2014 Foreclosures Down 18%, Says RealtyTrac

2014 Foreclosure ReportFor the fifth year in a row foreclosure levels are down, signaling an end to the worst real estate collapse since the Great Depression.

But while the numbers are greatly improved for 2014, the real estate market remains fragile with 1.1 million foreclosure notices generated during the year.

“Despite the annual increase in foreclosure starts in December and November,” said RealtyTrac, “foreclosure starts for all of 2014 were still down compared to the previous year. A total of 643,193 U.S. properties started the foreclosure process in 2014, down 14 percent from 2013 and down 70 percent from the peak of 2,139,005 foreclosure starts in 2009. Foreclosure starts in 2014 were at the lowest annual total since RealtyTrac began issuing its annual foreclosure report in 2006.”

“The U.S. foreclosure numbers in 2014 show a foreclosure market that is close to finding a floor and stabilizing at a historically normal level,” said Daren Blomquist vice president at RealtyTrac. “But a recent surge in foreclosure starts and scheduled foreclosure auctions in several states in the last few months of 2014 indicate that lenders are gearing up for a spring cleaning of deferred distress in the first half of 2015 in some local markets.”

Part of the problem is that the damage from pre-2009 loans is not over. For instance, the Mortgage Bankers Association reported at the end of 2013 more than 90 percent of all serious delinquencies were associated with loans originated before 2009.

Another problem is that wages continue to lag. According to the Census Bureau, paychecks in 2013 were 9 percent lighter than in 1999. That’s important because while wages are falling the cost of just-about everything else is rising, leaving not-too-many dollars for housing.

Annual U.S. Foreclosure Filings
Year Foreclosure Filings Annual Change
   2014 1,117,426   down 17.94 percent
2013 1,361,795    down 25.85 percent
2012 2,304,941 down 14.59 percent
2011 2,698,967 down 29.45 percent
2010 3,825,637 down 3.33 percent
2009 3,957,643 up 25.33 percent
2008 3,157,806 up 43.32 percent
2007 2,203,295 up 74.99 percent
2006 1,259,118 up 42.20 percent
2005 885,468 n.a.
Source: RealtyTrac.com
Chart Copyright 2015 OurBroker.com

“The December surge in foreclosure starts is not a cause for concern, as it comes from a previously existing supply of distressed properties,” said Andres Carbacho-Burgos, Senior Economist at Moody’s Analytics, which analyzes RealtyTrac foreclosure data to forecast foreclosure trends. “The national pool of distressed mortgages has not increased despite the surge in foreclosure filings.

“The geographic location of the surge in foreclosure starts is not surprising,” Carbacho-Burgos continued. “The list of states with increased activity in the last months of 2014 includes those with judicial foreclosure backlogs such as Massachusetts, New Jersey, Pennsylvania and New York. Nevada is also not a judicial state but still has a substantial pool of seriously delinquent mortgages relative to the years before the housing crisis.”


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