US Foreclosures Show Decline, But Drop May Be Temporary
The nation’s foreclosure rate fell last month to its lowest level since February, according to new data, but the drop might be temporary.
A total of 306,627 Americans received a foreclosure notice in November, an 8 percent decrease from the month before but 18 percent higher than a year ago, according to the report by RealtyTrac, a foreclosure tracking Web site.
That's one in every 417 housing units receiving a foreclosure notice, which is defined as a default notice, bank repossession or auction sale notice.
“They’re artificially low because of underlying causes,” said Rick Sharga, vice president of RealtyTrac.
He cites three reasons why foreclosures have dropped in certain states: The holiday season, when foreclosures typically slow down; the government's mortgage modification program, which has created a slowdown in delinquent loans; and mandatory mediation in more states between homeowners and lenders before going into foreclosure.
“What we think is going to happen is that the bulk of those loans will end up in foreclosure, but not right away,” added Sharga.
The result could be seen in certain states where foreclosures have dropped by double digits.
Nevada, for example, saw its rate drop 33 percent from the month before. The state still had the highest foreclosure rate in the nation, with one in every 119 homes in foreclosure in November.
Florida ranked second, followed by California, Arizona and Idaho.
The state with the lowest foreclosure rate was Vermont, with one in every 19,465 homes going into foreclosure.
After having the highest metro foreclosure rate for the past four months, Las Vegas dropped to No. 5 in November, with one in every 102 homes in the city receiving a foreclosure filing.
Las Vegas was replaced by Merced, Calif. in the top spot. California metro areas made up most of the top ten with Riverside-San Bernardino-Ontario (No. 6), Bakersfield (No. 7), Vallejo-Fairfield (No. 9) and Sacramento-Arden-Arcade-Roseville (No. 10) making the list.
The rest of the metro areas with the highest foreclosure rates came from Florida, with Cape Coral-Fort Myers (No. 4) and Orlando-Kissimmee (No. 8) posting high rates.