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Foreclosure Starts Plunge to 71-Month Low, REO Activty Increases

A significant drop in foreclosure starts brought down foreclosure activity in November, according to a ""foreclosure report"":http://www.realtytrac.com/content/foreclosure-market-report/november-2012-foreclosure-activity-report-7514 from ""RealtyTrac"":http://www.realtytrac.com/home/.


Foreclosure starts were filed on 77,494 U.S. properties in November, a 71-month low and the lowest level since December 2006, RealtyTrac reported Thursday.

The decrease represents a 13 percent drop from October and a 28 percent decline from November 2011. Twenty-eight states experienced annual declines in foreclosure starts, with Oregon (-84 percent), Pennsylvania (-67 percent), and California (-63 percent) registering the significant decreases.

Eighteen states posted annual increases in foreclosure starts, with substantial upsurges seen in New Jersey (+538 percent), Arkansas (+455 percent), and New York (+209 percent).

The drop eased the number of foreclosure filings overall, which include default notices, scheduled auctions, and bank repossessions. Foreclosure filings were reported on 180,817 U.S. properties in November and fell 3 percent from October and 19 percent from a year ago. The yearly decline is the 26th straight month of annual decreases in foreclosure filings.

While the worst may be over, foreclosures may still make a comeback.

""[F]oreclosures are continuing to hobble the U.S. housing market as lenders finally seize properties that started the process a year or two ago â€" and much longer in some cases,"" said Daren Blomquist, VP at RealtyTrac.

""We’re likely not completely out of the woods when it comes to foreclosure starts, either, as lenders are still adjusting to new foreclosure ground rules set forth in the ""National Mortgage Settlement"":http://nationalmortgagesettlement.com/ along with various state laws and court rulings,"" he added.


While foreclosure filings and starts fell, bank repossessions rose annually for the first time in 25 months.

RealtyTrac explained bank repossessions have been trending downward since October 2010 when news began to surface of ""robo-signing"" practices from banks, causing some major servicers to delay foreclosures while their processes were being reviewed.

In November, 59,134 properties became bank repossessions, or REOs, an increase of 11 percent from October and 5 percent from a year ago.

Twenty-nine states and the District of Columbia saw yearly increases in REO activity, with significant increases seen in Indiana (+96 percent), Arkansas (+88 percent), and Missouri (+87 percent).

States where REO activity saw a significant drop were Nevada (-64 percent), Oregon (-58 percent), and Massachusetts (-49 percent).

In Florida, one in every 304 housing units received a foreclosure filing, the highest foreclosure rate among any other state. The national average shows one in every 728 housing units received a foreclosure filing in November, according to data from RealtyTrac.

Even though Nevada saw its foreclosure activity decrease 54 percent from last year, the state had the second highest foreclosure rate (one in every 390 housing units). Illinois was a close third, where one in every 392 housing units received a foreclosure filing.

Among the metros with the highest foreclosure rates, seven of the top 10 metros were in Florida and the remaining three were in California.

Palm Bay-Melbourne-Titusville had the highest foreclosure rate (one in every 158 housing units) and was followed by Ocala (one in 210 housing units).

Other Florida metros in the top 10 included Jacksonville, which ranked No. 4, along with Miami-Fort Lauderdale-Pompano Beach ( No. 5), Sarasota-Bradenton-Venice (No. 8), Port St. Lucie (No. 9), and Gainesville (No. 10).

The California metros were Riverside-San Bernardino-Ontario (No. 3), Stockton (No. 6), Modesto (No. 7).

About Author: Esther Cho


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