It seems mortgage lenders have decided to lift the self-imposed foreclosure moratorium, which slowed the rate of foreclosure litigation. In October 2010, lenders drastically curtailed foreclosure filings after receiving significant backlash in response to news stories regarding sloppy or fraudulent paperwork and other questionable practices.
The California-based Realty Trac, a firm specializing in tracking foreclosure data, reports 1,170,402, residential property owners nationwide received some form of foreclosure filing notice in the second quarter of 2011. This includes default notices, auction sales, and bank repossessions. First-time defaults jumped 33 percent, from July to August 2011.
The real estate market peaked in June 2006. Since 2007, the three cities with the largest percentage drop in home values also are the US cities with the highest foreclosure rates — Las Vegas, Phoenix, and Miami with foreclosure rates of 9.02 , 5.80 and 5.54 percent, respectively.
Las Vegas, Nevada
Through July 2011, Nevada posted the highest number of foreclosures for 52 consecutive months among US cities with the highest foreclosure rates. . In August, one of every 99 homeowners received a notice of foreclosure action taken by the lender. Filings rose to 3,589 from 2,502 filings in July.
Since real estate values peak, home values have declined 58.9 percent, based on the Standard & Poor’s/Case-Shiller index — a leading indicator of the state of the U.S. residential housing market. The median value of homes, $112, 500, has fallen to 1996 levels.
Phoenix, Arizona
As number two among US cities with the highest foreclosure rates since 2007, filings decreased from a year ago – 2,645 in August 2010 to 1,800 in August 2011. The local market has shown signs of life as August sales reached the highest level in five years.
Arizona State University’s Realty Studies reported that 44 percent of 7,500 real estate transactions involved the sale of foreclosed residential properties. The median sales price of homes dropped 55.9 percent to $118,000, the lowest median value since April 1998.
Miami, Florida
A report issued by Foreclosure-Response.org calls the Florida housing market, led by the city of Miami, the epicenter of the nation’s foreclosure crisis. The state has 17 cities represented in the top 25 US cities with the highest foreclosure rates. In the Miami-Dade area, lenders filed nearly15, 000 notices of foreclosure action from January to June 2011.
Miami [what decreased? the foreclosure rate?] experienced a 60 percent decrease in filings on a year-to-year basis. Nonetheless, August filings rose 1,559 in August compared to 1,194 in July. Since June 2006, homes values have dropped 51.2 percent to a median price of $160,000 in August.
Conclusion
The Las Vegas, Phoenix, and Miami housing markets exemplify the variety of opposing trends affecting housing markets across the country. Year-to-year foreclosure filings have declined, but the August up tick in foreclosure filings may signal lenders’ intentions to address the backlog of mortgage delinquencies.
A more deliberate approach protects them from additional liabilities because of the robo-signing controversy. It also prevents further deterioration of home prices by gradually releasing pent-up foreclosure inventory.