Last year, the foreclosure crisis began dissipating. Foreclosure filings -- including default notices, scheduled auctions, and bank repossessions -- were down 26 percent in 2013 compared to 2012, and were down 53 percent from the peak in 2010, according to RealtyTracâ€™s Year-End 2013 Foreclosure Market report.
The 1.4 million properties with foreclosure filings in 2013 marked the lowest amount since 2007.
During the year, one in every 96 homes -- or about 1.04 percent of U.S. housing units -- received a foreclosure filing. Thatâ€™s down from a peak of 2.23 percent of housing units in 2010.
The following states had the highest foreclosure filing rates in 2013:
- Florida: 3.01% of all housing units received a foreclosure filing
- Nevada: 2.16%
- Illinois: 1.89%
- Maryland: 1.57%
- Ohio: 1.53%
The average estimated value of a property receiving a foreclosure filing in 2013 was $191,693 at the time of the foreclosure filing -- a 1 percent increase from the average value in 2012, according to the RealtyTrac report. Whatâ€™s more, the average estimated value of properties that received foreclosure filings in 2013 rose 10 percent since the foreclosure notice was filed.
The national average time to complete a foreclosure rose 3 percent in the fourth quarter of 2013 to a record high of 564 days. The states that face the longest times to foreclose are New York (1,029 days), New Jersey (999 days), and Florida (944 days), according to the RealtyTrac report.
â€œMillions of home owners are still living in the shadow of the massive foreclosure crisis that the country experienced over the past eight years since the housing price bubble burst â€” both in the form of homes lost to directly to foreclosure as well as home equity lost as a result of a flood of discounted distressed sales,â€ says Daren Blomquist, vice president at RealtyTrac. â€œBut the shadow cast by the foreclosure crisis is shrinking as fewer distressed properties enter foreclosure and properties already in foreclosure are poised to exit in greater numbers in 2014 given the greater numbers of scheduled foreclosure auctions in 2013 in judicial states â€” which account for the bulk of U.S. foreclosure inventory.â€
Foreclosures are falling, but they still remain a problem in some pockets across the country. Foreclosure activity in November was found to be the highest in the following states, according to RealtyTrac:
- Florida: 1 in every 392 housing units received a foreclosure filing in November (down 23% from a year ago)
- Delaware: 1 in every 480 housing units (up 141% from a year ago)
- Maryland: 1 in every 618 housing units (up 42% from a year ago)
- South Carolina: 1 in every 660 housing units
- Illinois: 1 in every 700 housing units
- Ohio: 1 in every 757 housing units
- Connecticut: 1 in every 768 housing units
- Nevada: 1 in every 859 housing units
- Iowa: 1 in every 869 housing units
- Utah: 1 in every 889 housing units
By metro areas, Florida had eight of the top 10 foreclosure rates in November. Jacksonville, Fla., posted the nationâ€™s highest foreclosure rate for a metro: 1 in every 288 housing units, which is more than four times the national average. Other Florida metros with high foreclosure rates were Miami, Port St. Lucie, and Palm Bay-Melbourne-Titusville.
CoreLogic released its third quarter 2013 analysis, and it finds that about 791,000 more residential U.S. properties returned to a state of positive equity and are no longer underwater.
However, nearly 6.4 million homes â€“ 13 percent of all residential properties with a mortgage â€“ were still in negative equity at the end of the third quarter. Still, that number is down from 7.2 million homes â€“ 14.7 percent of all residential properties with a mortgage â€“ at the end of the second quarter of 2013.
In a state-by-state comparison, Florida ranked second in percentage of underwater mortgages with 28.8 percent. Nevada had the highest percentage of mortgaged properties in negative equity at 32.2 percent, followed by Arizona (22.5 percent), Ohio (18.0 percent) and Georgia (17.8 percent). The top five states accounted for 36.4 percent of negative equity in the U.S.
