RealtyTrac, a leading market for economically distressed real estate, reported a first quarter drop in the number of properties in the foreclosure process nationally.
But the firm also reported that it expected the rate to rise again as the year goes on, attributing the drop to the backlog many mortgage servicers face in the mortgage process as they work through problems with their servicing documents.
“The nation’s housing market continued to languish in the first quarter, even as foreclosure activity fell to a three-year low,” said RealtyTrac CEO James J. Saccacio. The company said default notices, scheduled auctions and repossessions totaled 681,153, down 14.8% from the previous quarter and 26.9% from the first quarter of 2010.
“Weak demand, declining home prices and the lack of credit availability are weighing heavily on the market, which is still facing the dual threat of a looming shadow inventory of distressed properties and the probability that foreclosure activity will begin to increase again as lenders and servicers gradually work their way through the backlog of thousands of foreclosures that have been delayed due to improperly processed paperwork,” Saccacio said.
Nevada, Arizona and California again led the country in the numbers of economically distressed properties in the first quarter, the company said.