57,000 Foreclosures Completed in September; Down Nearly a Third from Last Year

While completed foreclosures continued to drop in September, CoreLogic's National Foreclosure Report points out that they are still nearly triple what could be considered the typical level prior to 2006.  According to the report released on Wednesday, there were 57,000 completed foreclosures across the country in September, down from 59,000 in August (-3.4 percent) and 83,000 in September 2011 (-31.3 percent.)  In the period between 2001 and 2006 completed foreclosures averaged 21,000 per month.  Since the financial crisis began in September 2008 there have been approximately 3.9 million foreclosures completed nationwide.

The three-month moving average of completed foreclosures is continuing to increase in those states using a judicial foreclosure process but it has leveled off at a much lower level in non-judicial states.

Largely due to a backlog in judicial states the foreclosure inventory is dwindling more slowly than the number of completed foreclosures.  There were approximately 1.4 million homes in some stage of foreclosure in September compared to 1.5 million a year earlier and September's number was down 1.1 percent from August.  The September foreclosure inventory represents 3.3 percent of all homes in the U.S. with a mortgage while a year earlier it represented 3.5 percent.

"The continuing downward trend in foreclosures along with a gradual clearing of the shadow inventory are signs of stabilization and improvement in the housing market," said Anand Nallathambi, president and CEO of CoreLogic. "Increasingly improving market conditions and industry and government policy are allowing distressed homeowners to pursue refinancing, loan modifications or short sales rather than foreclosures."

"Homes lost to foreclosure in September 2012 are down 50 percent since the peak month in September 2010 and 22 percent less than the beginning of the year," said Mark Fleming, chief economist for CoreLogic. "While there is significant progress to be made before returning to pre-crisis levels, the trend is in the right direction as short sales, up 27 percent year over year in August, continue to gain popularity."

Completed foreclosures were highest in California (108,000), Florida (92,000), Texas (59,000) Georgia (55,000) and Michigan (51,000).  These five states account for almost half of all completed foreclosures nationally. 

Florida had by far the highest foreclosure inventory on a percentage basis at 11.5 percent followed by New Jersey (7.3 percent), New York (5.3 percent), Illinois (5.2 percent), and Nevada (4.9 percent). Nevada is the only non-judicial foreclosure state among the top five.