Foreclosure Filings Decline in U.S. to Lowest Since 2007
Foreclosure filings in the U.S. fell in the first quarter to their lowest level in more than four years after lenders under legal scrutiny slowed actions against delinquent homeowners, according to RealtyTrac Inc.
Default, auction and repossession notices were sent to 572,928 properties, down 2 percent from the previous three months and 16 percent from the first quarter of 2011. It was the lowest quarterly tally since the fourth quarter of 2007, the Irvine, California-based data firm said today in a statement. One in every 230 U.S. households received a filing.
“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement. “The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen.”
The five largest banks agreed Feb. 9 to a $25 billion settlement after their foreclosure practices were subjected to a 16-month probe by all 50 state attorneys general. The accord removed some barriers to property seizures and cleared the way for lender actions to resume without releasing banks from individual or class-action claims or criminal liability.
Estimates of the number of homes that will be lost to foreclosure or distressed sale range from 1.6 million currently in the pipeline -- the forecast from Santa Ana, California-based CoreLogic Inc. (CLGX) -- to 8 million homes over the next five years, according to Oliver Chang, a housing analyst with Morgan Stanley in New York.
Surge of Foreclosures
A surge of foreclosures was started between August and November of 2011, and with legal delays it now takes an average of 370 days to finish the repossession process, Daren Blomquist, a RealtyTrac spokesman, wrote in an e-mail.
“We’d expect many of those foreclosure starts from last year to become completed foreclosures around the same time period this year,” he said.
Filings totaled 198,853 in March, down 4 percent from February and 17 percent from a year earlier. It was the first time since July 2007 that the number fell below 200,000.
The largest decreases occurred in states with no court supervision of repossessions, led by Arkansas with a 79 percent decline from a year earlier and Nevada with a 62 percent drop, RealtyTrac said. Both states passed laws that “disrupted the normal foreclosure process,” according to the data firm. Filings fell 55 percent in Washington, 41 percent in Arizona, 31 percent in Texas and 21 percent in California.
States with judicial oversight of the process had increases from the first quarter of 2011, with filings rising 45 percent in Indiana, 38 percent in Connecticut and 26 percent in Massachusetts, Florida and South Carolina, RealtyTrac said. They were followed by Pennsylvania, with a 23 percent gain.
Judicial states had bigger decreases in filings last year from “artificial” delays, resulting in backlogs that are showing up in gains now, Blomquist said.
Nevada had the nation’s highest rate of foreclosure filings per household at one in 95 in the first quarter, followed by California at one in 103 and Arizona at one in 106. Georgia was fourth at one in 119, and Florida fifth at one in 123.
California led in filings with 133,245 properties receiving notices, accounting for 23 percent of the U.S. total. Florida was second at 73,344 and Illinois third at 37,660. Georgia followed at 34,234, Michigan had 27,934 and Arizona had 26,956, according to RealtyTrac, which sells default data from more than 2,200 counties representing 90 percent of the U.S. population.
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