According to a recently released report by RealtyTrac, the foreclosures are down by 10% from December. The foreclosure rate compared to the previous month has also decreased by 2%.
The numbers seem to indicate that the foreclosures are slowing going down finally. Industry experts are treating this new set of numbers with a cautionary approach. The foreclosure rate may have gone down, but it is not a good indicator of the actual number of homeowners still under distress and reeling from mortgage repayment problems. Experts believe that the numbers have come down mostly on account of new legislations, home owner support programs, and delays in processing of foreclosure cases.
The government’s mortgage modification program, which was introduced a few months ago, offers some benefits to lenders to avoid foreclosing on defaulters immediately. Most lenders are taking time to evaluate individual cases to see if it’s in their favor to delay on foreclosing and benefit from the program. The bad weather conditions of last month could also be a possible reason of the delays in foreclosures because of many courts remaining closed due to the storms.
Do the numbers ring true?
Because of these factors, the latest numbers could be artificially depressed. The foreclosure rates are historically still at a high level. In fact, the foreclosure rate of this February was 6% higher than the rate in the same month last year.
March would be an important month to watch out for. It is quite likely that the numbers will show a reverse trend this month. Last year, January and February foreclosure numbers were not so alarming, but the scenario completely changed in March and a huge jump in foreclosures was reported.
Six states that were worst hit in February, accounting for nearly 60% of all foreclosure filings, were California, Florida, Arizona, Michigan, Texas and Illinois. California had the maximum number of foreclosure filings in February – nearly sixty eight thousand, with one in every 195 homes affected. Nevada, on the other hand, had the highest foreclosure rate with one in every 102 households hit. Overall, about seventy eight thousand houses were repossessed last month across the country.
It has also been reported that the repossessed houses when put up for sale are getting sold quickly. Many of them are even getting multiple bids. This is an encouraging sign as compared to last year when buyers were hard to come by. There is clearly some buoyancy in the market and people are once again looking to invest in real estate.