RealtyTrac reports that June foreclosures have fallen to their lowest levels since 2006 as banks foreclosure and repossess fewer homes. It’s also due to fewer borrowers are defaulting amid improving economic conditions, which has helped bring the foreclosure rate down 35% from year-ago levels. Judicial foreclosure states like Florida, New Jersey and New York, however, are still experiencing spikes. Foreclosures are moving faster in those states and banks are more easily finding buyers as homes prices continue to rise. For more on this continue reading the following article from TheStreet.
A total of 127,790 properties had foreclosure filings in June, down 14% from the previous month and down 35% from a year ago, reaching their lowest level since December 2006, according to a report released by RealtyTrac.
In the first half of 2013, a total of 801,359 properties had a foreclosure filing — including notice of default, schedule auction and bank repossessions. That’s down 19% from the previous six months and down 23% from the first half of 2012.
Banks are filing fewer foreclosures, with foreclosure starts declining 45% in June from a year earlier to a seven-and-a-half year low.
Banks are also repossessing fewer homes. Year-to-date through June, a total of 248,538 bank repossessions have occurred nationwide, putting it on pace for nearly 500,000 for the year. In 2012, banks repossessed more than 671,000 homes.
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Foreclosure activity has been declining as fewer borrowers default on their loans and as banks opt for loan modifications and short sales to avoid a costly and time-consuming foreclosure process.
But more than a million loans are still stuck in the foreclosure process, thanks to a large backlog of cases in overwhelmed courts, as well as new laws in some states that have slowed down the pace of foreclosures.
The average time to foreclose on a U.S. property is now 526 days. In New York and New Jersey, it now takes 1033 days, according to the report.
Fears that a glut of foreclosures will hit the market and depress home prices have receded as a result. On the contrary, the declining share of foreclosure sales have helped push home prices across the country.
Still, foreclosure activity continues to spike in so-called judicial foreclosure states such as Florida, New York and New Jersey, where banks require court approval to proceed with a foreclosure. Judicial foreclosure auctions were up 34% from a year earlier in June.
"Halfway through 2013 it’s becoming increasingly evident that, while foreclosures are no longer a problem nationally, they continue to be a thorn in the side of several state and local markets, particularly where a backlog of delayed distress has built up thanks to a lengthy foreclosure process," said Daren Blomquist, vice president at RealtyTrac in a press release. "The increases in judicial foreclosure auctions demonstrate that these delayed foreclosure cases are now being moved more quickly through to foreclosure completion. Given the rising home prices in most of these markets, it is an opportune time for lenders to dispose of these distressed properties, either at the foreclosure auction to a third-party buyer, or by repossessing the property at the auction and subsequently selling it as a bank-owned home."
Florida continues to be the state with the highest foreclosure rate, accounting for the top five metro areas with the highest foreclosure rates, led by Miami. Florida accounts for 12 out of the top 20 metros with the highest foreclosure rates.
Nevada, Illinois, Ohio and Georgia round out the list of the top five states with the highest foreclosure rates.
This article was republished with permission from TheStreet.