Rise in Foreclosure Activity for the First Quarter 2010

The numbers say it all. Accordingly to RealtyTrac’s U.S. Foreclosure Market Report for the first quarter 2010, there was a 7% increase in foreclosure filings, including notices of defaults, auction sales and bank REO’s. That was a 16% increase from the first quarter 2009. There were a total of 932,234 foreclosure properties, which calculates to 1 out of every 138 households receiving some type of foreclosure notice.

For March 2010 alone, there were 367,056 properties in foreclosure that received notices, which is an increase of nearly 19% from February 2010 and an increase of 8% from March 2009. The foreclosure activity is not a surprise as it follows a similar pattern from January 2009. The difference was that there were more final foreclosure filings than initial filings. REOs increased 9% in the first quarter of 2010 compared to a 13% quarterly decrease in REOs in the first quarter of 2009. REO’s are at the highest quarterly total ever according to RealtyTrac. The numbers indicate that lenders are putting their backlog of inventory on the market for sale.

Nevada, Arizona, Florida still have the highest rates of foreclosure in the nation. The past 13 quarters, Nevada has been the #1 state with the highest foreclosure rates. One in every 33 Nevada homes received a foreclosure filing, that is 4 times the national average and an increase of nearly 15% from the previous quarter. However, Nevada’s total of 34,557 properties receiving foreclosure notices was actually down 16% from the first quarter of 2009.

Arizona foreclosure activity puts Arizona as the nation’s second highest foreclosure state during the first quarter of 2010. One in every 49 Arizona properties received some type of foreclosure filing, that was nearly three times the national average.

Florida ranked as the third highest foreclosure state for the first quarter 2010, with one in every 57 Florida properties receiving a foreclosure notice. This was an increase both on a quarter and yearly basis.

Although California’s foreclosure activity decreased 6% from the first quarter of 2009, it still ranks as the fourth highest foreclosure state with one in every 62 houses receiving a foreclosure filing.

Other states with high foreclosure activity were Utah, with an increase of 75% foreclosure activity from the first quarter of 2009. That was the highest annual increase among the 10 foreclosure states making Utah the fifth highest foreclosure state. There were 10,756 Utah foreclosure filings, which is 1 in every 88 houses and an increase of 21% from the previous quarter.

Other states that had high foreclosures were Michigan, Georgia, Idaho, Illinois and Colorado, Texas and Ohio. The government foreclosure prevention program through HAMP is anticipated to slow down the foreclosure filing process this year and allow some homeowners to save their homes with mortgage modifications and refinances. However, already many of these homeowners have shown that within 6 months after receiving a modification or refinance, they are in default again so it may only be further delaying the process. The HAFA program should speed up the short sale process, but it will only add more inventory to the marketplace bringing prices down further. It’s going to be awhile before all these foreclosures are absorbed by new buyers/investors in the market. For buyers and investors looking for bargains, there are lots of choices right now in all prices ranges and neighborhoods.