Home foreclosure filings for May, including default notices, auction sale notices and bank repossessions, were down 6% from April but up nearly 19% from May 2008, according to a report by RealtyTrac®, the nation’s leading foreclosure property marketplace. Ten states, including the southeastern states of Florida, Georgia and Virginia, account for nearly 77% of nation’s total foreclosure activity.

“While defaults and scheduled foreclosure auctions were both down from the previous month, bank repossessions, or REOs, were up two percent thanks largely to substantial increases in several states, including Michigan, Arizona, Washington, Nevada, Oregon and New York,” said James J. Saccacio, CEO of RealtyTrac. “We expect REO activity to spike in the coming months as foreclosure delays and moratoria implemented by various state laws come to an end.”

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Home foreclosure filings for April, including default notices, auction sale notices and bank repossessions, were up less than 1% from March but 32% from April 2008, according to a report by RealtyTrac®, the nation’s leading foreclosure property marketplace.

“Total foreclosure activity in April ended up slightly above the previous month, once again hitting a record-high level,” said James J. Saccacio, CEO of RealtyTrac. “Much of this activity is at the initial stages of foreclosure – the default and auction stages – while bank repossessions, or REOs, were down on a monthly and annual basis to their lowest level since March 2008. This suggests that many lenders and servicers are beginning foreclosure proceedings on delinquent loans that had been delayed by legislative and industry moratoria. It’s likely that we’ll see a corresponding spike in REOs as these loans move through the foreclosure process over the next few months.”

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As reported this week in The New York Times, some of the housing markets where prices crashed early in the recession are showing preliminary signs of a rebound. This includes part of Florida and California, as well as the Las Vegas area:

Investors and first-time buyers, the traditional harbingers of a housing rebound, are out in force here, competing for bargain-price foreclosures. With sales up 45 percent from last year, the vast backlog of inventory has diminished. Even prices, which have plummeted to levels not seen since the beginning of the decade, show evidence of stabilizing.

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The financial industry, already struggling in light of residential foreclosures and defaulted home loans, is now starting to face a greater problem from the commercial real estate sector. According to a recent article at Bloomberg, banks are seeing significantly depressed property values on holdings and double digit decreases in rent revenues.

The country’s 10 biggest banks have $327.6 billion in commercial mortgages, which face a wave of defaults as office vacancies grow and retailers and casinos go bankrupt. A projected tripling in the default rate would result in losses of about 7 percent of total unpaid balances, according to estimates from analysts at research firm Reis Inc.

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Residential and commercial foreclosures continue to make headlines during this period of economic uncertainty. Although the federal government has made several efforts to curb residential foreclosures, there seems to be no end in sight. According to Realtytrac.com‘s October 2008 U.S. Foreclosure Market Report, foreclosure filings nationwide were up 5% from the previous month and 25% from October 2007.

Historically, foreclosed properties were difficult for the average person to purchase, largely due to the relatively limited number of properties available. However, with the recent rise in foreclosures, numerous Web sites, including RealtyTrac.com and Foreclosures.com, have been developed to assist potential investors.

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