Foreclosure activity in September was up
2 percent from August, RealtyTrac said today, but the third quarter saw the
lowest level of foreclosure related filings since the financial crisis
began. The company's U.S. Foreclosure Market ReportTM covering the two periods
showed 131,232 filings in September including default notices, scheduled
auctions, and bank repossessions or completed foreclosures compared to 128,560 in August, but down 27 percent from
a year before.
RealtyTrac said September was the 36th
consecutive month that filings decreased on an annual basis, a decline that
began with the robo-signing revelations in October 2010. At that time there was a near nationwide moratorium
on foreclosures after lenders and servicers were accused of improperly signing
off on legal documents.
Third quarter activity was the
lowest since the second quarter of 2007 with 376,931 filings, down 7 percent
from the second quarter and 29 percent from the same quarter in 2012. One in every 348 housings units was the
subject of a filing during the quarter.
The foreclosure process was begun on
174,366 properties in the third quarter, a seven year low, 13 percent and 39
percent fewer than in the previous quarter and the previous year respectively
and the lowest level since the second quarter of 2006. Bank repossessions (REO) increased 7 percent for
the quarter with 119,485 properties taken by lenders but this number
represented a 24 percent year-over-year drop.
"The September and third quarter
foreclosure numbers show a housing market that is haltingly returning to
health," said Daren Blomquist, vice president at RealtyTrac. "In a healthy
housing market foreclosures are rare but streamlined while still protecting the
rights of the homeowner. While foreclosures are clearly becoming fewer and
farther between in most markets, the increasing time it takes to foreclose is
holding back a more robust and sustainable recovery.
As has been noted in previous
reports there some states that continue to go against the national flow in
foreclosure activity and to do so dramatically. While foreclosure starts
decreased year-over-year in the third quarter in 38 states and included
substantial decreases in many including Colorado (-71 percent), Arizona (-63
percent), California (-59 percent), Illinois (-56 percent), and Florida (-52
percent) there were 11 states in which starts rose. They skyrocketed in Maryland (+259 percent),
and Oregon (+252) and rose more than 50 percent in New Jersey and Connecticut. Likewise REO's increased in 26 states,
notably New York (+65 percent), New Jersey (+64 percent), and Illinois (+44
For September overall activity was
up in 16 states compared to the previous year, notably Maryland (+230 percent),
Nevada (+97 percent) and Connecticut (+69 percent) and in 64 metropolitan
areas, especially Baltimore (+381 percent) and Las Vegas (+109 percent).
"The sharp jumps in foreclosure
activity in some local markets may come as a surprise to some," Blomquist said.
"These spikes in activity demonstrate that while millions of distressed
homeowners have been pulled back from the precipice by foreclosure prevention
programs over the past several years, once those programs expire or are
exhausted, a percentage of these troubled homeowners are still susceptible to falling
into foreclosure. In addition even slight economic downturns at the local or
regional level can push these homeowners hanging on by a thread over the edge."
Florida continued to lead the nation
in overall foreclosure activity but filings in the third quarter were down 8
percent from a year earlier. One in every 126 housing units received a filing
during the period, more than twice the national average. Long-suffering Nevada was a close second with
a rate of one in 128 housing units. Filings
increased 10 percent from Q2 and 21 percent from a year earlier. Maryland, up 180 percent in foreclosure
activity over the year before, was third highest among the states with one in
every 204 housing units the subject of a filing during the quarter. Illinois and Ohio rounded out the top five
U.S. properties foreclosed in the
third quarter of 2013 were in the foreclosure process an average of 551 days,
up 5 percent from 526 days in the second quarter and up 44 percent from 382
days in the third quarter of 2012. New
York and New Jersey continued to have the most protracted timelines, 1,037 days
and 1,014 days respectively. Florida (929 days), Illinois (828 days) and
Connecticut (693 days) also substantially exceeded the national average. The shortest time to foreclose was in Maine,
160 days, followed by Texas, Alabama, and Virginia, all with averages under 190