Busy with Foreclosure Activity
May turned out to be a busy month for foreclosure activity. Foreclosure filings, which include default notices, scheduled auctions, and bank repossessions, were up 9 % in May from the previous month of April, but still down 4 % from a year ago, according to RealtyTracâ€™s U.S. Foreclosure Market Report for May 2012.
Foreclosure filings were reported on 205,990 properties in May after two consecutive months below 200,000, but activity levels were still down on a yearly basis for 20 consecutive months now. In April, foreclosure filings totaled 188,780.
After three straight monthly decreases to a 49-month low in April, bank repossessions (REOs) climbed 7 % month-over-month, but were still down 18 % from May 2011. In May, lenders completed the foreclosure process on 54,844 properties.
Foreclosure starts â€“ default notices or scheduled foreclosure auctions, depending on the state â€“ were filed on 109,051 properties in May, a 12 percent monthly increase and a 16 % jump from a year ago. The annual increase was a first after 27 consecutive months of yearly declines.
Based on the rise in pre-foreclosure sales seen so far this year, a higher percentage of these new foreclosure starts will likely end up as short sales or auction sales to third parties rather than bank repossessions going forward. While pre-foreclosure sales have less of a negative impact on home values than bank-owned sales, they still represent a discounted sale where a distressed homeowner is losing his or her home.