Foreclosure Filings Back Over 200K in May, Up 9%

Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 205,990 U.S. properties in May, a jump of 9 percent from April that marks the first increase since January, according to RealtyTrac.
Foreclosure activity rose back up above the 200,000 level in May after two consecutive months below that mark. But filings are down 4 percent from May 2011.
Foreclosure starts nationwide have increased on an annual basis after 27 consecutive months of year-over-year declines.
“Based on the rise in pre-foreclosure sales we’ve 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,” said Brandon Moore, CEO of RealtyTrac.
Pre-foreclosure sales, such as short sales, have less of a negative impact on home values than bank-owned transactions. However, they still represent a discounted sale where a distressed homeowner is losing his or her home.
“Disposing of distressed homes by pre-foreclosure sale can also benefit lenders and servicers because pre-foreclosure homes sell at a higher average price point than bank-owned homes,” Moore said.
Realtytrac’s first quarter foreclosure sales report showed that the average price of a pre-foreclosure home was more than $27,000 higher than the average price of a bank-owned home.
Other findings from RealtyTrac’s May report:

  • 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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