National foreclosure filings plummet by 29 percent due to procedural delays

July 14, 2011 09:48AM

Nationwide foreclosures are on the way down, with only about 1.7 million properties receiving default notices, auction sale notices or bank repossessions in the first half of 2011, a 25 percent decrease from the previous six months and a 29 percent decrease from the first half of 2010, according to a mid-year foreclosure market report by RealtyTrac, released yesterday. However, the reduction is not necessarily a good sign for the market, RealtyTrac said. Rather, it is simply more evidence that processing delays are pushing foreclosures further and further back into 2012.

Foreclosure filings were reported on 222,740 U.S. properties in June, the report shows, an increase of almost 4 percent from the previous month, but a decrease of 29 percent from June 2010. June was the ninth straight month where foreclosure activity decreased on a year-over-year basis. 

Filings were reported on 608,235 U.S. properties during the second quarter, a decrease of close to 11 percent from the first quarter and a decrease of 32 percent from the second quarter of 2010. The second-quarter total was the lowest quarterly total since the fourth quarter of 2007.

“It would be nice to report that foreclosure activity is dropping as a result of improvements in the economy or the housing market,” James Saccacio, CEO of RealtyTrac, said. “Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn’t appear to be the case.” 

As for procedural delays, Saccacio said: “We estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012, or perhaps even later. This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number.” — Katherine Clarke