Posts filed under “Foreclosures”
Second Quarter Foreclosure Starts Increase Annually For First Time Since Q4 2009
California Foreclosure Starts Jump in June, Giving It Highest State Foreclosure Rate
IRVINE, Calif. – July 12, 2012 – RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its Midyear 2012 Foreclosure Market Report, which shows a total of 1,045,801 U.S. properties with foreclosure filings — default notices, auction sale notices and bank repossessions — in the first half of 2012, a 2 percent increase from the previous six months but still down 11 percent from the first half of 2011.
The report also shows that 0.79 percent of all U.S. housing units (one in 126) had at least one foreclosure filing in the first six months of the year.
High-level findings from the report
- First-half foreclosure activity did increase from a year ago in 20 states, including Indiana (32 percent), Pennsylvania (24 percent), South Carolina (23 percent), Connecticut (23 percent), Florida (23 percent), and Illinois (22 percent).
- Overall foreclosure activity was down in the second quarter, driven primarily by a drop in bank repossessions (REOs), but 311,010 properties started the foreclosure process during the quarter, a 9 percent increase from the previous quarter and a 6 percent increase from the second quarter of 2011 — the first year-over-year increase in quarterly foreclosure starts since the fourth quarter of 2009.
- A total of 31 states posted year-over-year increases in foreclosure starts in the second quarter — 17 judicial foreclosure states and 14 non-judicial foreclosure states.
- Overall foreclosure activity in June decreased on a year-over-year basis for the 21st consecutive month, but foreclosure starts for the month increased annually for the second consecutive month.
- An 18 percent year-over-year increase in California foreclosure starts in June helped boost that state’s foreclosure rate to highest nationwide for the month. It was the first month California’s foreclosure rate ranked No. 1 since RealtyTrac began issuing its report in January 2005.
“Additional scrutiny on how lenders and servicers process foreclosures, along with aggressive foreclosure prevention efforts by the federal government and several state governments, continue to keep a lid on the foreclosure problem at a national level,” said Brandon Moore, CEO of RealtyTrac. “Still, foreclosure starts began boiling over in more markets in the first half of the year, particularly in the second quarter, when rising foreclosure starts spread from primarily judicial foreclosure states in the first quarter to more than half of all non-judicial foreclosure states in the second quarter.
“Lenders and servicers are slowly but surely catching up with the backlog of delinquent loans that under normal circumstances would have started the foreclosure process last year, and that catching up is why the average time to complete the foreclosure process started to level off or decrease in some states in the second quarter,” Moore added. “The increases in foreclosure starts in the first half of the year will likely translate into more short sales and bank repossessions in the second half of the year and into next year.”
Nevada, Arizona, Georgia post top state foreclosure rates in first half of 2012
Despite a 61 percent year-over-year drop in foreclosure activity, Nevada posted the nation’s highest foreclosure rate in the first half of 2012: 1.76 percent of all housing units with a foreclosure filing (one in 57). A total of 20,618 Nevada properties had at least one foreclosure filing during the first half of 2012, down 43 percent from the previous six months. Nevada foreclosure starts increased 61 percent from the first quarter to the second quarter, indicating lenders there are beginning to adjust to a new law that took effect in October 2011 and requires additional documentation to initiate the foreclosure process.
Arizona foreclosure activity in the first half of 2012 decreased 37 percent from the same time period in 2011, but the state still documented the nation’s second highest foreclosure rate: 1.73 percent of housing units with a foreclosure filing (one in 58). A total of 49,157 Arizona properties had at least one foreclosure filing during the six-month period, down 6 percent from the previous six months. Second quarter foreclosure starts in Arizona increased 11 percent from the first quarter of 2012, but were still down 14 percent from the second quarter of 2011.
Georgia foreclosure starts in the second quarter increased 5 percent from the previous quarter and were up 23 percent from a year ago, helping the state post the nation’s third highest foreclosure rate in the first half of the year. During the first six months of 2012, a total of 65,342 Georgia properties had at least one foreclosure filing, a foreclosure rate of 1.60 percent of housing units (one in 63).
California registered the nation’s fourth highest state foreclosure rate in the first half of 2012, with 1.56 percent of housing units with a foreclosure filing, and Florida registered the nation’s fifth highest state foreclosure rate, with 1.55 percent of housing units with a foreclosure filing.
Other states with foreclosure rates among the 10 highest nationwide in the first half of 2012 were Illinois (1.40 percent of housing units with foreclosure filing), Michigan (1.02 percent), Colorado (0.97 percent), Ohio (0.94 percent), and Utah (0.93 percent).
Foreclosure process lengthens nationwide, down in some key states
U.S. properties foreclosed in the second quarter were in the foreclosure process an average of 378 days from the initial foreclosure notice to the completed foreclosure, up from 370 days in the first quarter and a record high going back to the first quarter of 2007.
Although the average time to foreclose increased nationwide, it was down in some of the states with the longest foreclosure timelines. The average time to foreclose in New York decreased from 1,056 days in the first quarter to 1,001 days in the second quarter, a 5 percent drop — although the state still maintained the longest time to foreclose nationwide.
The average time to foreclose decreased 3 percent in New Jersey, the state with the second longest foreclosure process, and was down 1 percent in Pennsylvania, the state with the seventh longest time to foreclose.
Bank-owned (REO) properties that sold in the second quarter took an average of 195 days to sell from the time they were foreclosed, up from 178 days in the first quarter. REO properties took the longest to sell in New York, at 430 days, followed by Arkansas at 357 days and New Jersey at 354 days.
