Third Quarter Foreclosure Activity Increases From Year Ago in 32 States

Bank Repossessions Up 66 Percent From Year Ago Nationwide;
Third Quarter Foreclosure Starts Down 14 Percent From Year Ago to 10-Year Low

IRVINE, Calif. – Oct. 15, 2015 — RealtyTrac® (www.realtytrac.com), the nation’s leading source for comprehensive housing data, today released its Q3 and September 2015 U.S. Foreclosure Market Report™, which shows a total of 327,258 U.S. properties with foreclosure filings — default notices, scheduled auctions and bank repossessions — in the third quarter of 2015, down 5 percent from the previous quarter but up 3 percent from the third quarter of 2014.

The annual increase in the third quarter marked the second consecutive quarter where U.S. foreclosure activity increased on a year-over-year basis following 19 consecutive quarters of year-over-year decreases.

A total of 133,811 U.S. properties started the foreclosure process in the third quarter, down 12 percent from the previous quarter and down 14 percent from a year ago to the lowest level since the third quarter of 2005.

There were a total of 123,040 U.S. properties repossessed by the lender (REOs) in the third quarter, down less than 1 percent from the previous quarter but up 66 percent from a year ago, the largest year-over-year increase in bank repossessions since RealtyTrac began tracking quarterly foreclosure activity in the first quarter of 2008.

“The widespread rise in foreclosure activity in the third quarter compared to a year ago is the result of two starkly different trends taking place,” said Daren Blomquist, vice president at RealtyTrac. “In states such as New Jersey, Massachusetts, and New York, a flood of deferred distress from the last housing crisis is finally spilling over the legislative and legal dams that have held back some foreclosure activity for years. That deferred distress often represents properties with deferred maintenance that will sell at more deeply discounted prices, creating a drag on overall home values. On the other hand, in states such as Texas, Michigan and Washington, the third quarter increases are a sign that the foreclosure market has settled into a normalized pattern close to or even below pre-crisis levels, and in those states the overall housing market should easily absorb the additional foreclosure activity with little impact on home values.”

New Jersey posts top state foreclosure rate, Florida rate drops to second highest

New Jersey foreclosure activity increased 27 percent from a year ago, boosting the state’s foreclosure rate to the nation’s highest foreclosure rate: one in every 171 housing units with a foreclosure filing during the quarter — more than twice the national average of one in every 404 U.S. housing units with a foreclosure filing during the quarter. New Jersey foreclosure starts were down 28 percent from a year ago, but scheduled foreclosure auctions increased 61 percent, and bank repossessions jumped 351 percent.

Florida foreclosure activity in the third quarter of 2015 decreased 17 percent from a year ago, but the state still posted the nation’s second highest foreclosure rate: one in every 186 housing units with a foreclosure filing. Florida foreclosure starts decreased 28 percent from a year ago, and scheduled foreclosure auctions were down 46 percent year-over-year, but bank repossessions in Florida increased 34 percent from a year ago in the third quarter.

Nevada foreclosure activity in the third quarter of 2015 increased 13 percent from a year ago, with the third highest foreclosure rate in the nation — one in every 194 housing units with a foreclosure filing. Nevada foreclosure starts decreased 14 percent from a year ago, and scheduled auctions were down 14 percent, but bank repossessions in Nevada increased 255 percent from a year ago in the third quarter.

Maryland’s foreclosure rate ranked No. 4 highest among the states despite nearly a 7 percent year-over-year decrease in foreclosure activity in the third quarter, and the Illinois foreclosure rate ranked fifth highest, despite a nearly 5 percent year-over-year decrease in foreclosure activity in the third quarter.

Other states with foreclosure rates ranking among the top 10 highest in the third quarter were South Carolina (one in 311 housing units with a foreclosure filing), New Mexico (one in every 322), Ohio (one in every 334), Georgia (one in every 337) and Indiana (one in every 353).

“We are anticipating a continued slowdown in foreclosure activity across the state in the fourth quarter. While the lower number of foreclosures is a good reflection of the growing economy and jobs across Ohio, less foreclosure activity will help lender servicers to provide quicker action on pending foreclosure accounts into their REO portfolios,” said Michael Mahon, president at HER Realtors, covering the Cincinnati, Dayton and Columbus markets in Ohio. “The growth in REO portfolios will increase the amount of available inventory for consumers looking to take advantage of low interest rates in purchasing a new home before the start of 2016.”

Atlantic City posts top foreclosure rate among metros

With one in every 97 housing units with a foreclosure filing in the third quarter, Atlantic City, New Jersey, posted the nation’s highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more.

