FC Activity Drops, But State Laws May Be Clogging Pipelines

Posted by Orb Staff on November 12, 2009 No Comments
Categories : Mortgage Servicing

Foreclosure filings, which include default notices, foreclosure auctions and bank repossessions, were reported on 332,292 U.S. properties in October, according to RealtyTrac.

The filings total represents a 3% decrease from September but nearly a 19% increase from October 2008. One in every 385 housing units in the U.S. received a filing in October.

‘Three consecutive monthly declines is unprecedented for our report, and on first blush, an indication that the foreclosure tide may be turning,’ says James J. Saccacio, CEO of RealtyTrac. "However, the fundamental forces driving foreclosure activity in this housing downturn – high-risk mortgages, negative equity and unemployment – continue to loom over any nascent recovery. And despite all the efforts and resources directed at helping homeowners avoid foreclosure, we continue to see foreclosure activity levels that are substantially higher than a year ago in most states."

Despite a 26% decrease in foreclosure activity from the previous month, Nevada continued to document the nation's highest state foreclosure rate – one in every 80 housing units received a foreclosure filing in October. A total of 13,842 Nevada properties received a foreclosure filing during the month – a 4% decrease from October 2008 and the first ever year-over-year decrease in Nevada since RealtyTrac began tabulating the year-over-year change in January 2006.

Nevada default notices were down 10% from October 2008, and scheduled foreclosure auctions were down 6% from October 2008, while bank repossessions were up 8% from October 2008. A new foreclosure mediation program implemented by state law in July may be slowing the inflow of distressed properties into the foreclosure pipeline, RealtyTrac says.

California posted the second-highest state foreclosure rate, with one in every 156 units receiving a filing. A total of 85,420 California properties received a foreclosure filing during the month – a decrease of 1% from the previous month but still nearly 50% above the total reported in October 2008. The state's default notices and scheduled foreclosure auctions were up 120% and 73%, respectively, from October 2008, when California foreclosure activity was in the midst of a three-month trough after a law requiring lenders to give distressed homeowners extra notification before initiating foreclosure took effect in September 2008.

Florida posted the third-highest state foreclosure rate, with one in every 168 housing units receiving a foreclosure filing in October. A total of 51,911 Florida properties received a foreclosure filing during the month – a nearly 6% decrease from the previous month and a decrease of 4% from October 2008. It was the first year-over-year decrease in overall Florida foreclosure activity since July 2006.

Other states with foreclosure rates ranking among the nation's 10 highest were Arizona, Idaho, Illinois, Michigan, Georgia, Maryland and Utah.

Four states accounted for 52% of the nation's total foreclosure activity in October: California, Florida, Illinois and Michigan.

Illinois posted the third-highest state total after California and Florida, with 19,946 properties receiving a foreclosure filing in October – a 56% spike from the previous month and the highest monthly total for Illinois since RealtyTrac began issuing its report.

The state's foreclosure rate jumped from No. 11 in September to No. 6 in October, and it was the only state with a foreclosure rate in the top 10 to post a monthly increase in foreclosure activity. A recent state law that gives distressed homeowners an extra grace period to seek counseling to help avoid foreclosure may have created some pent-up foreclosure activity in the state. After the law went into effect in April, Illinois foreclosure activity decreased for three straight months before beginning to climb again.

Michigan registered the fourth-highest state foreclosure activity total, despite a nearly 2% decrease from the previous month. A total of 16,468 Michigan properties received a foreclosure filing in October – an increase of nearly 45% from October 2008.

Other states with totals among the 10 highest in the country were Nevada (13,842), Arizona (13,345), Georgia (12,468), Texas (11,798), Ohio (11,646) and New Jersey (7,435).

SOURCE: RealtyTrac

Register here to receive our Latest Headlines email newsletter




Leave a Comment