Sandy's Potential Impact Looms over October Foreclosure Report

Parsing foreclosure data in search ofrntrends is becoming increasingly difficult as evidenced by the RealtyTrac’srnOctober U.S. Foreclosure market Report. rnBasic numbers of foreclosure related filings are getting more and morernconflated by local situations such as the type of foreclosure process followedrnin a particular state, new consumer laws, and now the impact of Hurricane Sandyrnwhich hit at the very end of the current reporting period but will apparentlyrnbe felt strongly in coming months.  </p

RealtyTrac reports that foreclosurernfilings across the three categories totaled 186,455 in October.  This is an increase of 3 percent fromrnSeptember but is 19 percent lower than one year earlier.  One in every 706 U.S. housing units receivedrna foreclosure filing during October.</p

The first tworncategories, foreclosure starts/default notices and scheduled auctions were filedrnfor the first time on 89,209 U.S. properties, a 2 percent increase fromrnSeptember but still down 19 percent from October 2011 – the third straightrnmonth with an annual decrease in foreclosure starts.</p

Lenders completed the foreclosurernprocess on 53,478 U.S. properties in October, down less than 1 percent from thernprevious month but 21 percent lower than in October 2011.  It was the 24^th straight monthrnwith an annual decrease in REO activity.</p

 “We continued to see vastlyrndifferent foreclosure trends across the country in October, depending primarilyrnon how each state’s foreclosing infrastructure was able to handle the highrnvolume of delinquent loans during the worst of the foreclosure crisis in 2010,”rnsaid Daren Blomquist, vice president of RealtyTrac.”Unfortunately the threernstates dealing with the biggest rebound in deferred foreclosure activity – NewrnJersey, New York and Connecticut – also had to deal with the devastation tornhomes inflicted by super storm Sandy. The foreclosure moratoriums being putrninto effect as a result of the storm will likely extend the already-lengthyrntime to foreclose in these states, further prolonging a fundamentally soundrnhousing recovery.”</p

In the 34 counties in Connecticut,rnNew Jersey and New York that are being given individual assistance by FEMA, arntotal of 6,380 properties had foreclosure filings in October (the storm struck thernarea on October 29) down 8 percent from September but an increase of 92 percentrnfrom October 2011.  Despite the sharprnyear-over-year increase, the foreclosure rate in those counties combined wasrnless than half the national average: one in every 1,467 housing units with arnforeclosure filing.  All three states arernjudicial foreclosure states and have had these very high inventories of homesrnin the process of foreclosure for some time and exceptionally long periods ofrndelinquency leading to those foreclosures. rnAt the end of October, total inventory of properties in some stage ofrnforeclosure or bank owned in these counties was 124,608, up 15 percent from thernprevious month and up 54 percent from October 2011. The estimated combinedrnmarket value of foreclosure inventory in the impacted counties was more thanrn$41 billion.</p

Fannie Mae owned the biggestrnpercentage of REO inventory of any lender in the impacted counties in all threernstates, with 29 percent in New York, 25 percent in New Jersey, and 22 percentrnin Connecticut. Other lenders with large percentages of REO inventory in thernimpacted counties included Wells Fargo, US BankCorp and Deutsche Bank.  </p

The three states with the biggestrnannual increases in foreclosure activity in October were again those threernstates most affected by Sandy, New Jersey (140 percent), New York (123 percent)rnand Connecticut (41 percent). Other states with sizable increases were Marylandrn(27 percent), Ohio (24 percent) and Illinois (19 percent).</p

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Florida posted the nation’s highestrnforeclosure rate for the second month in a row, with one in every 312 housingrnunits with a foreclosure filing in October, more than twice the nationalrnaverage.  It was followed by Nevada,rnIllinois, California and Arizona.

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