Friday, September 9, 2011
Most U.S. Metro Areas Enjoying Decrease in Foreclosures
Foreclosures are down nationwide as banks take longer to act against borrowers who are delinquent in paying their mortgages. In the first half of 2011 nearly 85% of U.S. metropolitan regions with populations greater than 200,000 saw a drop in foreclosure rates as compared to the first half of 2010.
Data used to conduct the study was collected from notices for defaults, scheduled home auctions, and home repossessions, all indicators that can show that a home may be lost to foreclosure.
Out of 211 of the nation’s largest municipalities, 178 saw a decline in foreclosure activity of the first half of the year. Analysis shows that the declines are likely attributable to impediments in the foreclosure process caused by documentation problems that came up last fall – considerable paperwork had to be resubmitted on many homes that were destined for foreclosure, spurring an outbreak of government and regulatory agency investigations of the lending and banking industry.
The decline in foreclosure activity can also be linked to mortgage banks avoiding action against delinquent borrowers in favor of home loan modifications or other schemes that will keep borrowers in their homes and out of default.
Unimpressive home sales have also influenced lenders to refrain from evicting foreclosed homeowners, allowing the property to sit vacant and unsold for months.
Florida held some of the metropolitan areas that saw the biggest annual declines in foreclosure activity, likely aided by the fact that Florida is a judicial foreclosure state that requires courts to sort out foreclosure issues in such volumes that significant hurdles are inevitable. These declines mark a much welcomed change in Florida’s foreclosure rates, which in July ranked seventh in the nation, with one in every 372 home loans being foreclosed. The news at the beginning of 2011 was even worse, when Florida was ranked first in the nation for foreclosures, with one out of every four of the nations foreclosures occurring in Florida. The constantly improving trend is good news for Florida’s homeowners, and forecasts show that the cooling off in foreclosure rates might continue in the short term.