IRVINE, Calif. – July 12, 2012 – A total of 1.04 million U.S. properties with foreclosure filings — default notices, auction sale notices and bank repossessions — were made in the first half of 2012, a 2 percent increase from the previous six months but still down 11 percent from the first half of 2011. The data comes from RealtyTrac (www.realtytrac.com), the leading online marketplace for foreclosure properties, which today released its Midyear 2012 Foreclosure Market Report.
RealtyTrac's report also reveals that 0.79 percent of all U.S. housing units (one in 126) had at least one foreclosure filing in the first six months of 2012.
High-level findings from the report
- First-half foreclosure activity did increase from a year ago in 20 states, including Indiana (32 percent), Pennsylvania (24 percent), South Carolina (23 percent), Connecticut (23 percent), Florida (23 percent), and Illinois (22 percent).
- Overall foreclosure activity was down in the second quarter, driven primarily by a drop in bank repossessions (REOs), but 311,010 properties started the foreclosure process during the quarter, a 9 percent increase from the previous quarter and a 6 percent increase from the second quarter of 2011 — the first year-over-year increase in quarterly foreclosure starts since the fourth quarter of 2009.
- A total of 31 states posted year-over-year increases in foreclosure starts in the first quarter — 17 judicial foreclosure states and 14 non-judicial foreclosure states.
- Overall foreclosure activity in June decreased on a year-over-year basis for the 21st consecutive month, but foreclosure starts for the month increased annually for the second consecutive month.
- An 18 percent year-over-year increase in California foreclosure starts in June helped boost that state’s foreclosure rate to highest nationwide for the month. It was the first month California’s foreclosure rate ranked No. 1 since RealtyTrac began issuing its report in January 2005.
“Additional scrutiny on how lenders and servicers process foreclosures, along with aggressive foreclosure prevention efforts by the federal government and several state governments, continue to keep a lid on the foreclosure problem at a national level,” said Brandon Moore, CEO of RealtyTrac. “Still, foreclosure starts began boiling over in more markets in the first half of the year, particularly in the second quarter, when rising foreclosure starts spread from primarily judicial foreclosure states in the first quarter to more than half of all non-judicial foreclosure states in the second quarter.
“Lenders and servicers are slowly but surely catching up with the backlog of delinquent loans that under normal circumstances would have started the foreclosure process last year, and that catching up is why the average time to complete the foreclosure process started to level off or decrease in some states in the second quarter,” Moore added. “The increases in foreclosure starts in the first half of the year will likely translate into more short sales and bank repossessions in the second half of the year and into next year.”
Nevada, Arizona, Georgia post top state foreclosure rates in first half of 2012
Despite a 61 percent year-over-year drop in foreclosure activity, Nevada posted the nation’s highest foreclosure rate in the first half of 2012: 1.76 percent of all housing units with a foreclosure filing (one in 57). A total of 20,618 Nevada properties had at least one foreclosure filing during the first half of 2012, down 43 percent from the previous six months. Nevada foreclosure starts increased 61 percent from the first quarter to the second quarter, indicating lenders there are beginning to adjust to a new law that took effect in October 2011 and requires additional documentation to initiate the foreclosure process.