CoreLogicÂ® Reports Almost 65,000 Completed Foreclosures Nationally in February:Â Lower Foreclosure Rates than a Year Ago For Sixty-One of the Top 100 CBSAs
SANTA ANA, Calif., March 29, 2012 /PRNewswire/ â€”Â CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its National Foreclosure Report for February, which provides monthly data on completed foreclosures, foreclosure inventory and 90+ delinquency rates. There were approximately 65,000 completed foreclosures in February 2012, compared to 66,000 in February 2011, and 71,000 inÂ January 2012. The number of completed foreclosures for the 12 months ending in February was 862,000. From the start of the financial crisis in September 2008, there have been approximately 3.4 million completed foreclosures.
Approximately 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the foreclosure inventory as of February 2012 compared to 1.5 million, or 3.6 percent, in February 2011 and 1.4 million, or 3.4 percent, in January 2012. Nationally, the number of borrowers in the foreclosure inventory decreased by 115,000, a decline of 7.6 percent, in February 2012 compared to February 2011.
â€œThe pace of completed foreclosures is down slightly compared to January, running at an annualized pace of 670,000, but compares favorably to the pace of completed foreclosures in February a year ago. Even though the pace of completed foreclosures has slowed, the overall foreclosure inventory is decreasing because REO sales were up in February,â€ said Mark Fleming, chief economist for CoreLogic. â€œWith the spring buying season upon us, the inventory may decline further as the pace of distressed-asset sales rises along with the rest of the housing market.â€
â€œIn February, more than 60 major markets saw a decrease in their foreclosure rates compared to a year ago,â€ said Anand Nallathambi, president and CEO of CoreLogic. â€œThis combined with faster REO-clearing rates, better employment news, and continued historically low interest rates are all positive signs of improvement in the housing economy.â€
The share of borrowers nationally that were 90 or more days late on their mortgage payment fell to 7.3 percent in February 2012 from 7.8 percent in February 2011, but inched up from 7.2 percent in January 2012. At the same time, the inventory of real estate owned (REO) assets held by servicers nationwide grew faster in February 2012 than the pace of REO sales, as measured by the distressed clearing ratio. The distressed clearing ratio is calculated by dividing the number of REO sales by the number of completed foreclosures; the higher the ratio, the faster the pace of REO sales relative to the pace of completed foreclosures. The distressed clearing ratio for February 2012 was 0.73, up from 0.66 in January 2012.
Highlights as of February 2012
* January data was revised. Revisions are standard, and to ensure accuracy, CoreLogic incorporates newly released data to provide updated results.
** For the list of top 100 CBSAs, visithttp://www.corelogic.com/downloadable-docs/top_100_cbsa.pdf.
Figure 1 â€“Â Completed Foreclosures per Thousand Active Loans
Judicial Foreclosure States vs. Non-Judicial Foreclosure States (3 month moving average)
Figure 2 â€“Â Foreclosure Rates as of February 2012
Judicial Foreclosure States vs. Non-Judicial Foreclosure States
Figure 3 â€“Â CoreLogic 90+ Delinquency Rates
(click image to enlarge)
This report has state data separated into judicial vs. non-judicial foreclosure state categories. In judicial foreclosure states, lenders must provide evidence to the courts of delinquency in order to move a borrower into foreclosure, while in non-judicial foreclosure states lenders can accomplish this same transition by issuing notices of default directly to the borrower without court intervention. Itâ€™s important to note this distinction since judicial states, as a rule, have longer foreclosure timelines and thus affect foreclosure statistics as a result.
A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender. If the home is purchased by the lender, it is moved into the lenderâ€™s real estate owned (REO) inventory. In â€œforeclosure by advertisementâ€ states, a redemption period begins after the auction and runs for a statutory period, e.g., six months. During that period the borrower may regain the foreclosed home by paying all amounts due as calculated under the statute. For purposes of the CoreLogic National Foreclosure Report, because so few homes are actually redeemed following an auction, we assume the foreclosure process ends in â€œforeclosure by advertisementâ€ states at the completion of the auction.
The foreclosure inventory represents the number of homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan. Serious delinquency is typically defined as 90, 120, or 150 days delinquent (sometimes more), in foreclosure or in REO. Once a foreclosure is â€œstarted,â€ and absent the borrower paying all amounts necessary to halt the foreclosure, the home remains in foreclosure until the completed foreclosure results in the sale to a third party at auction or the home enters the lenderâ€™s REO inventory. The foreclosure inventory is measured only against homes that have an outstanding mortgage. Homes with no mortgage liens can never be in foreclosure and are therefore excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data.
The distressed clearing ratio is calculated by dividing the number of REO sales by completed foreclosures. It is a measure of whether the REO inventory is growing or shrinking. The higher the ratio, the faster the REO inventory is clearing.