Quarterly Foreclosure Rate Rises for 1st Time in 3 Years

One has to hope that foreclosure datarnreported on Thursday by RealtyTrac is a sign that states are wrapping up thernforeclosure crisis that has been ongoing since 2008, not that it signalsrnfurther trouble in the housing sector. rnThe company’s U.S. ForeclosurernMarket Report for both September and the third quarter of 2014 indicate thatrnboth defaults and scheduled auctions increased in the third quarter drivingrnoverall foreclosure activity to its first quarterly increase in three years.  </p

The increase was small; overall foreclosurernfilings including default notices, scheduled auctions, and completedrnforeclosures or bank repossessions increased 0.42 percent form the secondrnquarter to a total of 317,171 and were down 16 percent from the same quarter inrn2013.  However the increases were at thernfront end of the foreclosure process.  Defaultrnnotices increased 2 percent from the second quarter and scheduled foreclosurernauctions were up 7 percent.  These werernpartially offset by a 12 percent drop in completed foreclosures.  </p

The quarterly uptick, which alsornincludes an increase in scheduled auctions compared to the third quarter ofrn2013 in 22 states, occurred even as activity in September was down 9 percentrnfrom August and 19 percent from September 2013 to the lowest level in 98 months,rna total of 106,866 filings.  Septemberrnalso marked 4 straight years when foreclosure activity declined during thernmonth when compared to the same month the previous year.</p

“Septemberrnforeclosure activity was back to pre-housing bubble levels nationwide, in largernpart thanks to a continued slide in bank repossessions,” said Daren Blomquist,rnvice president at RealtyTrac. “However, a recent rise in scheduled foreclosurernauctions in many markets across the country shows lenders are continuing tornclean house of lingering delinquent loans. This rise in scheduled auctionsrnforeshadows a corresponding rise in bank repossessions and auction sales tornthird party buyers in the coming months.” </p

Default notices were filed onrn103,179 U.S. properties in the third quarter, an increase of 2 percent from thernprevious quarter but still down 11 percent from the third quarter of 2013 – thernninth consecutive quarter where default notices have decreased on arnyear-over-year basis nationwide.</p

Foreclosure auctions (NFS, NTS) werernscheduled on 139,721 U.S. properties in the third quarter, an increase of 7rnpercent from the previous quarter but a decrease of 1 percent from the thirdrnquarter of 2013 – the 15^th consecutive quarter where scheduledrnforeclosure auctions have decreased on a year-over-year basis nationwide.</p

Lenders repossessed (REO) 74,271rnU.S. properties in the third quarter, a decrease of 12 percent from thernprevious quarter and down 38 percent from the third quarter of 2013 – the 16^{th</supconsecutive quarter where REOs have decreased on a year-over-year basisrnnationwide.</p}

States with the five highestrnforeclosure rates in the third quarter were Florida, Maryland, New Jersey,rnNevada, and Illinois.  Despite continuingrnto be the number one state for foreclosure the activity in that state is waning.  Filings were down 4 percent from the secondrnquarter and 17 percent from a year earlier. rnThe situation in Maryland and New Jersey however continues torndeteriorate.   Filings in the thirdrnquarter increased in Maryland on a year-over-year basis for the ninthrnconsecutive quarter and in New Jersey for the 10^th.  Nevada and Illinois saw activity down 41rnpercent and 20 percent respectively from the third quarter of 2013. </p

U.S. properties foreclosed in thernthird quarter of 2014 were in the foreclosure process an average of 615 days,rnup 7 percent from the previous quarter and up 13 percent from the third quarterrnof 2013 to the longest average time to foreclose since RealtyTrac beganrntracking in the first quarter of 2007.       rnStates with the longest average time to foreclose in the third quarter were NewrnJersey (1,064 days), Florida (951 days), Hawaii (937 days), New York (902 days)rnand Illinois (889 days).

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