Foreclosure levels decrease 10% from year ago

Irvine, Calif. – Aug. 9, 2012 — Foreclosure filings decreased 3% in July 2012 compared to June, and dropped 10% from July 2011, according to a report issued today by RealtyTrac (www.realtytrac.com). Filings were reported on 191,925 U.S. properties in July, which reflects one in every 686 U.S. housing units with a foreclosure filing during the month.

“U.S. foreclosure activity continued its uneven descent in July as the overall numbers declined on an annual basis for the 22^nd straight month, but properties starting the foreclosure process increased on an annual basis for the third straight month,” said Daren Blomquist, Vice President of RealtyTrac. “Recent foreclosure activity patterns vary significantly from state to state, often hinging on the level of dysfunction that exists in each state’s foreclosure process. In states like Florida, Illinois and New Jersey, where processing and procedural issues slowed foreclosure activity to a crawl last year, foreclosure numbers continue to rebound off those artificially low levels. But in states like Texas, Arizona and Virginia, where the average time to foreclose is well below the national average of 378 days, foreclosure activity continues on a long-term downward trend.

“Recent legislation and court rulings could lengthen the foreclosure process in some of the states with the shorter timelines, however, resulting in a temporary foreclosure lull and subsequent rebound in those states as well,” Blomquist continued. “Case in point is a new Oregon law that took effect in July and gives homeowners in default — or at risk of default — the right to request mediation to avoid foreclosure. Oregon foreclosure activity dropped 42 percent from June to July, hitting a five-year low, but we would expect the Oregon numbers to trend back higher sometime in the next several months based on the pattern we’ve seen in other states with similar legislation.” 

High-level findings from the report:

• Overall foreclosure activity decreased on a year-over-year basis for the 22^nd consecutive month in July, dropping to its lowest level since April.

• The decline in overall foreclosure activity was driven primarily by a 21 percent year-over-year decrease in bank repossessions, or REOs.

• Thirty-eight states and the District of Columbia posted annual decreases in REO activity, but there were some notable exceptions where REO activity increased annually, including Florida (38 percent), Ohio (25 percent), Illinois (22 percent), and New Jersey (21 percent) — all judicial foreclosure states where foreclosures are processed through the court system.

• U.S. foreclosure starts in July increased 6 percent on a year-over-year basis, the third straight month with an annual increase in foreclosure starts following 27 consecutive months of decreasing foreclosure starts on an annual basis.

• Foreclosure starts increased on a year-over-year basis in 27 states, led by Connecticut (201 percent), New Jersey (164 percent), Pennsylvania (139 percent), Indiana (83 percent), and Massachusetts (65 percent) — all judicial foreclosure states.

Foreclosure starts increase annually for third straight month

Foreclosure starts — default notices or scheduled foreclosure auctions, depending on the state — were filed on 98,174 U.S. properties in July, a 6 percent decrease from June but still up 6 percent from July 2011.

Foreclosure starts increased annually in 27 out of the 50 states — 16 “judicial” states where foreclosures are processed through the court system and 11 “non-judicial” states where foreclosures are processed outside of the court system.

Along with the aforementioned judicial states with substantial annual increases in foreclosure starts, the non-judicial states with the biggest year-over-year increases were New Hampshire (55 percent), Missouri (39 percent), Alabama (35 percent), Washington (30 percent), and Georgia (25 percent).

Bank repossessions decrease annually for 21st straight month