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Foreclosure Activity Falls below Pre-Crisis Levels

In an important signpost of recovery, foreclosure activity in the United States has fallen to levels not seen since before the financial crisis began, according to a report issued by RealtyTrac Thursday.

The Midyear Foreclosure U.S. Market Report showed that a total of 613,874 properties in the United states in some stage of the foreclosure process in the first half of 2014. The number represents a 19 percent decrease from the previous six months and down 23 percent from the first half of 2013.

At the halfway point of 2014, a total of 315,895 U.S. properties have started the foreclosure process, a figure on a pace to reach more than 630,000 for the year. If that pace holds it would represent a significant decline from the 747,728 foreclosures reported in 2013.

“Nationwide foreclosure activity in June reached an important milestone, dropping to levels not seen since before the housing price bubble burst in August 2006,” said Daren Blomquist, Vice President at RealtyTrac. “Over the next six to nine months nationwide foreclosure numbers should start to flat line at consistently historically normal levels.

The report also includes data for the month of June which showed that 107,194 U.S. properties had a foreclosure filing, a 2 percent drop from the previous month.  Filings are down 16 percent year-over year from June of 2013.

A total of 47,243 U.S. properties started the foreclosure process for the first time in June.  The June figure is down 4 percent from the previous month and down 18 percent from a year ago to the lowest level since November 2005.

But it’s too early to throw a victory parade.

Nine states recorded a foreclosure activity increase in the first half of 2014 compared to a year ago, including New Jersey, which was up a staggering 54 percent.

“There continue to be concerning trends in some states and local markets that clearly indicate those markets are not completely out of the woods when it comes to the lingering foreclosure problem left over from the housing bust,” Blomquist continued.

“While it’s important that any remaining foreclosure infection is addressed promptly to keep it from festering, foreclosures are no longer a widespread contagion threatening to derail the housing market’s return to full health.”

About Author: Derek Templeton

Derek Templeton is an attorney based in Dallas, Texas. He practices in the areas of real estate, financial services, and general corporate transactional law. His experience includes time as an Attorney Adviser for the U.S. Small Business Administration and as General Counsel for a nonprofit organization in Dallas. A self-avowed "policy junkie," he has a keen interest in the effect that evolving federal policy has on the mortgage, default servicing, and greater housing industries.
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