Foreclosures Up 9 Percent in May, RealtyTrac Report Says
(IRVINE, Calif.) -- U.S. foreclosure activity increased nine percent in May compared with the month before, according to a report released Thursday by RealtyTrac.
RealtyTrac says nearly 206,000 U.S. properties were in default or foreclosure, under bank repossession, or scheduled for auction in May -- a nine-percent increase from April, but still down four percent from May 2011. The report also shows that more than 109,000 properties had started the foreclosure process in May 2012 -- a 12-percent increase from the month before and 16 percent from a year ago.
RealtyTrac vice president Darren Bloomquist said many of these foreclosure starts will become bank-approved short sales and are good for the market. Short sales are properties on which the foreclosure process has started, but the homeowner is able to sell the property for less than is owed on the mortgage before the process is complete.
"The short sales usually sell at a higher price point. And they also represent properties that transfer to a new homeowner right away. Whereas with a bank repossession, you usually end up with a vacant property sitting for several months and contributing to often-declines in neighborhood values," Bloomquist told ABC News Radio.
But Bloomquist said though home sales are heading in an upward direction with buyers willing to purchase foreclosed properties, last month's foreclosure spike may be a sign that the nation is not out of the woods yet regarding its foreclosure problem.
"Foreclosures in general have been trending downward over the last year and a half, and I think, in part, that's because slowly we are working our way through the foreclosure problem," Bloomquist said. "But [sic] those decreases have been exaggerated because of delays in processing foreclosures."
Additional findings included in the RealtyTrac's U.S. Foreclosure Market Report:
- Foreclosure activity rose back up above the 200,000 level in May after two consecutive months below 200,000.
- Foreclosure starts nationwide increased on an annual basis after 27 consecutive months of year-over-year declines.
- Judicial states combined posted a 26 percent year-over-year increase in overall foreclosure activity while non-judicial states combined posted a 20 percent year-over-year decrease in foreclosure activity.
- Foreclosure starts increased on a year-over-year basis in 17 of the 26 judicial states and in 16 of the 24 non-judicial states.
- Georgia leapfrogged past Arizona, Florida, California and Nevada to post the nation’s highest state foreclosure rate in May, the first time since February 2006 that Georgia’s foreclosure rate has ranked highest among the states.
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