Second QuarterForeclosure Starts Increase Annually For First Time Since Q42009
California Foreclosure StartsJump in June, Giving It Highest State Foreclosure Rate
IRVINE,Calif. – July 12, 2012 – RealtyTrac® (www.realtytrac.com), theleading online marketplace for foreclosure properties, today released itsMidyear 2012 Foreclosure Market Report, which shows a total of 1,045,801 U.S.properties with foreclosure filings — default notices, auction sale notices andbankrepossessions — in the first half of 2012, a 2 percent increase fromthe previous six months but still down 11 percent from the first half of 2011.
The report also shows that 0.79 percent of all U.S. housingunits (one in 126) had at least one foreclosure filing in the first six monthsof the year.
High-level findings from thereport
- First-half foreclosureactivity did increase from a year ago in 20 states, including Indiana (32percent), Pennsylvania (24 percent), South Carolina (23 percent), Connecticut(23 percent), Florida (23 percent), and Illinois (22percent).
- Overall foreclosureactivity was down in the second quarter, driven primarily by a drop in bankrepossessions (REOs), but 311,010 properties started the foreclosure processduring the quarter, a 9 percent increase from the previous quarter and a 6percent increase from the second quarter of 2011 — the first year-over-yearincrease in quarterly foreclosure starts since the fourth quarter of2009.
- Atotal of 31 states posted year-over-year increases in foreclosure starts in thesecond quarter — 17 judicial foreclosure states and 14 non-judicial foreclosurestates.
- Overall foreclosure activityin June decreased on a year-over-year basis for the 21st consecutive month, butforeclosure starts for the month increased annually for the second consecutivemonth.
- An 18 percent year-over-year increasein California foreclosure starts in June helped boost that state’s foreclosurerate to highest nationwide for the month. It was the first month California’sforeclosure rate ranked No. 1 since RealtyTrac began issuing its report inJanuary 2005.
“Additional scrutiny on how lendersand servicers process foreclosures, along with aggressive foreclosureprevention efforts by the federal government and several state governments,continue to keep a lid on the foreclosure problem at a national level,” saidBrandon Moore, CEO of RealtyTrac. “Still, foreclosure starts began boiling overin more markets in the first half of the year, particularly in the secondquarter, when rising foreclosure starts spread from primarily judicialforeclosure states in the first quarter to more than half of all non-judicialforeclosure states in the second quarter.
“Lenders andservicers are slowly but surely catching up with the backlog of delinquentloans that under normal circumstances would have started the foreclosureprocess last year, and that catching up is why the average time to complete theforeclosure process started to level off or decrease in some states in thesecond quarter,” Moore added. “The increases in foreclosure starts in the firsthalf of the year will likely translate into more short sales and bankrepossessions in the second half of the year and into next year.”
Nevada, Arizona,Georgia post top state foreclosure rates in first half of 2012
Despite a 61 percent year-over-year drop in foreclosure activity,Nevadaposted the nation’s highest foreclosure rate in the first half of 2012: 1.76percent of all housing units with a foreclosure filing (one in 57). A total of20,618 Nevada properties had at least one foreclosure filing during the firsthalf of 2012, down 43 percent from the previous six months. Nevadaforeclosure starts increased 61 percent from the first quarter to the secondquarter, indicating lenders there are beginning to adjust to a new law thattook effect in October 2011 and requires additional documentation to initiatethe foreclosure process.
Arizonaforeclosure activity in the first half of 2012 decreased 37 percentfrom the same time period in 2011, but the state still documented the nation’ssecond highest foreclosure rate: 1.73 percent of housing units with aforeclosure filing (one in 58). A total of 49,157 Arizona properties had atleast one foreclosure filing during the six-month period, down 6 percent fromthe previous six months. Second quarter foreclosure starts in Arizona increased11 percent from the first quarter of 2012, but were still down 14 percent fromthe second quarter of 2011.
Georgiaforeclosure starts in the second quarter increased 5 percent from theprevious quarter and were up 23 percent from a year ago, helping the state postthe nation’s third highest foreclosure rate in the first half of the year.During the first six months of 2012, a total of 65,342 Georgia properties hadat least one foreclosure filing, a foreclosure rate of 1.60 percent of housingunits (one in 63).
