Foreclosure Filings Drop in September

For the second straight month, U.S. foreclosure filings decreased in September, according to foreclosure data firm RealtyTrac Inc, reaching a five-year low.

Last month, there were just 180,427 foreclosure filings, down 7 percent from August and down 16 percent from the previous year. September’s total was the lowest since July 2007. Filings include default notices, scheduled auctions and repossessions.

Foreclosure starts, which include just first default notices or scheduled auctions, also declined in September falling 12 percent from August to 87,066, and down 15 percent from a year earlier.

Yet this overall downward trend somewhat masks what is going on in many states.

“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market – at least at a national level,” said Daren Blomquist, vice president at RealtyTrac in a Los Angeles Times article. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year,” he said.

In states like Florida, Illinois, Ohio, New Jersey, and New York where foreclosures are required to be signed off by a judge foreclosure filings are continuing to rise.

“A backlog of delayed foreclosures will likely build up in those states as lenders adjust to the new rules, with many of those delayed foreclosures eventually hitting down the road,” Blomquist said.

The states that saw the greatest declines in foreclosure filings were California, Arizona, Michigan, Georgia and Texas. Those that had the greatest increases were New Jersey, Pennsylvania, New York, Washington State and Florida.

Florida had the highest mortgage foreclosure rate of any state, with one out of every 117 households in the foreclosure process.

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on October 12th 2012 in Mortgage News

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