Recent decreases in nationwide foreclosure figures may be celebrated by both lenders and borrowers. Having a smaller amount of bank owned properties on housing markets means more consumers are able to afford their mortgage payments, and signifies the potential strengthening of the nation's finances.
According RealtyTrac's recent U.S. Foreclosure Market Report for March and the first quarter of 2013 showed a decline in foreclosure filings, as last month saw 152,500 properties with scheduled auctions, bank repossessions and default notices. The figure represents a 1 percent monthly improvement and an annual amelioration of 23 percent.
Daren Blomquist, vice president at RealtyTrac, said that the current foreclosure numbers are encouraging, but may not stay so low in the near future. Delayed repossessions may still be seen in certain states, as the foreclosure process concludes in coming months.
"Although the overall national foreclosure trend continues to head lower, late-blooming foreclosures are bolting higher in some local markets where aggressive foreclosure prevention efforts in previous years are wearing off," Blomquist said. "Meanwhile, more recent foreclosure prevention efforts in other states have drastically increased the average time to foreclose, which could result in a similar outbreak of delayed foreclosures down the road in those states."
The decrease in foreclosed houses exhibited in March reportedly saw the first quarter numbers sink to their lowest levels since the second quarter of 2007. A total of 442,117 foreclosure filings were seen during the first three months of 2013, showing a quarterly dip of 12 percent and a year-over-year change of 23 percent. National foreclosures figures may have seen declines due to the fact that the amount of time it took to foreclose in the first quarter increased in 39 states.
Increase in loan cure, refinancing activity exhibited by consumers
Another reason fewer foreclosure filings were submitted during the last moth and previous months may have been the low rates exhibited by mortgage records and consumers' abilities to modify existing loans.
The February Mortgage Monitor report, recently released by Lender Processing Services, showed an increase in the amount of loans which were delinquent in the preceding month but are now current. Additionally, the majority of cures were reportedly on loans that were one-to-two months delinquent, and approximately 500,000 loans were ameliorated during February.
The rise in loan cures may be due to the advantageous national mortgage rate averages seen during recent months. Small weekly increases followed by significant drops, and long periods of no change, may have offered a number of consumers the opportunity to refinance or establish affordable payment plans.