Connecticut foreclosure filings fell by nearly 30 percent in May compared with the previous month, according to a new report Thursday, but they are still nearly 90 percent higher than in May of last year.
The number of properties with filings in May fell 28.4 percent to 2,088, down from 2,915 in April, according to RealtyTrac, the foreclosure tracking firm, in its monthly report of national and state-by-state foreclosure trends.
May's decline comes after a modest increase in filings in April.
The decline is encouraging, and a recent report from the Mortgage Bankers Association showed that the number of homeowners falling behind on their mortgage payments may be leveling off. Still, the association said homeowners delinquent on payments remain at record levels in the state.
The state's job market showed renewed strength in the first four months of the year, but unemployment still remains high.
The numbers reported Thursday also may mask that some banks and servicers are allowing homeowners delinquent on their mortgage payments to remain in their homes longer or not make filings as soon as they are 90 days past due.
Donald L. Klepper-Smith, an economist at DataCore Partners Inc. in New Haven, said some banks are being more restrained about how quickly they foreclose and eject borrowers from their homes.
"Banks are playing a bit of a waiting game," Klepper-Smith said. "It's in their long-term interest to work with borrowers and not take on properties. Many banks are trying to figure out what direction the economy is headed.
Klepper-Smith said some banks are hoping that the "fragile and embryonic" economic recovery will strengthen and improve borrower prospects for making mortgage payments.
In May, Connecticut's decline in foreclosure filings was deeper than the nation as whole, which fell 3.3 percent from the previous month, according to RealtyTrac.
This week, an economist from Moody's Economy.com warned that the foreclosures in Connecticut could cause a mild "double dip" in house sale prices, reversing some of the recent price gains in the market.
Economist Andres Carbacho-Burgos said sale prices could decline another 1 or 2 percent in the next year as foreclosed properties are sold at lower prices. That can hold back increases, but in the case of Connecticut, it will be strong enough to force another — though mild — overall decline, Carbacho-Burgos said.
The number of properties repossessed by banks and other lenders in Connecticut in May was 396, down 34 percent from 600 in April, according to RealtyTrac. That was still 67 percent higher than the 237 in May of last year.
In Connecticut, 1 in every 691 households had a foreclosure filing, significantly better than 1 in 400 for a nation.
Reprinted with permission of the Hartford Courant.
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