foreclosure auctions

Foreclosure Activity by Type

A total of 96,462 U.S. properties received default notices (NOD, LIS) in May, a 7 percent decrease from the previous month and a 22 percent decrease from May 2009. It was the fewest default notices since November 2008 and down 32 percent from the peak of 142,064 default notices in April 2009.

Foreclosure auctions (NTS, NFS) were scheduled for the first time on a total of 132,681 U.S. properties, a decrease of 4 percent from the previous month and down less than 1 percent from May 2009. The May 2010 total was down 16 percent from the peak of 158,105 scheduled auctions in March 2010.

Bank repossessions (REOs) hit a record monthly high for the second month in a row in May, with a total of 93,777 U.S. properties repossessed by lenders during the month — an increase of 1 percent from the previous month and an increase of 44 percent from May 2009. All 50 states posted year-over-year increases in REO activity.

Nevada, Arizona, Florida post top state foreclosure rates in May
With one in every 79 housing units receiving a foreclosure filing in May, Nevada continued to document the nation’s highest foreclosure rate despite a nearly 12 percent decrease in foreclosure activity from the previous month and a 16 percent decrease from May 2009. The state’s foreclosure rate was more than five times the national average.

Arizona foreclosure activity increased less than 1 percent from the previous month and was down nearly 5 percent from May 2009, but the state posted the nation’s second highest foreclosure rate for the second month in a row. One in every 169 Arizona properties received a foreclosure notice during the month — more than twice the national average.

One in every 174 Florida properties received a foreclosure notice in May, the nation’s third highest foreclosure rate, and one in every 186 California properties received a foreclosure notice in May, the fourth highest state foreclosure rate.

Foreclosure activity in Michigan increased nearly 6 percent from the previous month and was up 46 percent from May 2009, helping the state post the nation’s fifth highest foreclosure rate — one in every 223 Michigan properties received a foreclosure filing in May.

Other states with foreclosure rates ranking among the top 10 in May were Georgia, Idaho, Illinois, Utah and Maryland.

Metro foreclosure hot spots continue to post annual declines
With a 1 percent increase in foreclosure activity from May 2009, Vallejo-Fairfield, Calif., was the only metro area with a top-10 foreclosure rate to post an annual increase in foreclosure activity. One in every 101 Vallejo-Fairfield properties received a foreclosure notice in May, the fourth highest foreclosure rate among metropolitan areas with a population of 200,000 or more.

All other metro foreclosure rates in the top 10 were in cities with declining foreclosure activity on a year-over-year basis: No. 1 Las Vegas was down nearly 18 percent; No. 2 Merced, Calif. Was down 7 percent; No. 3 Modesto, Calif., was down nearly 28 percent; No. 5 Cape Coral-Fort Myers, Fla., was down nearly 19 percent; No. 6 Stockton, Calif., was down 33 percent; No. 7 Riverside-San Bernardino-Ontario, Calif., was down nearly 29 percent; No. 8 Bakersfield, Calif., was down 19 percent; No. 9 Reno-Sparks, Nev., was down nearly 18 percent; and No. 10 Phoenix was down nearly 9 percent.

"That's a very good thing," said Thomas Lawler, an independent housing economist in Virginia. But he noted that even with that positive trend, "you are highly likely to see an acceleration in the number of actual completed foreclosures."

Lenders are offering to help some homeowners modify their loans. But many borrowers can't qualify or they are falling back into default. The Obama administration's $75 billion foreclosure prevention effort has made only a small dent in the problem.

About 25 percent of the 1.2 million homeowners who started the program over the past year had received permanent loan modifications as of April. About 23 percent of those enrolled dropped out during a trial phase that lasts at least three months. Many more are in limbo.

Among states, Nevada posted the highest foreclosure rate in May. One in every 79 households there received a foreclosure notice. However, foreclosures there are down 16 percent from a year earlier.

Arizona, Florida, California and Michigan were next among states with the highest foreclosure rates. Rounding out the top 10 were Georgia, Idaho, Illinois, Utah and Maryland.

Las Vegas continued to be the city with the nation's highest foreclosure rate, but activity there was down 18 percent from a year earlier. And nine out of the top 10 cities with the highest foreclosure rates posted annual declines. The exception was the Vallejo-Fairfield area in California, where foreclosures were up 1 percent from a year ago.

Foreclosed homes are typically sold at steep discounts, lowering the value of surrounding properties. That's a concern for local communities, and a drag on the economic recovery.

In recent months, home prices have started to sink again after stabilizing last summer. Economists at Goldman Sachs predicted in a report last week that prices will fall about 3 percent nationally over the next year, with the largest declines in cities where mortgage defaults are rising.

"The housing market remains plagued by enormous excess supply," wrote Goldman economist Sven Jari Stehn.

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