Foreclosure Activity Hits Six-Year Low

Foreclosure activity hit a six-year low in April according to RealtyTrac, but while home losses were down in general they actually rose in states where foreclosure actions must go through local courts.

Maryland, for example, is the nation’s wealthiest state in terms of household income and yet foreclosure activity — default notices, scheduled auctions and bank repossessions — rose 199 percent this April when compared with April 2012. The reason? All foreclosure actions must go through the court system.

Some will look at the Maryland numbers — and the numbers in other judicial states — and blame the rising foreclosure activity levels in those jurisdictions because lenders generally cannot move as quickly to foreclose. In fact, the problem has not been with the court system, rather it has been caused by efforts to avoid wrongful foreclosures as a result of robo-signed claims and questions regarding who actually has the right to foreclose when notes are endorsed in blank or lost.

“The April numbers indicate that the pig is moving through the python when it comes to deferred foreclosures in judicial foreclosure states,” said Daren Blomquist, vice president at RealtyTrac. “Foreclosure starts have been increasing for several months in many of the judicial states, and now that increased volume is showing up in the second stage of the process: the public foreclosure auction. Scheduled foreclosure auctions in judicial states jumped to a 30-month high in April, evidence that lenders are serious about moving forward with completing the foreclosure process — either through repossession or sale to a third-party investor at public auction.

“Meanwhile, foreclosure starts are bouncing higher in a handful of non-judicial states where servicers are adjusting to legislation designed to prevent improper foreclosures,” Blomquist continued. “This includes Nevada, Washington and Arkansas, where foreclosure starts have been increasing on an annual basis since late 2012, along with Oregon and California, where foreclosure starts are still down from a year ago but have been moving steadily higher in recent months.”

High-level findings From The Report

According to RealtyTrac the latest foreclosure activity report contained the following highlights:

  • Scheduled judicial foreclosure auctions (NFS) increased 22 percent from March to April and were up 31 percent from a year ago to the highest level since October 2010 — a 30-month high.
  • Scheduled foreclosure auctions increased from a year ago in 15 of the 26 judicial or quasi-judicial foreclosure states, including Maryland (199 percent increase), New Jersey (91 percent increase), Ohio (73 percent increase), Oklahoma (57 percent increase), and Florida (55 percent). Scheduled foreclosure auctions reached a 68-month high in Ohio, a 31-month high in Maryland, a 27-month high in New Jersey, and an 18-month high in Oklahoma.
  • Scheduled non-judicial foreclosure auctions (NTS) in April were down 7 percent from March and down 43 percent from April 2012 to the lowest level since December 2005 — an 88-month low.
  • A total of 70,133 U.S. properties started the foreclosure process in April, down 4 percent from the previous month and down 28 percent from a year ago.
  • Despite the nationwide decline, 22 states reported increasing foreclosure starts from the previous month, including New Jersey (138 percent increase), Connecticut (46 percent increase), Texas (37 percent increase), Georgia (35 percent increase), Oregon (16 percent increase), and California (13 percent increase). Foreclosure starts reached a 36-month high in Connecticut, a 27-month high in New Jersey, and were up on a monthly basis for the third consecutive month in California after hitting a 90-month low in January, when new legislation impacting the foreclosure process took effect.
  • Lenders repossessed 34,997 U.S. properties in April, down 20 percent from March and down 32 percent from April 2012 to the lowest level since July 2007 — a 69-month low.
  • Lender repossessions (REO) decreased from a year ago in 37 states and the District of Columbia in April, but some notable exceptions where REO activity increased from a year ago included Washington (164 percent increase), Maryland (98 percent increase), Oklahoma (19 percent increase), and Ohio (17 percent increase).
  • Nevada posted the nation’s highest state foreclosure rate for the second month in a row despite a 15 percent monthly decrease in foreclosure activity.
  • Akron, Ohio, posted the nation’s highest metro foreclosure rate in April thanks in part to a 147 percent annual increase in overall foreclosure activity. One other Ohio city (Columbus), along with five Florida cities, Las Vegas, Myrtle Beach, S.C. and Chicago also registered top 10 metro foreclosure rates in April.
  • As of the beginning of May, A total of 11.3 million mortgages nationwide were seriously underwater, meaning combined amount of mortgages secured by the home was at least 25 percent more than the estimated value of the home. That represented 26 percent of all outstanding mortgages, but was down nearly 1.5 million from the 12.8 million seriously underwater mortgages in May 2012.

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