Foreclosures Returning To Pre-Housing Bust Levels

The number of homes lost to foreclosure is closing in on levels not seen since before the housing meltdown.

By Les Christie @CNNMoney

Foreclosure filings — including notices of default, scheduled auctions and bank repossessions — during the first quarter fell 23% from a year earlier, the lowest level since the second quarter of 2007.

Last month, banks repossessed just under 44,000 homes, within striking distance of the pre-housing bust monthly average. At the height of the housing meltdown, in September 2010, repossessions topped 100,000 a month.

“We’re getting back to normal and will be there by next year,” said Daren Blomquist, vice president at RealtyTrac.

For the past couple of years, foreclosures have been on the decline as homeowners seek alternatives like short sales, in which they sell their home for less than what they owe and the bank agrees to forgive the difference. The deals are preferred by the banks over foreclosures and have less of a negative impact on consumers’ credit scores.

But now even the need to turn to short sales is waning. These deals accounted for 10% of sales in February versus 14% a year earlier, according to the National Association of Realtors.

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