There was a host of encouraging news in the National Foreclosure Report for February released by CoreLogic this morning. Foreclosures, the foreclosure inventory, and the pipeline clearing ratio all posted improving numbers. At the same time the numbers of lender owned properties (REOs) and serious delinquencies were up compared to January figures.
There were 65,000 completed foreclosures in February, 1,000 fewer than in January. In February 2011 completed foreclosures numbered 71,000. During the 12 months ending in February there were 862,000 foreclosures nationwide, an average of 71,800 per month. Of the top 100 core-based statistical areas (CBSAs) tracked by CoreLogic, 61 had lower foreclosure rates than one year earlier.
There were 1.4 million homes in the process of foreclosure - the foreclosure inventory - in February compared to 1.5 million in February, 2011 and 1.4 million in January 2012. These figures represent 3.4 percent of all homes with a mortgage in January and February 2012 and 3.6 percent in February, 2011. Mark Fleming, chief economist for CoreLogic said that even though the pace of foreclosures is down, the inventory continues to decrease partially because distressed real estate sales (i.e. short sales) are increasing. "With the spring buying season upon us, the inventory may decline further as the pace of distressed-asset sales rises along with the rest of the housing market."
"In February, more than 60 major markets saw a decrease in their foreclosure rates compared to a year ago," said Anand Nallathambi, president and CEO of CoreLogic. "This combined with faster REO-clearing rates, better employment news, and continued historically low interest rates are all positive signs of improvement in the housing economy."
The number of seriously delinquent borrowers, those 90 or more days late on their mortgage payment, inched up from 7.2 percent to 7.3 percent from January to February but remained well below the 7.8 percent rate February 2011.
REO grew faster in February 2012 than the pace of REO sales, as measured by the distressed clearing ratio. The distressed clearing ratio is calculated by dividing the number of REO sales by the number of completed foreclosures; the higher the ratio, the faster the pace of REO sales relative to the pace of completed foreclosures. The distressed clearing ratio for February 2012 was 0.73, up from 0.66 in January 2012.
California, Florida, Michigan, Arizona, and Texas were the top five states in the number of completed foreclosures during the 12 months ending in February. Together they accounted for 49.4 percent of all completed foreclosures during the period.
Florida, New Jersey, Illinois, Nevada, and New York had the highest foreclosure rates, ranging from 12.0 percent in Florida to 4.9 percent in New York.
From the start of the financial crisis in September 2008, there have been approximately 3.4 million completed foreclosures.