The rate of foreclosures in Missouri increased in August by 3 percent compared to July, but the state rate is down 12 percent compared to August 2011, according to Irvine, Calif.-based home sales data tracking firm RealtyTrac.
RealtyTrac released its U.S. Foreclosure Market Report for August on Sept. 11, revealing the monthly change in Missouri outpaced a relatively flat increase of 0.8 percent across the country. Foreclosure activity nationwide dipped 15 percent in August compared to the same month last year, the report said.
RealtyTrac Vice President Daren Blomquist said a 3 percent increase in foreclosures in Missouri is not alarming, considering the larger downward trend since 2010.
“(Missouri) is basically in the middle of the pack when it comes to foreclosure rates,” Blomquist said. “Its market is certainly not as impacted by foreclosures as many other states.”
Missouri ranked No. 22 in the nation for foreclosures. Illinois had the highest rate of foreclosures nationwide in August. Among Missouri’s neighboring states, only Iowa ranked higher at No. 19, and the others ranged between Nos. 24 and 41.
Blomquist said foreclosures statewide have averaged roughly 2,400 per month through the first eight months of the year. In 2010, Missouri averaged roughly 3,500 foreclosures. Historically, however, there is a lot of ground to make up. In 2005, for example, Blomquist said the average number of foreclosures in Missouri was 967 per month.
According to the market report, Greene County’s foreclosure volume was significantly below the national average. During the month of August, 11 homes, or one out of every 11,399 housing units, were foreclosed on in the county. The average rate of foreclosures in the U.S. in August was one out of every 681. In August 2011, Greene County had 110 foreclosures, according to RealtyTrac.
RealtyTrac’s August numbers appear to be a fluke based on recent history. According to legal notices publisher The Daily Events, foreclosure auctions in Greene County increased by 15 percent in the second quarter, the most recent data available, landing at 473 April–June compared to 410 in the second quarter of 2011.
RealtyTrac data shows St. Louis County with the highest number of foreclosures in the state in August with 675, or one out of every 649 housing units. Jackson County was second with 637 foreclosures, or one out of every 490 housing units. St. Charles County had the highest per capita rate of foreclosures: 1:480.
Candy Turnbull, a real estate agent at Carol Jones, Realtors who specializes in short sales, said a downward trend in foreclosures might reflect flexibility among local banks with regard to short sales.
“I have found that the banks are working closer with me and are more amicable toward doing a short sale before a foreclosure,” Turnbull said of the practice through which a home sells for less than the amount owed the bank, and the bank cut its losses.
Turnbull said her current home portfolio lists 15 out of 19 homes that would represent short sales based on their asking prices.
While one local bank has seen a significant drop in foreclosures this year, one of its officials said the decline was not due to short sales.
Guaranty Bank Senior Vice President Dana Elwell said there have been only a handful of foreclosures on the bank’s books this year compared to between 30 and 40 each year 2008–11.
“That certainly is a positive sign,” he said, acknowledging that the national downward trend is more muted.
Elwell said Guaranty Bank avoids short sales in favor of buying back homes at auction.
“It’s a little different for us as a local bank to short sale,” Elwell said, adding that those customers who pay timely may not appreciate that those who get behind on payments can get a pass on their debts.
He said national lenders are generally more receptive to short sales.
While Guaranty Bank can be outbid at auction, Elwell said it typically tries to buy back a foreclosed property at a price it is expected to generate on the market, so the bank can minimize potential losses. He said it is common for the bank to sell properties at 20 percent below appraised value and for mortgages on homes that go into foreclosure to owe at least the appraised value.
“When we bid at a foreclosure sale is when we take our loss. Our hope is that we bid it appropriately at the foreclosure sales, so that we can at least break even at that point,” Elwell said. “Our intent is to sell them for as much as we can as fast as we can.”
While the foreclosure trend is down overall, RealtyTrac’s Blomquist said he expects total foreclosures to increase slightly in the coming months.
“The one thing that does stand out with Missouri’s numbers – and it is something we are seeing in other states – from March to July, we did see five straight months where the initial foreclosure notices increased from a year ago,” Blomquist said. “That trend did change in August.”
Blomquist said RealtyTrac data includes initial foreclosure notices – aka foreclosure starts – and the properties repossessed by lenders. While overall foreclosure activity increased by 3 percent in August, initial notices in Missouri were down 3 percent, Blomquist said.
Elwell said the overall trend toward fewer foreclosures is healthy for the real estate market.
“Hopefully, people trying to sell homes will benefit from that,” he said. “They may not recognize that now, but when they try to sell their home and there are a bunch of foreclosed homes on their block, they start to recognize the negative impact they have.”[[In-content Ad]]
