Completed Foreclosures Fall 25 Percent in October

There was a dramatic drop in the rate of completed foreclosures in October according to CoreLogic's National Foreclosure Report issued on Monday; however this good news should probably be approached with caution.  The total of 58,000 foreclosures completed during the month was down 25 percent from the 77,000 completed in September.  September's number however was originally reported at 57,000 and revised upward in the current Foreclosure Report release.  The October total is also 17 percent lower than in October 2011 when there were 70,000 completed foreclosures. . 

To put all of the numbers in perspective, CoreLogic notes that the average number of foreclosures reported in the pre-housing crash years 2000 to 2006 was 21,000.  Since the financial crisis began in September 2008, there have been approximately 3.9 million completed foreclosures across the country.

The national foreclosure inventory - the share of all mortgaged homes that are in some stage of foreclosure - also dropped on both an annual and a monthly basis.  There were 1.3 million homes in the inventory in October, a rate of 3.2 percent, compared to 1.5 million or 3.6 percent one year earlier and down 1.3 percent from the approximately 1.4 million homes reported in September. 

"A lower foreclosure inventory is a good indicator of improving housing markets," said Anand Nallathambi, president and CEO of CoreLogic.  "The downward trend in foreclosure inventories over the past year is yet another signal that a recovery in housing is gaining traction."

"As a result of completed foreclosures and alternative disposition methods, the foreclosure inventory has declined by 9 percent year-to-date. This is good news for housing markets as we look forward to 2013," said Mark Fleming, chief economist for CoreLogic.

Five states, California, Florida, Michigan, Texas, and Georgia accounted for 49 percent of all completed foreclosures in the country.  The highest foreclosure inventories were in Florida (11.1 percent), New Jersey (7.7 percent), New York (5.3 percent), Illinois (5.0 percent) and Nevada (4.8 percent).  All of the high inventory states except Nevada use a judicial foreclosure process.