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Despite signs of foreclosure activity, real estate confident surges

Mar 16, 2012 Walt Wojciechowski

Foreclosure activity in the U.S. was down slightly in February, but the pace of recovery appears to be slowing. Debt collection services and alternative credit providers may need to pay close attention to how household debt impacts their revenues streams in coming months. According to the February U.S. Foreclosure Market Report from RealtyTrac, foreclosure filings were reported on 206,900 U.S. properties last month. That figure marks a 2 percent decrease from the previous month and an 8 percent decline from the same period in 2011. However, the year-over-year shift is the lowest its been since October 2010. Brandon Moore, CEO of RealtyTrac, argued that last month's figures point to a gradual return of foreclosure activity as some of the barriers that had been holding back foreclosures have been removed. In total, 21 states reported year-over-year gains in foreclosure activity, the most states with annual increases since November 2010. "The foreclosure and mortgage settlement filed in court earlier this week will help pave the way to a properly functioning foreclosure process by providing a clear roadmap for necessary foreclosures," Moore added. "That should result in more states posting annual increases in the coming months." Unsurprisingly, states with more bureaucratic foreclosure procedures tended to post the biggest annual gains for February. This resulted in a larger backlog of foreclosures built up over the last 18 months. The report comes even as signs point to swelling of homeowner confidence. Another survey released this week by Prudential Real Estate, 60 percent of surveyed Americans have favorable views of the real estate market, up from 52 percent last year. An overwhelming majority of respondents - 96 percent - agree that, with record-low interest rates, now is the time to buy. Seventy percent of Americans hold some degree of confidence that property values will improve over the next two years, up from 62 percent in last year's survey. "Respondents told us what our sales professionals see every day that, despite recent market volatility, homeownership remains integral to the dreams of most Americans and that consumers' confidence in the housing market is returning," said Earl Lee, president of Prudential Real Estate.