Home repossessions are dropping in the US, providing more evidence that the market is bottoming out after near catastrophic price drops over recent years in some cities.
New figures show that lenders are looking to possess fewer homes compared with 12 months ago.
Almost a million homeowners faced foreclosure year-to-date up to October 2012 – a drop of 8% on the same period the year before, according to RealtyTrac, a firm that lists repossessed homes.
Banks repossessed just over 550,000 homes this by the end of October, a drop of nearly 19% compared with last year.
The firm expects around 650,000 foreclosures in 2012, down from 800,000 in 2011.
A total of 89,209 homes entered foreclosure in October, an increase of 2% on September, but a fall of 19% compared with October last year, the report revealed.
Negative equity
Homeowners lost 53,478 properties in October, a marginal fall of less than 1% from September, but a 21% decrease from October 2011.
The trend has been for repossessions to have fallen each month for the past two years.
The picture varies nationwide – with some states showing an increase in foreclosures, while others saw the rate fall.
The firm disclosed 14 states recorded an annual increase in foreclosure activity of receiving a default notice, being scheduled for auction or repossessed by the bank.
States where foreclosure activity increased the most are New Jersey, New York and Connecticut.
Many homeowners struggling with their finances were cheered by figures showing home sales are up on last year, pulling many out of negative equity and giving them headroom to refinance and lower monthly payments.
Superstorm delays repossessions
“Those improving housing conditions are lifting all boats and lifting some people out of foreclosure,” said Daren Blomquist, a vice president at RealtyTrac, www.realtytrac.com
“We’re past the bulk of the high-risk loans that were most susceptible to foreclosure.
Meanwhile, the number of mortgage payers in arrears of two months or more on their home loans to the lowest level in more than three years in the third quarter of 2012, according to credit rating firm TransUnion.
The figures are likely to be distorted over the next few months as the courts have placed a moratorium on repossessions in the aftermath of Hurricane Sandy. Some homes in foreclosure were seriously damaged or destroyed in the recent storm.
The moratorium will delay the court process and lengthen the time lenders take to complete foreclosure and repossession.
