Foreclosure activity dropped in April to the lowest level in more than six years, another sign the recovery in the housing market is on track, a report from RealtyTrac showed on Thursday.
Activity was seen on 144,790 properties last month, down 5% from March, and down 23% from a year earlier. It was the lowest mark since February 2007. Foreclosure activity includes default notices, scheduled auctions and bank repossessions. Overall, fewer properties started the foreclosure process in April, falling 4% from March to 70,133, while lenders repossessed 34,997 homes, a drop of 20%.
There also were signs that foreclosures that had been deferred were making their way through the process in states using the court system to handle foreclosures, known as judicial states. There are 26 judicial or quasi-judicial foreclosure states, according to RealtyTrac.
Scheduled foreclosure auctions in judicial states rose 22% in April and 31% from the year-ago period to their highest level since October 2010. Scheduled auctions in non-judicial states fell 7%. Judicial states have seen the time it takes to foreclose increase compared to their counterparts, partly because of the intensive process and the large volume of cases the courts must handle.
"Foreclosure starts have been increasing for several months in many of the judicial states, and now that increased volume is showing up in the second stage of the process: the public foreclosure auction," said Daren Blomquist, vice president at RealtyTrac.
The housing market has been a bright spot for the economy since the sector turned a corner last year, with prices rising, inventory tightening and low interest rates drawing in buyers.
Other key findings:
· Despite the nationwide decline, 22 states reported increasing foreclosure starts from the previous month, including New Jersey (138% increase), Connecticut (46% increase), Texas (37% increase), Georgia (35% increase), Oregon (16% increase) and California (13% increase). Foreclosure starts reached a 36-month high in Connecticut, a 27-month high in New Jersey, and were up on a monthly basis for the third consecutive month in California after hitting a 90-month low in January, when new legislation impacting the foreclosure process took effect.
· Lender repossessions (REO) decreased from a year ago in 37 states and the District of Columbia in April, but some notable exceptions where REO activity increased from a year ago included Washington (164% increase), Maryland (98% increase) and Oklahoma (19% increase).
· Nevada posted the nation’s highest state foreclosure rate for the second month in a row despite a 15% monthly decrease in foreclosure activity.
· Akron, Ohio, posted the nation’s highest metro foreclosure rate in April thanks in part to a 147% annual increase in overall foreclosure activity. One other Ohio city (Columbus), along with five Florida cities, Las Vegas, Myrtle Beach, S.C. and Chicago also registered top 10 metro foreclosure rates in April.
· As of the beginning of May, a total of 11.3 million mortgages nationwide were seriously underwater, meaning combined amount of mortgages secured by the home was at least 25% more than the estimated value of the home. That represented 26% of all outstanding mortgages, but was down nearly 1.5 million from the 12.8 million seriously underwater mortgages in May 2012.