Foreclosures Shrink But Are Expected To Surge In Coming Months

After hitting a record high in 2009, US foreclosure filings in January dropped 10% from the previous month, according to the online market place RealtyTrac.

More than 315,000 homes received a foreclosure filing, which include default notices, scheduled foreclosure auctions and bank repossessions. Although the numbers improved from December, levels remain 15% above January 2008.

“January foreclosure numbers are exhibiting a pattern very similar to a year ago: a double-digit percentage jump in December foreclosure activity followed by a 10 percent drop in January,” said James Saccacio, CEO of RealtyTrac. “If history repeats itself we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.”

Broken down into categories, default notices dropped 12% from December but stayed 4% above levels in January 2009. Scheduled foreclosure auctions also fell 11% from December and remained 15% above the amount a year ago. Activity in real estate owned (REO) property sales fell 5% from December but grew 31% from January 2009.

Nevada continued to lead all states in terms of foreclosure rate. There, one in every 95 homes received a filing in January, more than four times the national average. Arizona jumped to second with a 4% increase in foreclosure activity. One in every 129 Arizona homes received a filing in January.

California foreclosure filings dropped more than 10%. There, one in every 187 homes received a filing in January, the third highest rate in the country. Florida wasn’t far behind as one in every 187 homes received a filing, a 15% drop from the previous month.

Of the top-10 metro areas hardest hit by the foreclosure crisis, Phoenix was the only one to post a monthly increase. One in every 102 homes there received a filing in January, a 4% increase. Las Vegas had the highest metro foreclosure rate with one in every 82 homes receiving a filing for the month, a 2% drop from December and a 21% decrease from January 2009.

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