Foreclosures To Increase As US Housing Recovers

Posted by: : Paul EbelingPosted on: January 7, 2014 Foreclosures To Increase As US Housing Recovers

Foreclosures To Increase As US Housing Recovers

As the US housing market recovers, the number of foreclosures may increase according RealtyTrac, and that is because lenders will speed up the foreclosure process and move homes to the auction block as home prices rise and more credit worthy buyers line up to buy.

“Lenders know there’s now a much better chance they can get those properties sold, so they’re moving to do that,” Daren Blomquist at RealtyTrac, a real estate data firm, said in an interview Monday.

After the fall of the US housing market, mortgage credit was scarce, prices were falling, and lenders swamped by mortgage defaults. In many cases, foreclosure proceedings were mired in legal problems, missing documents and unclear title chains.

Lenders often opted to let defaulting borrowers remain in their homes instead of seizing a home they might not be able to sell.

In some cities, lenders faced fines if they failed to maintain properties, Mr. Blomquist explains. “If the lender can’t take on that property and maintain it properly, it benefited them to allow the homeowner to live there and not foreclose until ready.”

Now the foreclosure backlog is clearing and lenders are more optimistic homes will sell.

The number of foreclosure auctions has increased steadily since last July in states with a judicial foreclosure process, where judges approve foreclosures, he says.

Foreclosure filings are heading to auction faster in 19 states, including Oregon, Massachusetts, Utah, Connecticut, Delaware and New York. according to the data.

Investors and other all-cash buyers are driving the housing recovery. “Lenders are taking advantage of this environment to dispose more of their bank-owned inventory and in-foreclosure inventory at the foreclosure auction.

“But as the backlog of distressed inventory available dries up in many of the markets with the most efficient foreclosure processes, namely California, Arizona and Nevada, with Georgia not far behind, overall sales volume is declining and will continue to do so until more non-distressed sellers enter the market,” according to RealtyTrac.

The trend indicates that lenders are now better able to weather potential losses on the sales and more optimistic about getting better prices, RealtyTrac says.

Stay tuned…

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Paul Ebeling

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Paul Ebeling

Pattern Recognition Analyst, equities, commodities, forex
Paul Ebeling is best known for his work as writer and publisher of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly-regarded, weekly financial market letter, where he enjoys an international audience among opinion makers, business leaders, and respected organizations. Something of a pioneer in online stock market and commodities discussion and analysis, Ebeling has been online since 1994. He has studied and worked in the global financial and stock markets since 1984.
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