Although the national foreclosure rate continues to decrease, there are still areas of the country where foreclosure filings – including default notices, scheduled auctions and bank repossessions (REOs) – remain high, according to RealtyTrac's Midyear 2013 U.S. Foreclosure Market Report.
Foreclosure rates are not coming down as quickly in the judicial states compared to the non-judicial states, the report finds. That is mainly because of the amount of time it takes to complete the foreclosure process in those states. For example, in New York and New Jersey, it takes an average of 1,033 days to complete a foreclosure. In addition, there are certain communities and neighborhoods where the foreclosure rate remains stubbornly high for various reasons.
The report notes, however, that judicial states have been doing a good job, overall, of speeding up the process.
‘Halfway through 2013, it is becoming increasingly evident that while foreclosures are no longer a problem nationally, they continue to be a thorn in the side of several state and local markets, particularly where a backlog of delayed distress has built up thanks to a lengthy foreclosure process,’ said Daren Blomquist, vice president at RealtyTrac.
‘The increases in judicial foreclosure auctions demonstrate that these delayed foreclosure cases are now being moved more quickly through to foreclosure completion,’ he added. ‘Given the rising home prices in most of these markets, it is an opportune time for lenders to dispose of these distressed properties, either at the foreclosure auction to a third-party buyer or by repossessing the property at the auction and subsequently selling it as a bank-owned home.’
There were a total of 801,359 foreclosure filings in the first half of 2013, a 19% decrease from the previous six months and down 23% from the first half of 2012, according to RealtyTrac. Less than 1% of all U.S. housing units (one in 164) had a foreclosure filing in the first six months of the year.
For the month of June, there were 127,790 foreclosure filings, down 14% compared to May and down 35% compared to June 2012. Foreclosure starts dropped 21% compared to May and dropped 45% compared to May 2012.
RealtyTrac is forecasting that foreclosures will total about 800,000 for 2013, down from 1.1 million last year.
There were 409,491 foreclosure starts recorded from Jan. 1 to June 30, according to the report.
REOs are also on the decline, having dropped 9% from May to June and 35% from June 2012. A total of 248,538 REOs were completed in the first half of this year.
RealtyTrac forecasts REOs will reach nearly 500,000 for the year, down from more than 671,000 in 2012.
To check out the full report, click here.