Home Seizures in U.S. Decline 9% as States Probe Foreclosures
Iowa Attorney General Tom Miller
Iowa Department of Justice via Bloomberg
Iowa Attorney General Tom Miller, leader of the investigation, said the probe is on a “fast track” and may lead to multiple settlements.
Iowa Attorney General Tom Miller, leader of the investigation, said the probe is on a “fast track” and may lead to multiple settlements. Source: Iowa Department of Justice via Bloomberg
Nov. 10 (Bloomberg) -- Stan Humphries, chief economist at Zillow Inc., talks about U.S. home prices and the outlook for the housing market. Humphries speaks with Carol Massar and Matt Miller on Bloomberg Television's "Street Smart." (Source: Bloomberg)
Home seizures in the U.S. fell 9 percent in October from the previous month, the biggest decline in a year, as attorneys general began a nationwide probe into lender foreclosure practices, according to RealtyTrac Inc.
The number of properties taken back by banks fell to 93,236 last month from a record 102,134 in September, the Irvine, California-based data seller said today in a report. Foreclosure filings, which also include default and auction notices, fell 4 percent from the previous month to 332,172 and were little changed from a year earlier. One in 389 households got a filing.
Top legal officers in all 50 states began a coordinated inquiry on Oct. 13 into whether banks and loan servicers used false documents and signatures on hundreds of thousands of foreclosures in a process known as “robo-signing.” The probe is on a “fast track” and may lead to multiple settlements, Iowa Attorney General Tom Miller, the leader of the investigation, said in an interview this week.
Foreclosures last month “probably would have been higher except for the fallout from the recent ‘robo-signing’ controversy,” RealtyTrac Chief Executive Officer James J. Saccacio said in a statement. The probes are likely to result in further declines in home seizures in November, he said.
Bank of America Corp., the largest U.S. lender, temporarily halted repossessions nationwide as it reviewed processes, while JPMorgan Chase & Co. and Ally Financial Inc.’s GMAC unit froze home seizures in states where courts oversee foreclosures.
Home Sales
A prolonged decline in repossessions threatens to hurt U.S. home sales. Almost a third of all transactions in September involved distressed properties, according to RealtyTrac.
House sales fell 21 percent in the third quarter from a year earlier and 25 percent from the previous three months, the National Association of Realtors said today in a report. Half of U.S. metropolitan areas had price declines, with the national median declining 0.2 percent from a year earlier to $177,900.
In Florida, the state with the second-highest rate of filings, completed foreclosure cases in the 17th Judicial Circuit fell to 310 in the week of Oct. 4 from 955 the prior week because of the moratoriums, Chief Judge Victor Tobin said in a telephone interview. The pace may return to pre-review levels after lenders improve procedures, he said.
“I anticipate within three to four weeks it will pick back up,” said Tobin, whose circuit includes Broward County, home of Fort Lauderdale.
‘Enhanced Procedures’
PNC Financial Services Group Inc. now has “enhanced procedures” to process home seizures, the Pittsburgh-based lender said Nov. 9. PNC, the sixth-largest U.S. bank by deposits, stopped sales of foreclosed homes last month as investors showed concern about buying mortgage assets, Chief Financial Officer Richard J. Johnson said last week.
Home repossessions reached records in four of the last seven months as banks accelerated actions against delinquent homeowners, according to RealtyTrac. The October seizures were up 21 percent from a year earlier.
The month-over-month decline was the largest since October 2009, RealtyTrac said. Repossessions fell on a monthly basis in 33 states, while 14 states showed year-over-year declines.
Default notices, the first stage of foreclosure, were sent to 100,575 properties last month, down 2 percent from September and 19 percent from a year earlier, RealtyTrac said. They fell in California, Nevada and Michigan on a monthly basis while rising in Florida, Ohio and Illinois.
Foreclosure Auctions
Foreclosure auctions, the second stage in the process, were scheduled on 138,361 properties in October, down 3 percent from September and up 6 percent from a year earlier. Auctions decreased from the previous month in 26 states and the District of Columbia.
Nevada had the highest foreclosure filing rate at one in every 79 households, almost five times the national average. A total of 14,205 homes in the state received filings, down 13 percent from September and up 3 percent from a year earlier.
One in 155 Florida households received a filing. Arizona ranked third at one in 165. Other states with the 10 highest rates were California, Michigan, Utah, Georgia, Idaho, Illinois and Colorado.
The Las Vegas-Paradise, Nevada, area had the highest foreclosure rate among major metropolitan regions, with one in 70 households receiving a filing in October. It was followed by Cape Coral-Fort Myers, Florida, at one in 96.
California Leads
Five states accounted for more than half of all U.S. filings, led by California’s 66,475, a fifth of the national total. Filings in the most populous state were down 12 percent from September and 22 percent from a year earlier.
Florida ranked second with 56,858 filings, down 4.5 percent from September and up 9.5 percent from October 2009, RealtyTrac said. Michigan was third at 19,288, down 12 percent from September and up 17 percent from a year earlier.
Illinois had 16,969 filings and Arizona had 16,538. Georgia, Nevada, Ohio, Texas and Washington rounded out the top 10, according to RealtyTrac, which sells default data from counties representing 90 percent of the U.S. population.
To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net.
To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net
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