Home Foreclosures Fall in May but Still High

Irvine, CA, June 11, 2009--Home foreclosures are still rising, but the annual increase in May was the smallest in nearly three years.

Foreclosure filings rose nearly 18 percent in May compared with the same month last year, according to RealtyTrac Inc. It was the smallest yearly gain since June 2006, and a 6 percent decline from April.

Ohio had one of the highest foreclosure rates, though filings dropped nearly 13 percent from a year ago.

However, foreclosures are likely to remain elevated this year and into 2010 as layoffs become the main reason that borrowers default on their home loans.

More than 321,000 households received at least one foreclosure-related notice in May, RealtyTrac said. That means one in every 398 U.S. homes received a foreclosure filing last month.

The mortgage industry has resumed cracking down on delinquent borrowers after foreclosures were temporarily halted by mortgage finance companies Fannie Mae and Freddie Mac and other lenders.

"It would not be a huge surprise to see the numbers level off a little bit at this point," said Rick Sharga, RealtyTrac's senior vice president for marketing.

Banks repossessed about 65,000 homes in May, up from 64,000 in April, due to big increases in several states including Michigan, Arizona and Nevada.