LOS ANGELES Foreclosure activity — as measured by the number of properties receiving a notice of default, scheduled for auction or repossessed by lenders — sank in March to the lowest level since July 2007.
In all, 198,853 homes received a foreclosure-related notice last month, down 4 percent from February, and down 17 percent from March last year, foreclosure listing firm RealtyTrac Inc. said Thursday.
Banks took back 55,075 homes in March, down 14 percent from the previous month, and down 25 percent from March 2011.
Foreclosure activity in the first quarter fell primarily in states where the courts do not play a role in foreclosures. Among them: Arkansas (79 percent), Nevada (62 percent) and Arizona (21 percent).
In contrast, many states where courts must sign off on foreclosures saw outsized increases foreclosure activity, including Indiana (45 percent), Connecticut (38 percent) and Florida (26 percent).
Still, more U.S. homes are entering the foreclosure process, setting the stage for a surge in properties repossessed by lenders this year.
The number of homes that received first-time foreclosure notices rose 7 percent in March from the previous month.
That marks the third consecutive monthly increase this year and reflects stepped-up efforts by banks to take action against homeowners who fail to keep up with mortgage payments.
“We’re not out of the woods yet with foreclosures,” said Daren Blomquist, a vice president at RealtyTrac. “There are more batches of foreclosures coming through the pipeline.”
Rather than a large wave of bank-owned homes crashing onto the market at once, it’s likely the new crop of foreclosures will arrive in smaller waves throughout the year, Blomquist said.
Still, many of the homes entering the foreclosure process now are properties with loans that have gone unpaid for a long time, not instances of borrowers just starting to fall behind. That suggests the possibility that the number of homes at risk of foreclosure could begin to taper off once banks tackle the crop of homes with long-overdue mortgage payments.
At the end of last year, some 1.5 million U.S. homes had mortgages that had gone unpaid at least 90 days, according to Mortgage Bankers Association data.
Thirty-one states posted a monthly increase in homes with a first-time foreclosure notice. Nevada led the pack with an increase of 153 percent.
RealtyTrac expects banks will repossess close to 1 million homes this year. Last year, lenders took back 804,000 homes.
For the first three months of this year, foreclosure activity fell 2 percent compared to the last quarter of 2011 and was down 16 percent from the first quarter of last year, the firm said.