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While mortgage foreclosures continue to soar in many parts of the nation, filings in the Louisville area dropped 48 percent last month from the year before, a new report shows.
April's decline follows an 8 percent drop locally in the first three months of the year when compared with the same period in 2007 and is in stark contrast to last month's 65 percent national increase in foreclosure filings.
RealtyTrac, which measures foreclosure trends, said there were 288 filings in Louisville and surrounding counties in April, or one for every 1,874 households. Nationally, there was one filing for every 519 households.
But the recent Louisville-area improvement doesn't necessarily mean there will be an immediate decrease in the number of homes sold at auction.
There are still "plenty of people who need help" with their mortgages, said Jeremy T. Bowman, a real estate investor in Jeffersontown. After a homeowner receives an initial default notice, it can take six months or longer for a financial institution to repossess the property and approve the auction price.
In the meantime, investors such as Bowman say they're still doing a brisk business purchasing homes from people who can no longer afford the payments, but want to avoid the financial blemish of a foreclosure.
Still, Bowman said he has noticed fewer people responding to his marketing campaigns in recent weeks. And he noted that the slowdown coincided with the launch of several new foreclosure-prevention initiatives by Louisville metro government and nonprofit groups.
Those efforts include a local mortgage hot line, 2-1-1, that has drawn more than 1,500 unique callers since its launch in mid-February. Metro government also is granting emergency loans to distressed homeowners, and city spokesman Matt Stull said a public forum planned for June 11 will connect homeowners with the institutions that service their mortgages.
In a related effort, The Housing Partnership Inc. is using nearly $1 million in federal funds to hire mortgage counselors to work with borrowers who are in trouble. Lessley Wood, manager of the nonprofit group's home mortgage loan department, said the recent decrease is a sign that the foreclosure initiatives are starting to have an impact.
The rising number of foreclosures nationally has played a key role in the housing downturn that started after the market's 2005 peak. Homes that are repossessed and sold at auctions for low prices can drag down property values and make it more difficult to sell nearby properties. And because the legal process can take so long to play out, foreclosed homes often sit empty for months.
The RealtyTrac figures for April show Kentucky was 43rd in the rate of foreclosure filings among states, with one for every 3,710 households. Indiana was 11th, with one filing for every 544 households. Nine of the top 10 metro areas were in California and Florida.
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