Foreclosure Home Housing & Foreclosure Reports September and Q3 2012 U.S. Foreclosure Market Report

Foreclosure Activity Drops to 5-Year Low in September

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Monthly Activity at Lowest Level Since July 2007 Led by Drops in CA, MI, GA, TX, AZ
  Lowest Quarterly Total Since Q4 2007, But Activity Increasing in FL, IL, OH, NY, NJ

IRVINE, Calif. – Oct. 11, 2012 — RealtyTrac® (www.realtytrac.com), the leading online marketplace for foreclosure properties, today released its U.S. Foreclosure Market Report™ for September and the third quarter of 2012, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 180,427 U.S. properties in September, a decrease of 7 percent from the previous month and down 16 percent from September 2011. September’s total was the lowest U.S. total since July 2007.

The decrease in September helped drop the third quarter foreclosure numbers to the lowest level since the fourth quarter of 2007. Foreclosure filings were reported on 531,576 U.S. properties during the quarter, a decrease of 5 percent from the second quarter and a decrease of 13 percent from the third quarter of 2011 — the ninth consecutive quarter with an annual decrease in foreclosure activity. The report also shows one in every 248 U.S. housing units with a foreclosure filing during the quarter.

“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.

“Meanwhile, several states where the foreclosure flow was not so dammed up last year could see a roller-coaster pattern in foreclosure activity going forward because of recent legislation or court rulings that substantively change the rules to properly foreclose,” Blomquist added. “A backlog of delayed foreclosures will likely build up in those states as lenders adjust to the new rules, with many of those delayed foreclosures eventually hitting down the road.”

Other high-level findings from the report

  • The national decrease in September and the third quarter was driven mostly by sizable decreases in the non-judicial foreclosure states such as California, Georgia, Texas, Arizona and Michigan.
  • Several judicial foreclosure states — including Florida, Illinois, Ohio, New Jersey and New York — continued to buck the national trend, registering substantial year-over-year increases in foreclosure activity in September and the third quarter.
  • U.S. foreclosure starts in the third quarter decreased both from the previous quarter and a year ago, reversing a bump in foreclosure starts in the second quarter.
  • California foreclosure starts (NOD) in September decreased 18 percent from the previous month and were down 45 percent from a year ago to a 69-month low, although the state’s foreclosure rate still ranked in the top three for the month and quarter.
  • Florida foreclosure starts (LIS) in September increased 24 percent on a year-over-year basis, the 11th consecutive month with an annual increase, and the state’s foreclosure rate ranked highest nationwide for the first time since April 2005.

Non-judicial states push national numbers lower
Of the 24 states where the non-judicial foreclosure process is primarily utilized, 20 reported annual decreases in foreclosure activity in the third quarter, including Nevada (71 percent decrease), Oregon (63 percent decrease), Utah (60 percent decrease), Virginia (34 percent decrease), California (29 percent decrease), Michigan (28 percent decrease), Arizona (23 percent decrease), Colorado (21 percent decrease), Georgia (20 percent decrease) and Texas (17 percent decrease).

Nevada, Oregon and California have all enacted legislation within the past year adding more requirements for lenders to properly foreclose, while a Georgia Court of Appeals ruling in July of this year requires lenders to provide certain information on foreclosure notices that some lenders may not have been including previously.

Washington state was one of only four non-judicial foreclosure states where foreclosure activity increased in the third quarter, up 70 percent from the previous quarter and up 15 percent from the third quarter of 2011. Washington state was one of the first non-judicial states to enact legislation impacting the foreclosure process following the so-called robo-signing controversy that came to light in October 2010. The state legislature passed a law that took effect in July 2011, requiring lenders to offer mediation to homeowners facing foreclosure.

Judicial states buck national trend
Meanwhile, third quarter foreclosure activity increased on a year-over-year basis in 14 out of the 26 states with a primarily judicial foreclosure process, including New Jersey (130 percent increase), New York (53 percent increase), Indiana (36 percent increase), Pennsylvania (35 percent increase), Connecticut (34 percent increase), Illinois (31 percent increase), Maryland (28 percent increase), South Carolina (16 percent increase), North Carolina (14 percent increase), and Florida (14 percent increase).

Some notable exceptions where foreclosure activity in the third quarter decreased on annual basis in judicial foreclosure states included Massachusetts (16 percent decrease) and Wisconsin (12 percent decrease).

Foreclosure starts reverse upward trend
First-time foreclosure starts, either default notices or scheduled foreclosure auctions depending on the state’s foreclosure process, were filed on 284,720 U.S. properties during the third quarter, an 8 percent decrease from the second quarter and also an 8 percent decrease from the third quarter of 2011.

Nationwide foreclosure starts decreased on an annual basis for the second straight month in September following three straight months of annual increases. Foreclosures were started on 87,066 U.S. properties during the month, down 12 percent from August and down 15 percent from September 2011.

September foreclosure starts decreased on an annual basis in 31 states, including California (45 percent decrease), Arizona (34 percent decrease), Michigan (22 percent decrease), Georgia (21 percent decrease) and Texas (19 percent decrease).

