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RealtyTrac — Foreclosure Filings Dive 29%. Is Housing Back?

If we go by the numbers there’s good news on the foreclosure front.

Okay, there’s relatively good news on the foreclosure front.

Er, well, foreclosure activity is “better” in the sense of current numbers but we should be awfully concerned with what the numbers do not say.

RealtyTrac reports that foreclosure activity in the first six months fell 25 percent when compared with 2010. Still, 1.17 million homes received foreclosure filings of some sort — default notices, auction sale notices and bank repossessions. One in every 111 homes now faces foreclosure.

Looked at quarterly, the second quarter numbers were down 32 percent, the lowest level since the fourth quarter of 2007.

On a monthly basis, June foreclosure activity was down 29 percent from 2010. There were 222,740 foreclosure actions in June.

“It would be nice to report that foreclosure activity is dropping as a result of improvements in the economy or the housing market,” said James J. Saccacio, chief executive officer of RealtyTrac. “Unfortunately, with unemployment rates inching back up, consumer confidence weak and home sales and prices continuing to languish, this doesn’t appear to be the case.

“Processing and procedural delays are pushing foreclosures further and further out — we estimate that as many as 1 million foreclosure actions that should have taken place in 2011 will now happen in 2012, or perhaps even later. This casts an ominous shadow over the housing market, where recovery is unlikely to happen until the current and forthcoming inventory of distressed properties can be whittled down to a manageable number.”

Analysis

In effect, the foreclosure process is stuck in first, lurching ahead, longing for the robo-signing days when owners could be tossed out of their homes with greater speed, even if foreclosure claims were iffy or required paperwork was incorrect, missing or nonexistent.

In effect, we’re postponing foreclosures for a future day — assuming the paperwork can ever be corrected and brought up to legal standards so that foreclosures will be accurate, both lenders and owners will be protected, and property records will thus be clear and unclouded.

In Oregon, lenders have tried to resolve the paperwork mess by simply changing the law. Brent Hunsberger, writing for the Oregonian, reports that the Oregon House Judiciary Committee defeated legislation sought by loan servicers, title companies and credit unions that would have “relieved lenders of ensuring a property’s ownership history is properly recorded in public records before foreclosing outside a courtroom ” (See: MERS foreclosure amendment dies in Oregon House committee, June 1, 2011)


The RealtyTrac study also provides additional information:

Nevada, Arizona, California post top state foreclosure rates

Nearly 5 percent of all Nevada housing units (one in 21) received at least one foreclosure filing in the first half of 2011, giving Nevada the nation’s highest foreclosure rate during the six-month period despite continued decreases in foreclosure activity. A total of 53,217 Nevada properties received a foreclosure filing from January to June, a decrease of 17 percent from both the previous six months as well as from the first six months of 2010. Overall Nevada foreclosure activity decreased on a year-over-year basis for the fifth straight month in June despite a 19 percent year-over-year spike in REO activity.

Arizona registered the nation’s second highest state foreclosure rate in the first half of 2010, with 2.82 percent of its housing units (one in 36) receiving a foreclosure filing, and California registered the nation’s third highest state foreclosure rate, with 1.96 percent of its housing units (one in 51) receiving a foreclosure filing during the six months. Other states with foreclosure rates ranking among the nation’s 10 highest were Utah (1.65 percent), Georgia (1.50 percent), Idaho (1.49 ercent), Michigan (1.34 percent), Florida (1.28 percent), Colorado (1.19 percent), and Illinois (1.15 percent).

California, Florida, Arizona post highest foreclosure totals

A total of 263,500 California properties received a foreclosure filing in the first half of 2011, the nation’s highest total but down 13 percent from the previous six months and down nearly 23 percent from the first half of 2010.  California foreclosure activity decreased on a year-over-year basis for the 19th straight month in June, but default notices and REOs increased on a month-over-month basis, continuing a sawtooth pattern in the monthly numbers.

With 113,641 properties receiving a foreclosure filing in the first six months of 2011, Florida documented the second highest state total despite a nearly 55 percent decrease in foreclosure activity from the previous six months and a nearly 59 percent decrease in foreclosure activity from the first half of 2010. Florida foreclosure activity decreased on a year-over-year basis for the eighth straight month in June, but default notices spiked 44 percent from May and scheduled auctions jumped 17 percent from May.

Arizona’s 77,525 properties with foreclosure filings in the first six months of 2011 was the third highest state total. The state’s foreclosure activity decreased nearly 7 percent from the previous six months and was down 15 percent from the first half of 2010. Other states with first-half totals among the 10 highest in the country were Michigan (61,005), Georgia (60,870), Illinois (60,636), 
Texas(55,442), Nevada (53,217), Ohio (44,419), and Colorado (25,744).

Foreclosure Process Timelines and Days to Sell

U.S. properties foreclosed in the second quarter were in the foreclosure process an average of 318 days from the initial foreclosure notice to the completed foreclosure, up from a revised 298 days in the first quarter and up from 277 days in the second quarter of 2010.

The foreclosure process took the longest in New York, at 966 days on average for properties foreclosed in the second quarter, followed by New Jersey at 944 days and Florida at 676 days. Texas posted the shortest foreclosure timeline, at 92 days for properties foreclosed in the second quarter, followed by Virginia at 106 days.

U.S. REO properties that sold in the second quarter took an average of 178 days to sell from the time they were foreclosed, up slightly from 176 days in the first quarter and up from 164 days in the second quarter of 2010. REO properties took the longest to sell in New York, at 309 days, followed by New Jersey at 285 days and Minnesota at 268 days.

U.S. properties in the foreclosure process that sold in second quarter (typically short sales) took an average of 213 days to sell from the time they entered the foreclosure process, down from 228 days in the first quarter but up from 195 days in the second quarter of 2010.

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