January may
have been the beginning of a new year, but some things never change. America
remains in the throes of a foreclosure epidemic for the fourth straight year.
There was a foreclosure filing of some type
on 261,333 U.S. properties in January, but while the numbers were still
staggering, there were some encouraging signs. Total foreclosure filings are now well below their peak levels and overall foreclosure
activity was down 17 percent from January of 2010, even though it was up 1
percent over the December numbers.
The
information comes from RealtyTrac's January U.S. Foreclosure Market Report, a
monthly compilation of data from the Irvine California firm which tracks
documents filed in all three stages of foreclosure:
- Notice of
Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a
lender that the borrower on a mortgage loan has defaulted under the terms of
their mortgage and the lender intends to foreclose unless the loan is brought
current.
- Auction - Notice
of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS): if the borrower does not
catch up on their payments the lender will file a notice of sale (the lender
intends to sell the property). This notice is published in local paper and
contains information pertaining to the date, time and subject property address.
- Real Estate
Owned or REO properties : "REO" stands for "real estate owned" and
typically refers to the inventory of real estate that banks and mortgage
companies have foreclosed on and subsequently purchased through the foreclosure
auction if there was no offer higher than the minimum bid.
The
261,000+ filings spread across these categories represent one for every 497
housing units.
Default notices, NOD or
LIS were received for a total of 75,198 properties, down one percent since
December and 27 percent from one year earlier.
This was the fourth straight month where filings in this category
declined and the lowest monthly total since July 2007.
Foreclosure auctions were scheduled on 108,002 properties, the lowest
monthly total since February 2009 and a decrease of 4 percent from December and
13 percent from January 2010.
Perhaps because of the delay caused by the moratorium on foreclosures
that had been imposed by many servicers in the fall, the number of homes that
were foreclosed and taken into bank inventory in January increased by 12 percent
over December to a total of 78,133 properties, but continuing the pattern of
substantial year-over-year decreases, were 11 percent lower than in January
2010.
While we viewed the numbers as a positive sign, RealtyTrac sees it in a
different light. According to James J.
Saccacio, chief executive officer, "We've now seen three straight months with
fewer than 300,000 properties receiving foreclosure filings, following 20
straight months where the total exceeded 300,000. "Unfortunately this is less a sign of a robust
housing recovery and more a sign that lenders have become bogged down in
reviewing procedures, resubmitting paperwork and formulating legal arguments
related to accusations of improper foreclosure processing."
For the 49th straight month Nevada had the highest
foreclosure rate in the nation, driven by bank repossessions which increased 16
percent from December. The numbers of
default notices and scheduled auctions decreased but one in every 93 housing
units in the state received a foreclosure filing in January, five times the
national average. Foreclosure activity was up 16 percent in
Arizona, again driven by bank repossessions which increased 54 percent from
December. One in every 175 housing units
in Arizona received a filing in January.
California also saw a substantial increase in REO activity, up 32
percent. One in every 200 houses was the
subject of a foreclosure filing.
The two remaining states in the top five were Idaho and Utah with one in
every 241 and one in every 265 housing units receiving a filing respectively.