auction or repossession, down 14 percent from a year earlier, the Irvine, California-based data seller said today in a report.

One in 579 U.S. households got a filing, compared with one in 563 in October, a decline partly the result of a holiday eviction moratorium by mortgage giants Fannie Mae and Freddie Mac, said RealtyTrac Chief Executive Officer James J. Saccacio.

The U.S. housing market must digest more than 14 million distressed properties — 1.5 million homes in the foreclosure process, 3.5 million with delinquent mortgages and at least 10 million “underwater” properties, whose owners owe more than the homes are worth — before the foreclosure crisis will subside, according to RealtyTrac.

“The python took a break — the pig is still in there,” Saccacio said in a telephone interview.

While total filings declined in November, the number of scheduled foreclosure auctions reached a nine-month high, indicating that in early 2012 more homes will be seized by banks or offered as short sales, in which lenders agree to accept less than the balance of a mortgage, Saccacio said.

The “first quarter typically is a better buying season, so you’ll see more of this inventory try to come to market,” he said. “I expect 2012 to look similar to 2011 in volume if nothing changes with government intervention or regulations.”

State Investigations

Notices fell from November 2010, when banks and loan servicers began slowing the foreclosure process after complaints over the way they handled home-seizure documents. Attorneys general from all 50 states launched investigations of foreclosure actions a year ago and most of them remain in negotiations with the five largest mortgage servicers, including Bank of America Corp. and JPMorgan Chase & Co.

Nevada led the nation with the highest foreclosure rate for the 59th straight month even as foreclosure notices fell 43 percent from a year earlier, according to RealtyTrac. The decline came in the wake of a new state law requiring lenders to sign and publicly record affidavits of “key” information. One in 175 Nevada homes received a foreclosure filing in November, more than triple the U.S. average.

California had the second-highest foreclosure rate, with one in 211 homes receiving a filing in November. The most populous state led the nation with 63,689 filings, or 28 percent of the U.S. total. Notices of trustee sale or foreclosure auctions, when property owners face a date of losing their homes, increased 63 percent in California from October to November.

Stockton, Las Vegas

The state was home to nine of the 10 cities with the highest foreclosure rates, led by Stockton, where foreclosure auctions rose 65 percent from October to November. Las Vegas ranked No. 6 and was the only city outside California in the top 10, having lost its No. 1 ranking in October, when Nevada’s tougher foreclosure law took effect.

Arizona had the third-highest foreclosure rate, with one in every 256 properties receiving a notice in November. Utah had the fourth-highest foreclosure rate, followed by Georgia.

Florida fell to seventh-highest in November from fourth place in October, as the number of filings dropped 25 percent. The state had the second-highest number of foreclosure filings, with 24,739 properties receiving notices. It was followed by Michigan, Illinois and Georgia, RealtyTrac said.

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