US home foreclosures have increased as of October 2015, according to RealtyTrac, which monitors housing data.
It revealed that the number of foreclosed properties, which already include bank repossession and default notices, have gone up by 6% in October 2015 compared to the previous month with more than 110,000 properties. However, if it’s any consolation, this percentage remains lower than the previous year.
According to the report, much of the increase may be attributed to foreclosure starts, or properties that are finally into the foreclosure process. It’s also possible that the figure accounts for homes that have been delinquent for a long time. Normally, banks give homeowners up to three months of default before the foreclosure process begins. Sometimes, though, they give grace periods or restructure the homeowner’s loan to make repayments easier.
The company’s vice president Daren Blomquist was quoted saying that this trend is not “surprising” especially for the month of October since it’s been going on over the last five years, although this year’s jump is higher than the normal average increase of 5%.
So far, at least 34 states have increased foreclosure starts with Maryland posting more than 250%. Bank foreclosures are also up each year in over 30 states. However, per month, real-estate-owned properties (REOs) went down by as much as 9% compared to September 2015 data. This could be because the banks haven’t posted all of their foreclosed properties yet. Blomquist expects that the number could go up later.
Scheduled auctions for foreclosures continue to increase each year in 17 states. For October 2015, the rate was up by 12% but lower than the 22% in the previous year. Leading the states are New York with 47% and Massachusetts with 45%.
While foreclosures remain to be an unfortunate event in any homeowner’s life, it can also be an opportunity for those who are looking for cheap homes to purchase. For example, real estate agents are willing to pay a considerable price in banks’ foreclosed auctions if the distressed properties can enjoy a much higher value once flipped. Further, as some states are experiencing a better job climate—in some instances, employment is higher than the national average—they can now afford to look for a better home found in foreclosed listings.
Many states have also taken initiatives to improve the real estate environment and reduce speculation. For example, in Baltimore, Maryland, a city with a very high foreclosure rate of 1 in 429 homes with foreclosure filing), the lenders Fannie Mae and Freddie Mac are giving non-profits 12-day window to snatch foreclosed properties up to $175,000 before the rest are offered to the public. These non-profits can also buy them at discounted prices. The program, which is called Neighborhood Stabilization Initiative, is also carried out in other cities with high foreclosures such as Chicago in Illinois and Detroit in Michigan.
Non-profits, on the other hand, will be able to sell good rehabilitated properties at a more attractive price point for working families in the city because of the program and the discount.