Foreclosure Activity Continues it Positive Trend

by devteam October 13th, 2011 | Share

Foreclosurernactivity increased during the third quarter of 2011, driven largely by a spikernin early filings in August.  Data for Septemberrnshowed a return to the trends reported in earlier months.  This information came Thursday in quarterlyrnU.S. Foreclosure Market Report issued on Thursday by RealtyTrac.  The report also includes statistics on Septemberrnactivity.   </p

ThernIrvine, California firm issues regular reports on foreclosure activityrnthroughout the United States, tracking foreclosure filings in three categories:</p<ol start="1" type="1"

  • Notice of Default (NOD) and Lis Pendens (LIS).rn This is the first legal notification from a lender that the borrower on arn mortgage loan has defaulted under the terms of their mortgage and thern lender intends to foreclose unless the loan is brought current.</li
  • Auction – Notice of Trustee Sale and Notice of Foreclosure Sale (NTSrn and NFS): if the borrower does not catch up on theirrn payments the lender will file a notice of sale (the lender intends to sellrn the property). This notice is published in local paper and containsrn information pertaining to the date, time and subject property address.</li
  • Real Estate Owned or REO properties :rn “REO” stands for “real estate owned” and typicallyrn refers to the inventory of real estate that banks and mortgage companiesrn have foreclosed on and subsequently purchased through the foreclosurern auction if there was no offer higher than the minimum bid.

    Therernwere foreclosure filings on 610,337 properties during the third quarter, anrnincrease of 0.35 percent over Quarter Two and a drop of 34 percent from thernthird quarter of 2010.  One out of everyrn213 U.S. housing units received some type of foreclosure filings during thernthird quarter.  </p

    DuringrnSeptember there were 214,855 filings affecting one in every 605 homes. This wasrna decrease of 6 percent since August and was 38 percent lower than Septemberrn2010.  This was the sixth straight monthrnwhen the filing rate was lower than it had been one year earlier.  </p

    Defaultrnnotices were filed on 195,878 properties in the third quarter up 14 percentrnfrom the second quarter. Much of the increase occurred in August which set arnnine month high in this category.  Septemberrnfilings totaled 70,710, down 10 percent from the August numbers.  Year-over-year comparisons improved for bothrnquarterly and monthly data.  Quarterlyrnfilings were 27 percent lower than Q3 2010 and September’s numbers were down 31rnpercent from the same period a year earlier.</p

    Duringrnthe quarter foreclosure auctions were scheduled for the first time on 217,929rnproperties, 79,098 of these filings were in September.  The second quarter figures were down quarterrnover quarter and year-over-year by 6 percent and 41 percent respectively andrnSeptember’s figures were down 6 percent from August and 45 percent from onernyear earlier.</p

    Foreclosuresrnwere completed on 196,530 properties during the quarter, 4 percent less than inrnQ2 and nearly one third less than a year earlier.  Foreclosures in September totaled 65,047; anrnincrease of less than 1 percent from August and down 36 percent from Septemberrn2010 which was the peak month for bank repossessions in RealtyTrac’s reportingrnhistory. </p

    Therntimeline for all processes related to foreclosures continues to grow.  RealtyTrac found that it now takes 336 daysrnto complete the foreclosure process compared to 318 days in the secondrnquarter.  The time required to sellrnproperty keeps climbing as well.  It tookrna record high average of 318 days during the quarter to sell a property inrnprocess of foreclosure – usually via a short sale – compared to 245 days in thernsecond quarter.  REO sales were occurring,rnon average, 193 days after the banks took possession of the property comparedrnto 178 in the previous quarter.</p

    “U.S.rnforeclosure activity has been mired down since October of last year, when thernrobo-signing controversy sparked a flurry of investigations into lenderrnforeclosure procedures and paperwork,” said James Saccacio, chief executivernofficer of RealtyTrac. “While foreclosure activity in September and the thirdrnquarter continued to register well below levels from a year ago, there isrnevidence that this temporary downward trend is about to change direction, withrnforeclosure activity slowly beginning to ramp back up.</p

    “Thirdrnquarter foreclosure activity increased marginally from the previous quarter,rnbreaking a trend of three consecutive quarterly decreases that started in thernfourth quarter of 2010,” Saccacio continued. “This marginal increase in overallrnforeclosure activity was fueled by a 14 percent jump in new default notices,rnindicating that lenders are cautiously throwing more wood into the foreclosurernfireplace after spending months spent trying to clear the chimney of sloppilyrnfiled foreclosures.”</p

    Itrntook an average of 986 days to foreclose on a property in New York, the longestrnof any state and a record high for the state. The second longest average foreclosurernprocess was in New Jersey, at 974 days, and the third longest averagernforeclosure process was 749 days in Florida.  In contrast, the Texas average is 86 days andrnin Tennessee a typical foreclosure takes 94 days.</p

    Asrnusual Nevada, California, and Arizona were the most active states forrnforeclosure filings although the numbers are shrinking in all threernstates.  The incidence of filings was onernin 44 in Nevada, one in 88 in California and one in 93 in Arizona.  Other states with high rates of filings were Georgia,rnFlorida, Utah, Michigan, Idaho, Illinois, and Colorado.</p

    Severalrnstates bucked the national trend with significant quarterly increases in REOrnactivity during the quarter.  Thesernstates and their quarter-over-quarter increases are Massachusetts (62 percent);rnOregon (47 percent); Georgia (42 percent); and Illinois (27 percent).</p

    Therernwere also large increases in default notices during the quarter: Massachusetts (65rnpercent); New Jersey (29 percent); Florida 24 percent); Ohio and California (21rnpercent each).</p

      U.S. Foreclosure Market Data by State – Q3 2011</p

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  • About the Author


    Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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