Despite Improvements, Foreclosures Still Double Pre-Crisis Pace

It continues to be clear that thernforeclosure crisis is winding down while ongoing elevated levels of mortgagerndistress mean it could be a long time before it actually ends.  CoreLogic’s April 2015 National ForeclosurernReport shows dramatic year-over-year declines in both delinquencies and completedrnforeclosures and a foreclosure inventory that has shrunk to less than a thirdrnof its peak level.  It also shows thesernstatistics remain at levels far above historic “norms.”</p

The company said that there were 40,000rncompleted foreclosures nationwide in April compared to 50,000 in April 2014, arndecline of 19.8 percent year-over-year and down 65.8 percent from the foreclosurernpeak in September 2010.  </p

The rate of completed foreclosures inrnApril was nearly identical to the previous month.  Both were reported at 40,000 althoughrnCoreLogic said there was a month-over-month decline of 1.1 percent.  As a basis of comparison completedrnforeclosures averaged 21,000 per month nationwide between 2000 and 2006.</p

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Since the financial crisis began inrnSeptember 2008, there have been approximately 5.7 million homes lost tornforeclosure nationwide and since homeownership rates peaked in the secondrnquarter of 2004 there have been approximately 7.8 million foreclosures. </p

The five states with the highest numberrnof completed foreclosures for the 12 months ending in April 2015 were: Floridarn(106,000), Michigan (49,000), Texas (33,000), Ohio (28,000) and Georgiarn(27,000). These five states accounted for almost half of all completedrnforeclosures nationally.</p

As of April 2015, the nationalrnforeclosure inventory, that is homes in the process of foreclosure, stood at approximatelyrn521,000, or 1.4 percent, of all homes with a mortgage.  In April 2014 there were 694,000 homes in therninventory, a rate of 1.8 percent.  ThernApril inventory was down by 2.2 percent from March 2015 and at a rate of 1.4rnpercent is back to early 2008 levels. </p

Four states and the District ofrnColumbia had the highest foreclosure inventory as a percentage of all mortgagedrnhomes: New Jersey (5.1 percent), New York (3.8 percent), Florida (3.1 percent),rnHawaii (2.6 percent) and the District of Columbia (2.5 percent).  The District of Columbia was also countedrnamong the five locations with the lowest number of completed foreclosures.  Black Knight Financial Services reportedrnyesterday that, at the current rate, it could take 43 years to clear thernDistrict’s backlog of distressed mortgages. </p

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CoreLogic also reports that the numberrnof mortgages in serious delinquency (defined as 90 days or more past due,rnincluding those loans in foreclosure or REO) declined by 22.1 percent fromrnApril 2014 to April 2015, with 1.4 million mortgages, or 3.6 percent of therntotal, falling into this category. This is the lowest serious delinquency raternsince February 2008. On a month-over-month basis, the number of seriouslyrndelinquent mortgages declined by 3 percent.</p

“By mid-2011, after the GreatrnRecession and at the trough of the house-price collapse, more than 1.5 millionrnhomes were in the foreclosure pipeline,” said Frank Nothaft, chiefrneconomist for CoreLogic. “Employment recovery, foreclosure alternatives,rnand home-value gains have worked to reduce this inventory. At CoreLogic, wernfound that April’s foreclosure inventory was down 25 percent from a year ago,rnfalling to one-third the mid-2011 level.”</p

“Despite a slow and steadyrnimprovement in most housing market fundamentals, too many families remain inrndefault of their mortgage obligations,” said Anand Nallathambi, presidentrnand CEO of CoreLogic. “The percent of homeowners with a mortgage that havernmissed three-or-more monthly payments or are in foreclosure proceedings droppedrnto 3.6 percent in our April data; while well below the record peak of nearly 9rnpercent and the lowest in more than seven years, it remains about double thernpre-2007 rate.”

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