Another foreclosure listing site reported today that foreclosures are declining at an accelerating rate as subprime resets abate and unemployment, though high, remains relatively unchanged.
ForeclosureListingsNationwide.com, a provider of foreclosure listings and foreclosure investment information, announced a nationwide 5 percent decrease of foreclosure properties in its database over the past six months.
Much of the decrease occurred during the second quarter of 2010, when foreclosures fell 4 percent from the previous quarter and were up only 1 percent from the second quarter of 2009. In its first quarter report released last month, RealtyTrac reported a 5 percent decrease in total properties receiving a foreclosure notice from the previous six months.
ForeclosureListingsNationwide.com said 1.28 percent of all U.S. housing units (one in 78) received at least one foreclosure filing in the first half of the year and a total of 1,654,630 properties entering some stage of the foreclosure process from January 1 to June 30, the mid-year statistics show a slowing trend over the first part of the year, and a year over year decrease of almost 7 percent from June of 2009.
“We’re seeing a decline in foreclosure rates not because the market is repairing itself, but because banks are providing homeowners more time to pay off their debts before a foreclosure occurs in order to slow the trend,” remarked Jason Gallagher, a business analyst with Foreclosure Listings Nationwide. “This basically means we’re not seeing as many new foreclosure properties. But we are seeing many existing foreclosure properties moving out of the foreclosure limbo stage into repossession by banks.” Bank repossessions increased roughly 5 percent during the second quarter, and have increased by 3i8 percent since the second quarter of 2009, he said.
Though the REO pipeline may be full in many markets, evidence is growing that the level of delinquencies, especially subprime loans, are falling.
Though prime delinquencies continue to climb, subprime residential mortgage backed securities are declining and may be reaching a plateau, according to Fitch Ratings yesterday.
Fitch’s Managing Director Vincent Barberio said the agency’s latest performance metrics show the increased liquidation rate of delinquent loans has slowed considerably since April.
“Prime delinquency increases have averaged 12 basis points a month since April, which compare favorably to 44-bps monthly averages between April 2009 and March 2010,” Barberio said. “While increased liquidations of distressed properties are helping to stem the rise in delinquencies, it also means that realized losses are rising.”
However, the monthly annualized net-loss rate for prime RMBS has more than doubled from 0.8 percent to 1.7 percent over the past year, according to Fitch.
Subprime RMBS delinquencies in July fell to 43% from 43.7% in June, but were higher than the 41.8% a year ago. Fitch said Alt-A RMBS delinquencies for the month dipped slightly to 33.6% from 33.7% in June, but rose from 29.7% last year. California and Florida hold more than half of all Alt-A RMBS loans out. California, New York, Florida, Virginia, and New Jersey represent about two-thirds of the total prime RMBS sector, with the Golden State leading the way with a 44% market share.
Finally, in its second quarter report released earlier this week, Freddie Mac said that the single-family delinquency rate for loans in its portfolio was 3.96 percent for the quarter, down from 4.13 percent as of March 31, 2010.