Home Foreclosures Drop 12% as State Laws Slow Mortgage Defaults

Home foreclosures fell 12% in September as state legislatures have begun to pass laws to stem mortgage defaults, according to RealtyTrac's U.S. Foreclosure Market Report.

"Much of the 12% decrease in September can be attributed to change in state laws that have at least temporarily slowed down the pace at which lenders are moving forward with foreclosures," said James J. Saccacio, chief executive officer of RealtyTrac.

RealtyTrac noted the foreclosure rate has begun to slow as several states have passed legislation to allow homeowners in distress additional time before foreclosure proceedings are initiated.

"In September, we saw California Notice of Defaults (NOD) drop 51% from the previous month, and that the drop has had a significant impact on the national numbers given that California accounts for close to one-third of the nation's activity foreclosure each month," Saccacio said.

California reported 69,548 foreclosure filings in September. According to the report, foreclosures in California decreased by 32% from the previous month and increased by 36% from the prior year. One in every 189 households filed for foreclosure in California.

According to the report, Nevada continued to lead the pack with an 11% month-over-month increase, the highest monthly foreclosure rate. There were 13,022 foreclosure filings in September, a 137% increase from the prior year.

One in every 82 households in Nevada filed for foreclosure, the report added.

California, Florida, Arizona and Nevada together accounted for more than half of the nation's foreclosure activity, according to the report.

By Steve Stecyk and edited by Nancy Girgis
©CEP News Ltd. 2008