Foreclosures Stalled by Housing Glut: RealtyTrac


NEW YORK (TheStreet) -- Foreclosure activity decreased dramatically in the first half of 2011, overpowered by a glut of already foreclosed properties and a moratorium on new foreclosure filings.

According to a mid-year report by RealtyTrac, 84% of the 211 metropolitan areas with a population of 200,000 or more posted lower foreclosure activity in the first half of 2011 compared to the first half of 2010.

The report also showed that 10 metro areas with the highest foreclosure rates in the first half of the year posted decreasing foreclosure activity compared to the first half of 2010.

"Foreclosure activity continued to slow in the first half of 2011, especially in the most foreclosure-saturated markets and in markets where the judicial foreclosure process is used," said James J. Saccacio, chief executive officer of RealtyTrac. "These dramatic decreases indicate the foreclosure pipeline continues to be clogged in many local markets across the country, sometimes by a glut of already-foreclosed properties that are not selling quickly, sometimes by a mountain of improperly filed foreclosures that are blocking the inflow of new foreclosure filings -- and sometimes by both."

The nation's largest banks Bank of America, JPMorgan Chase, Citigroup and Wells Fargo have been accused of following improper procedures in foreclosing homes and have been engaged in lengthy settlement talks with federal and state officials. That has put a stop to fresh foreclosure activities in states where these irregularities have cropped up.

The 20 metro areas with the biggest foreclosure activity decreases were all in states with judicial foreclosure processes- New York, Maryland, Florida, New Jersey, Connecticut, Massachusetts and Illinois.

Cities in California, Nevada and Arizona accounted for all the top ten metros with the highest foreclosure rates. Las Vegas continued to post the nation's highest metro foreclosure rate, with one in every 19 housing units receiving a foreclosure filing during the first half of 2011 -- nearly six times the national average.

The Phoenix-Mesa-Scottsdale, Arizona metro area moved up the ranks, becoming the metro with the second highest foreclosure rate, up from the seventh highest metro foreclosure rate in the first half of 2010.

A total of 60,985 Phoenix properties received a foreclosure filing during the first half, a decrease of 8 percent from the previous six months and a decrease of nearly 17 percent from the first six months of 2010.

Meanwhile, foreclosures appear to have stalled significantly in Florida. Only one Florida metro area -- Cape Coral-Fort Myers -- figured in the top 20 metro foreclosure rates list. In the first half of 2010, Florida cities accounted for nine of the top 20 metro foreclosure rates.

Seattle stood out for being the only city in the nation's 20 most-populated metro areas to record an increase in foreclosure rates. Foreclosure activity rose 10% in the first half over the corresponding year-ago period. With one in every 98 housing units receiving a foreclosure filing during the six-month period, Seattle's foreclosure rate ranked 57th among all metro areas, up from a 97th in the first half of 2010.

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