It has been announced that the number of properties being foreclosed has risen for the first time in 27 months, according to data released by RealtyTrac; however, experts have stated that they expect the US residential real estate market to recover gradually over the coming months and years.
There was a 12% rise between April and May in the number of properties being foreclosed, with an overall annual rise of 16% after what had been 27 months of month-on-month decline. Although bank repossessions sunk to a 49-month low in April, this figure rose by 7% during May with 54,844 homes being repossessed in that month alone. While this move is unfortunate for some, it is offering others a chance to buy property for the first time and offering investors a chance to increase their portfolio.
Speaking about the figures, RealtyTrac’s vice-president, Daren Blomquist, said: “That the May numbers were up the month after that settlement was completed is an indication that lenders are more confident that there are clear ground rules to foreclose now, so they can play by the rules. The banks are getting to a place where they consider their foreclosure processing issues resolved, so they're confident enough to go ahead and push through more foreclosures,"
Blomquist was quick to highlight, however, that the rise in foreclosures was not down to new borrowers starting to miss payments. He pointed out that he anticipates many of the new foreclosure starts to result in what he described as ‘short sales’. This is a process where the property is sold, with the lender keeping the proceeds while releasing the borrower from any further obligation.