Sixty-two percent of major metropolitan areas saw an improvement in foreclosure activity during the third quarter of 2012 with 141 of the nation's 212 MSAs posting lower foreclosures rates than they did during the third quarter of 2011.  According to RealtyTrac 134 or 63 percent of the MSAs showed decreased activity compared to the second quarter of 2012.  The Irvine California firm reports on MSAs with populations over 200,000.

Three of the five MSAs showing the largest decreases were in California with San Francisco leading the list at -36 percent.  Detroit (-31 percent), Los Angeles (-29 percent), Phoenix (-27 percent) and San Diego (-26 percent) were the other cities with large declines. 

The largest increases in the annual rate of foreclosures were in New York (+69 percent), Tampa (43 percent), Philadelphia (34 percent), Chicago (34 percent), and Seattle (20 percent).

"Two-thirds of the nation's largest metros posted decreases in foreclosure activity in the third quarter, indicating that most of the nation's housing markets are past the worst of the foreclosure problem" said Daren Blomquist, vice president at RealtyTrac. "In fact foreclosure activity in September 2012 was below September 2007 levels in 58 percent of the metro markets we track.

"Still, rebounding foreclosure activity in some markets remains a threat to home price stability and growth in those markets," Blomquist continued. "The rebounding foreclosure activity tends to be in markets where the foreclosure process slowed down most dramatically in the last two years, resulting in a buildup of foreclosures in limbo that lenders are finally working through this year.

Despite the improvement in its three largest cities California still has pockets of distress.  The seven highest rate of foreclosure filings in the country were in the state with Stockton at the top of the list.  Stockton's foreclosure filing decreased 21 percent on an annual basis but one of every 67 houses in the MSA received a foreclosure filing during the quarter, nearly three times the national average.  Stockton was followed by Riverside-San Bernardino (1 in 73 units), Vallejo-Fairfield (1 in 78), Modesto (1 in 79), Merced (1 in 83), Bakersfield (1 in 87) and Sacramento (1 in 96).  Rockford Illinois and Chicago each had filings on one of every 98 housing units and Miami, number 10, had a rate of 1 per 100.  Foreclosure activity rates in all seven of the California MSAs were down from a year earlier while rates in Miami and the two Illinois MSAs increased.

The top 20 MSAs in terms of foreclosure rates included six other Florida cities and additional MSAs in California.  The only cities in the top 20 outside of California or Florida were Atlanta and Phoenix at numbers 15 and 16 respectively.