States with the biggest annual increases in foreclosure starts in September included New Jersey (424 percent increase), Pennsylvania (134 percent increase), New York (95 percent increase), Washington (60 percent increase) and Florida (24 percent increase).

Florida, Arizona, California post top state foreclosure rates in third quarter
Florida foreclosure activity in the third quarter increased 14 percent from a year ago, the third consecutive quarter with an annual increase and boosting the state’s foreclosure rate to highest in the nation. One in every 117 Florida housing units had a foreclosure filing in the third quarter, more than twice the national average.

Florida’s foreclosure rate also ranked highest in the nation in September, the first time since April 2005 that Florida has held the No. 1 spot. Florida foreclosure starts in September increased 24 percent from a year ago — the 11th straight month with an annual increase — and Florida bank repossessions (REO) increased 23 percent year over year — the ninth straight month with an annual increase.

Arizona REOs in September increased 2 percent from a year ago, the first year-over-year increase in Arizona REOs since November 2011, but the state’s overall foreclosure activity was down on an annual basis both in September and the third quarter thanks to big drops in foreclosure starts. Despite those decreases, one in every 125 Arizona housing units had a foreclosure filing during the third quarter — the nation’s second highest state foreclosure rate.

California also posted a foreclosure rate of one in every 125 housing units with a foreclosure filing in the third quarter, but the state’s foreclosure rate was slightly lower than that of Arizona, ranking No. 3 among all states for the quarter. A total of 109,369 California properties had foreclosure filings during the quarter, the highest of any state but still down from the previous quarter and a year ago.

California foreclosure auctions and REOs in the third quarter both increased from the previous quarter, but foreclosure starts (NODs) dropped 19 percent from the previous quarter. California foreclosure starts in September dropped to their lowest level since December 2006 — a 69-month low.

Other states with foreclosure rates ranking among the top 10 in the third quarter were Illinois (one in 126 housing units with a foreclosure filing), Georgia (one in 151), Nevada (one in 158), Ohio (one in 197), Michigan (one in 201), South Carolina (one in 215), and Colorado (one in 216).

Days to foreclose at record 382 days, legislation extends process in some states
U.S. properties foreclosed in the third quarter took an average of 382 days to complete the foreclosure process, up from 378 days in the previous quarter and up from 336 days in the third quarter of 2011. It was the highest average number of days to foreclose going back to the first quarter of 2007.

The average time to complete a foreclosure increased substantially from a year ago in several states where recent legislation and court rulings have extended the foreclosure process. These states included Oregon (up 62 percent to 193 days), Hawaii (up 62 percent to 662 days), Washington (up 62 percent to 248 days) and Nevada (up 42 percent to 520 days).

The average time to foreclose decreased from a year ago in 15 states, including Arkansas (down 49 percent to 199 days), Michigan (down 15 percent to 226 days), Maryland (down 9 percent to 541 days), California (down 8 percent to 335 days), and New Jersey (down 4 percent to 931 days).

New Jersey documented the second longest state foreclosure timeline in the third quarter behind New York, where the average time to complete a foreclosure was 1,072 days for properties foreclosed during the quarter. Florida registered the third highest state foreclosure timeline, 858 days — down slightly from 861 days in the previous quarter — and Illinois registered the fourth highest state foreclosure timeline, 673 days.

Report Methodology
The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month and quarter — broken out by type of filing. Some foreclosure filings entered into the database during a month or quarter may have been recorded in previous months or quarters. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: DefaultNotice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the quarterly report, if more than one foreclosure document is received for a property during the quarter, only the most recent filing is counted in the report. Both the quarterly and monthly reports check if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report does not count the property again in the current month or quarter.

Report License                                                                               
The RealtyTrac U.S. Foreclosure Market Report is the result of a proprietary evaluation of information compiled by RealtyTrac; the report and any of the information in whole or in part can only be quoted, copied, published, re-published, distributed and/or re-distributed or used in any manner if the user specifically references RealtyTrac as the source for said report and/or any of the information set forth within the report.

Order Customized Reports
 Detailed and historical foreclosure data used to create the above report may be purchased  through the RealtyTrac Data Licensing Department at 949.502.8300 Ext. 158. Aggregate data is available at the state, metro, county and zip code levels dating back to 2005, and address-level foreclosure records are also available historically.

About RealtyTrac Inc.                                                        
RealtyTrac (www.realtytrac.com) is the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties, along with detailed property, loan and home sales data. Hosting millions of unique monthly visitors, RealtyTrac provides innovative technology solutions and practical education resources to facilitate buying, selling and investing in real estate. RealtyTrac’s foreclosure data has also been used by the Federal Reserve, FBI, U.S. Senate Joint Economic Committee and Banking Committee, U.S. Treasury Department, and numerous state housing and banking departments, private companies and academic institutions to help evaluate foreclosure trends and address policy issues related to foreclosures.

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Media Contact:
Jennifer von Pohlmann
949.502.8300, ext. 139
jennifer.vonpohlmann@realtytrac.com

Ginny Walker
949.502.8300, ext. 268
ginny.walker@realtytrac.com

Historical & Detailed Data
Data Sales Department
800.913.0439
datasales@realtytrac.com  



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