Foreclosure activity at lowest level since 2Q 2007
There were 117,485 foreclosure filings in March 2014, which is up 4% from February but still down 23% compared to March 2013, according to RealtyTrac’s “U.S. Foreclosure Market Report.”
RealtyTrac’s report on foreclosures — that includes default notices, scheduled auctions and bank repossessions — covers the month of March and the first quarter of 2014.
March was the 42nd consecutive month where U.S. foreclosure activity decreased from a year ago, helping to drop first quarter foreclosure activity to the lowest level since the second quarter of 2007.
“Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time,” said Daren Blomquist, vice president at RealtyTrac. “This is most evident in judicial foreclosure states that were more likely to have impediments in the foreclosure process, but there are also signs of this catch-up trend happening in some non-judicial states like California, where an increasing number of judicial foreclosure filings boosted foreclosure starts in the first quarter.”
The monthly increase in foreclosure activity was driven by a 7% month-over-month increase in foreclosure starts — the initial public notice starting the foreclosure process — and a 6% monthly increase in scheduled foreclosure auctions.
Homeowners saw lenders repossess 28,840 properties in March, down 5% from the previous month and down 34% year-over-year to the lowest level since July 2007 — an 80-month low.
About 341,670 properties had a foreclosure notice in the first quarter, down 3% from the previous quarter and down 23% from a year ago.
“Banks will also now be able to devote more resources to dealing with the lingering inventory of nearly half a million already-foreclosed homes that still need to be sold,” Blomquist continued. “Our estimates indicate only 10% of these bank-owned properties are listed for sale and more than half are still occupied by the former homeowner or tenant.”
Despite the decrease in overall foreclosure activity in the first quarter, 29 states posted annual increases in scheduled foreclosure auctions, including Utah (up 226%), Oregon (up 177%), Connecticut (up 131%), New Jersey (up 79%), Delaware (up 49%), New York (up 47%), Maryland (up 46%), Massachusetts (up 37%), Nevada (up 21%) and Florida (up 21%).
Meanwhile foreclosure starts in the first quarter increased from a year ago in 19 states, including New Jersey (up 83%), Maryland (up 43%), Indiana (up 38%), Delaware (up 24%), Connecticut (up 13%), and California (up 10%).
The increase in California was the first annual increase since the second quarter of 2012, and the first double-digit percentage increase since the fourth quarter of 2009.
RealtyTrac also included an update of occupied REOs — bank-owned properties still occupied after the completed foreclosure — in its first quarter report.
Of the 259,783 bank-owned properties with owner-occupancy data available — out of a total of 483,224 bank-owned homes nationwide — 51% were still occupied by the former homeowner or a tenant. Metros with the highest%age of occupied REOs included Nashville, Tenn. (80%), Richmond, Va. (80%), New York (73%), Houston (73%) and San Jose, Calif., (73%).
U.S. properties foreclosed in the first quarter of 2014 were in the foreclosure process an average of 572 days, up 1% from 564 days in previous quarter and up 20% from 477 days in first quarter of 2013.
“Distressed properties are not a huge part of the Southern California market at this point in time and haven’t been for quite a while,” said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market, where the average time to foreclose decreased slightly in the first quarter. “Since the market has significantly rebounded and home prices have increased, we are seeing banks moving through foreclosures at a faster pace because the current level of housing inventory can support it.”
Among the nation’s 20 largest metropolitan areas based on population, the highest foreclosure rates were in Miami, Tampa, Chicago, Riverside, Calif., and Baltimore. Foreclosure activity declined annually in 16 of the 20 largest metros, but it increased in Washington, D.C. (up 28%), New York (up 21%), Baltimore (up 19%), and Philadelphia (up 10%).