Florida also ranked high in a city-by-city breakdown of underwater mortgages. Of the largest 25 metropolitan areas, Orlando-Kissimmee-Sanford, Fla., had the highest percentage of mortgaged properties in negative equity at 32.3 percent, followed by Tampa-St. Petersburg-Clearwater, Fla. (30.1 percent). The last three metro areas in the top five include Phoenix-Mesa-Scottsdale, Ariz. (23.2 percent), Riverside-San Bernardino-Ontario, Calif. (20.8 percent) and Chicago-Naperville-Arlington Heights, Ill. (20.5 percent).
Negative equity, often referred to as â€œunderwaterâ€ or â€œupside down,â€ means that borrowers owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in value, an increase in mortgage debt or a combination of both.
Of 42.6 million residential U.S. properties with positive equity, 10 million have less than 20 percent. Borrowers with less than 20 percent, referred to as â€œunder-equitied,â€ may have a more difficult time obtaining new financing for their homes due to underwriting constraints. Under-equitied mortgages accounted for 20.4 percent of all residential properties with a mortgage nationwide in the third quarter of 2013, with more than 1.5 million residential properties at less than 5 percent equity, referred to as near-negative equity. Properties with near-negative equity are considered at risk should home prices fall.
â€œNegative equity will decline even further in the coming quarters as the housing market continues to improve,â€ says Mark Fleming, chief economist for CoreLogic.
Source:Â Florida RealtorsÂ®
One of the biggest scars from the housing crisis â€“ foreclosures â€“ is rapidly fading away. Foreclosure activity posted a 15 percent month-to-month drop from October to November â€“ the largest monthly drop in three years, RealtyTrac reports in its latest foreclosure report. Whatâ€™s more, foreclosure filings have posted a 37 percent decrease from year ago levels.
Reports on foreclosure filings, default notices, auctions, and bank repossessions all showed big declines in the latest report.
â€œI think that [the housing crisis is] really in the rear-view mirror,â€ Daren Blomquist, vice president at RealtyTrac, told ABC News.
The number of homes entering the foreclosure process has dropped by two-thirds since the peak of the housing crisis in 2010. The number of homes that have started the foreclosure process has fallen to its lowest level since December 2005.
â€œWhile some of the decrease in November can be attributed to seasonality, the depth and breadth of the decrease provides strong evidence that we are entering the ninth inning of this foreclosure crisis with the outcome all but guaranteed,â€ says Blomquist. â€œWhile foreclosures will likely continue to stage a weak rally in certain markets next year as the last of the distress left over from the Great Recession is dealt with, it is highly unlikely that there will be a foreclosure comeback that poses any major threat to the solid housing recovery that has now taken hold.â€
Source: RealtyTrac and â€œForeclosures Plunge as Housing Crisis Retreats,â€ ABC News (Dec. 12, 2013)
Freddie Mac and Fannie Mae announced a holiday moratorium on all foreclosed single-family homes that the mortgage giants own or guarantee, suspending all evictions between Dec. 18 and Jan. 3. Processing of the evictions will continue during this period, but families living in foreclosed homes will be able to stay in their homes.
â€œAt this time of year we want to bring some relief to families who confronted financial difficulties and went through foreclosures,â€ says Chris Bowden, senior vice president of REO at Freddie Mac. â€œWe also want to remind home owners going into the New Year facing financial challenges to reach out for help as soon as they can by calling their mortgage servicer.â€
Freddie Mac and Fannie Mae are also issuing a holiday moratorium on foreclosed 2-4 unit properties.
While the mortgage giants will be putting evictions on a two-week holiday hold, they will continue to proceed on other pre- or post-foreclosure activities.
The mortgage giants have issued eviction moratoriums during the holidays in the past as well.
Source: REALTOR(R) Magazine Daily News
The Obama administration urged banks to improve their service of the governmentâ€™s anti-foreclosure efforts through the Making Home Affordable Program and to use federal funds more effectively in helping to save struggling home owners from foreclosure.
The U.S. Treasury singled out CitiMortgage Inc., telling the bank it needed to make â€œsubstantial improvementâ€ in its loan modification efforts through the Home Affordable Modification Program and to reach out to more home owners who are eligible to receive assistance.
