The number of U.S. homes struggling through foreclosure held steady in March but fell from a year earlier, new data show, indicating that the huge wave of foreclosures that some housing experts keep predicting isn’t even a whitecap yet.
About 1.4 million homes, or 3.4% of all homes with a mortgage, were at some stage in the foreclosure process last month, the same as in February but down slightly compared with 1.5 million in March 2011, Santa Ana research firm CoreLogic said.
Banks completed 69,000 foreclosures in March compared with 85,000 a year earlier and 66,000 a month earlier. In the first quarter, lenders completed 198,000 foreclosures compared with 232,000 in the same period last year.
March also brought no change in the share of borrowers who were more than 90 days late on their mortgage payment, CoreLogic said. That stood at 7% in March, the same level as in February but down from 7.5% in March 2011.
“Compared to a year ago, the number of completed foreclosures has slowed,” CoreLogic Chief Executive Anand Nallathambi said. “Since the foreclosure inventory is also coming down, this suggests that loan modifications, short sales, deeds-in-lieu are increasingly being used as an alternative to foreclosures to clear distressed assets in our communities.”
Foreclosures slowed last year as lenders and regulators wrangled over accusations of faulty practices and improper paperwork. A national settlement reached in February with five major lenders led some housing experts to predict that the foreclosure machinery would crank back up again.
But so far, there is little evidence of a new foreclosure flood, various data firms have reported. Nallathambi appears to think it’s because the settlement also pushed lenders to work with troubled borrowers to avoid foreclosure.
“This is what was envisioned with the recent national foreclosure settlement, and can often be a better outcome for both borrowers and investors,” he said.