The besieged real estate market has recently displayed encouraging signs that it might be just about to turn the corner for a new and brighter day. In a meaningful way, too. Home sales are increasing in some areas, prices are firming, and even inching up a bit, consumer confidence in housing is improving and then of course mortgage rates continue sliding to new lows – week after week it seems - to everyone’s delight.
And then RealtyTrac published its Midyear 2012 Foreclosure Market Report to pour cold water on the incipient party. It isn’t over till the fat lady sings, they say.
Foreclosure filings, which are default notices, auction sale notices and bank repos, amounted to 1,045,801 housing units during the first six months of 2012, RealtyTrac reported. That translates to 2% increase from the last half of 2011. The good news is that it is 11% lower from the first half of 2011. For the last several quarters foreclosure starts have been more or less bouncing along a narrow band, but now, a little alarmingly, it turned up after a long descent and then the recent plateau.
The mortgage foreclosure settlement about robo-signers, lost home loan paperwork and other shortcomings announced in February between the five largest banks and 49 states and the District of Columbia cleared much of the uncertainty over how the lenders can handle and approve foreclosures. Now they are cranking up their efforts to begin clearing the backlog that this prolonged legal action that put everything temporarily on hold must’ve created.
The infamous shadow inventory believed to be outside the legal settlement was probably being released in greater numbers as well this spring, since the housing market has lately shown some sparkle and it should be easily absorbable and possibly sold at a slightly better price as well. Except that all of a sudden the above two developments created a minor flood and pushed the foreclosure starts up. The weak economy isn’t doing fragile homeowners any favors either, still dragging many into delinquency, adding to the increase.
Yet, it seems that a majority of reports surfacing nowadays from mortgage and housing experts are favorable instead of the other kind. So long as that trend holds the overall future outlook is positive. A bump in the road here and there is expected. Besides, mortgage lenders surely read RealtyTrac’s reports themselves and likely gasped at this one and predictably will streamline foreclosure filings to minimize, perhaps even eliminate, any undue aggression on tentatively rising housing prices.