N.C. foreclosure rate drops 16% from April, down 36% from a year ago

Posted June 11, 2009

— Real estate foreclosures across North Carolina in May fell 16 percent from April and were down 35 percent from a year ago, according to foreclosure firm RealtyTrac.

The state’s statistics reflect the national trend. The number of U.S. households on the verge of losing their homes dipped in May from April, and the annual increase was the smallest in three years, RealtyTrac said in data released Thursday.

North Carolina, the 10th largest state in terms of population, ranks 36th in foreclosures.

A total of 2,587 properties were in some state of foreclosure last month, or one for every 1,595 households.

As layoffs, rather than risky mortgages, become the main reason that borrowers default on their home loans, foreclosures likely will remain elevated this year and into 2010. Many economists expect unemployment, now at 9.4 percent nationwide, to rise as high as 10 percent, and some project it will exceed the post-World War II record of 10.8 percent.

Foreclosure filings fell 6 percent in May from April, according to RealtyTrac Inc. More than 321,000 households nationwide received at least one foreclosure-related notice last month — 18 percent more than a year earlier — but the smallest annual gain since June 2006.

Despite the drop from April, it was the third-highest monthly rate since Irvine, Calif.-based RealtyTrac began its report in January 2005, and the third straight month with more than 300,000 households receiving a foreclosure filing.

One in every 398 U.S. homes received a foreclosure filing last month, according to the foreclosure listing firm’s report.

The mortgage industry has resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies Fannie Mae and Freddie Mac and other lenders.

“It would not be a huge surprise to see the numbers level off a little bit at this point,” said Rick Sharga, RealtyTrac’s senior vice president for marketing.

Banks repossessed about 65,000 homes in May, up from 64,000 in April, due to big increases in several states including Michigan, Arizona and Nevada.

The Obama administration announced a plan in March to provide $50 billion from the financial industry rescue fund as an incentive for the mortgage industry to modify loans at lower monthly payments.

But the effectiveness of the relief plan remains unclear, with questions lingering about how much the lending industry will cooperate. Many housing counselors say it hasn’t made much of a difference so far.

After banks take over foreclosed homes, they usually put them up for sale at deep discounts, pulling down prices for other sellers. Nationwide, sales of foreclosures and other distressed properties made up about 45 percent of the market in April, according to the National Association of Realtors.

The supply of new foreclosures had diminished in recent months as banks held off on taking back properties, but it’s starting to surge again, said Gary Kent, a San Diego real estate broker who focuses on the foreclosure market.

“Everything I’ve got that’s priced right is just flying off the shelves,” he said.

On a state-by-state basis, Nevada had the nation’s highest foreclosure rate in May with one every 64 households receiving a filing. California took the No. 2 slot previously occupied by Florida. California’s rate was one in every 144 households.

In Florida, one in every 148 households received a foreclosure filing. Rounding out the top 10 were Arizona, Utah, Michigan, Georgia, Colorado, Idaho and Ohio.

Among large cities, Las Vegas led the way with one in every 54 households receiving a filing. Four California metropolitan areas — Stockton, Modesto, Riverside-San Bernardino and Merced — were next, followed by Cape Coral-Fort Myers, Fla.; Bakersfield, Calif.; Orlando, Fla.; Vallejo-Fairfield, Calif.; and Miami.


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  • wildervb Jun 11, 2009

    Gee guys, I thought a drop in foreclosures was a good thing, there have been several small improvements occurring in the economy which makes one think that the recession has bottomed out. Why all the gloom?

  • Boot-the-DC-Tyrant Jun 11, 2009

    Are these numbers supposed to be encouraging?!? I think not. The damage is already done. The masses have already went into foreclosure so the percentage that arent in foreclosure have gone down. This makes the numbers smaller, therefore making Obama look like a hero.

    It's still bad. Don't believe the liberal hype or the Obama scam.

  • hi_i_am_wade Jun 11, 2009

    The worst is yet to come. Gas prices are on the rise again. That was a big reason for a lot of problems to begin with. Then we have a huge stimulus to pay for. That will mean higher taxes. The worst way to end a recession is to give people less money to spend. One the stimulus ends, the hole will be bigger and deeper.

    The worst has yet to come.

  • tatermommy52 Jun 11, 2009

    I miss Bush.

  • time4real Jun 11, 2009

    false calm!

  • mep Jun 11, 2009

    The article does not mention the spike of foreclosures that will occur when all those folks still without a job exhaust their unemployment benefits. And yes, the commercial market is nearing a crisis as well. Look at Southpoint mall as a good example. The recession is not over yet.

  • moth Jun 11, 2009

    Interesting that no one mentions the inventory anymore.Most banks are sitting on these properties and NOT selling them because the market is so glutted.Foreclosures may be down from a year ago in the residential market but the commercial foreclosures are just beginning.