Foreclosures fall, but are still higher than a year ago

Posted Nov 12th 2009 9:30AM by Mark Fightmaster
Filed under: Before the Bell, Housing, Financial Crisis

According to RealtyTrac, the number of homeowners facing foreclosure dropped during October, thanks in part to foreclosure prevention programs that helped borrowers. RealtyTrac stated that more than 332,000 households (one in every 385 homes) were recipients of either a notice of default or a trustee's sale. This number is 3% lower than September, making October the third-straight month with a drop in the number of homeowners facing foreclosure. As for homes actually repossessed, the number dropped to 77,000 in October from 88,000 in September.

RealtyTrac noted that one reason for the lower number of foreclosures is new state programs that require a bank to try and work with the homeowner before seizing property. In addition, some lenders are staving off foreclosures by evaluating which of their close-to-default borrowers may qualify for the new federal loan modification program.

For the 34th straight month, Nevada led the way in foreclosures, despite the state's best efforts to slow the rate of foreclosures. Las Vegas ranked in the unenviable top spot of cities, with one in every 68 homes receiving a foreclosure filing.

Now, some may celebrate the fact that the number of foreclosures has fallen, but we need to realize that the number of foreclosures is still 19% higher than a year ago. RealtyTrac also believes that rising job losses will continue to threaten any stabilization seen on the foreclosure front.

Will this part of the study receive the attention or will it be lost in the fact that foreclosures have dropped during the past three months? My guess is that investors and talking heads will attempt to focus on the positive and say that the worst is over. That said, the worst won't be over until we can stem the tide of job losses, which could lead to more people making their home payments and less foreclosures.

Tags: bank foreclosures, BankForeclosures, featured, financial crisis, FinancialCrisis, foreclosures, home payments, HomePayments, house payments, HousePayments, RealtyTrac