Foreclosure Filings Drop by 10 Percent

Foreclosure filings on U.S. properties have come down by 10 percent compared to last year, reported foreclosure tracking site Realty Trac.

Default notices, scheduled auctions and bank repossessions were reported on 191,925 U.S. properties in July, which is a decrease of three percent from the previous month, the site stated.

“Recent foreclosure activity patterns vary significantly from state to state, often hinging on the level of dysfunction that exists in each state’s foreclosure process,” said Daren Blomquist, Vice President of RealtyTrac, in a statement.

California, Arizona and Florida recorded the highest state foreclosure rates, the report said. In July, one in every 325 California housing units had a foreclosure filing and the state also accounted for nine of the 20 highest foreclosure rates among metropolitan areas.

The foreclosure filing in Arizona was one in every 346 housing units and in Florida it was one in every 352 housing units.

Government Initiatives

Meanwhile, the government, too, has initiated programmes to avoid foreclosures and bring in a sense of stability in the market. The U.S. Department of Housing and Urban Development’s (HUD) Distresses Asset Stabilization Program provides an opportunity for the purchaser and the borrower to avoid expensive foreclosure. The HUD has also invited applications from qualified entities to purchase pools of distressed loans formerly insured by the Federal Housing Administration (FHA).

“Under the program, loans are sold competitively at a market-determined price generally below the outstanding principal balance. FHA then processes an insurance claim, removes the FHA insurance and transfers the loan to the investor. Once the note is purchased, foreclosure is delayed for a minimum of six additional months, giving the new servicer time to work through alternatives with the borrower, possibly finding an affordable solution to allow the borrower to remain in their home,” a statement issued by HUD said.

Chicago, Newark, Phoenix and Tampa are the hardest hit by the foreclosure crisis and approximately 3,500 loans will be sold in these four metropolitan areas.

“The housing market has momentum not seen since before the crisis,” said HUD Secretary Shaun Donovan, in a statement. “But some metro areas are still under pressure and some FHA borrowers remain seriously behind on their loans and stand to lose their homes in a matter of months. As one step towards avoiding unnecessary foreclosures and further stabilizing communities, we are increasing the number of loans beyond our original goals of 5,000 per quarter to approximately 9,000 this quarter. Providing the opportunity for borrowers to potentially stay in their home under a new sustainable mortgage or other meaningful help not only benefits that homeowner but reduces the costs to FHA and ultimately benefits the entire community.”

This programme is part of the Obama Administration’s initiatives to encourage public-private-partnership and stabilize home values in critical markets.