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December 10th, 2013

Foreclosures drop in every state



Foreclosure for SaleHome buyers who want to purchase a bank foreclosure likely will find fewer such properties on the market in 2014.

That prediction is based on new data recently released by CoreLogic, a property information, analytics and services company in Irvine, Calif.

According to CoreLogic, only 48,000 foreclosures were completed in the U.S. in October 2013, a sizeable drop from both year-over-year and previous-month levels which were 68,000 and 64,000 respectively.

Between 2000 and 2006, completed foreclosures averaged just 21,000 per month nationwide. But since September 2008, approximately 4.6 million foreclosures have been completed across the country.

The recent drop suggests the “scourge” of widespread foreclosures in the U.S. is easing, said CoreLogic CEO Anand Nallathambi.

Different rates in different states

The five states that had the most completed foreclosures during the 12-month period that ended Oct. 31, 2013, were:

  1. Florida: 115,000
  2. Michigan 50,000
  3. California: 46,000
  4. Texas: 43,000
  5. Georgia: 39,000

Together, those states accounted for almost half of all completed U.S. foreclosures.

The five states that had the fewest completed foreclosures during that 12-month period were:

  1. Washington, D.C.: 57
  2. North Dakota: 411
  3. Hawaii: 491
  4. West Virginia: 514
  5. Wyoming: 694

“In October, every state posted a year-over-year decline in completed foreclosures, which is positive news,” Nallathambi said. “Additionally, the rate of serious delinquencies, which fell more than 25 percent year-over-year, is at the lowest level in nearly five years, which is great news as we head into a new year.”

Foreclosure inventory shrinks

The number of homes in the foreclosure process also declined. As of October 2013, approximately 879,000 U.S. homes were in foreclosure, a 31 percent decrease compared with 1.3 million homes in October 2012.

The foreclosure inventory dropped almost a full percentage point to 2.2 percent of all homes with a mortgage from October 2012 to October 2013, according to CoreLogic Chief Economist Mark Fleming.

“This is good news for the housing and mortgage finance markets, but the rate remains elevated relative to the pre-crisis level of about 0.6 percent,” Fleming said. “A normal level would be only a quarter of the current stock.”

A home is in foreclosure when the mortgage is deemed seriously delinquent and the servicer begins the process of taking back the home. Not all foreclosures that are started are later completed since some homeowners sell their home or find a way to make the payments they’ve missed.

Approximately one-third of U.S. homes are owned outright without a mortgage.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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