New Crop of Foreclosures Is Coming

While fewer Americans are falling on their mortgage payments, the huge backlog of already delinquent mortgages is finally its way through the banking system to foreclosure.

Total foreclosure activity rose the first half of this year from the previous six months, according to online foreclosure sale site RealtyTrac, driven by a jump new foreclosure actions by lenders.

“Those foreclosure starts are welcome news prospective buyers and real estate brokers in many local markets a shortage of aggressively priced inventory has been holding sales activity. Markets with increasing foreclosure starts will likely see more distressed inventory for sale in the form of short sales and bank- properties in the second half of the year,” said Brandon Moore, CEO of RealtyTrac.

More than half of the 212 metropolitan areas RealtyTrac surveys saw increases in foreclosure starts, and of the ten foreclosure rates in the nation, five of them were in California. Stockton holds the dubious distinction of the nation’s highest metro foreclosure , at more than three the national average. Despite their high ranking, , all of the California metros in the top ten actually saw decreasing foreclosure activity overall. In , Atlanta was the only metro area with a top ten foreclosure rate see increasing foreclosure activity in the first half this year.

While many of the previously hard- markets are seeing declines in foreclosures, other cities are seeing big gains. Foreclosure activity increased more than 20 percent second half of 2011 in Tampa (47 percent), Philadelphia (30 percent), Chicago (28 percent), New York (26 percent), and Baltimore (21 percent).

Foreclosure activity dropped the most Seattle, WA. Other cities where activity dropped more than 10 percent the second half of 2011 were San Francisco, Detroit, Los Angeles and Boston.

New foreclosures, as “starts,” rose in more than 60 percent of metro markets. RealtyTrac ranked the best markets investing, by looking at where sales prices are increasing but foreclosure discounts still at 15 percent or higher. Durham, NC, Boston, MA, Cleveland, OH and Phoenix, AZ all the top ten.


Adapted from: CNBC, July 26, 2012.