First the good news, banks initiated the fewest foreclosures in Q1 2012 since the housing bubble burst in the last quarter of 2007. Now the bad news, that number only fell by .1% from 4.5% last year to 4.4% in Q1 2012.
Unfortunately the number of foreclosures may have only stalled because several states are now requiring that courts oversee foreclosures to make sure they are properly completed, a requirement that has slowed the foreclosure process for many banks.
The Wall Street Journal however notes that while foreclosure rates are still disturbingly high, there does appears to be some improvement in payments made on past due loans. For example past due loans of 30 days or more now sit at 11.8%, an entire percentage point lower than last years high of 12.8% and far better than two years ago when that rate was 14.7%.
In the meantime new homeowners are continuing to make their payments on time which has helped with the decline, a sign according to some analysts that the housing market is beginning to stabilize. According to the MBA’s chief economist:
“The drops we continue to see are the best news out of this. It indicates the speed with which we’re working through the backlog.”
In the meantime extremely low interest rates are allowing many home owners to refinance their homes at fixed rates which in turn has lowered their payments, making their mortgage situation easier to manage over the long-term, which in turn could be helping drive down repayment issues and ultimately foreclosures at the same time.