Foreclosure filings drop for the 2nd consecutive month

The total number of households that received an auction notice in February was 308,524, meaning that one in every 408 houses faced foreclosure.

Though this number is less than 315,716 houses that received a filing in January, foreclosures have exceeded 300,000 for the 12th month consecutively.

Further, the foreclosures are up six percent compared to the same period in the previous fiscal year.

Foreclosures in various states
Nevada recorded the highest number of foreclosures for the 38th month straight. In the state, one in every 102 homes received an auction notice.

But the filings have dropped seven percent in the state compared to January, when one in 95 housing units faced foreclosure. Also, filings have fallen 30 percent compared to same period a year earlier.

The drop in the foreclosure filings in the month of February is a sign that President Barack Obama’s effort to ensure that citizens retain their homes is paying off.

Nevada was followed by Arizona and Florida. In both the states, one in every 163 households received auction notice.

California, Michigan, Utah, Idaho, Illinois, Georgia, and Maryland were among the top 10 states that received highest auction notices.

Among the metropolitan areas, Las Vegas topped the list, with one in every 90 households receiving a filing.

But this number is down nine percent from January when one in 82 households received auction notice.

Further, the total number of filings in New Jersey was 3,750. In Connecticut and New York, they totaled to 2,294 and 3,237 respectively.

Obama’s HAMP works
The drop in the foreclosure filings in the month of February is a sign that President Barack Obama’s effort to ensure that citizens retain their homes is paying off.

Under the Home Affordable Modification Program (HAMP), aimed at helping struggling households, the Obama administration has modified 116,000 mortgages permanently.

Further, there have been more than 830,000 trial loan modifications till January, the Treasury Department stated.

Filing expected to remain high
To convince economists that the economy is on the road to recovery, it is important that there is a continuous decline in foreclosure filings over the months.

But analysts believe that foreclosure filing will continue to remain high in the nation, and there is quite a possibility of many people losing their homes.

According to them, government’s $75-billion HAMP plan has failed to deal with the problem of negative equity, which occurs when the value of an asset used to secure a loan is less than the outstanding balance on the loan.