As we previously posted, foreclosures were up when it came to judicial states, like Florida, where a judge is required to sign off on a foreclosure. Now, according to RealtyTrac, this trend of an increase in foreclosure starts continued on for the month of May. In fact, foreclosure starts across the U.S. reportedly showed a year-over-year increase for the first time in 27 straight months.
According to RealtyTrac, there was a 9.1 percent increase in foreclosure activity from April to May of this year. When breaking foreclosure activity out by type, there were increases in foreclosure starts and bank repossessions.
However, when looking at foreclosure starts, Daren Blomquicst, who is the vice president of RealtyTrac, said the prediction is that there will be more and more short sales.
In general, a short sale is when a home is sold for less than the amount that is still owed on the mortgage. In order to go through a short sale, the mortgage holder must first approve. In many cases, these lenders are approving the sales due to the fact that banks can often get a better price for a home than if it went through foreclosure and back onto the market.
Of course though, this is not the only solution for a homeowner. Another option is also a deed in lieu where the property owner agrees to sign over the home to the mortgage holder. In other cases, foreclosure may also be the best option.
For a property owner who is behind on making mortgage payments, it's important to remember that just like with bankruptcy, there are many different options and a person's individual circumstances need to be analyzed and considered before a decision is made.
Source: Reuters, "Foreclosures up for first time in 27 months," Anna Louie Sussman, June 14, 2012