Good news on the foreclosure front continues as defaults fell 7 percent in May. Overall foreclosure activity fell 3 percent during the month and is virtually unchanged from the level of a year ago, according to RealtyTrac’s latest report.
Bank repossessions hit a record high for the second month in a row in May, with a total of 93,777 U.S. properties repossessed by lenders during the month - an increase of 1 percent from the previous month and an increase of 44 percent from May 2009. All 50 states posted year-over-year increases in REO activity.
“The numbers in May continued and confirmed the trends we noticed in April: overall foreclosure activity leveling off while lenders work through the backlog of distressed properties that have built up over the past 20 months,” said James J. Saccacio, chief executive officer of RealtyTrac. “Defaults and scheduled auctions combined increased by 28 percent from 2007 to 2008 and another 32 percent from 2008 to 2009 - creating a build-up of delayed bank repossessions. Lenders appear to be ramping up the pace of completing those forestalled foreclosures even while the inflow of delinquencies into the foreclosure process has slowed.”
The significant drop in notices of default is good news for the real estate markets in the month ahead and a further sign, along with decreasing delinquencies, that the flood of foreclosures that have driven down property values may have peaked.
A total of 96,462 U.S. properties received default notices in May, a 7 percent decrease from the previous month and a 22 percent decrease from May 2009. It was the fewest default notices since November 2008 and down 32 percent from the peak of 142,064 default notices in April 2009.
With one in every 79 housing units receiving a foreclosure filing in May, Nevada continued to document the nation’s highest foreclosure rate despite a nearly 12 percent decrease in foreclosure activity from the previous month and a 16 percent decrease from May 2009. The state’s foreclosure rate was more than five times the national average.
Arizona foreclosure activity increased less than 1 percent from the previous month and was down nearly 5 percent from May 2009, but the state posted the nation’s second highest foreclosure rate for the second month in a row. One in every 169 Arizona properties received a foreclosure notice during the month - more than twice the national average.
One in every 174 Florida properties received a foreclosure notice in May, the nation’s third highest foreclosure rate, and one in every 186 California properties received a foreclosure notice in May, the fourth highest state foreclosure rate.
Foreclosure activity in Michigan increased nearly 6 percent from the previous month and was up 46 percent from May 2009, helping the state post the nation’s fifth highest foreclosure rate - one in every 223 Michigan properties received a foreclosure filing in May.
Other states with foreclosure rates ranking among the top 10 in May were Georgia, Idaho, Illinois, Utah and Maryland.