Foreclosure filings in the U.S. fell
to a five-year low last month as lenders sought to avoid seizing
property and a housing recovery showed signs of taking hold.
The number of default, auction and seizure notices sent to
homeowners in April totaled 188,780, down 14 percent from a year
earlier and 5 percent from the previous month, according to
RealtyTrac Inc. It was the lowest tally since July 2007, before
the onset of the biggest housing crash in seven decades, the
Irvine, California-based data seller said today in a report.
The “gradually rising foreclosure tide” forecast by
RealtyTrac after a February settlement by the nation’s biggest
mortgage servicers over faulty practices has yet to materialize,
limiting the number of properties on the market and propping up
prices. Banks are finding alternatives to home seizures, selling
distressed property for less than the amount owed on the
mortgage, known as a short sale, or modifying loans for
borrowers struggling to keep up payments while an improving
economy is helping to ease defaults.
“Things are getting better and the number of vulnerable
households is going down,” Paul Willen, senior economist at the
Federal Reserve Bank of Boston, said in a telephone interview.
“The pool of borrowers is much more stable than it was two or
three years ago.”
The U.S. mortgage delinquency rate fell in the first
quarter to 7.4 percent, the lowest level in more than three
years, the Mortgage Bankers Association said yesterday. The rate
peaked at 10.1 percent in the first quarter of 2010 and was last
lower in the third quarter of 2008, when it was 6.99 percent.
Tighter Inventories
Home prices in the U.S. rose 0.6 percent in March from the
previous month, the first sequential advance since July and the
third straight month-over-month gain excluding short sales and
foreclosure sales, said mortgage data company CoreLogic Inc.
Prices fell 0.6 percent from a year earlier, according to the
Santa Ana, California-based firm’s index of home values.
Short sales have been the preferred means for lenders to
dispose of distressed real estate in California, where they
totaled 11,397 in January, compared with 8,821 foreclosure deals
in that state, according to RealtyTrac. The tally in Arizona was
3,217 short sales to 2,776 foreclosures, while in Florida it was
5,014 to 3,959.
There were 35,816 short sales in the U.S. in January,
compared with 38,443 foreclosure deals, RealtyTrac said.
The national home-price data belies improvements in many
markets where “tighter inventories are beginning to lift home
prices,” CoreLogic Chief Executive Officer Anand Nallathambi
said in a May 8 statement.
Miami Area
A drop in properties for sale may also be reducing
foreclosure deals, and helping to put a floor under prices. Home
listings in the U.S. fell 22 percent to 2.37 million in March
from a year earlier, a 6.3-month supply at the current sales
pace that’s considered a balanced market, National Association
of Realtors data show.
In the Miami area, March listings declined 34 percent from
a year earlier and prices rose for the fourth straight month,
with condos jumping 46 percent and single-family homes gaining
13 percent, according to the Miami Association of Realtors.
The $25 billion settlement over foreclosure practices
between the five largest mortgage servicers, including Bank of
America Corp. and JPMorgan Chase Co., and attorneys general
from 49 states has made servicers leery of incurring further
legal action, said Daren Blomquist, a RealtyTrac spokesman.
“Lenders are proceeding with caution and want to avoid
risk,” Blomquist said. “They’re not in a rush to foreclose
right away.”
‘Gradual Improvement’
The housing market may see “further gradual improvement”
as homeowners take advantage of current federal aid plans and
new policies are introduced, Elizabeth Duke, a governor of the
Federal Reserve, said May 15 in Washington. In markets such as
Miami and Phoenix, where foreclosure rates have been among the
highest in the U.S., price declines have halted, even with a
“steady supply” of new problem loans, she said.
“This calls into question the notion that housing prices
cannot stabilize until the foreclosure pipeline is worked off,”
Duke said in prepared remarks at a National Association of
Realtors meeting. “Mortgages that were originated using the
tight underwriting that has prevailed since 2008 would
presumably have lower delinquency rates, and recent vintage
loans now make up an increasing share of outstanding
mortgages.”
Housing Affordability
Affordability for homebuyers increased to the highest on
record in the first quarter, based on the combination of low
mortgage rates, low prices and improved incomes measured in a
Realtors index. A family earning a median income of about
$61,000 could afford to buy a $325,500 residence, more than
double the $158,100 median cost of an existing single-family
home in the U.S., the Chicago-based trade group said May 15.
Greater purchasing power by consumers has risen along with
builder confidence, which increased every month this year and
reached a five-year high in May, according to Barry Rutenberg,
chairman of the National Association of Home Builders and a
builder from Gainesville, Florida. That’s a harbinger of new
jobs for the construction industry, he said.
“Housing demand is slowly beginning to recover,”
according to Joseph LaVorgna, chief U.S. economist at Deutsche
Bank Securities Inc. in New York. “Banks are showing increasing
willingness to lend to consumers, which should bode positively
for the mortgage market. In turn, this would help shift the
housing recovery into a higher gear.”
Housing Starts
Housing starts increased by 2.6 percent to an annual pace
of 717,000 in April, beating economists’ estimates, the Commerce
Department data reported yesterday.
Foreclosure filings fell year-over-year in U.S. states
hard-hit by the housing crisis, and where steady investor
purchases have contributed to price rebounds or stabilization,
according to RealtyTrac. Short sales likely outnumbered sales of
bank-owned properties in the first quarter in California,
Arizona and 10 other states, the company said.
Among the 20 largest metropolitan areas, filings in April
fell 54 percent in Seattle; 44 percent in Phoenix; 34 percent in
San Francisco; 30 percent in Riverside-San Bernardino,
California; and 28 percent in Los Angeles.
Filings plunged year-over-year in the 24 states where
lenders record actions at the county level, without court
supervision, while they rose in the 26 so-called judicial states
that had “artificially low” filings during the national legal
probe of lender practices, Blomquist said.
Nonjudicial states and the District of Columbia saw filings
drop 29 percent from April 2011, with declines in Arizona,
California and Nevada accounting for much of the decrease, and
judicial states showing a 15 percent increase, RealtyTrac said.
To contact the reporter on this story:
Dan Levy in San Francisco at
dlevy13@bloomberg.net
To contact the editor responsible for this story:
Kara Wetzel at
kwetzel@bloomberg.net
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Article source: http://www.bloomberg.com/news/2012-05-17/foreclosures-plunge-to-five-year-low-in-u-s-recovery-mortgages.html
“My Dear Extended Family,
“Gold and Silver – As you can see from the charts, both 
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