by Broderick Perkins
(6/15/2011) RealtyTrac says foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 214,927 U.S. properties in May, a 2 percent decrease from April and a 33 percent decrease from May 2010.
Unfortunately, the decrease may be related to lender shenanigans.
"Foreclosure processing delays continue to mask the true face of the foreclosure situation, although there were some clues in the May numbers of what lies behind that mask," said James J. Saccacio, chief executive officer of RealtyTrac.
"First, activity spiked in May for various stages of the foreclosure process in some states, a pattern that has occurred in several states over the past few months. This pattern provides evidence that lenders are somewhat unevenly pushing batches of bad loans through foreclosure as they overhaul their paperwork and documentation procedures and as they determine that some local markets are able to absorb more foreclosure inventory," he said.
"Second, while the inventory of properties in the foreclosure process has declined steadily over the past six months — thanks in large part to 16 consecutive months of year-over-year declines in new default notices — the inventory of unsold bank-owned REOs increased in April and May even as new REO activity slowed in both of those months," Saccacio continued.
"That points to continued weak demand from buyers, making it tough for lenders to unload their REO inventory. Even at a significantly lower level than a year ago, the new supply of REOs exceeds the amount being sold each month," he said.
Default notices were filed for the first time on a total of 58,797 U.S. properties in May, a 7 percent decrease from the previous month and a 39 percent decrease from May 2010. May's total was the lowest number of monthly default notices since December 2006 — a 53-month low.
Foreclosure auctions were scheduled for 89,251 U.S. properties in May, an increase of 3 percent from the 31-month low hit in April, but still down 33 percent from May 2010. May's monthly increase followed eight consecutive monthly decreases in scheduled foreclosure auctions.
Bank repossessions (REOs) decreased on a monthly basis for the second straight month in May, with 66,879 U.S. properties repossessed by lenders during the month — a 4 percent decrease from the previous month and a 29 percent decrease from May 2010.
Since the so-called robo-signing controversy came to light in October 2010, REO activity has followed a rollercoaster pattern, with five monthly decreases and three monthly increases.
Non-judicial foreclosure activity accounts for two-thirds of the national total.
A total of 141,348 properties received foreclosure filings in states where lenders primarily use the non-judicial foreclosure process — nearly two-thirds of the national total. Overall foreclosure activity in non-judicial foreclosure states was down 3 percent from April and down 25 percent from May 2010.
Scheduled auctions in non-judicial foreclosure states increased 2 percent on a month-over-month basis, led by a 16 percent increase in California and 10 percent increases in Texas, Virginia and Michigan.
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