Foreclosures Filings Drop but Still Exceed 300,000

While there was a decrease of 3 percent in the number of foreclosure filings reported in June from the previous month, and a 7 percent decrease from June 2009, the number of filings topped 300,000 for the 16th straight month. Foreclosure filings were reported on 313,841 U.S. properties in June, according to RealtyTrac.

For the first half of 2010, default notices, auction sale notices and bank repossessions were reported on 1,654,634 U.S. properties. That's a 5 percent decrease on the previous six months, but an 8 percent increase over the first six months of 2009. In fact one in 78 U.S. housing units got at least one foreclosure filing in the first half of the year.

But there is some light at the end of the tunnel. Default and auction notices were down on a quarter-over-quarter and year-over-year basis in the second quarter. Yet bank repossessions increased 5 percent from the previous quarter and 38 percent from Q2 2009, to 269,962. So the light is very dim, because this is a new quarterly high for the report.
"The second quarter was a tale of two trends," said James J. Saccacio, CEO of RealtyTrac. "The pace of properties entering foreclosure slowed as lenders preempted 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."

Saccacio expects 3 million properties will receive foreclosure filings by the end of the year and there will be more than 1 million bank repossessions. He added, "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."

As expected, Nevada, Arizona and Florida continue to lead the pack in foreclosure rates. Nearly 6 percent of all Nevada housing units (one in 17) got at least one foreclosure filing in the first half of 2010. Arizona was second with 3.36 percent of its housing units (one in 30) receiving foreclosure notices, and Florida was third with 3.15 percent of its units (one in 32) getting notices.

Other hard hit states include California (2.54 percent), Utah (1.91 percent), Georgia (1.79 percent), Michigan (1.73 percent), Idaho (1.68 percent), Illinois (1.61 percent), and Colorado (1.40 percent).

When it comes to the number of properties receiving foreclosure notices, California tops the list with a total of 340,740 properties receiving a foreclosure filing in the first half of 2010. But the numbers are down: 15 percent from the previous six months and down nearly 13 percent from the first six months of 2009.

Florida has the second highest total, with 277,073 properties receiving a foreclosure filing in the first six months of 2010. The news is good for Florida, too, as its first-half foreclosure activity is down nearly 9 percent from the previous six months, but there was an increase of 3 percent from the first half of 2009.

Arizona, with 91,484 properties receiving a foreclosure filing in the first six months of 2010, had the third highest state total, even though the state's foreclosure activity decreased nearly 2 percent from the previous six months. Arizona foreclosure activity in the first half of 2010 was still up nearly 2 percent from the first half of 2009.

Other states with first-half totals among the 10 highest in the country were Illinois (85,223), Michigan (78,509), Georgia (71,949), Texas (64,883), Nevada (64,429), Ohio (59,927), and New Jersey (36,542).

While we do seem to see some reduction in foreclosure filings, the rates are high and will probably remain there until we see improvement in job growth.

Lita Epstein has written more than 25 books, including "The 250 Questions Everyone Should Ask About Buying Foreclosures."

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