Foreclosure activity continued to decline in November and is now down 14 percent from one year ago when one in every 492 U.S. housing units was the subject of a foreclosure filing.  In November 2011 that number dropped to one in every 579 units.  RealtyTrac reported this morning that the 224,394 filings in November also represented a 3 percent decrease from filings in October.

RealtyTrac, an Irvine California company, compiles a U.S. Foreclosure Market Report^TM each month by tracking documents filed in all three stages of foreclosure:

1.  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.

2.  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.

3.  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.

All three filing categories were lower than one year ago and the only category that increased compared to the previous month was foreclosure auctions which were scheduled on 96,540 properties during the month, an increase of 13 percent from October but down 17 percent from one year earlier.  RealtyTrac reported that this category was up more than 35 percent in several states including California where 63 percent more auctions were scheduled than in October, Washington which increased 56 percent, Ohio (+53 percent), New Jersey and New York up 44 percent and 38 percent respectively.

Default notices were filed for the first time on 71,730 properties, down 8 percent from October and 9 percent from November 2010.  

The final step in the process, repossession of the property or REO was down 17 percent from both October and from November 2010 with 56,124 properties affected.  This was the lowest level of REO activity in 44 months. 

Despite the improving numbers, which he called a seasonal slowdown, James Saccacio, co-founder of RealtyTrac said, "November's numbers suggest a new set of incoming foreclosure waves, many of which may roll into the market as REOs or short sales sometime early next year. Overall foreclosure activity is down 14 percent from a year ago, the smallest annual decrease over the past 12 months, and some bellwether states such as California, Arizona, and Massachusetts actually posted year-over-year increases in foreclosure activity in November.

"Scheduled foreclosure auctions reached a nine-month high in November, corresponding to a recent surge in default notices that began back in August," Saccacio continued. "Many of the new defaults that started the foreclosure process over the past few months are now being scheduled for public foreclosure auction."

There were few changes on the state level as Nevada led in the rate of filings for the 59^th straight month despite the impact of a new state law that alters the foreclosure process in the state.  One in every 175 housing units in the state received a foreclosure notice in November, more than three times the national average and a 3 percent increase over the 45 month low achieved in October.  The rate was still down 43 percent from one year earlier.  

Scheduled auctions were at a 10 month high in California and one in every 211 properties received some type of filing. The 63,689 filings in California represented 28 percent of the national total.

In Arizona, which consistently ranks among the top three states for foreclosure activity, filings increased on a year-over-year basis for the first time since October 2010.  One in every 256 properties received a filing in November, more than twice the national average.

The other two states in the top five for foreclosure activity were Utah, with a 74 percent increase for the month and Georgia, up 23 percent.  In Utah one in 290 units received a foreclosure notice and in Georgia the rate was one in 330 units.  

Besides California, other states with high numbers of foreclosures were Florida, Michigan, Illinois, and Georgia.