Five Florida cities posted third quarter foreclosure rates among the 10 highest: Jacksonville, Florida at No. 2 (one in every 153 housing units with a foreclosure filing); Deltona-Daytona Beach-Ormond Beach, Florida at No. 3 (one in every 155); Tampa, Florida at No. 4 (one in every 162); Miami, Florida at No. 5 (one in every 162); Lakeland, Florida at No. 7 (one in every 176); and Ocala, Florida at No. 8 (one in every 179).

Trenton, New Jersey posted the nation’s sixth highest metro foreclosure rate: one in every 172 housing units with a foreclosure filing in the third quarter of 2015. Albuquerque, New Mexico (one in every 181) and Las Vegas, Nevada (one in every 187) take the final two top spots.

11 of nation’s 20 largest metro areas post annual increases in foreclosure activity

Eleven of the nation’s 20 largest metro areas posted a year-over-year increase in foreclosure activity in the third quarter of 2015 compared to a year ago: St. Louis, Missouri (up 113 percent), Boston, Massachusetts (up 55 percent), Dallas, Texas (up 39 percent), Detroit, Michigan (up 39 percent), New York, New York (up 33 percent), Seattle, Washington (up 14 percent), Houston, Texas (up 12 percent), Minneapolis-St. Paul, Minnesota (up 11 percent), Atlanta, Georgia (up 5 percent), Philadelphia, Pennsylvania (up 1 percent) and Washington D.C. (up 1 percent).

“It’s no surprise that foreclosure activity is up from a year ago as banks slowly, but surely, work their way through their pipeline of foreclosed inventory. It’s really nothing more than housekeeping on the part of the banks and not a cause for concern,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market. “In fact, given the dire shortage of homes for sale, I actually see an increase in foreclosures as a positive as it will, in a small way, help with meeting the substantial pent up demand that we have for housing in the Seattle market.”

Among the nation’s 20 largest metro areas, those posting the biggest decreases in foreclosure activity in the third quarter of 2015 compared to a year ago were Riverside-San Bernardino in Southern California (down 21 percent), Los Angeles, California (down 21 percent), San Diego, California (down 20 percent) and Miami, Florida (down 16 percent).

“The South Florida real estate market is back to normal after a 10 year roller coaster ride. We are seeing the remnants of the REO’s working through our ponderous judicial system and being absorbed rapidly by our strong market,” said Mike Pappas, CEO and president of the Keyes Company covering the South Florida market.

U.S. foreclosure activity increased slightly in September

A total of 109,130 U.S. properties had foreclosure filings in September 2015, down less than 1 percent from the previous month but up 2 percent from a year ago. U.S. foreclosure activity has increased on a year-over-year basis in six of the last seven months.

43,358 properties started the foreclosure process in September, the lowest level since November 2005.

States bucking the national trend with the biggest increase in foreclosure starts in September compared to a year ago included Louisiana (up 468 percent), Missouri (up 131 percent), Virginia (up 70 percent), Massachusetts (up 60 percent), and Texas (up 21 percent).

Lenders repossessed a total of 40,308 properties in September, up 10 percent from the previous month and up 76 percent from a year ago. Bank repossessions increased year-over-year for the seventh consecutive month in September.

States with the biggest increase in REOs in September compared to a year ago included Nevada (up 844 percent), New York (up 580 percent), New Jersey (up 401 percent), Georgia (up 186 percent), and North Carolina (up 183 percent).

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 quarter — broken out by type of filing. Some foreclosure filings entered into the database during the quarter may have been recorded in previous 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’s 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). The report does not count a property again if it receives the same type of foreclosure filing multiple times within the estimated foreclosure timeframe for the state where the property is located.

Special methodology note on REOs
In the first quarter of 2015, RealtyTrac started receiving REO data from a new source that provides the data more quickly in some cases than other sources. This new source may be resulting in some REOs reported by RealtyTrac in the first six months of 2015 that would have been reported in subsequent months using other sources. As always, if RealtyTrac receives an REO filing (or any other foreclosure filing type) on the same property from multiple sources, or from the same source multiple times, that REO filing is only counted in the RealtyTrac U.S. Foreclosure Market Report the first time it is received.

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About RealtyTrac
RealtyTrac is a leading provider of comprehensive U.S. housing and property data, including nationwide parcel-level records for more than 130 million U.S. properties. Detailed data attributes include property characteristics, tax assessor data, sales and mortgage deed records, distressed data, including default, foreclosure and auctions status, and Automated Valuation Models (AVMs). Sourced from RealtyTrac subsidiary Homefacts.com, the company’s proprietary national neighborhood-level database includes more than 50 key local and neighborhood level dynamics for residential properties, providing unrivaled pre-diligence capabilities and a parcel risk database for portfolio analysis. RealtyTrac’s data is widely viewed as the industry standard and, as such, is relied upon by real estate professionals and service providers, marketers and financial institutions, as well as the Federal Reserve, U.S. Treasury Department, HUD, state housing and banking departments, investment funds and tens of millions of consumers.

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