U.S. Foreclosure Filings Drop 10% as States Slow Process
U.S. foreclosure filings fell 10 percent in July from a year earlier as court rulings and new legislation slowed the process for seizing homes in some states, according to RealtyTrac Inc.
Default, auction and repossession notices were sent to 191,925 homes, or one in 686 households, the Irvine, California-based data firm said today in a statement. It was the 22nd straight decline on a year-over-year basis.
Seizing properties from borrowers behind on their mortgage payments became harder as judicial decisions and recently enacted laws gave homeowners more ways to avoid foreclosure, RealtyTrac Vice President Daren Blomquist said in the statement. An Oregon law that took effect last month, for example, grants homeowners in or at risk of default the right to request mediation, he said.
The law resulted in foreclosure filings in the state “hitting a five-year low, but we would expect the Oregon numbers to trend back higher sometime in the next several months based on the pattern we’ve seen in other states with similar legislation,” Blomquist said. Procedural changes in states such as Florida, Illinois and New Jersey produced only “a temporary foreclosure lull,” he said.
Lenders have contributed to declines in filings by approving more short sales, in which a property is sold for less than the loan balance. Those deals avert home seizures and minimize losses, RealtyTrac Chief Executive Officer Brandon Moore said on June 14. Short sales fetched $27,000 more than transactions involving bank-owned homes in the first quarter, according to the company.
Repossessions fell last month in 38 states and the District of Columbia, with 53,654 U.S. homes receiving a notice of home seizure, RealtyTrac said today. Nevada led with a 71 percent decrease from a year earlier, followed by declines of 65 percent in Virginia, 44 percent in California, 39 percent in Georgia and 35 percent in Washington state.
Nationwide, foreclosure filings of all types fell 3 percent from June. Initial notices were sent to 98,174 homes, a 6 percent decline.
States with increases in foreclosure starts were led by Connecticut, where they tripled, followed by New Jersey and Pennsylvania, where initial notices more than doubled, RealtyTrac said. They rose 83 percent in Indiana and 65 percent in Massachusetts.
California had the highest foreclosure rate, with one in 325 households receiving a notice. Filings in the most populous state fell 11 percent from June and 25 percent from a year earlier. Arizona had the second-highest rate, with one in 346 homes receiving a notice, and Florida was third at one in 352.
Filings rose more than 14 percent from a year earlier in Florida, and by almost 30 percent in Illinois. In New Jersey, they more than doubled, according to RealtyTrac.
RealtyTrac sells default data from more than 2,200 counties representing 90 percent of the U.S. population.
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