DETROIT (WWJ/AP) - A report from RealtyTrac shows the number of foreclosure properties in Michigan dropped 11.5 percent from February to March.
The report also shows the number of foreclosures in the first quarter of the year were down nearly 18 percent from the fourth quarter of last year. RealtyTrac says in Michigan 1 in every 489 housing units received a foreclosure filing in March 2012.
Approximately one in every 162 homes in Michigan is in foreclosure, with the largest number in Wayne County (2,705) followed by Oakland (1,139) and Macomb (773) counties.
The RealtyTrac report shows however, that more homes are entering the foreclosure process nationwide, setting the stage for a surge in properties repossessed by lenders this year. That marks the third consecutive monthly increase this year and reflects stepped-up efforts by banks to take action against homeowners who fail to keep up with mortgage payments.
Foreclosure activity, as measured by the number of homes receiving foreclosure-related notices, slowed sharply in the fall of 2010 when claims surfaced that some banks and mortgage servicers were processing foreclosures without verifying documents.
A $25 billion settlement reached in February between the nation’s biggest mortgage lenders and state officials has paved the way for banks to take action on unpaid mortgages, many of which have been in a procedural limbo for months or years. And it’s those homes that could ultimately be foreclosed-upon and end up back on the market.
Foreclosures typically sell at a discount to other homes and can drag down the value of neighboring properties, so the prospect of more foreclosures means it could take longer for home prices in some areas to bounce back.
The U.S. housing market remains weak, even after the best winter for home sales in five years and steady improvement in the job market. Home prices are now back to 2002 levels, according to the Standard & Poor’s/Case-Shiller U.S. home price index.
Rather than a large wave of bank-owned homes crashing onto the market at once, it’s likely the new crop of foreclosures will arrive in smaller waves throughout the year, said Daren Blomquist, a vice president at RealtyTrac.
Still, many of the homes entering the foreclosure process now are properties with loans that have gone unpaid for a long time, not instances of borrowers just starting to fall behind. That suggests the possibility that the number of homes at risk of foreclosure could begin to taper off once banks tackle the crop of homes with long-overdue mortgage payments.
All told, 101,939 U.S. homes received a first-time notice in March, the biggest monthly increase since October, RealtyTrac said. Even so, foreclosure activity overall – as measured by the number of properties receiving a notice of default, scheduled for auction or repossessed by lenders – sank in March to the lowest level since July 2007, the firm said.
In all, 198,853 homes received a foreclosure-related notice last month, down 4 percent from February, and down 17 percent from March last year.
Banks took back 55,075 homes in March, down 14 percent from the previous month, and down 25 percent from March 2011.
RealtyTrac expects banks will repossess close to 1 million homes this year. Last year, lenders took back 804,000 homes.
For the first three months of this year, foreclosure activity fell 2 percent compared to the last quarter of 2011 and was down 16 percent from the first quarter of last year, the firm said.
Foreclosure activity in the first quarter fell primarily in states where the courts do not play a role in foreclosures. Among them: Arkansas (79 percent), Nevada (62 percent) and Arizona (21 percent).
In contrast, many states where courts must sign off on foreclosures saw outsized increases foreclosure activity, including Indiana (45 percent), Connecticut (38 percent) and Florida (26 percent).
For more foreclosure rate trends in Michigan, visit www.realtytrac.com.
TM and © Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.