Foreclosure Improvements Held Back by Judicial States

Completed foreclosures in September totaled 51,000 nationwide, down 39 percent from a year earlier when banks repossessed 84,000 homes.   CoreLogic said, in its September National Foreclosure Report, that the number of foreclosures last month was virtually identical to that in August.

By way of comparison, CoreLogic said that in what might be considered a more normal market, the period from 2001 to 2006, there were an average of 21,000 foreclosures completed each month.  The approximately 4.6 million foreclosures completed in the 60 months since the financial crisis began in September 2008 average 76,700 per month.

In September the foreclosure inventory, that is the number of homes in some stage of foreclosure, stood at approximately 902,000, down one third from 1.4 million one year earlier.  The inventory decreased by 3.3 percent from August to September.  The inventory in September represented approximately 2.3 percent of mortgages homes in the U.S., down from 3.2 percent in September 2012.

"The foreclosure inventory continues to decline, now standing at an early 2009 level," said Mark Fleming, chief economist for CoreLogic. "Just over 900,000 properties remain in the inventory, two thirds of them in judicial states where the foreclosure process is typically slower. Consequently, the pace of overall improvement in the inventory will slow down and distressed assets will cast a long shadow over housing markets in states with judicial foreclosure."

"The number of seriously delinquent mortgages continues to drop across the country at a rapid rate with every state showing year-over-year declines in foreclosure inventory," said Anand Nallathambi, president and CEO of CoreLogic. "We're not out of the woods yet, but these are encouraging signs for a return to a healthier housing market in the U.S."

Five states accounted for almost half of all completed foreclosures over the 12 months ended in September.  Florida had 115,000 foreclosures, California 52,000, Texas 43,000, Michigan, 40,000, and Georgia 39,000. The states with the highest foreclosure inventory as a percent of mortgaged homes were Florida (7.4 percent), New Jersey (6.5 percent), New York (4.8 percent), Maine (4.0 percent) and Connecticut (3.7 percent).