It appears that lenders feel the New York and New Jersey housing markets are ready to handle a new batch of distressed inventory. According to the latest data from foreclosure-tracking firm RealtyTrac, both states posted double-digit increases in bank repossessions of residential properties last month, far outpacing their peers.
New York, which saw a 97 percent spike in repossessions, and New Jersey, where repossessions rose by 21 percent, both use a judicial foreclosure process, which usually tends to be slower and more prone to delays. Overall, judicial foreclosure states saw a much smaller, 1 percent increase in bank repossessions during May.
According to James Saccacio, RealtyTrac’s CEO, the disproportionate surge in activity in New York and New Jersey is likely due to lenders “somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory.”
Nationwide, foreclosure filings — including bank repossessions, scheduled auctions and notices of default — hit a 42-month low in May, with a total of 214,927 residential units, or one in every 605 residences, affected. That’s down 2 percent from April and 33 percent from May 2010, and non-judicial foreclosure states accounted for nearly two-thirds of this national total.
New York saw a 13 percent increase in foreclosure filings from April, and a 41 percent decline from last May. New Jersey filings dropped both month-over-month and year-over-year, by 15 percent and 87 percent, respectively.
But Saccacio warned that despite the declines, lenders are, in general, having a difficult time working their way through their inventory of foreclosed properties. “Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month,” he said.
– Sarabeth Sanders