Foreclosure Rate Lowest in 5 Years


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The number of homes lost to foreclosure has fallen to its lowest level in five years, according to new figures from the real estate analytical firm CoreLogic.

A total of 58,000 residential foreclosures were completed in July, down from a revised figure of 62,000 in June and a 16 percent annual decline from the 69,000 foreclosures that were completed in July 2011.

The total number of homes in the foreclosure process is down to 1.3 million, a 3.2 percent decline from 1.5 million in July 2011, according to CoreLogic, though unchanged from the June 2012 level.

More short sales

"The decline in completed foreclosures is yet another positive signal that the housing market is continuing on a progressive path of stabilization and recovery," said Anand Nallathambi, president and CEO of CoreLogic. "Alternative resolutions are helping to reduce foreclosures and often result in a more positive transition for the borrower and lower losses for investors and lenders."

Alternatives to foreclosure include a significant increase in short sales, in which at-risk homeowners are allowed to sell their home for less than the balance owed on the mortgage, rather than completing the foreclosure process itself, which can be costly for lenders.

Loan modifications are another alternative to foreclosure, but recent figures from the HOPE NOW Alliance indicate that those have been trending downward in 2012.

Repossessions concentrated in a few states

Five states accounted for nearly half of all completed foreclosures in July, led by California with Florida, Michigan, Texas and Georgia rounding out the list.

States with the highest proportion of properties in the foreclosure process, as a share of all homes with mortgages, were Florida (11.2 percent), New Jersey (5.7 percent), New York (5.2 percent), Illinois (4.9 percent) and Nevada (4.7 percent).

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This article appears in: Personal Finance Real Estate
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