A foreclosure sign sits atop a for sale sign in front of a single-family home in Denver.ALEX VEIGA
LOS ANGELES (AP) – Lenders initiated foreclosure proceedings against more U.S. homeowners in May, setting the stage for increases in home repossessions and short sales – scenarios that could further weigh down home values in coming months.
Default or scheduled-home-auction notices were filed for the first time against 109,051 homes last month. That’s an increase of 12 percent from April and up 16 percent versus May last year, foreclosure listing firm RealtyTrac Inc. said Thursday.
The firm monitors documents filed on properties with mortgages that have gone unpaid. Once that process begins, homes can end up foreclosed-upon, sold at auction or via a short sale. A short sale is when the bank agrees to accept less than what the borrower owes on their mortgage.
May was the first month since January 2010 that the number of homes starting on the foreclosure path rose on an annual basis. But the trend has been visible in the monthly numbers, with four out of the first five months of this year recording increases over the preceding month.