It seems like months now that analysts have predicted that the next wave of foreclosures will unfreeze and start rolling through the pipeline. The latest foreclosure report continues to show a year-over-year decline, but the month-over-month pick up in foreclosure filings might be the beginning of the anticipated new cycle.
The U.S. Foreclosure Market Report for January shows a 19 percent decrease in foreclosure filings from January 2010, but a 3 percent increase from the previous month, according to RealtyTrac. That’s a total of 210,941 U.S. properties with a foreclosure filing in January.
“Although overall foreclosure activity was down from a year ago for the 16th straight month in January, we continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw,” said Brandon Moore, chief executive officer of RealtyTrac. “Foreclosure activity increased on a year-over-year basis for the first time in more than 12 months in Florida, Illinois, Indiana and Pennsylvania, following a pattern we saw in late 2011 in states such as California, Arizona and Massachusetts.
- Default notices were filed for the first time on a total of 58,362 U.S. properties in January, unchanged from the previous month but down 22 percent from January 2011. Default notices increased more than 20 percent on a year-over-year basis in several states, including Connecticut (23 percent), Massachusetts (27 percent), Florida (36 percent), Maryland (100 percent) and Pennsylvania (112 percent). Florida default notices increased on an annual basis for the third straight month, and default notices in Pennsylvania reached a 15-month high.
- Foreclosure auctions were scheduled on 86,037 U.S. properties in January, up 1 percent from December, but still down 20 percent from January 2011. Scheduled auctions increased more than 20 percent on a year-over-year basis in several states, including Minnesota (24 percent), Massachusetts (57 percent), South Carolina (79 percent), Indiana (141 percent) and Illinois (141 percent). Minnesota scheduled auctions increased on an annual basis for the third straight month, and scheduled auctions reached a 17-month high in Indiana and a 15-month high in Illinois.
- Lenders repossessed (REO) a total of 66,542 U.S. properties in January, an 8 percent increase from December but still a 15 percent decrease from January 2011. REO activity increased at least 30 percent on a year-over-year basis in several states, including Wisconsin (30 percent), Connecticut (39 percent), Illinois (52 percent), Indiana (60 percent), New Hampshire (62 percent) and Massachusetts (75 percent). REO activity increased on an annual basis for the fourth straight month in Massachusetts and for the third straight month in Wisconsin and Illinois. REO activity in January reached a 16-month high in Illinois and a 15-month high in Indiana.
“We expect the pattern of increasing foreclosures to continue in the coming months, especially given the finalized mortgage and foreclosure settlement reached in early February between 49 state attorneys general and five of the nation’s largest lenders,” Moore said. “The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year.”
There are other roadblocks to foreclosure still in place at the state level, according to Moore, which include legislation altering the foreclosure process and lawsuits against lenders. The company still expects to see somewhat uneven trend in local and regional foreclosure numbers going forward as lenders work through these additional legislative and legal roadblocks.