Any signs that we were seeing over the past couple of months that the economy and housing market were bottoming seem like a distant memory as data released this week shows that housing prices are continuing to fall and foreclosures are increasing at an alarming rate. March foreclosure numbers were higher than expected, leading many to believe that the growth of foreclosures would decline in April. Instead, they soared. In all, more than 1.3 million homes have been lost to foreclosure during the past 20 months.

In all, 342,000 homeowners received notices of Foreclosure during the month. That’s 1 out of every 374 homes in the country, and it represents a 1% growth from March’s dismal numbers. It was the highest monthly foreclosure rate in the past 4 years, signaling that the numbers could be further from improving than many had thought. The number of foreclosures was 32% higher than in April of 2008.

The hardest hit states were the usual suspects; California led the way, followed by Nevada, Florida, and Arizona. Las Vegas was the city most affected, with 1 in 54 homes in foreclosure.

These statistics include homes in every step of the foreclosure process, from the initial default notice to the bank finally repossessing the home. The silver lining to this story is that bank repossessions fell by 11% in April. Most of the April foreclosure filings were in the earlier stages of the process, giving homeowners some time to find a solution. Part of the reason for this is that moratoriums on foreclosures the past few months have made it hard for lenders to start the foreclosure process. Now that most of those moratoriums have expired, lenders are beginning the process with homeowners again.

Lenders are reporting that larger number of homeowners are also walking into their offices unsolicited, announcing that they can no longer make their mortgage payments and giving lenders the key and deeds to their homes. Falling home prices mean that more homeowners are underwater. As a result, equity is not available when major expenses arise and homeowners don’t feel like they’re losing anything (other than their credit score) by walking away.

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Tags: economy, foreclosures, housing market, lenders, mortgages, underwater

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