Signaling the gradual recovery in the housing market, the
foreclosure market report released by RealtyTrac revealed a drop in
the overall foreclosure activity in the third quarter. As per this
leading online marketplace of foreclosure properties, foreclosure
filings plummeted 5% from the last quarter and 13% from the
prior-year quarter. This brought the total number of properties
receiving default, auction or repossession notices to 531,576.
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Further, foreclosure starts - default notices issued and
foreclosure auctions (depending on the state's foreclosure
procedure) - declined 8% both from the prior quarter and the
prior-year quarter to 284,720 properties in the third quarter.
Additionally, the procedure to complete the foreclosure of
properties in the third quarter took an average of 382 days, up
from 378 days in the previous quarter and 336 days from the
In the reported quarter, the top 10 states with the highest
foreclosure rates were Florida, Arizona, California, Illinois,
Georgia, Nevada, Ohio, Michigan, South Carolina and Colorado.
Moreover, out of the total 24 non-judicial states, the overall
foreclosure activity declined in 20 states. However, of the total
26 judicial states, 14 reported a quarterly augmentation.
Overall, foreclosure activity has been accelerating in judicial
states after the $25 billion deal was signed between five mortgage
JPMorgan Chase & Co.
Bank of America Corporation
), Ally Financial Inc. and
Wells Fargo & Company
) - 49 states' attorneys general and the regulators earlier this
year. In a report released by the official monitoring the
implementation of the deal, it was stated that the five banks
provided nearly $10.6 billion in relief during the period ranging
from March 1 to June 30.
Nevertheless, foreclosure activity has been receding in most
non-judicial states as they did not create a significant backlog of
pending foreclosure cases over the last two years, when
foreclosures were halted in almost all the judicial states.
Furthermore, a number of steps - short sale, refinancing of loans
and loan modifications - are being undertaken by the government and
banks to prevent foreclosures.
Over the nine-month period, foreclosures were completed on a total
of 505,585 properties. Thus, it is anticipated that the country is
on track to close foreclosures on 675,000 properties by the end of
this year. This is lower than 800,000 completed foreclosures in
The rate at which properties are entering the foreclosure procedure
is expected to trend down gradually, thereby lifting the housing
prices going forward. However, the decline in foreclosures will be
at an uneven pace, as processes that are being used in handling
them vary from state to state. Moreover, the housing market will
get a chance to regain a solid foothold if there are sufficient
buyers for these properties.