Foreclosures Fall...And That's a Bad Thing?

A new report came out this week with a curious headline: "Foreclosure Activity Declines, Hurting Investors." I read it twice. You would think declines in foreclosure activity would be a good thing, that is, would help, not hurt. Not in this bizarre housing market. The report is from Foreclosure Radar, a foreclosure sales and analytics website. Foreclosure starts, the first stage in the foreclosure process, fell in April in the hardest hit states of California, Arizona and Nevada, according to Foreclosure Radar. California saw the steepest slide, with Notice of Default filings down nearly 16% from a year ago and nearly 70% from the peak in March of 2009. Foreclosure sales (sales of these properties at the courthouse steps, not sales of already bank-owned, or REO, properties) also declined, as the investor share of these purchases soared to a record high. "Nevada investors purchased more than 50% of foreclosure sales for the first time at 50.7%," according to the Foreclosure Radar report. "The low number of sales, combined with a record percent purchased on the courthouse steps, left very little to become Bank Owned (REO). This further depletes the inventory of Bank Owned homes, as REO sales continue to outpace the addition of new inventory."

Read the rest of the article at The Street