To paraphrase Charles Dickens, it was the worst of times, it was, well, it really was the worst of times. Figures from RealtyTrac show that 2,871,891 U.S. properties received foreclose filings in 2010, a record and an increase of nearly 2 percent from 2009 and up 23 percent when compared with 2008.
The final figures would actually have been worse had it not been for the foreclosure moratoriums and slow-downs caused by the still-simmering robo-signing scandal. In most cases the lower figures reflect delays and deferrals, foreclosures which will proceed once paperwork issues are cleared up and added to 2011 totals.
“Total properties receiving foreclosure filings would have easily exceeded 3 million in 2010 had it not been for the fourth quarter drop in foreclosure activity — triggered primarily by the continuing controversy surrounding foreclosure documentation and procedures that prompted many major lenders to temporarily halt some foreclosure proceedings,” said James J. Saccacio, chief executive officer of RealtyTrac. “Even so, 2010 foreclosure activity still hit a record high for our report, and many of the foreclosure proceedings that were stopped in late 2010 — which we estimate may be as high as a quarter million — will likely be re-started and add to the numbers in early 2011.”
Foreclosure filings — default notices, scheduled auctions and bank repossessions — slowed in 2010. This reduction also was related to procedural and paperwork issues, matters that are likely to be resolved in 2011.
Going back to 2005, the annual totals from RealtyTrac look like this:
___ 2010 — 3,825,637 foreclosure filings — down 3.45 percent.
___ 2009 — 3,957,643 foreclosure filings — up 21 percent.
___ 2008 — 3,157,806 foreclosure filings — up 81 percent.
___ 2007 — 2,203,295 foreclosure filings — up 75 percent.
___ 2006 — 1,259,118 foreclosure filings — up 42 percent.
___ 2005 — 885,468 foreclosure filings.
In terms of percentages, foreclosure filings increased the most in 2007 and 2008. However, the number of filings topped out in 2009 and would have been higher in 2010 had it not been for a fourth-quarter slow-down caused by paperwork concerns. Looking toward 2011, many marginal borrowers have left the marketplace and as we start the new year there’s evidence of some economic improvement. That said, home prices nationwide are down 14.5 percent from the April 2007 high.
Real estate — as always — is a localized commodity. That means while national trends are significant, buyers and sellers need to watch pricing patterns in local neighborhoods and communities, patterns which may not follow national swings.
Also, before home values can generally begin to rise the enormous inventory of foreclosed and distressed properties must be reduced. Steps such as a renewal of the tax credit for first-time home buyers and efforts to bring more small investors into the marketplace should be encouraged.
RealtyTrac also reported the following results for 2010:
Highest state foreclosure rates
More than 9 percent of Nevada housing units (one in 11) received at least one foreclosure filing in 2010, giving it the nation’s highest state foreclosure rate for the fourth consecutive year despite a 5 percent decrease in foreclosure activity from 2009. Nevada foreclosure activity in December increased 18 percent from the previous month and was up 14 percent from December 2009. Fourth quarter foreclosure activity in Nevada decreased nearly 7 percent from the previous quarter but increased 19 percent from the fourth quarter of 2009.
Arizona registered the nation’s second highest state foreclosure rate for the second year in a row, with 5.73 percent of its housing units (one in 17) receiving at least one foreclosure filing in 2010, and Florida registered the nation’s third highest foreclosure rate, with 5.51 percent of its housing units (one in 18) receiving at least one foreclosure filing during the year.
Other states with 2010 foreclosure rates ranking among the nation’s 10 highest were California (4.08 percent), Utah (3.44 percent), Georgia (3.25 percent), Michigan (3.00 percent), Idaho (2.98 percent), Illinois (2.87 percent), and Colorado (2.51 percent).
California, Florida, Arizona, Illinois and Michigan account for half of national total
Five states accounted for 51 percent of the nation’s total foreclosure activity in 2010: California, Florida, Arizona, Illinois and Michigan. Together these five states documented nearly 1.5 million properties receiving a foreclosure filing during the year despite annual decreases in the three states with the most foreclosure activity.
A total of 546,669 California properties received a foreclosure filing in 2010, a decrease of nearly 14 percent from 2009 but still the largest state total. After hitting a two-year low in November, California foreclosure activity rebounded nearly 15 percent higher in December but was still down 18 percent from December 2009.
Florida posted the nation’s second biggest total in 2010, with 485,286 properties receiving a foreclosure filing — a 6 percent decrease from 2009. Florida foreclosure activity in December hit the lowest monthly level since July 2007, down 22 percent from the previous month and down nearly 54 percent from December 2009.
A total of 155,878 Arizona properties received a foreclosure filing in 2010, a 4 percent decrease from 2009 but the third biggest state total for the third straight year. Arizona foreclosure activity in December jumped nearly 31 percent higher from a 32-month low in November, but was still down nearly 33 percent from December 2009.
Illinois posted the fourth biggest state total, with 151,304 properties receiving a foreclosure filing in 2010, and Michiganposted the fifth biggest state total, with 135,874 properties receiving a foreclosure filing during the year. Foreclosure activity in both states increased about 15 percent from 2009.
Other states with 2010 totals among the 10 biggest in the country were Georgia (130,966), Texas (118,923), Ohio (108,160), Nevada (106,160), and New Jersey (64,808).