Californiaregistered the nation’s fourth highest state foreclosure rate in the first halfof 2012, with 1.56 percent of housing units with a foreclosure filing, andFloridaregistered the nation’s fifth highest state foreclosure rate, with 1.55 percentof housing units with a foreclosure filing.
Other states withforeclosure rates among the 10 highest nationwide in the first half of 2012were Illinois (1.40 percent of housing units with foreclosure filing), Michigan(1.02 percent), Colorado (0.97 percent), Ohio (0.94 percent), and Utah (0.93percent).
Foreclosure process lengthensnationwide, down in some key states
U.S. propertiesforeclosed in the second quarter were in the foreclosure process an average of378 days from the initial foreclosure notice to the completed foreclosure, upfrom 370 days in the first quarter and a record high going back to the firstquarter of 2007.
Although the average time toforeclose increased nationwide, it was down in some of the states with thelongest foreclosure timelines. The average time to foreclose in New Yorkdecreased from 1,056 days in the first quarter to 1,001 days in the second quarter,a 5 percent drop — although the state still maintained the longest time toforeclose nationwide.
The average time to foreclosedecreased 3 percent in New Jersey, the state with the second longestforeclosure process, and was down 1 percent in Pennsylvania, the state with theseventh longest time to foreclose.
Bank-owned (REO)properties that sold in the second quarter took an average of 195 days to sellfrom the time they were foreclosed, up from 178 days in the first quarter. REOproperties took the longest to sell in New York, at 430 days, followed byArkansas at 357 days and New Jersey at 354 days.
U.S. properties in the foreclosure process thatsold in the second quarter (typically short sales) took an average of 319 daysto sell from the time they entered the foreclosure process, up from 306 days inthe first quarter. Pre-foreclosure sales took the longest in New York, at 788days on average, followed by New Jersey at 753 days and Connecticut at 630days.
The RealtyTrac Midyear U.S. ForeclosureMarket Report provides a count of the total number of properties with at leastone foreclosure filing entered into the RealtyTrac database during the firstsix months of the year. Some foreclosure filings entered into the databaseduring the six-month period may have been recorded in previous months. Data iscollected from more than 2,200 counties nationwide, and those counties accountfor more than 90 percent of the U.S. population. RealtyTrac’s reportincorporates documents filed in all three phases of foreclosure:Default — Noticeof Default (NOD) and LisPendens (LIS); Auction — Notice of Trustee Saleand Notice of Foreclosure Sale (NTS and NFS); and RealEstate Owned, or REOproperties (that have been foreclosed on and repurchased by a bank).For the midyear and quarterly reports, if more than one foreclosure document isreceived for a property during the six-month period or quarter, only the mostrecent filing is counted in the report. The midyear, quarterly and monthlyreports all check if the same type of document was filed against a propertypreviously. If so, and if that previous filing occurred within the estimatedforeclosure timeframe for the state where the property is located, the reportdoes not count the property in the current year, quarter ormonth.
The RealtyTrac U.S.Foreclosure Market Report is the result of a proprietary evaluation ofinformation compiled by RealtyTrac; the report and any of the information inwhole or in part can only be quoted, copied, published, re-published,distributed and/or re-distributed or used in any manner if the userspecifically references RealtyTrac as the source for said report and/or any ofthe information set forth within thereport.
Detailed and historical foreclosuredata used to create the above report may be purchased through theRealtyTrac Data Licensing Department at 949.502.8300 Ext. 158. Aggregate datais available at the state, metro, county and zip code levels dating back to2005, and address-level foreclosure records are also availablehistorically.
RealtyTrac (www.realtytrac.com) is theleading online marketplace of foreclosure properties, with more than 1.5million default, auction and bank-owned listings from over 2,200 U.S. counties,along with detailed property, loan and home sales data. Hosting millions ofunique monthly visitors, RealtyTrac provides innovative technology solutionsand practical education resources to facilitate buying, selling and investingin real estate. RealtyTrac’s foreclosure data has also been used by the FederalReserve, 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 trendsand address policy issues related to foreclosures.
Jennifer von Pohlmann