More U.S. homes are entering the foreclosure process
setting the stage for a surge in repossessions by lenders
this year.

The number of homes that received notices of default
rose 7 percent in March from the previous month. That
marks the third consecutive monthly increase this year
and reflects stepped-up efforts by banks to take action
against homeowners who fail to keep up with their
monthly payments.

"We are not out of the woods yet with foreclosures,
said Daren Blomquist, a Vice President at RealtyTrac.
There are more batches of foreclosures coming through
the pipeline."

Foreclosure activity in the first quarter fell primarily in
states where the courts do not play a role in foreclosures:
Arkansas (79 percent), Nevada (62 percent) and Arizona
(21 percent).

In contrast, in many states where courts must sign off
on foreclosures saw outsized increases in foreclosures,
Indiana (45 percent), Florida (26 percent), etc.

A broker for Keller-Williams Realty in
Las Vegas, reported a total real estate owned or bank
owned inventory of 986 homes in March, a 62 percent
decrease from 2,581 a year ago. Forty percent of the
4,198 escrow closings in March were real estate owned.

Notices of default filings in Nevada have dropped since
October since the robo-signing law was passed.

"There is talk of a second wave of foreclosures but I
don't see that coming." It seems like the rush and the
bulk of foreclosures was up front. We are going to be
dealing with short sales and foreclosures for the next
ten years but I don't see them being dumped on the
market where prices drop another 20 percent."

The U.S. housing market remains weak, even after the
best winter for home sales in five years, and improved
job market. Home prices are back to 2002 levels according
to the U.S. home price index.

Banks have turned the housing inventory spigot to a
trickle following legal issues and government backlash
from the robo-signing scandal creating their own support
mechanism to help the housing recovery. "If this was a
plan to help the housing market, it worked."

Rather than a large wave of bank owned homes crashing
on the market at once, it's likely that the new crop of
foreclosures will arrive in smaller waves throughout the
year.