Crumpton asked some great questions that really got to the heart of what is happening with the nation’s foreclosure trends. Namely, that although foreclosure activity hit a five-year low in the first quarter, another set of foreclosure waves is coming this year as lenders play catch-up with the delayed foreclosures from 2011. We’re seeing evidence of those coming waves in gradually increasing foreclosure starts, up on a monthly basis for three straight months ending in March.
The evidence of the coming foreclosure waves is even more obvious at the state and regional level, particularly in areas with a longer foreclosure process.For example, starts of Florida foreclosures increased 58 percent in March 2012 compared to March 2011, the fifth straight month where Florida foreclosure starts have been up on a year-over-year basis. In South Florida, the increases were even bigger, with an 85 percent year-over-year increase in Miami foreclosure starts in March, also the fifth straight month with an annual increase in foreclosure starts.
New Jersey has not had multiple months of increasing foreclosure starts, but in March there was a reversal of a downward trend that has lasted nearly a year and a half in the state. Starts on New Jersey foreclosures in March increased 73 percent from the previous month and were up 392 percent from March 2011, the first annual increase after 17 consecutive months of annual decreases in New Jersey foreclosure starts.
The big annual increases in states with a judicial foreclosure process like Florida and New Jersey are not too surprising given that the foreclosure numbers there dropped to such artificial lows in 2011 because of delays in processing foreclosures through the court system. But even in non-judicial foreclosure states that did not see huge processing delays in 2011, we’re seeing some early evidence of an uptick in foreclosure starts on a month-to-month basis. California foreclosure starts increased on a monthly basis for the second straight month in March, and foreclosure starts in the Los Angeles metro area increased on a monthly basis for the third straight month in March. Washington foreclosure starts were also up on a monthly basis for the third straight month in March.
As I’ve been saying over and over again to the media this week, we’re past the peak in this foreclosure crisis but it’s going to be a bumpy ride back to the bottom.
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