Foreclosures Spike After January’s Reprieve: Report

Completed foreclosure sales in February reached their highest monthly mark since the beginning of the foreclosure crisis, according to a survey released Wednesday by online foreclosure analytic company and real estate information provider According to the data gathered, completed foreclosures spiked 67 percent in February over January’s reduced foreclosures. A total of 121,756 new foreclosures were completed in February, up from 72,694 in January (which had posted a 26 percent decline over December’s data). The month’s data sets a new record for new foreclosures after September 2008’s high mark of 104,243. The index for pre-foreclosure filings — a solid indicator of the pending volume of completed foreclosures — also rose to its highest monthly mark and rests more than 24 percent above January’s level, suggesting the volume of foreclosure starts and completions has nowhere to go but up, despite the brief respite seen in January. “Despite the efforts to stem foreclosures by government and many banks, the hopeful signs of the last quarter of 2008 and January didn’t follow through in February,” said president Alexis McGee in a media statement. “Many homeowners are in trouble and rising unemployment continues to threaten to intensify the problem.” Foreclosures increased in all regions regardless of foreclosure moratoriums and foreclosure and eviction  halts put in place by the GSEs Fannie Mae (FNM) and Freddie Mac (FRE) and large banks, said. The Northeast posted the largest decline, up a whopping 138 from January, while the Midwest took a close second, up 90 percent from the previous month. The Southwest trailed in third place with a 63 percent increase in completed foreclosures, while the Southeast saw a 46 percent increase since January. The numbers, of course, represent only completed foreclosures, and not mortgages “somewhere in the foreclosure process,” which noted account for a record 3.3 percent of all outstanding loans. “Annualizing the first two months of this year, if foreclosures were to continue unabated, we could end up with another 1.2 million homes back in lenders’ hands by year-end,” McGee said. “However, I am hopeful that our new administration’s plan to stem the foreclosure tide will take hold and we will see fewer foreclosures by year end. The Fed means business, and they’re throwing money — lots of it — behind the foreclosure crisis.” Write to Diana Golobay at Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.

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