A "for sale" sign in front of a foreclosed home in Miami says the… (Joe Raedle / Getty Images )
Few signs of any looming foreclosure wave emerged in May, although filings edged up 9% from a month earlier, according to a new report.
Banks filed foreclosure paperwork—default notices, scheduled auctions and bank repossessions — on 205,990 American homes in May, according to the report by data firm RealtyTrac. That was down 4% from May 2011, the 20th consecutive month of year-over-year decreases.
RealtyTrac Chief Executive Brandon Moore said most new foreclosure starts probably would end up as short sales or auctioned off to other buyers, not remain on banks’ books.
“It’s going to be a bumpy ride down to the bottom of this foreclosure cycle,” Moore said. “More banks are now recognizing that treating the problem of delinquent mortgages with short sales rather than bank repossessions can help them minimize their losses and also avoid taking on more [bank-owned homes], which they then have to manage, maintain and market for sale.”
Foreclosure filings in May rose above the 200,000 mark after holding below that threshold for two consecutive months.
Judicial states -- those in which a court order is required to take back a home -- posted a 26% year-over-year increase in foreclosure activity last month. On the other hand, non-judicial states -- those in which a court order is not needed, including California -- posted a 20% decrease.
In California, foreclosure activity increased 8% from April but was down 19% from May 2011.
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