Distressed Property Update:
Markets that experienced the biggest boom in foreclosures in 2009 and 2010 today are experiencing a decline in new foreclosures.
New data from the National Association of REALTORS®’ Local Market reports shows that the national foreclosure rate eased from 2.8 percent in June of 2011 to 2.7 percent by December, with 113 of the 163 markets surveyed experiencing a decline in their foreclosure rate over this period.
While the improvement was widespread, the largest aggregate declines occurred in markets where the rate had ballooned in 2009 and 2010. Markets in Florida and Nevada dominated the top 10 in declines, but Seattle and Spokane, Wash., also made the top 10 despite having a small overall foreclosure rate, which suggests stronger proportionate improvements and potential for robust recoveries. Miami, Fort Myers, Orlando and Sarasota, Fla. all reported the greatest declines in foreclosure rates.
Falling foreclosure rates reflect stronger employment conditions and consumer confidence as well as record low mortgage rates which are driving additional home sales. Efforts to improve the short sale process and modification programs have also had an impact.
During the period of the survey many servicers slowed their foreclosure processing activities, including new foreclosures, in hopes that the multi-state AG agreement would result in new processing standards that would reduce their risk of liability. Now that the new agreement has been signed, new foreclosure filings are expected to increase.