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Foreclosure Numbers Begin to Stabilize

March 19th, 2010

The rate of foreclosures across the nation in February decreased 2% from the previous month, according to an industry report from Thursday. The decrease indicates the number of foreclosures are declining.


The foreclosure rate for January had also shown a 10% drop from December, according to RealtyTrac. Although the number of foreclosures in February are higher by 6% from the same time last year, that is still the smallest increase in year-over-year increases since RealtyTrac began keeping records in January 2006. This trend does not prove that a lesser number of homeowners are in default and risk foreclosure. But it is a sign that the foreclosure preventive measures, new regulations and other processing delays are reducing the monthly foreclosure activity - even though we are still seeing historical numbers of foreclosures. Refinancing mortgages can reduce risk of a current loan and allow individuals to keep their homes.

The lenders are responsible for the processing delays by choosing not to label borrowers in default the first month they fail to make a payment. They are evaluating the borrowers' circumstances to determine if they can receive help from President Obama's mortgage modification program. This results in some distressed mortgages not being included in the RealtyTrac's report. This may also indicate that the foreclosure numbers are artificially depressed. The terrible weather throughout February led to some court closings, which also may have led to fewer foreclosures being filed. Which may lead to a even bigger number in March. 60% of all the foreclosure filings came from just six states.

California, with 68,562, led all states and had the fourth highest rate, with one of every 195 households receiving a filing. The remaining five states with high foreclosure filings were Florida, Michigan, Illinois, Arizona and Texas. The highest foreclosure rate of any state was found in Nevada where one household out of ever 102 was affected. The number of homes actually taken back in bank repossessions fell to 78,683 during February, from 87,648 a month earlier. The good news is that the homes are selling once they have been taken by the banks. In most parts of the country when a bank-owned home goes back on the market, it's getting multiple bids.

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