Foreclosure Filings for 1st Quarter Fall to 56-Month Low

The 572,928 foreclosure filings for the first quarter of 2012 marked the lowest total since the fourth quarter of 2007, according to RealtyTrac’s quarterly update.
The total for first quarter 2012 filings was down 2 percent from the previous quarter, and down 16 percent from one year ago.
Foreclosure filings — default notices, scheduled auctions and bank repossessions – were reported on 198,853 U.S. properties in March, a 4 percent decrease from February and a 17 percent decrease from March 2011.
March’s total was the lowest since July 2007, and also the first monthly total below 200,000 since July 2007.
However, the number of homes that received first-time foreclosure notices rose 7 percent in March, compared to the previous month. That’s the third consecutive monthly increase. And it indicates a potential reversal of the downward trend in overall foreclosure activity.
Despite the declines in overall filings, analysts are putting the housing market on alert that foreclosures in so-called “judicial states,” where the courts preside over the process, are poised to surge as a backlogs start to ease.
These states are the most affected from investigations into the improper documentation, or “robo-signing” by servicers, that led to last month’s filing of the $25 billion mortgage settlement between the government and the nation’s top five lenders.
Foreclosure activity increased in states that primarily use the judicial foreclosure process. These 26 states combined accounted for 243,074 properties with foreclosure filings during the quarter, an increase of 8 percent from the previous quarter and an increase of 10 percent from the first quarter of 2011.
Judicial states posting some of the biggest year-over-year increases in foreclosure activity in the first quarter included Indiana (up 45 percent), Connecticut (up 38 percent), Massachusetts (up 26 percent), Florida (up 26 percent), South Carolina (up 26 percent), and Pennsylvania (up 23 percent).
“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” said Brandon Moore, chief executive officer of RealtyTrac. “There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March.”
The 24 states dependent on the non-judicial foreclosure process, along with the District of Columbia, had 329,854 properties with foreclosure filings during the quarter, more than half the national total — but a decrease of 8 percent from the previous quarter and a decrease of 28 percent from the first quarter of 2011.

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