Foreclosures and foreclosure inventory levels are starting to slow in their decline. Compared to a year earlier, the foreclosure inventory nationally in September was 31.1 percent lower, while the number of completed foreclosures was down by only 7.0 percent, according to CoreLogic’s September 2016 National Foreclosure Report.
Anand Nallathambi, President and CEO of CoreLogic, said that heading into 2017, prices, performance, and production (the three most important drivers of the real estate market) are all improving.
"Completed foreclosures have fallen by a total of more than 100,000 homes during the 12 months prior to September 2016,” said Nallathambi. “The decline in foreclosures in one of the drivers in the drop in vacancies, which is positive for homeowners and communities.”
Nationally, there were 36,000 completed foreclosures in September. This is a decline of 3,000 from 2015. The national foreclosure inventory included approximately 340,000 homes with a mortgage (under 1 percent) compared with 493,000 homes the year prior. The numbers made August’s foreclosure inventory rate the lowest it's been since August 2007. Additionally, 48 states and the District of Columbia posted a double-digit decline in foreclosures from the previous year.
CoreLogic also reported that the number of mortgages in serious delinquency (90 days or more past due, including loans in foreclosure or REO) declined by 24.8 percent from September of 2015.
“September’s serious delinquency rate dropped by 25 percent compared to a year earlier, the third consecutive monthly acceleration in the rate of decline,” said Frank Nothaft, Chief Economist for CoreLogic. "This improvement is continued evidence of the recovery in the housing market, especially given that the decreases were fairly uniform in most cities across the country."
Over the year, Florida had twice the number of completed (53,000) than its nearest second, Texas (27,000). Ohio, California, and Georgia also all had more than 20,000 foreclosures, and these five states made up almost half of completed foreclosures.
In stark contrast, the District of Columbia had the lowest number of completed foreclosures since last year (with only 186) followed by North Dakota, West Virginia, Arkansas, and Montana.
Over the year, New Jersey’s 3.0 percent inventory rate led the way, followed closely by New York with a 2.7 percent rate, Maine and Hawaii’s 1.8 percent rate, and Washington D.C. with 1.6 percent.
In addition, according to the FHFA’s August 2016 Foreclosure Prevention Report, the number of nationwide foreclosures has fallen on a year-over-year basis every month since November 2011.
In August of 2016, the GSEs completed 16,585 foreclosure prevention activities, over half of which (11,431) were loan modifications including HAMP permanent modifications. August’s total activities brought the total number of foreclosure prevention actions completed by the GSEs to 3,773,630 since the conservatorships began in September 2008.
Despite the total activities completed since that origination date, the number has been on the decline for a few years along with foreclosure volume. For example, in 2012, Fannie Mae and Freddie Mac completed a total of 940,974 foreclosure prevention actions between them. That number fell to 789,627 the next year and down to 561,312 for 2014. For 2015, the pace fell to 428,881 and through the past eight months of 2016, the number is 130,143.
The number of home retention actions recorded by the GSEs, which included loan modifications, repayment plans, and forbearance plans, totaled 14,451, up from 13,442 in July. The number of home forfeiture actions, which included short sales and deeds-in-lieu of foreclosure, was also up over the month in August from 2,105 to 2,134.
The number of permanent loan modifications also rose from July to August, from 11,342 to 11,431. The share of modifications with principal forbearance did drop, though, to 19 percent. According to the report, improved house prices and a declining Home Affordable Modification Program (HAMP)-eligible population resulted in a drop in the share of modifications with extend-term only down to 44 percent of all modifications.