The number of homes that underwent foreclosure in the month of February saw the largest year-over-year decline in real estate history. The recently released RealtyTrac report showed that a total of 225,000 foreclosure filings took place during the month. In other words, one out of 577 homes were facing foreclosure nationwide. Of that number 64,643 homes were reposed by banks throughout the month. This represents a 14% drop in homes in foreclosure from the previous month and a staggering 27% drop from the same time last year.
RealtyTrac produced the latest report, and the drop was the largest the company has ever recorded. There are some outside factors that may have affected this unprecedented drop in foreclosures, however. Allegations of improper foreclosure document processing have permeated the real estate world since the fall, and the mortgage industry's process is affecting normal court proceedings that would foreclose on a property. On top of that delayed paperwork processing due to the unusually harsh winter weather in many parts of the country could have slowed down the number of foreclosures that should have been completed.
Even if the foreclosure drop is influenced by artificial factors, the home building industry is one that will surely benefit. David Crowe, chief economist for the Association of Home Builders, stated that though existing home sales produce some economic activity, their impact pales in comparison to that of new home sales. He went on to say that the Association of Home Builders calculates that for every 100,000 homes built, 150,000 construction jobs are created as well as an additional 150,000 manufacturing jobs once one factors in home appliances and furniture.
The report showed that trends that have been ongoing since the housing market burst have not changed much, either. Three out of the four "sand states," those desert regions that have seen the worst of the foreclosure crisis, are still in serious trouble. Nevada has the highest foreclosure rate in the nation, with one in 119 housing units currently facing foreclosure. Arizona and California aren't far behind, with one in 222 and one in 239 foreclosure rates, respectively. Florida, the fourth sand state, has shown some improvement, however, with a year-over-year foreclosure rate drop of 65%. The state now has a rate of one in 472 foreclosures.
Just like nationwide fears regarding artificial factors' effect on the foreclosure rate, it is suggested by some experts that Florida's rate has dropped significantly because many foreclosures in the state now involve court hearings that have been delayed by judges. This is due to the fallout from the robo-signing issue in the state and reflects the trend of more severe foreclosure rate drops in judicial foreclosure states.
Massachusetts fares better than most states in number of foreclosures. The state sees a low of one foreclosure in 1,758 housing units, with an average foreclosure sale price of $185,445. Worcester County had the highest count of foreclosures for the month of February 2011, while Berkshire County had the lowest, which can largely be attributed to the population of each respective county. This rate is down significantly since February 2010, when one in every 601 homes in Massachusetts faced foreclosure, making it the state with the 15th highest foreclosure rate in the nation. At this time last year, Middlesex County led the state with foreclosure count.
Though Massachusetts' foreclosure rate has improved significantly since this time last year and is relatively better off compared to many states in the nation, foreclosure is still a threat to homeowners who are behind on their mortgage payments or who experience any kind of financial burden. It is always best to consult an experienced real estate attorney when facing possible foreclosure, as prevention is always more effective than trying to fix one's finances or save one's home once foreclosure is imminent.
At Prousalis & Papantonakis, P.C., our experienced attorneys can help any homeowner struggling with debt by providing foreclosure prevention options such as loan modification, short sale or bankruptcy, including Chapter 13 bankruptcy in which the homeowner is typically able to keep their home and other possessions. Contact our office today to schedule a free consultation and learn what method is best for you.
