U.S. Foreclosure Filings Decline for Fourth Consecutive Month

U.S. Foreclosure Filings Decline Fourth Consecutive Month
Banks seized 78,133 homes in January, a 12 percent increase from December and an 11 percent drop from January 2010. Photographer: Jacob Kepler/Bloomberg

Foreclosure filings in the U.S. fell 17 percent in January from a year earlier, the fourth straight month of declines, as legal scrutiny of lender practices slowed actions against delinquent homeowners, RealtyTrac Inc. said.

A total of 261,333 U.S. properties received notices of default, auction or seizure, the Irvine, California-based data seller said today in a statement. One in every 497 households got a filing. It was the third consecutive month with fewer than 300,000 filings, following 20 straight months above that mark.

“Unfortunately, this is less a sign of a robust housing recovery and more a sign that lenders have become bogged down in reviewing procedures, resubmitting paperwork and formulating legal arguments related to accusations of improper foreclosure processing,” James J. Saccacio, RealtyTrac’s chief executive officer, said in the statement.

All 50 states are investigating the way lenders and loan servicers handle foreclosures after claims some were marred by faulty documentation or by “robo-signing,” the mass processing of paperwork without proper verification. The coordinated probe began in October after the biggest U.S. banks suspended some home repossessions to review their procedures. In December, filings declined 26 percent, the biggest year-over year drop in RealtyTrac data going back to January 2005.

Foreclosure filings last month rose 1 percent from December, according to RealtyTrac.

Default notices in January fell 1 percent from December and 27 percent from a year earlier to 75,198, the lowest monthly total since July 2007. Defaults have declined for 12 straight months on an annual basis, and sequentially for four months.

State Slowdowns

The slowdown was most evident in states such as Florida, where courts oversee foreclosures, RealtyTrac said. Those states had drops in defaults of 2 percent from December and 39 percent from January 2010. In non-judicial states, they rose less than 1 percent from December and declined 8 percent from a year earlier.

Auction notices fell 4 percent from the previous month and 13 percent from a year earlier to 108,002, the lowest monthly total since February 2009, according to RealtyTrac. Auctions decreased 39 percent in judicial states and 3 percent in other states.

Banks seized 78,133 homes in January, a 12 percent increase from December and an 11 percent drop from January 2010. Seizures fell 16 percent from a year earlier in judicial states and 9 percent in other states.

Nevada had the highest foreclosure filing rate for the 49th straight month -- one in 93 households, five times the national average. Home seizures in the state rose 16 percent from December.

Rise in Seizures

Arizona had the second-highest filing rate, one in 175 households, and a 54 percent increase in home seizures from December. Filings rose 16 percent from December and fell 25 percent from a year earlier.

California was third at one in 200 households. Seizures in the most populous U.S. state were up 32 percent from the previous month. Idaho had the fourth-highest rate, with one in 241 households receiving a foreclosure filing. Utah was fifth at one in 265.

Michigan, Georgia, Illinois, Florida and Colorado rounded out the top 10 highest rates.

Five states had more than half of U.S. filings in January, led by California’s 67,072, which accounted for more than a quarter of the nation’s total. After hitting a 25-month low in November, filings there have increased for two straight months.

Florida was second with 21,671 filings, declining for the fourth straight month to a 42-month low. Michigan, Arizona and Texas were third through fifth.

Las Vegas had the highest foreclosure rate of any U.S. metro area with a population of 200,000 or more. Three California cities -- Modesto, Stockton and Riverside -- were second through fourth. Reno, Nevada, ranked fifth; Vallejo and Bakersfield in California were sixth and seventh; Phoenix was eighth; and Merced and Sacramento in California were ninth and 10th.

Florida cities were absent from the top 20 in January, after accounting for nine of the top 20 a year earlier, according to RealtyTrac, which sells data from counties representing 90 percent of the U.S. population.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE