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.
Arizona foreclosure activity in the first half of 2012 decreased 37 percent from the same time period in 2011, but the state still documented the nation’s second highest foreclosure rate: 1.73 percent of housing units with a foreclosure filing (one in 58). A total of 49,157 Arizona properties had at least one foreclosure filing during the six-month period, down 6 percent from the previous six months. Second quarter foreclosure starts in Arizona increased 11 percent from the first quarter of 2012, but were still down 14 percent from the second quarter of 2011.
Georgia foreclosure starts in the second quarter increased 5 percent from the previous quarter and were up 23 percent from a year ago, helping the state post the nation’s third highest foreclosure rate in the first half of the year. During the first six months of 2012, a total of 65,342 Georgia properties had at least one foreclosure filing, a foreclosure rate of 1.60 percent of housing units (one in 63).
California registered the nation’s fourth highest state foreclosure rate in the first half of 2012, with 1.56 percent of housing units with a foreclosure filing, and Florida registered the nation’s fifth highest state foreclosure rate, with 1.55 percent of housing units with a foreclosure filing.
Other states with foreclosure rates among the 10 highest nationwide in the first half of 2012 were Illinois (1.40 percent of housing units with foreclosure filing), Michigan (1.02 percent), Colorado (0.97 percent), Ohio (0.94 percent), and Utah (0.93 percent).
Foreclosure process lengthens nationwide, down in some key states
U.S. properties foreclosed in the second quarter were in the foreclosure process an average of 378 days from the initial foreclosure notice to the completed foreclosure, up from 370 days in the first quarter and a record high going back to the first quarter of 2007.
Although the average time to foreclose increased nationwide, it was down in some of the states with the longest foreclosure timelines. The average time to foreclose in New York decreased from 1,056 days in the first quarter to 1,001 days in the second quarter, a 5 percent drop — although the state still maintained the longest time to foreclose nationwide.
The average time to foreclose decreased 3 percent in New Jersey, the state with the second longest foreclosure process, and was down 1 percent in Pennsylvania, the state with the seventh longest time to foreclose.
Bank-owned (REO) properties that sold in the second quarter took an average of 195 days to sell from the time they were foreclosed, up from 178 days in the first quarter. REO properties took the longest to sell in New York, at 430 days, followed by Arkansas at 357 days and New Jersey at 354 days.
U.S. properties in the foreclosure process that sold in the second quarter (typically short sales) took an average of 319 days to sell from the time they entered the foreclosure process, up from 306 days in the first quarter. Pre-foreclosure sales took the longest in New York, at 788 days on average, followed by New Jersey at 753 days and Connecticut at 630 days.
The RealtyTrac Midyear U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the first six months of the year. Some foreclosure filings entered into the database during the six-month period may have been recorded in previous months. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. RealtyTrac’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the midyear and quarterly reports, if more than one foreclosure document is received for a property during the six-month period or quarter, only the most recent filing is counted in the report. The midyear, quarterly and monthly reports all check if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report does not count the property in the current year, quarter or month.