Lis Pendens Foreclosures Up in Birmingham, but Delinquencies Fell
Lis pendens foreclosure cases increased in Birmingham, Alabama, during February 2011, leading to a higher year-over-year foreclosure rate for the metro area. The latest data showed that the region's foreclosure rate surged during the month compared with one year ago. However, the number of delinquent homeowners fell over the same period.
The number of foreclosed homes for sale in Birmingham AL inched up in February, causing the metropolitan region's foreclosure rate to jump to 1.97%. The figure was higher than the 1.51% rate recorded in February of last year, although it represented a decline from the 2.05% rate posted in January of this year. Despite the rise in foreclosure rate, local analysts are optimistic about the market's outlook, asserting that housing will get better in the coming months.
Their optimism was caused mainly by the decline in the number of borrowers in the metro area who are in danger of losing their properties to Alabama foreclosed homes in the coming months. Delinquency rate in the region dipped in February, opening the possibility of fewer foreclosures in the near future. For February, 6.72% of mortgage holders in Birmingham were at least three months behind in their loan payments. This represents a drop from the February 2010 delinquency rate of 7.48%.
Local housing industry analysts stated that the decrease in the number of homeowners getting behind in their loan payments is a good sign for the metro area. They claimed that this could somehow ease the problem of lis pendens foreclosures in the region, particularly as foreclosures are expected to rise again within the year. They stated that this could also benefit housing prices in the coming months as huge foreclosure numbers can sink residential values.
Meanwhile, nationwide figures followed the same trend, with bank foreclosed homes for sale numbers continuing to rise, while delinquency figures continue to decline. During the month of February 2011, the national foreclosure rate was pegged at 3.61%, rising from the 3.08% rate posted during the same month of 2010. In terms of delinquency, the U.S. rate for February 2011 was 7.79%, declining from the February 2010 delinquency level of 8.5%.
Analysts stated that lis pendens foreclosures are likely to jump higher in the second half of 2011, but most of the cases will not come from delinquent homeowners but are likely to come from foreclosures that were held off the market by lenders. They stated that the documentation problem that plagued the mortgage industry last year prevented lenders from working through their foreclosure backlogs.