Foreclosure Starts At 10 Year Low

foreclosure_startsAccording to the Midyear 2015 U.S. Foreclosure Market Report™, which shows a total of 597,589 U.S. properties with foreclosure filings—default notices, scheduled auctions and bank repossessions—in the first half of 2015, down 13 percent from the previous six months and down 3 percent from the same time period in 2014.

A total of 304,439 U.S. properties started the foreclosure process in the first half of the year, down 4 percent from a year ago and 18 percent below foreclosure starts in the first half of 2006 before the housing price bubble burst in August 2006. First-half foreclosure starts 2015 were at their lowest level in any year since tracking began in 2006—a 10-year low.

U.S. foreclosure starts have not only returned to pre-housing crisis levels, they have fallen well below those pre-crisis levels and are still searching for a floor, down 4 percent from a year ago. Loans originated in the last five years continue to perform better than historic norms, with tighter lending standards and more cautious borrower behavior acting as important guardrails for the real estate boom of the past three years.

There were 19 states where foreclosure starts in the first half of 2015 were at or below their pre-crisis levels of 2006, including California, Florida, Arizona, Georgia and Illinois.

Bank repossessions still 37 percent above pre-crisis levels

A total of 209,281 U.S. properties were repossessed by lenders in first half of 2015, up 20 percent from a year ago and 37 percent above the number of bank repossessions (REOs) in the first half of 2006 before the housing bubble burst.

Less-disciplined loans originated during the last housing boom continue to account for the majority of distress still hanging over the housing market, with two-thirds of all loans in foreclosure on loans originated between 2004 and 2008. An increasing number of these failed bubble-era loans finally exited the foreclosure process in the first half of 2015, resulting in accelerating bank repossessions that are still well above pre-crisis levels along with record-long average foreclosure timelines for properties foreclosed in the second quarter.

First-half bank repossessions in 2015 were above 2006 levels in 35 states, including California, Florida, Arizona, Illinois and Nevada.

Florida, New Jersey, Maryland post highest foreclosure rates in first half of 2015

Florida foreclosure activity in the first half of 2015 decreased 22 percent from a year ago, but the state still posted the nation’s highest foreclosure rate: 1.06 percent of housing units (one in every 95) with a foreclosure filing during the six-month period.

New Jersey foreclosure activity in the first half of 2015 increased 24 percent from a year ago, boosting the state’s foreclosure rate to second highest nationwide: 0.92 percent of housing units (one in every 109) with a foreclosure filing during the six-month period.

Maryland’s foreclosure rate was almost identical to the New Jersey foreclosure rate, but was slightly lower and ranked No. 3 highest among the states despite a 1 percent year-over-year decrease in foreclosure activity.

Nevada foreclosure activity in the first half of 2015 increased 10 percent from a year ago, and the state’s foreclosure rate — 0.79 percent of housing units (one in every 126) with a foreclosure filing — ranked fourth highest among the states, while the Illinois foreclosure rate—0.74 percent of housing units (one in every 135) with a foreclosure filing — ranked fifth highest despite a 9 percent year-over-year decrease in foreclosure activity in the first six months of 2015.

Other states with foreclosure rates ranking among the top 10 highest in the first half of 2015 were Delaware (0.61 percent of housing units with a foreclosure filing), Ohio (0.58 percent), Indiana (0.54 percent), South Carolina (0.54 percent), and Tennessee (0.53 percent).

Atlantic City posts top metro foreclosure rate in first half of 2015

With 1.70 percent of housing units (one in every 59) with a foreclosure filing in the first half of 2015, Atlantic City, N.J., posted the nation’s highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more.

Eight Florida cities posted first-half foreclosure rates among the 10 highest: Tampa at No. 2 (1.22 percent of housing units with a foreclosure filing); Lakeland at No. 3 (1.21 percent); Jacksonville at No. 4 (1.20 percent); Ocala at No. 5 (1.18 percent); Miami at No. 6 (1.15 percent); Orlando at No. 8 (1.07 percent); Deltona-Daytona-Beach-Ormond Beach at No. 9 (1.05 percent); and Crestview-Fort Walton Beach-Destin at No. 10 (0.97 percent).

Rockford, Ill. posted the nation’s seventh highest metro foreclosure rate: 1.14 percent of housing units (one in every 87) with a foreclosure filing in the first six months of 2015.

Eight of nation’s 20 largest metro areas post annual increases in foreclosure activity

Eight of the nation’s 20 largest metro areas posted a year-over-year increase in foreclosure activity in the first half of 2015 compared to a year ago: Boston (up 29 percent), St. Louis (up 25 percent), New York (up 24 percent), Houston (up 19 percent), Dallas (up 19 percent), Detroit (up 13 percent), Philadelphia (up 8 percent), and Baltimore (up 5 percent).

Among the nation’s 20 largest metro areas, those posting the biggest decreases in foreclosure activity in the first half of 2015 compared to a year ago were Miami (down 30 percent), Riverside-San Bernardino in Southern California (down 15 percent), Seattle (down 14 percent), Los Angeles (down 14 percent), and Phoenix (down 14 percent).

States with the biggest increase in foreclosure activity in the first half of the year compared to a year ago included Massachusetts (up 43 percent), New York (up 31 percent), New Jersey (up 24 percent), Texas (up 21 percent), and Michigan (up 17 percent).

Average foreclosure timelines hit new highs for homes foreclosed in second quarter

Foreclosures completed in the second quarter of 2015 took an average of 629 days from the first public notice of foreclosure to complete the foreclosure process, the longest average time to foreclose since RealtyTrac began tracking in the first quarter of 2007.

States with the longest foreclosure timelines were New Jersey (1,206), Hawaii (1,060), Montana (1,028), New York (1,000), and Florida (989).

States with the shortest foreclosure timelines were South Dakota (177), North Carolina (198), Virginia (229), Wyoming (242), and Alabama (244).

U.S. foreclosure activity up from year ago for fourth consecutive month in June

There were a total of 117,055 U.S. properties with foreclosure filings in June, down 8 percent from a 19-month high in May but still up 9 percent from a year ago — the fourth consecutive month with a year-over-year increase.

A total of 49,105 U.S. properties started the foreclosure process for the first time in June, down 4 percent from the previous month but up 4 percent from a year ago. Despite the year-over-year increase, June foreclosure starts were still below their pre-crisis average of 52,000 a month in 2005 and 2006.

States with the biggest increase in foreclosure starts in June compared to a year ago included Massachusetts (up 141 percent), Colorado (up 83 percent), New York (up 45 percent), Virginia (up 41 percent), Texas (up 37 percent), Nevada (up 28 percent), Indiana (up 21 percent), Missouri (up 21 percent), and New Jersey (up 19 percent).

Lenders repossessed 36,503 U.S. properties in June, down 19 percent from the previous month but still up 36 percent from a year ago—the fourth consecutive month with a year-over-year increase in REOs and above the pre-crisis average of 23,000 a month in 2005 and 2006.

States with the biggest increase in REOs in June compared to a year ago included New Jersey (up 275 percent), Oregon (up 198 percent), New York (up 142 percent), Massachusetts (up 109 percent), Texas (up 84 percent), Nevada (up 78 percent), and Michigan (up 64 percent).

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