BasicGov / BLOG

RealtyTrac, an online marketplace for foreclosure properties, put out their report about foreclosures.

As reported in Business Week we are still not at the peak.

U.S. home foreclosures reached a record for the second consecutive month in May, with increases in every state, as lenders stepped up property seizures, according to RealtyTrac Inc.

Bank repossessions climbed 44 percent from May 2009 to 93,777, the Irvine, California-based data company said today in a statement. Foreclosure filings, including default and auction notices, rose about 1 percent to 322,920. One out of every 400 U.S. households received a filing.

“We’re nowhere near out of the woods,” Rick Sharga, RealtyTrac’s senior vice president for marketing, said in a telephone interview. “We’re likely to set a quarterly record for home seizures if June is anything like May.”

Almost 3.1 million properties have been seized by banks since April 2005, Daren Blomquist, RealtyTrac’s marketing communications manager, said in an interview today.

“The second quarter won’t be the peak,” Sharga said. “I’m not even sure 2010 will be.”

CNBC listed out the most impacted states …

The ten states with the highest foreclosure rates were little changed from the previous month. According to the RealtyTrac report, Nevada remains No. 1 with one in every 79 properties in the state getting a foreclosure notice, five times the national rate.

Arizona ranked second with one in every 169 households receiving a notice, followed by Florida (one in 174 households), California (one in 186 households) and Michigan (one in every 223 households.)
(See the full list in CNBC’s slideshow.)

Code enforcement software helps governments manage  property complaints from foreclosures ….

A  survey conducted last year found that the most frequent complaints related to foreclosures were:

• overgrown yards; property damage
• broken windows, gates, etc.
• garbage dumping

Survey also found that software was a good solution for cities/ towns to manage code enforcement process and help municipalities stay on top of the foreclosure property code regulations.

RealtyTrac reported today that U.S. home foreclosure filings slowed in October for a third straight month and rising unemployment will spur another record year of failing mortgages in 2010, with only marginal improvement in 2011.

Foreclosures have many casualties from individuals, homeowners, renters to entire communities.

Municipalities have seen and will continue to see a swell of citizen complaints resulting from foreclosures – vacancy and abandonment of homes when they cannot be resold.  Regulatory changes are needed but this will take time to institute.  In the meantime, municipalities have a sense of urgency to fix the economic and social impacts of foreclosures on their communities.

The Mustel/BasicGov survey revealed that they are finding ways to deal with the impact of foreclosures despite their limited resources by using code enforcement policies, assigning responsibilities and implementing technology to improve processes and efficiencies.

Read more about the Mustel/BasicGov survey findings and the impact of foreclosures on local governments.