Foreclosure, Shadow Inventories Show Impressive Declines


Foreclosure and shadow inventory rates have shown impressive strides in the past year: U.S. foreclosure inventory is down a whopping 35% nationally, and the value of shadow inventory has dropped by $70 billion, according to CoreLogic's National Foreclosure Report for February, also featuring shadow inventory data as of January.

According to the CoreLogic analysis, there were 43,000 completed foreclosures in the U.S. in February, down from 51,000 in February 2013 – a year-over-year decrease of 15%. On a month-over-month basis, completed foreclosures decreased 13.1% in February from 50,000 in January.

National residential shadow inventory was 1.7 million homes as of January, compared to 2.2 million in January 2013 – a year-over-year decrease of 23%.

CoreLogic notes that 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 4.9 million completed foreclosures across the country, the company reports.

As of February, approximately 752,000 homes in the country were in some stage of foreclosure, known as the foreclosure inventory, compared to 1.2 million in February 2013 – a year-over-year decrease of 35%. Month over month, the foreclosure inventory was down 3.3% from January. The foreclosure inventory as of February represented 1.9% of all homes with a mortgage, compared to 2.9% in February 2013.

At the end of February, there were 1.9 million mortgages, or 4.9%, in serious delinquency, defined as 90 days or more past due, including those loans in foreclosure or real estate owned (REO).

"Although there is good news that completed foreclosures are trending lower, the bigger news is the impressive decline in the foreclosure and shadow inventories," says Dr. Mark Fleming, chief economist for CoreLogic. "Every state has had double-digit, year-over-year declines in foreclosure inventory, which is reflected in the $70 billion decline in the shadow inventory."

"The stock of seriously delinquent homes and the foreclosure rate are back to levels last seen in the final quarter of 2008," adds Anand Nallathambi, president and CEO of CoreLogic. "The shadow inventory has also declined year over year for the past three years as the housing market continues to heal, including double-digit declines for the past 16 consecutive months."

The five states with the highest number of completed foreclosures for the 12 months ending February were Florida (118,000), Michigan (50,000), Texas (39,000), California (37,000) and Georgia (34,000). These five states accounted for almost half of all completed foreclosures nationally.

Four states and the District of Columbia experienced the lowest number of completed foreclosures for the 12 months ending February: The District of Columbia (60), North Dakota (421), Hawaii (519), West Virginia (571) and Wyoming (705).

The five states with the highest foreclosure inventory as a percentage of all mortgaged homes as of February were New Jersey (6.2%), Florida (6.0%), New York (4.7%), Maine (3.4%) and Connecticut (3.2%).

The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes as of February were Wyoming (0.3%), Alaska (0.4%), North Dakota (0.5%), Nebraska (0.5%) and Colorado (0.6%).

Shadow Inventory
The value of shadow inventory was $254 billion as of January, down from $324 billion a year before and down from $289 billion six months before.

As of January, year-over-year inventory of seriously delinquent homes decreased in all states by double digits. Twenty-four states experienced year-over-year declines in serious delinquency by at least 20%.

The shadow inventory is down 22% compared to January 2013. Over the 12 months ending January, shadow inventory has been decreasing at an average monthly rate of 41,000 units.

As of January, Florida, California, New York, New Jersey and Illinois carried 42% of all distressed properties in the country. Florida continues to account for 15% of the nation's distressed properties.

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