The Treasury provides financial incentives to mortgage servicers under HAMP, which aims to encourage servicers to change the terms of struggling borrowersâ€™ mortgages and lower their monthly payments. The Treasury routinely evaluates servicersâ€™ actions on implementing the program, identifying and contacting home owners, home owner evaluation and assistance, and program management and reporting.
"There is still room for improvement for servicers, and the Treasury is committed to applying pressure on the mortgage servicing industry to improve servicer behavior," says Tim Bowler, Treasury deputy assistant secretary.
The Treasuryâ€™s report also singled out Ocwen Loan Servicing LLC, Selecting Portfolio Servicing Inc., and Wells Fargo & Co. for needing â€œmoderate improvementâ€ in servicing struggling home owners through HAMP. Bank of America and JPMorgan Chase & Co. need to make only â€œminor improvement,â€ the Treasury noted.
By the end of October, 1.5 million home owners had received permanent loan modifications through HAMP. That's only about half of the number of home owners President Obama had first predicted would be helped by the program. When the program started in 2009, President Obama had predicted 3 million to 4 million would receive aid through HAMP.
Source: â€œU.S. Treasury prods mortgage servicers to perform better,â€ Reuters (Dec. 9, 2013)
CoreLogic released its October National Foreclosure Report. It finds 48,000 completed foreclosures in the U.S. in October 2013 â€“ a sale where the bank actually took the home â€“ down from 68,000 in October 2012 for a year-over-year decrease of 30 percent.
On a month-over-month basis, completed foreclosures decreased 25.6 percent from 64,000 reported in September.
According to CoreLogic, Florida had 114,588 completed foreclosures year-to-year by October. As a judicial state â€“ meaning one in which foreclosures generally take longer because they must go through the court system â€“ the recovery has taken more time. However, a non-judicial state had the second-highest level of completed foreclosures by October â€“ Michigan with 50,186.
Overall in Florida, 7.1 percent of homes with a mortgage were part of the foreclosure inventory in October, for a 3.1 percent year-to-year decline.
Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 4.6 million completed foreclosures across the country. As a basis of comparison, prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
As of October 2013, approximately 879,000 homes in the U.S. were in some stage of foreclosure â€“ still owned by a mortgage holder but at risk of being taken over by a lender and known as the â€œforeclosure inventoryâ€ â€“ compared to 1.3 million in October 2012 for a year-over-year decrease of 31 percent.
The October foreclosure inventory represented 2.2 percent of all homes with a mortgage compared to 3.1 percent in October 2012. The foreclosure inventory was down 2.9 percent from September 2013 to October 2013.
â€œYear over year, the foreclosure inventory, as a percentage of all homes with a mortgage, has declined almost a full percentage point to 2.2 percent,â€ says Mark Fleming, chief economist for CoreLogic. â€œThis is good news for the housing and mortgage finance markets, but the rate remains elevated relative to the pre-crisis level of about 0.6 percent.â€
Still, â€œthe scourge of an elevated foreclosure inventory is easing,â€ says Anand Nallathambi, president and CEO of CoreLogic. â€œAdditionally, the rate of serious delinquencies, which fell more than 25 percent year over year, is at the lowest level in nearly five years.â€
October 2013 report highlights
â€¢ The five states with the highest number of completed foreclosures for the 12 months ending in October 2013 were: Florida (115,000), Michigan (50,000), California (46,000), Texas (43,000) and Georgia (39,000). These five states account for almost half of all completed foreclosures nationally.
â€¢ The five states with the lowest number of completed foreclosures for the 12 months ending in October 2013 were: District of Columbia (57), North Dakota (411), Hawaii (491), West Virginia (514) and Wyoming (694).
â€¢ The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were Florida (7.1 percent), New Jersey (6.7 percent), New York (4.9 percent), Maine (3.8 percent) and Connecticut (3.7 percent).
â€¢ The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.4 percent), Alaska (0.6 percent), Nebraska (0.6 percent), North Dakota (0.7 percent) and Colorado (0.7 percent).
Source:Â Florida RealtorsÂ®