April foreclosures a mixed bag

  • Article by: JIM BUCHTA , Star Tribune
  • Updated: May 17, 2012 - 7:52 PM

In Minnesota they edged up but across the U.S. fell 15 percent from last year.

Foreclosure activity was up slightly in Minnesota and several states during April, but was down nationwide as lenders focused on improving the foreclosure process and reducing the number of houses that follow that path. That's according to RealtyTrac, which said that in Minnesota foreclosure activity was up 11 percent from March to April and 3 percent compared with last year. The group tracks a variety of foreclosure-related notices, including foreclosure warnings and sheriff's sales, also known as REOs, or real estate owned properties.

Nationwide activity declined 5 percent from the previous month and 15 percent from last year, falling to the lowest level since 2007. Still, such filings affected one in every 698 U.S. housing units during the month compared with only one in every 860 households in Minnesota.

"Rising foreclosure activity in many state and local markets in April was masked at the national level by sizable decreases in hard-hit foreclosure states like California, Arizona and Nevada," according to Brandon Moore, RealtyTrac's CEO.

While Minnesota's foreclosure rate has consistently been below the national average, recent increases in the number of default notices that are being sent to homeowners suggest that the number of homeowners who can't pay their mortgage remains elevated.

For example, there were 1,240 pre-foreclosure notices sent to Minnesota homeowners in March but another 1,568 sent in April, while the number of properties that became bank-owned during April was down only slightly compared with March, suggesting that there will be an increase in the number of mortgages that will eventually end up in foreclosure during the coming months, according to new RealtyTrac data.

A drop in sheriff's sales

Despite sometimes contradictory monthly gyrations in the local and national data, there's a sense that the worst of the foreclosure crisis is over.

Earlier this month Twin Cities-based HousingLink said that during the first quarter the number sheriff's sales in Minnesota had fallen 10 percent to 4,836, the lowest level since 2007. At the same time the report noted that the problem is getting worse in some counties.

Dan Hylton, HousingLink's research manager, warned that the number of people who have lost their home is still nearly four times higher than the 1,618 quarterly average posted in 2005. He said that declines in foreclosure sales have been strongest in the Twin Cities metro, which posted an 11.5 percent decline compared with a 7.4 percent decline in outstate counties.

Jim Buchta • 612-673-7376

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