Foreclosures in N.C. surge nearly 20 percent from 2011

Posted June 14, 2012

Real estate foreclosures across North Carolina jumped nearly 20 percent in May from a year earlier, part of a growing nationwide trend.

While foreclosures dipped slightly from April, the new data from foreclosure data firm RealtyTrac shows that actions jumped 19.75 percent to 3,220 last month compared to May 2011.

The growing nationwide trend is setting the stage for increases in home repossessions and short sales — scenarios that could further weigh down home values in coming months.

Default or scheduled-home-auction notices were filed for the first time against 109,051 homes last month. That's an increase of 12 percent from April and up 16 percent versus May last year, RealtyTrac Inc. said Thursday.

The firm monitors documents filed on properties with mortgages that have gone unpaid. Once that process begins, homes can end up foreclosed-upon, sold at auction or via a short sale. A short sale is when the bank agrees to accept less than what the borrower owes on their mortgage.

May was the first month since January 2010 that the number of homes starting on the foreclosure path rose on an annual basis. But the trend has been visible in the monthly numbers, with four out of the first five months of this year recording increases over the preceding month.

The data reflects how banks and mortgage servicers have been stepping up efforts this year to address unpaid mortgages.

Foreclosure activity, as measured by the number of homes receiving foreclosure-related notices, slowed sharply last year as banks grappled with allegations that they had been processing foreclosures without verifying documents.

A $25 billion settlement reached in February between the nation's biggest mortgage lenders and state officials has since cleared the way for banks to move against homeowners who have fallen behind on their mortgage payments.

"Lenders are starting to catch up with the delayed foreclosures of the past year and a half," said Daren Blomquist, a vice president at RealtyTrac.

Some 33 states saw annual increases in homes entering the foreclosure process last month, with New Jersey, Pennsylvania and Florida posting the biggest gains.

Many of the homes now entering the foreclosure process could end up repossessed by banks. Going by the last five years, it could be as many as half.

Some 8.7 million U.S. homes entered the foreclosure process between January 2007 and last month, RealtyTrac said. Out of those, 4.3 million properties ended up foreclosed-upon.

Still, the pace of home repossessions has been easing overall of late, with May being an exception.

Banks took back 54,844 properties last month, up 7 percent from April, the firm said.

That represents the first monthly increase after three consecutive monthly declines. Repossessions were still down 18 percent from May last year, although 17 states saw increases, including North Carolina, Florida and Georgia.

Notably, states that have been foreclosure hotbeds throughout the housing downturn — California, Nevada and Arizona — each recorded sharp annual declines in home repossessions last month.

One factor: Banks are increasingly opting to resolve foreclosure cases via short sale, rather than completing the foreclosure process by taking back properties.

In the first three months of the year, short sales grew 25 percent from a year earlier, hitting a three-year high. In contrast, sales of bank-owned properties declined 15 percent versus the first quarter of last year, according to RealtyTrac.

"The trend we're seeing is actually short sales are becoming the preferred method for many lenders, rather than bank repossession," Blomquist said.

Foreclosure sales can spell trouble for nearby homeowners, who could see the value of their homes erode further as neighboring foreclosures sell. But short sales typically sell at a smaller discount than bank-owned homes, so they have less of a negative impact on home prices.

All told, foreclosure-related notices were reported on 205,990 U.S. properties last month, an increase of 9 percent from April and down 4 percent versus May last year, RealtyTrac said.

On a state level, foreclosure activity in Georgia jumped 33 percent between April and May, and vaulted 30 percent from May last year. That translates to one in every 300 households receiving a foreclosure-related warning, the nation's highest foreclosure rate last month.

Rounding out the top 10 states with the highest foreclosure rate in May are Arizona, Nevada, California, Illinois, Florida, Ohio, Michigan, South Carolina and Utah.


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  • Wacky_dood Jun 14, 2012

    What this whole mess demonstrates is how we have passed a tipping point in this country where the fiscally irresponsible have the ability to destroy the nation for the rest of us.

