Foreclosure Problems are Increasingly Local

Foreclosure activity in September was uprn2 percent from August, RealtyTrac said today, but the third quarter saw thernlowest level of foreclosure related filings since the financial crisisrnbegan.  The company’s U.S. Foreclosure Market Report^TM covering the two periodsrnshowed 131,232 filings in September including default notices, scheduledrnauctions, and bank repossessions or completed foreclosures compared to 128,560 in August, but down 27 percent fromrna year before. </p

RealtyTrac said September was the 36^{th</supconsecutive month that filings decreased on an annual basis, a decline thatrnbegan with the robo-signing revelations in October 2010.  At that time there was a near nationwide moratoriumrnon foreclosures after lenders and servicers were accused of improperly signingrnoff on legal documents.</p}

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Third quarter activity was thernlowest since the second quarter of 2007 with 376,931 filings, down 7 percentrnfrom the second quarter and 29 percent from the same quarter in 2012.  One in every 348 housings units was thernsubject of a filing during the quarter.   </p

The foreclosure process was begun onrn174,366 properties in the third quarter, a seven year low, 13 percent and 39rnpercent fewer than in the previous quarter and the previous year respectivelyrnand the lowest level since the second quarter of 2006.  Bank repossessions (REO) increased 7 percent forrnthe quarter with 119,485 properties taken by lenders but this numberrnrepresented a 24 percent year-over-year drop. </p

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“The September and third quarterrnforeclosure numbers show a housing market that is haltingly returning tornhealth,” said Daren Blomquist, vice president at RealtyTrac. “In a healthyrnhousing market foreclosures are rare but streamlined while still protecting thernrights of the homeowner. While foreclosures are clearly becoming fewer andrnfarther between in most markets, the increasing time it takes to foreclose isrnholding back a more robust and sustainable recovery.</p

As has been noted in previousrnreports there some states that continue to go against the national flow inrnforeclosure activity and to do so dramatically. While foreclosure startsrndecreased year-over-year in the third quarter in 38 states and includedrnsubstantial decreases in many including Colorado (-71 percent), Arizona (-63rnpercent), California (-59 percent), Illinois (-56 percent), and Florida (-52rnpercent) there were 11 states in which starts rose.  They skyrocketed in Maryland (+259 percent),rnand Oregon (+252) and rose more than 50 percent in New Jersey and Connecticut.  Likewise REO’s increased in 26 states,rnnotably New York (+65 percent), New Jersey (+64 percent), and Illinois (+44rnpercent).</p

For September overall activity wasrnup in 16 states compared to the previous year, notably Maryland (+230 percent),rnNevada (+97 percent) and Connecticut (+69 percent) and in 64 metropolitanrnareas, especially Baltimore (+381 percent) and Las Vegas (+109 percent).  </p

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“The sharp jumps in foreclosurernactivity in some local markets may come as a surprise to some,” Blomquist said.rn”These spikes in activity demonstrate that while millions of distressedrnhomeowners have been pulled back from the precipice by foreclosure preventionrnprograms over the past several years, once those programs expire or arernexhausted, a percentage of these troubled homeowners are still susceptible to fallingrninto foreclosure. In addition even slight economic downturns at the local orrnregional level can push these homeowners hanging on by a thread over the edge.”</p

Florida continued to lead the nationrnin overall foreclosure activity but filings in the third quarter were down 8rnpercent from a year earlier. One in every 126 housing units received a filingrnduring the period, more than twice the national average.  Long-suffering Nevada was a close second withrna rate of one in 128 housing units.  Filingsrnincreased 10 percent from Q2 and 21 percent from a year earlier.  Maryland, up 180 percent in foreclosurernactivity over the year before, was third highest among the states with one inrnevery 204 housing units the subject of a filing during the quarter.  Illinois and Ohio rounded out the top fivernstates.  </p

U.S. properties foreclosed in thernthird quarter of 2013 were in the foreclosure process an average of 551 days,rnup 5 percent from 526 days in the second quarter and up 44 percent from 382rndays in the third quarter of 2012.  NewrnYork and New Jersey continued to have the most protracted timelines, 1,037 daysrnand 1,014 days respectively. Florida (929 days), Illinois (828 days) andrnConnecticut (693 days) also substantially exceeded the national average.  The shortest time to foreclose was in Maine,rn160 days, followed by Texas, Alabama, and Virginia, all with averages under 190rndays.

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