Rising Foreclosure Starts, Auctions Boost Foreclosure Activity In March

While rising foreclosure starts and auctions contributed to a 4% increase in foreclosure activity for March, it was still 23% lower from the same time last year, according to RealtyTrac's U.S. Foreclosure Market Report for the month and the first quarter of the year.

Foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 117,485 U.S. properties in March. RealtyTrac says the increase was driven by a 7% month-over-month increase in foreclosure starts – the initial public notice starting the foreclosure process – and a 6% monthly increase in scheduled foreclosure auctions.

Lenders repossessed 28,840 U.S. properties in March, down 5% from the previous month and down 34% from a year ago, to the lowest level since July 2007 – an 80-month low.

The report shows that March was the 42nd consecutive month where U.S. foreclosure activity decreased from a year ago, helping to drop first-quarter foreclosure activity to the lowest level since the second quarter of 2007. A total of 341,670 U.S. properties had a foreclosure notice in the first quarter, down 3% from the previous quarter and down 23% from a year ago. One in every 385 U.S. housing units had a foreclosure filing in the first quarter.

‘Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time,’ says Daren Blomquist, vice president at RealtyTrac. ‘This is most evident in judicial foreclosure states that were more likely to have impediments in the foreclosure process, but there are also signs of this catch-up trend happening in some non-judicial states like California, where an increasing number of judicial foreclosure filings boosted foreclosure starts in the first quarter.

‘Banks will also now be able to devote more resources to dealing with the lingering inventory of nearly half a million already-foreclosed homes that still need to be sold,’ Blomquist continues. ‘Our estimates indicate only 10 percent of these bank-owned properties are listed for sale and more than half are still occupied by the former homeowner or tenant.’

RealtyTrac also included an update of occupied real estate owned (REO) properties (bank-owned properties still occupied after the completed foreclosure) in its first quarter report.

Of the 259,783 bank-owned properties with owner-occupancy data available – out of a total of 483,224 bank-owned homes nationwide – 51% were still occupied by the former homeowner or a tenant.

Metros with the highest percentage of occupied REOs included Nashville, Tenn. (80%); Richmond, Va. (80%); New York (73%); Houston (73%); and San Jose, Calif. (73%).

Time to foreclose
U.S. properties foreclosed in the first quarter were in the foreclosure process an average of 572 days, up 1% from 564 days in the previous quarter and up 20% from 477 days in the first quarter of 2013.

New Jersey overtook New York as the state with the longest average time to foreclose in the first quarter, with an average of 1,103 days to complete foreclosure. That was followed by New York (986 days), Florida (935 days), Hawaii (840 days) and Illinois (830 days).

The average time to foreclose was the shortest among all states in Alaska (151 days), followed by Texas (169 days), Delaware (177 days), New Hampshire (190 days) and Alabama (193 days).

Time to sell
U.S. bank-owned properties sold in the first quarter had been bank-owned for an average of 226 days when they sold, up 34% from the average of 168 days in the first quarter of 2013.

States with above-average time to sell REOs included Texas (347 days), Michigan (342 days), Minnesota (313 days), Colorado (305 days) and Georgia (276 days).

Properties in the foreclosure process that sold during the first quarter took an average of 509 days to sell after starting the foreclosure process, up 33% from an average of 382 days in the first quarter of 2013.

States with above-average times to sell properties in foreclosure included Massachusetts (1,299 days), New York (854 days), New Jersey (830 days), Ohio (790 days) and Florida (720 days).

Florida cities accounted for 8 of top 10 metro foreclosure rates in the first quarter. With one in every 99 housing units with a foreclosure filing in the first quarter, Port St. Lucie, Fla., posted the highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more. Seven other Florida cities posted foreclosure rates in the top 10 highest nationwide.

Florida foreclosure activity in the first quarter decreased less than 1% from the previous quarter and was down 19% from a year ago, but the state still posted the nation's highest state foreclosure rate: one in every 129 housing units with a foreclosure filing during the quarter.

Maryland, Nevada, Illinois and New Jersey followed Florida in this category, respectively.

Among the nation's 20 largest metropolitan areas based on population, the highest foreclosure rates were in Miami; Tampa, Fla.; Chicago; Riverside, Calif.; and Baltimore. Foreclosure activity declined annually in 16 of the 20 largest metros, but it increased in Washington, D.C. (up 28%); New York (up 21%); Baltimore (up 19%); and Philadelphia (up 10%).


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