Foreclosure Inferno Contained, but Dangerous Flare-ups Still Popping Up: RealtyTrac
Foreclosure activity blipped up slightly
in February but continues to recede on a year over year basis. RealtyTrac, the Irvine California firm that
tracks legal filings for the process, reported this morning that default
notices, scheduled auctions, and bank repossessions or foreclosure sales were
reported on 154,281 U.S. properties in February, one in every 849 U.S. housing
units. This was an increase of 2 percent
from January but was 25 percent below the level in February 2012.
"At a high level the U.S. foreclosure inferno
has been effectively contained and should be reduced to a slow burn in the next
two years," said Daren Blomquist, vice president at RealtyTrac. "But dangerous
foreclosure flare-ups are still popping up in states where foreclosures have
been delayed by a lengthy court process or by new legislation making it more
difficult to foreclose outside of the court system. Foreclosure starts have
been steadily building in those states over the last several months and likely
will end up as bank repossessions or short sales later this year.
"These new foreclosure hot
spots include states like Washington, where seven straight months of rising
foreclosure activity pushed the state's foreclosure rate to fifth highest
nationwide -the highest it's ever been in our report - and Maryland, where
eight straight months of rising foreclosure activity placed the state's
foreclosure rate among the top 10 nationwide for the first time since July
2010," Blomquist noted.
Foreclosure starts jumped 10 percent
in February after three straight months in which they declined but were 25
percent below starts one year earlier.
Bank repossessions were down 11 percent month-over-month to the lowest
level since September 2007 and were 29 percent lower than one year earlier.
As Blomquist noted, the foreclosure
story in the U.S. is now a state-by-state one and the list of troubled states
are not necessarily the usual suspects from the last seven years. There were huge annual jumps in foreclosure
starts in perpetually troubled Nevada (up 334 percent), New York (139 percent)
and New Jersey (70 percent) but Maryland which is not a familiar name on
RealtyTrac reports was up 319 percent year over year.
Ohio is another state with emerging
problems. Overall foreclosure activity
increased by 26 percent in February and was up 12 percent from the previous
year and the state is now in fourth place nationally. Activity there has increased on an annual
basis in 11 of the last 13 months.
Washington State saw its seventh
straight month of increased activity on an annual basis. There were 4,362 filings in the state, one in
every 656 housing units, in February, a 123 percent increase from February 2012
and, as noted, the state is now fifth in the nation for foreclosure activity.
In other states the foreclosure epidemic
is merely continuing. Florida posted the nation's highest state foreclosure
rate for the sixth consecutive month in February, reporting one in every 282
housing units with a foreclosure filing during the month. In Nevada, with foreclosure starts at a
17-month high the state remained the second highest state for overall filings
for the fifth month in a row following nearly five years in the top spot. One in every 320 units in the state had a
filing in February.
Despite the third straight
month-over-month decrease in foreclosure activity, Illinois posted the nation's
third foreclosure rate for the second month in a row. A total of 12,671
Illinois properties, one in every 417, had a foreclosure filing in February,
down 10 percent from the previous month and down 5 percent from February 2012.
There were improvements in bank
repossessions in 32 state compared to a year ago with big improvements in Oregon
(down 78 percent), Massachusetts (down 69 percent), Nevada (down 59 percent),
Georgia (down 58 percent), and California (down 49 percent).
Although California foreclosure
starts rebounded 47 percent in February from an 88-month low in January,
overall foreclosure activity in the state was down from a year ago for the 15th
straight month, dropping the foreclosure rate down to No. 13 nationwide.
February was the first month since December 2006 where the California
foreclosure rate was not ranked among the top 10 state foreclosure rates