PHOENIX (AP) — A new report shows foreclosure activity in Arizona jumped nearly 18 percent in October compared with the previous month.
Foreclosure listing firm RealtyTrac says nearly 4,200 homeowners lost their homes last month, and another 6,400 were served with notices of default. Such notices are the first formal step lenders take before repossessing a home.
RealtyTrac’s Daren Blomquist says the numbers reflect an ongoing see-saw between up and down months as banks try to work through a raft of delinquencies but keep bring sidelined by missteps.
But the overall trend is positive. Arizona has now seen 12 consecutive months where foreclosures fell compared with the same month a year ago.
Arizona had the third-highest foreclosure rate of any state last month. One in every 259 housing units has a foreclosure filing.
Foreclosure activity in Arizona jumped nearly 18 percent in October compared with the previous month, according to a new report.
Nearly 4,200 homeowners in the state lost their homes last month, and another 6,400 were served with notices of default, according to Irvine, Calif.-based foreclosure listing firm RealtyTrac. Such notices are the first formal step lenders take before repossessing a home.
Nationally, 10 percent more homes received an initial default notice last month than in September.
The Arizona numbers reflect an ongoing see-saw between up and down months as lenders continue to work through a backlog of delinquencies but keep bring sidelined by missteps, RealtyTrac’s Daren Blomquist said. Government efforts to help homeowners stave off home losses also are playing a role.
The overall trend in Arizona remains positive. Arizona has now seen 12 consecutive months where foreclosures fell compared with the same month a year before, but stumbles like October’s show the market still is unhealthy.
“When we see an increase like this it shows us that we’re not on this consistent trend downward,” Blomquist said. “There’s a lot of distress still in the market, and the market is going to have to absorb those distressed properties at some point.”
Arizona had the third-highest foreclosure rate of any state last month. One in every 259 housing units had some type of foreclosure filing.
Banks appear to me moving to allow more homeowners go through the short-sale process rather than repossessing homes outright, Blomquist said. Those sales allow homeowners to avoid a full-out foreclosure by selling their homes for less than what’s owed on the mortgage, with the bank absorbing the loss.
That’s good for banks, homeowners and neighborhoods, because banks typically get more money from a short sale, homeowner’s don’t take as bad a credit hit, and the homes don’t sit vacant for months and drag down neighboring homes’ values.
Buyers have complained in recent years that banks can take up to a year to approve a purchase contract, and many have given up. But the time it takes for short-sale approval appears to be declining, Blomquist said.
“In a few states like Arizona you’re seeing that increase in short sales is a good indication that those are becoming a little more streamlined and palatable for buyers,” he said.
But there is still no quick end in sight for the state’s foreclosure crisis.
“I think that because of the severity of the housing bust in Arizona, Arizona’s foreclosure levels are going to remain high for a couple of years before we return to normal,” Blomquist said. “But the good news I think in the trends, I do think Arizona is past the peak of this foreclosure cycle. We’re at least headed in the right direction.”