Regulators and major lenders are still on the hot seat over flawed and sometimes abusive foreclosures that were carried out in recent years.
On Main Street, the ebbs and flows of foreclosure patterns – things like the public notice of a sale and the actual foreclosure transaction – still haven’t returned to a predictable or natural rhythm.
In Shelby County, there were 1,030 total foreclosures in the first quarter this year, according to real estate information company Chandler Reports, www.chandlerreports.com. That’s down from 1,252 foreclosures during the same period in 2012 – a drop of 17 percent.
Pull back one year before that, though, and the number of foreclosures had spiked to 1,235 in the first quarter of 2012 compared to 964 in the first quarter of 2011. At this time last year, in other words, the area was in the midst of a 30 percent gain in foreclosures.
Pointing to the recent drop, some local brokers and Realtors say a combination of forces is at work. There’s been a small improvement in the economy, which helps. Banks also are increasingly pursuing workouts, loan modifications and short sales.
Exactly in tandem with the 17 percent drop in total foreclosures, the number of foreclosure notices also fell by the same percentage. Foreclosure notices sunk from 2,186 in the first quarter of 2012 to 1,801 in the first quarter of 2013 – a 17.6 percent drop.
Studying the number of foreclosures themselves offers a look backwards at the activity. Looking at the notices – which lenders are required to publish in Tennessee in a newspaper of general circulation – offers a forward perspective on what’s to come.
That’s because publishing the notices is an early step in the process. It’s not a perfect indicator, though, because the homeowner has time to work out an arrangement with their lender to save their home before a foreclosure auction occurs.
“As far as the numbers showing a decrease in the amount of foreclosures, I believe it is because banks are moving slower,” said Mindy Creech, a Realtor at RE/MAX on Track. “Last week, the National Association of Realtors put out an article that said that foreclosures are taking longer to complete.
“The average time it takes a lender to repossess a property is now 477 days. They said that the five largest lenders have slowed down foreclosures due to the new servicing standards in the national mortgage settlement. Locally, we have definitely seen lower numbers in foreclosures.”
Raleigh and Frayser are two of the inner-city neighborhoods in Memphis that tend to see the largest cluster of foreclosure activity from one quarter to the next. But they both saw drops over the two first quarter periods.
Raleigh’s 38128 ZIP saw 80 residential foreclosures in the first quarter, down from 84 in the first quarter of 2012. Likewise, Frayser’s 38127 ZIP saw 77 foreclosures in the first quarter, down from 84 in the first quarter of 2012.
Commercial foreclosures also dropped between the two first quarter periods – from 27 down to 23.
“I think it’s a combination of banks going slower, a natural reduction and the workouts that banks are doing all helping, along with the push toward short sales,” said Greg Glosson, a broker at Fast Track Realty. “And just the overall improvement in the economy has helped with the number of foreclosures year over year. I think that will hold true for the rest of this year.”
Chandler Reports is a division of The Daily News Publishing Co. Inc.