Foreclosure Inventory Declining Quickly; Judicial States Still Skewing Data

Completed foreclosures in July were down 25 percent from a year earlier CoreLogic said today.  There were 49,000 completed foreclosures during the month compared to 53,000 in June, a decrease of 8.6 percent, and 65,000 in July 2012.  For context, CoreLogic pointed to its statistics for pre-crisis completed foreclosures which, between 2000 and 2006 averaged 21,000 per month.  The July foreclosures bring the number of completed foreclosures across the country to about 4.5 million since the financial crisis began in 2008. 

The foreclosure inventory at the end of July was at approximately 949,000 homes down from 1.4 million in July 2012.  This is a decrease of nearly one-third.  Month-over-month the inventory shrunk by 4.4 percent.  The foreclosure inventory represented 2.4 percent of all mortgaged homes in the U.S., down from 3.4 percent one year earlier.

"As the housing market continues to recover, the foreclosure inventory is declining quickly, down by 32 percent from a year ago," said Mark Fleming, chief economist for CoreLogic. "Continued strength in the housing market will contribute to our outlook for ongoing improvement in the stock of distressed assets through the end of this year."

"Completed foreclosures and delinquency rates continued their rapid descent in July. Every state posted a year-over-year decline in foreclosures and serious delinquencies fell to the lowest level since December 2008," said Anand Nallathambi, president and CEO of CoreLogic. "Not surprisingly, non-judicial states have come the farthest the fastest in reducing shadow inventory and lowering delinquency rates."

Nonetheless the foreclosure inventories in judicial process states continue to skew national figures.  Of the 24 states with judicial foreclosures 12 have inventories higher than the national average of 2.4 percent.  Florida at 8.1 percent and New Jersey and New York (5.9 percent and 4.7 percent) have the highest rates. Connecticut and Maine had a 4 percent rate.   Of the 26 states and the District of Columbia which employ a non-judicial process only two (Nevada, 3.7 percent and Oregon, 2.7 percent) have rates above the national average.

Almost half of the completed foreclosures in the 12 months ended in July took place in five states; Florida (110,000), California (65,000), Michigan (61,000), Texas (45,000) and Georgia (41,000).

The two metropolitan statistical areas (MSAs) with both the highest foreclosure inventory rate and the highest serious delinquency rates are in Florida.  The inventory in the Tampa-St. Petersburg-Clearwater SMA is 8.7 percent and its delinquency rate is 13.2 percent.  The Orlando-Kissimmee-Sanford area's inventory rate is 8.0 percent and the serious delinquency rate is 12.6 percent.  Also notable were the inventory and delinquency rates in Nassau-Suffolk, New York which were 6.2 and 10.2 respectively.