Foreclosure filings drop to five-year low in U.S. recovery
Bloomberg - Foreclosure filings in the U.S. fell to a five-year low last month as lenders sought to avoid seizing property and a housing recovery showed signs of taking hold.
The number of default, auction and seizure notices sent to homeowners in April totaled 188,780, down 14 percent from a year earlier and 5 percent from the previous month, according to RealtyTrac Inc. It was the lowest tally since July 2007, before the onset of the biggest housing crash in seven decades, the Irvine, California-based data seller said today in a report.
The “gradually rising foreclosure tide” forecast by RealtyTrac after a February settlement by the nation’s biggest mortgage servicers over faulty practices has yet to materialize, limiting the number of properties on the market and propping up prices. Banks are finding alternatives to home seizures, selling distressed property for less than the amount owed on the mortgage, known as a short sale, or modifying loans for borrowers struggling to keep up payments while an improving economy is helping to ease defaults.
“Things are getting better and the number of vulnerable households is going down,” Paul Willen, senior economist at the Federal Reserve Bank of Boston, said in a telephone interview. “The pool of borrowers is much more stable than it was two or three years ago.”
The U.S. mortgage delinquency rate fell in the first quarter to 7.4 percent, the lowest level in more than three years, the Mortgage Bankers Association said yesterday. The rate peaked at 10.1 percent in the first quarter of 2010 and was last lower in the third quarter of 2008, when it was 6.99 percent.