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By Lynn Adler~Reuters
U.S. foreclosure activity leaped 46 percent in March from a year earlier, hitting a record high as programs stunting the torrid pace of failing mortgages expired, RealtyTrac reported on Thursday.
A temporary freeze on foreclosures by major banks and government-controlled home finance companies Fannie Mae and Freddie Mac ended before President Barack Obama’s massive housing stimulus, unveiled on March 6, could take root.
Filings, which include notice of default, auction sale or bank repossession, jumped 17 percent in March from February.
Filings for the quarter also marked a record high, jumping 24 percent from the same period a year ago.
The March and first-quarter totals were the highest since RealtyTrac began tracking them in January 2005, even as bank repossessions declined.
One in every 159 U.S. households with mortgages got a foreclosure filing in the first three months of this year, RealtyTrac said. Filings were reported on more than 803,000 properties in the quarter.
California, Florida, Arizona, Nevada and Illinois accounted for nearly 60 percent of U.S. foreclosure activity in the first quarter, with a combined 479,516 properties receiving filings.
In the transition from industry freeze to new government rescues, the foreclosure filing floodgates reopened.
After the moratoriums ceased, “we saw an onslaught of notices of default, which is the first stage of foreclosure,” Rick Sharga, senior vice president at RealtyTrac, said in an interview.
The rise in filings suggests a backlog had built up due to the moratoriums. The success of the Obama mortgage bailout may not be seen until the autumn, Sharga added.
Activity should peak near year-end. “But unfortunately, these well-intentioned delays in the processing might have the unintended consequence of extending the housing downturn,” and further dragging down home prices, he said.
