The Foreclosure Story of May 2012

Earlier this year some of the biggest players in the US mortgage game agreed on a $25 billion settlement package with the government, which ended investigations into incorrect foreclosure practices . This was finally pushed through in April and Mays foreclosure stats seem to indicate that lenders are more confident in pursuing foreclosures than they have been in recent months.

The Bare Statistics

• Foreclosure activity kicked on in May, showing an increase of just over 9 percent in foreclosure rates when compared with the previous month.
• This meant that a total of 205,990 homes experienced mortgage defaults, went through a foreclosure auction or were repossessed by lenders.
• That figure equates to 1 in every 639 homes having a foreclosure filed against them in May.
• This was the first time since February that the total number of foreclosures went past the 200,000 mark.
• Relative to the same month of 2011, the figures still represented a decrease of just over 4 percent.

Foreclosure Trend In 2012

• In 2012 we have seen lenders becoming increasing open to short sales and May was no different.
• Why is this? Well pushing through a foreclosure is an expensive, time consuming process for lenders and they typically lose more money doing that than they would by allowing a short sale. Statistics show that if a lender allows the borrower to sell short, that sale fetches (on average) $27,000 more than the sale of a home at a foreclosure auction.

Worst Affected States in May

• May saw a new name at the top of the foreclosure list. For the first time since the beginning of 2006, Georgia’s foreclosure statistics exceeded those of any other state. 1 out of every 300 homes had a foreclosure filed and that represented a 33 percent jump from April’s figures and a 30 percent increase from the same month last year.
• Arizona was the second worst affected state and posted figures 24 percent higher than April. This was meant that 1 in every 305 homes had a foreclosure notice drop through their letterbox.
• Next up was Nevada, with 1 in every 313 homes receiving the news that they were being dragged into the dreaded foreclosure process.
• California was fourth, with a rate of 1 in every 324 homes with Illinois and Florida placed fifth and sixth place.