Trouble looms, even as U.S. foreclosures fall
Foreclosures decreased year-over-year for the 22nd consecutive month in July, but the housing market isn’t out in the clear just yet. While filings — which include default notices, scheduled auctions and bank repossessions — fell 10 percent since last July, foreclosure starts in the U.S. rose 6 percent in the last 12 months, marking the third straight month of annual increases in that category, according to a report released today by RealtyTrac. Prior to the last three months, foreclosure starts had tumbled for 27 consecutive months.
The divergent trends likely result from a combination of many banks putting their foreclosure processes on hold in anticipation of negotiations for a robo-signing settlement — which turned out to be worth $25 billion — and states that use the lengthier judicial process to sort through foreclosures, including Florida, first getting to a backlog of distressed loans. For example, RealtyTrac noted that Oregon, which recently began to offer borrowers a mediation option to avoid foreclosure, saw activity fall 42 percent between June and July. Daren Blomquist, a vice president of the firm, said he expected Oregon’s numbers to rebound sharply in the future, based on patterns in states with similar legislation.
Florida ranked third among the states in terms of foreclosure filings, with foreclosure filings attached to one out of every 352 homes. That’s 14 percent more than June’s rate and a 14 percent increase over the rate in July 2011. Only California and Arizona posted higher state foreclosure rates. — Adam Fusfeld and Christopher Cameron