In February, there were 2% fewer foreclosures than in January, and 8% fewer than a year ago. However, don't think this means the housing market is on the rebound, says RealtyTrac's CEO Brandon Moore. Many states halted foreclosures last year to investigate accusations of bank improprieties. Now that the $26 million settlement has been reached, these states are seeing an upswing in foreclosures as banks get the foreclosure process back on track. Moore says this trend will boost the national foreclosure rate throughout 2012.
In fact, foreclosures in the 26 states that halted them last year increased 2% in February, and 24% year-over-year. These states, known as judicial states, require that foreclosures must be processed through the courts. On the one hand, this slows down the foreclosure process, contributing to the backlog in these states. On the other hand, it allows the banks involved in the settlement to move quickly to clear up their backlog. The banks involved in the settlement are: Bank of America, JPMorgan Chase, Citibank, Wells Fargo and Ally Financial. As you might expect, foreclosure rates declined in the 24 non-judicial states.
In total, there were 206,900 foreclosure filings in February. This figure includes default notices, scheduled auctions and bank repossessions. As usual, the states with the largest foreclosures are Nevada, California, Arizona, Georgia, Florida, Illinois, Michigan, South Carolina, Ohio and Wisconsin. (Source: RealtyTrac, February U.S. Foreclosure Market Report, March 13, 2012)
What It Means to You
Housing market recovery will go faster in the non-judicial states, which worked through more of the foreclosure backlog last year. Increased foreclosures may keep housing prices depressed in the judicial states. Here's a link to RealtyTrac's guide to Foreclosure Laws and Process by State.
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