Foreclosure activity declines in third quarter
Posted on Thursday, December 6, 2012 at 9:51:46 AM
Foreclosure activity improved in the third quarter on an annual basis, but the rate of home repossessions surged from the previous three-month period.
During the third quarter, there were more than 193,000 properties in some stage of the foreclosure process, marking a 3 percent decline from a year earlier, according to a report from RealtyTrac. Despite the improvement, activity spiked 21 percent from the second quarter.
"The shift toward earlier disposition of distressed properties continued in the third quarter as both lenders and at-risk homeowners are realizing that short sales are often a better alternative than foreclosure," said RealtyTrac vice president Daren Blomquist.
Short sales have becoming an increasingly popular alternative to foreclosure, the report said. By the end of the third quarter, these types of transactions increased 15 percent from the previous three-month period, and accounted for roughly 22 percent of all residential sales.
Short sales are often less financially damaging for distressed borrowers and cost lenders less to maintain and repair. With a number of these properties being sold for well below market value, residential lending could increase if more buyers use these opportunities to make the transition to homeownership.