U.S. properties in the foreclosure process that sold in the second quarter (typically short sales) took an average of 319 days to sell from the time they entered the foreclosure process, up from 306 days in the first quarter. Pre-foreclosure sales took the longest in New York, at 788 days on average, followed by New Jersey at 753 days and Connecticut at 630 days.
The RealtyTrac Midyear U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the first six months of the year. Some foreclosure filings entered into the database during the six-month period may have been recorded in previous months. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the midyear and quarterly reports, if more than one foreclosure document is received for a property during the six-month period or quarter, only the most recent filing is counted in the report. The midyear, quarterly and monthly reports all check if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report does not count the property in the current year, quarter or month.
Click to enlarge: David Wilson of Bloomberg takes a crack at the Housing turnaround story: Persistently high foreclosure rates show the U.S. housing industry is “bouncing along the bottom” even though sale prices are recovering. The chart above, via strategist Pierre Lapointe of Brockhouse & Cooper, shows the percentage of foreclosed home loans…Read More
> My Sunday Washington Post Business Section column is out. This morning, we look at how the Foreclosure machinery is creaking back to life. The basic concept is that after a year plus of voluntary foreclosure abatements, the banks are now returning to normal foreclosure processing. Here’s an excerpt from the column: “With all that…Read More
Ever since the Robo-Signing scandal erupted in October 2010, banks slowly come to realize that their practices were under ever increasing scrutiny. (I know that’s a Duh! observation for most people, but these are bankers we are discussing).
By early 2011, many of the major money center banks had slowed down their normal foreclosure machinery in a belated attempt to figure out just WTF they were doing internally. There was an attempt to identify the normal processing of defaulted mortgages and see if there was any illegal chicanery going on.
They should have asked the question in the opposite way, as in “Are we doing anything legally?”
As it turned out, an army of outside law firms and 3rd party vendors had by and large run roughshod over the existing laws and legal practices. This did not insulate the banks from the fraud; subcontracting business to felons does not insulate your organization from their illegal behavior.
Regardless, I suspect when some smart bank executive somewhere learned how rampant illegal foreclosures had become, they decided to halt the foreclosure machines altogether to clean up their own house. Contrary to appearances, not every banker is an idiot. As it turns out, its mostly the ones in positions of authority.
Fast forward to the national robo-signer
giveaway settlement. With that now behind them, the voluntary foreclosure abatements have come to an end. Thee was an 18 month period where banks had stopped actively processing these properties. That ended earlier this year. As the creaky, wheezy, inadequate machinery of processing defaulted mortgages rumbles back to life, you would expect to see signs of increasing foreclosures and distressed sales begin any day now.
Cue the RealtyTrac report:
Foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 205,990 U.S. properties in May, an increase of 9 percent from April but still down 4 percent from May 2011.
-There have been an average of 1.6 million nationwide foreclosure starts per year for the past five years.
-Foreclosure activity rose back up above the 200,000 level in May after two consecutive months below 200,000.
-Foreclosure starts nationwide increased on an annual basis after 27 consecutive months of year-over-year declines.
-Bank repossessions are still down 18% year over year. Voluntary foreclosure freezes and increasing preforeclosure sales are the primary factors reasons.
-Judicial states combined posted a 26% year-over-year increase in overall foreclosure activity while non-judicial states combined posted a 20% year-over-year decrease in foreclosure activity.
-Foreclosure starts increased on a year-over-year basis in 17 of the 26 judicial states and in 16 of the 24 non-judicial states.
Banks seem to be getting religion about doing more distressed/short sales than outright foreclosures, as they generate higher priced sales — meaning a greater recovery for the lender, and less of a writedown:
-Higher percentages of new foreclosures are likely end up as short sales or auction sales to third parties (rather than bank repossessions).
-Pre-foreclosure sales have less of a negative impact on home values than bank-owned sales, they still represent a discounted sale where a distressed homeowner is losing his or her home
-Average price of a pre-foreclosure home was more than $27,000 higher than the average price of a bank-owned home.
One last surprising factoid: Georgia now leads the nation with the highest state foreclosure rate (per capita) versus the next 4 states: Arizona, Florida, California and Nevada. Georgia’s foreclosure rate has not ranked highest in the country February 2006.
U.S. Foreclosure Activity Increases 9 Percent in May
RealtyTrac June 14, 2012
All this week, we are looking at the Housing Recovery theme, challenging assumptions that make up the bullish argument. Monday, we began with Debunking the Housing Recovery Story, starting with Shadow inventory. On Tuesday, it was Reality Check on Home Affordability. Yesterday, we looked at the Problem With Home Prices. Today in part 4, we…Read More
Interesting data points from CoreLogic: • The five states with the largest number of completed foreclosures for the twelve months ending in January 2012 were: California (155,000), Florida (86,000), Arizona (65,000), Michigan (65,000) and Texas (57,000). These five states account for 49.7 percent of all completed foreclosures nationally. • The percent of homeowners nationally who…Read More
FT Alphaville gives us the Cliff note version of the national mortgage fraud bank settlement — available in easy to follow graphic or text form: > > Here is the breakdown: Under the agreement, the five servicers have agreed to a $25 billion penalty under a joint state-national settlement structure. Nationally: • Servicers commit a…Read More
Buying foreclosures to turn them into rental properties is tricky business. Mack Companies, a Chicago real-estate firm, invests in about one out of every 40 homes it inspects. MarketWatch’s Amy Hoak looks at why some make the cut and others don’t.
Feb. 3, 2012
A modern Pecora Commission could right Wall Street wrongs Barry Ritholtz January 28 2012 ~~~ What shall we make of this surprise pronouncement in President Obama’s State of the Union address? A belated investigation has been launched into the role of fraud in the financial crisis. This much is clear: Despite rampant illegalities, bank fraud…Read More