According to recent data released by RealtyTrac last week, foreclosure filings in April were higher than they were last year in New Jersey and Pennsylvania. In Philadelphia, the number of foreclosures reportedly fell around 11 percent from March, but was 24 percent higher than they were last April. The increase in foreclosures in Philadelphia has reportedly been going on for the last six months. Statewide, filings were about 4 percent higher than March and nearly 17 percent higher than last year.
Comparatively, both Pennsylvania in general and Philadelphia in particular are well below comparable metro areas in terms of foreclosures. Foreclosures in Philly are reportedly one fifth the number of Chicago and 400 less than New York. Pennsylvania ranks 28th among the states in terms of the number of foreclosure filings, making it slightly more foreclosure-prone than average.
One of the reasons behind the foreclosures is that, in Pennsylvania, foreclosures are handled in the court system, making the process less efficient. States that handle foreclosures through non-judicial means have considerably more efficient handling of foreclosures. Another factor is the increase of distressed loans being diverted into short sales, which cost lenders less money than the foreclosure process.
Sources didn’t specify whether the above numbers were for all foreclosures or merely residential real estate.
For business owners, foreclosure is a concern just as it is for residential real estate owners. Because foreclosure is costly, however, lenders may opt with other approaches if there are any better than foreclosure. Business owners who find they are facing foreclosure may choose to straighten their financial problems out by selling the real estate, working out a compromise with their lender or filing for bankruptcy. Each approach has its challenges and drawbacks, and requires a careful approach.
Source: philly.com, “Foreclosure filings up in Philadelphia region,” Alan J. Heavens, March 18, 2012