Foreclosure Filings Decline Despite Signs Of Ongoing Trouble
KENNETH R. GOSSELIN
June 11, 2009
The number of foreclosure filings fell in May from April, steeply in Connecticut and slightly across the nation, a new report showed, but experts warn the declines might not mean the worst is over.
In Connecticut, foreclosure filings of all types fell about 50 percent, to 1,106 from 2,174 in April, according to RealtyTrac Inc. It was the second straight month of sharp declines, an odd trend considering that the number of seriously delinquent mortgages continued to rise in the first three months of 2009, according to a separate report released last month by the Mortgage Bankers Association.
Foreclosure filings in May were down by about a third compared with the same month in 2008. Nationally, more than 321,000 households received at least one foreclosure-related notice in May, RealtyTrac said. That was 6 percent fewer than in April but 18 percent more than a year earlier. It was the smallest monthly year-over-year gain since June 2006.
Daren Blomquist, a RealtyTrac spokesman, said the May numbers nationally were still the third-highest monthly numbers for filings since RealtyTrac began its monthly report in January 2005, even with the decline from April.
Foreclosures are likely to remain elevated this year and into 2010 as layoffs, rather than risky mortgages, become the main reason borrowers default on their home loans. Many economists expect unemployment, now at 9.4 percent nationwide, to rise as high as 10 percent.
In Connecticut, the RealtyTrac foreclosure numbers from month to month tend to fluctuate because they are smaller, representing new filings within the month rather than all delinquent mortgages.
Ronald F. Van Winkle, an economist and acting town manager of West Hartford, said he was puzzled by the sharp declines in foreclosures in Connecticut, given the MBA's report and mounting job losses.
"Everything else is telling me the opposite, that there is a lot of stress out there," Van Winkle said.
Blomquist said the rise in seriously delinquent loans as reported by the MBA may not have shown up as foreclosure filings because banks take longer to start foreclosure action since there are so many past-due mortgages.
Reprinted with permission of the Hartford Courant.
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