OfflineAt the end of 2011, foreclosure inventories had fallen to their lowest level since the beginning of the housing crash in 2007. Default notices and bank repossessions were down by 33% for the year to 2.7 million.
One in every 69 homes had at least one foreclosure filing during the year. 804,000 homes were repossessed. More than 4 million homes have been lost to foreclosure over the past five years. While reading this far, one would begin to feel better about the housing situation, it’s really only a dip in the rising foreclosure numbers.
The robo-signing scandal that occupied a lot of press in 2010 resulted in the temporary cessation of foreclosures completely by many of the large lenders, and a prolonged slowdown by all banks while they examined their procedures and paperwork and dealt with charges of faulty foreclosures. This resulted in long delays in 2011, thus the lower total foreclosure numbers.
While many analysts state that the rate of foreclosures will rise again in 2012, they don’t expect them to exceed 2010 levels. In many urban markets there was a pronounced downturn in the number of homes sold in the third and fourth quarters of 2011. The lack of buyers aggravated the supply-demand imbalance, further pressuring home prices to the downside.
The top nine states for foreclosures in 2011 were Nevada, Arizona, California, Georgia, Michigan, Florida, Illinois, Colorado, and Idaho. December foreclosure filings nationally were 205,024 in December 2011, 20 percent fewer than the same period the year before. The fourth quarter foreclosure filings numbered 586,133, 27 percent lower than the previous year’s fourth quarter.
Government programs, like HARP and HAMP initiated around 5.5 million mortgage modifications from April 2009 forward, taking some of the pressure off rising foreclosure inventories. Though they made a dent, they haven’t lived up to their expected performance.
Just a little FYI on mortgage delinquencies. They have continued to decline in October according to information released by Lender Processing Services. At the same time foreclosure inventories reached a record high during the month, now representing 4.29 percent of all active mortgages.
The total delinquency rate in the country is now 7.93 percent down from 8.09 percent in September and 9.29 percent in October 2010. The delinquency rate is now 30 percent below the peak reached in January 2010. However, as the average days of delinquency have steadily increased, so has the foreclosure inventory, i.e. those properties that will in all probability become owned real estate (REO) at some point. The pre-foreclosure inventory now stands at a rate of 4.29 percent, up from 4.18 percent in September and 3.92 percent a year earlier.
The average delinquent loan in foreclosure has been delinquent for 631 days. At the beginning of the foreclosure crisis an average foreclosure took 251 days from the first missed payment. The length of the process has increased by three months just since the beginning of this year. The average days that a loan is seriously delinquent (90+ days) before the foreclosure process is implemented, however, declined for the second straight month in October and is now 388 days.
Randy Bailiff
Dean Graziosi Real Estate Investment Coach
before the storm hits...
Valerie
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