The flow of homes into the foreclosure pipeline is slowing in five Western states tracked by ForeclosureRadar.com, but lenders are also canceling fewer foreclosures once they’re under way.
The number of foreclosure proceedings initiated by lenders dropped from April to May in California, Arizona, Nevada, Oregon and Washington. At the other end of the pipeline, only California saw bank repossessions and sales to third parties increase in May.
Third-party investors in all five states needed less time to sell foreclosed homes they’d bought at auction, a sign that the slowing foreclosure process has left fewer affordable homes available for sale, said ForeclosureRadar CEO Sean O’Toole.
Shorter turnaround times for investors may be partially due to seasonal spring selling activity, but "we think it has more to do with an overall lack of quality, affordable homes for sale," O’Toole said. "Investors far better fill this need than banks, who put little into cleaning up their properties before sale, or nondistressed homeowners, who are often not motivated to sell at prices homebuyers can now realistically afford."