    If you bought too much house, then took out equity loans on the bogus valuation, you have no one to blame but yourself. You are the problem. Not the banks. Not the government. Not Presidents Bush (Sr or Jr), Clinton or Obama.

    For those fiscally irresponsible people out there, I wish we debtor prison for you. I hope you enjoy your trashed credit ratings and I hope you are never deemed credit worthy again.

  • DavyCrockett Jun 14, 2012

    Realcloak, you are absolutely correct in your assetions about personal responsibility. Now for extra credit, re-think your comment regarding the upcoming election, paying particular attention to which of the candidates is more likely to favor personal responsiblity and indvidual accountability and who wants to buy the youth vote by forgiving student loans and throwing more taxpayer funds down the entitlement rat hole. The choice becomes clearer. Are you actually going to vote for Obama again? For the record, not voting is avoiding your personal responsibility as a citizen to make an informed choice and act on it.

  • Bill Brasky Jun 14, 2012

    do, to reduce the monthly payments, especially when the homeowner is current on payments.
    June 14, 2012 2:45 p.m.
    Report abuse

    "I just want to know where all the billions that was given to the banks to help homeowners in trouble went? Most people who hit hard times"

    That money went towards the HARP program, and this program has saved millions of homes from foreclosure.

  • Bill Brasky Jun 14, 2012

    But most were duped, or basically dangled a big lie, (bankers and lenders knowingly altered income or adjusted here or there to get approval, in otherwords to say banks were faultless is a complete bald face lie

    Being in the mortgage business many years ago I witnessed and went after many loan officers that were falsifying documents. Some are even in jail today for their actions.

  • artist Jun 14, 2012

    realcloak -

    THANK YOU!!! for reassuring me that there are still people out there that "get it".

  • realcloak Jun 14, 2012

    Obama-this and Obama-that. Bush-this and Bush-that. Folks, what everyone needs to realize is that there needs to be some personal accountability. NAFTA had squat to with my neighbor four houses down from me here in Minnesota (I was born and raised in Fayettenam) getting a $325,000 loan with 5% down and a 4.75% ARM. And guess what? Because of his stupidity, and that of so many other neighbors who thought getting an ARM was so awesome, those ARMS turned into financial time bombs, and they leveled the value of every home in my neighborhood when those dinks defaulted. I am now $91,000 upside down on my house due to . The politicians, detatached from reality they may be, did not march people against their will to apply for a loan that plain common sense would tell them they could not afford. Yeah, I voted for Obama. So what? The two party system is a joke, and neither candidate will win based on sheer principle, but who has the fattest wallet. Want tangible change? Get a grip-load of cash.

  • slcota Jun 14, 2012

    I just want to know where all the billions that was given to the banks to help homeowners in trouble went? Most people who hit hard times.. and yes some of it is buying above what you can afford.. others have situations happen that cant be avoided... they could afford it, then something huge and bad happens... but where is the money? I can promise they arent using it to help people.. well besides the CEO's and presidents of the banks... Crooks.. all of them.

  • claudiaw Jun 14, 2012

    I don't see (this time) where anyone has mentioned banks that are not willing to refinance, i.e.reduce the interest rate on a mortgage, even though that is what the latest federal program is supposed to help people do, to reduce the monthly payments, especially when the homeowner is current on payments.

  • gingerlynn Jun 14, 2012

    The problems in NC go straight back to Clinton and NAFTA. Ross Perot was right about the sucking sound of all the manufacturing jobs flying out of the country. Many of my family who worked in textile mills and furniture mills out west have been out of work for a long time with no way to sell their house and move.

  • LambeauSouth Jun 14, 2012

    many business owners can afford to wait out the Obama nightmare

    Return of Finz
    AT THE EXPENSE OF THE CONSUMER! YEE HA Hey Maybe Mitt will bail us out