Foreclosure Rate Keeps Dropping
Foreclosures fell markedly during 2012, with the number of homes repossessed by lenders in November down by nearly a quarter from their level of one year earlier.
According to figures released today by the real estate analytics firm CoreLogic, there were 55,000 U.S. homes lost to foreclosure in November, down from 72,000 in November 2011, for a 12-month decline of 23 percent. Month-to-month, the number of completed foreclosures was down from October's level of 59,000.
Although the foreclosure crisis continues to recede, the rate of homes lost to foreclosure remains well above pre-crisis levels. From 2000 through 2006, completed foreclosures averaged 21,000 per month, according to CoreLogic. Some 4 million homes have been lost to foreclosure since the financial crisis began in 2008.
Short sales cutting into foreclosures
"The pace of completed foreclosures has significantly improved over a year ago as short sales gain popularity as a disposition method," said Mark Fleming, CoreLogic chief economist. "Additionally, the inventory of foreclosed properties continues to decline while the housing market demonstrates an ongoing ability to absorb the distressed sales that result from completed foreclosures."
The rate of short sales has increased over the past year as lenders have been pressed to embrace them as a result of a $25 billion settlement with the federal and state governments over mortgage servicing abuses.
CoreLogic calculates there were some 1.2 million homes in some stage of the foreclosure process in November, an 18 percent decline from 1.5 million in November 2011.
Just five states accounted for half of all the completed foreclosures that occurred during the 12 months ending in November 2012, led by California with 102,000 homes repossessed. Others were Florida (94,000), Michigan (75,000), Texas (58,000) and Georgia (52,000).
Shadow inventory called manageable
The number of at-risk properties continues to decline as well, though not as rapidly as completed foreclosures themselves. CoreLogic also reported this week that the shadow inventory of residential properties stood at 2.3 million in October, down 12. 3 percent from the October 2011 level of 2.6 million.
Shadow inventory is generally considered to be a measure of homes that are likely to be lost to foreclosure, although the CoreLogic definition includes homes that have been repossessed but not yet listed for sale. The bulk of the shadow inventory is homes that are either seriously delinquent or in the foreclosure process itself.
Fleming said the number of homes in the shadow inventory is a manageable level, given the long time it takes to complete foreclosures in many states, and should not have a distorting affect on the overall supply of homes in the housing market.
Some 1 million homes in the shadow inventory were listed as delinquent, with 900,000 in foreclosure and 350,000 already repossessed by lenders but not yet put up for sale.
First published at: http://www.mortgageloan.com/foreclosure-rate-keeps-dropping-9330