Foreclosure Spikes Signal "Spring Cleaning" RealtyTrac says

News

As the housing industry continues to recover we see
occasional troublesome spikes in one statistic or another.  RealtyTrac reported a couple of such statistics
in its U.S. Foreclosure Market Report for January, surges that, at first glance
look ominous, but are probably good news.

First, RealtyTrac reports that overall foreclosure activity
increased during the month, driven primarily by a large uptick in completed
foreclosures or bank repossessions which surged to a 15 month high and a much
smaller increase in scheduled foreclosure auctions.  Rather than signaling further trouble,
however these numbers, occurring as they do in the last two steps in the process,
are likely indications that lenders are finally, to paraphrase Daren Blomquist,
RealtyTrac vice president, “cleaning up.” 

RealtyTrac reports that overall foreclosure activity during
the month included filings – default notices, scheduled auctions, and
repossessions – on 119,800 properties nationwide, a 5 percent increase from
December but 4 percent fewer filings than in January 2014.   The
number represents a filing on one of every 1,102 housing units in the country.

Bank repossessions soared by 55 percent from December with a
total of 37,292 properties foreclosed during the month.  This was an increase of 23 percent from January
2014 and the highest monthly total since October 2013.  Still, the January figure was down 63 percent
from the peak of 102,134 in
September 2010. 

“The year-over-year increase in REOs in
January was the first annual increase nationwide following 25 consecutive
months of declines, getting the foreclosure spring cleaning we anticipated in
our last foreclosure report off to a quick start in 2015,” Blomquist said.
“Meanwhile, the number of future foreclosure auctions scheduled in January
continued to increase in many states, foreshadowing more foreclosure spring
cleaning to come in the next several months in those states.”

 

 

Twenty-seven states posted year-over-year
increases in completed foreclosures, many rising to levels not seen in months
or even years.  Among states with the
most dramatic increases were Ohio (+197 percent), New Jersey (+116 percent to a
51-month high), Maryland (+100 percent), Washington (+75 percent to a 39-month
high), Arizona (+61 percent to a 20-month high), California (+58 percent to a
24-month high), Pennsylvania (+44 percent to a 42-month high), Michigan (+39
percent to a 16-month high), North Carolina (+38 percent to a 15-month high),
Texas (+24 percent to a 16-month high), and New York (+24 percent to a 55-month
high.)

Foreclosure auctions were scheduled for
a total of 51,782 properties in January up 8 percent from the previous month
but 7 percent fewer than a year ago and 67 percent below the peak of 158,105 in
March 2010. Scheduled auctions were up in 21 states compared to one year
earlier.  Among the largest increases was
a 268 percent jump in Massachusetts, 125 percent in New Jersey, and 111 percent
in North Carolina.  New York rose 79
percent to a 55 month high and Missouri was up 74 percent to a 29 month high.

 

 

“It’s important to note that in most of
these states, foreclosure auctions and REOs are coming off somewhat
artificially low levels last year and are still far below the highs reached
during the worst of the foreclosure crisis back 2009 and 2010,” Blomquist
noted.

After spiking to a 17 month high at
year end foreclosure starts retreated 18 percent in January to a total of
48,838 properties.  This was down 15
percent from a year earlier and broke a two month streak of year-over-year
increases.

Nineteen states had larger numbers of
foreclosures starts than a year earlier. 
In Nevada starts were up 255 percent and Indiana and Massachusetts saw increases
of 45 percent and 14 percent respectively.

There were some hot spots among
metropolitan areas.  In nine of the 20 most
populous there were overall increases in foreclosure activity compared to a
year earlier with the largest in St. Louis where filings increased 47 percent
primarily because of a 51 percent growth in scheduled auctions.  The 1,116 total filings in the area was also
a month-over-month gain of 52 percent. 

 

 

Phoenix also saw jump in activity with
filings up 104 percent for the month to a 20 month high and a 45 percent
increase from the previous January. 
Foreclosure auctions – which constitute foreclosure starts in Arizona,
increased 37 percent from a year earlier and bank repossessions were up 58
percent.  

San Francisco had 1,279 filings, an
increase of 49 percent from December and 35 percent from a year earlier.  In Los Angeles 5,663 filings represented a
+59 percent change from December and +34 percent from a year earlier. 
There were 1,874 filings in Seattle, a 19 month high and 63 percent more than
in December and 31 percent above filings a year earlier.

The nation’s highest level of
foreclosure activity was again in Florida where one in every 441 housing units
received a filing during the month. 
Activity in the state however was down 21 percent from a year
earlier.  Nevada was second nationally
with filings on one in every 493 housing units and Maryland, with a one in 611
filing rate, was third. 

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