US foreclosure filings hit 5-year low in September

U.S. foreclosure filings dropped to a five-year low in September as fewer homes were on track to be seized by lenders.
Associated Press
Oct 15, 2012

 

It was the second-consecutive monthly decline in filings, although there remains a sharp divergence along state lines, according to a report Thursday by foreclosure listing firm RealtyTrac Inc.

On a national level, overall foreclosure filings last month — including home repossessions — fell 7 percent from August and 16 percent from September 2011. There were 180,427 foreclosure filings reported for September, the fewest since July 2007 in the midst the housing market bust.

The number of homes entering the foreclosure process, so-called foreclosure starts, fell to 87,066 in September, down 12 percent from August and 15 percent from a year earlier. It was the second-straight month of declines following three months of increases, Irvine, Calif.-based RealtyTrac reported.

Foreclosure starts since peaked in April 2009 at around 203,000. But the current level is still well above the 34,000 starts recorded in May 2005, before the collapse of the housing market.

Overall foreclosure filings include notices of defaults on mortgages, scheduled auctions and repossessions. Foreclosure starts are either default notices or scheduled auctions, depending on the state's legal process.

Foreclosure starts declined in September on an annual basis in 31 states, with the biggest drops in California, Arizona, Michigan, Georgia and Texas, the new report showed. They are among the so-called non-judicial states, in which court approval isn't required for foreclosures.

Foreclosure activity has been declining in most non-judicial states because they didn't build a huge backlog of pending cases during an industrywide slowdown in foreclosures last year. The slowdown stemmed from widespread claims that lenders had been processing foreclosures without verifying documents.

Of the 19 states in which foreclosure starts rose in September, those with the largest annual increases were New Jersey, Pennsylvania, New York, Washington state and Florida. Except for Washington, they are judicial states, where the courts must sign off on foreclosures.

The slower process in states where courts play a role in foreclosures contributed to a logjam of pending foreclosure cases that now has mortgage lenders catching up.

In Washington, a non-judicial state, lenders were catching up with foreclosure cases that had been delayed by a state law that took effect in July 2011 and allowed borrowers facing foreclosure to request mediation, RealtyTrac noted.

The pace of homes entering the foreclosure process is expected to slow gradually, barring another severe economic shock that would send the recovering housing market into a tailspin, experts say. But the decline in foreclosures is likely to continue playing out unevenly, in part because of the differing approaches to handling foreclosures from state to state.

Meanwhile, there were 53,569 completed foreclosures last month. That's up 2 percent from August but down 18 percent from September 2011.

Home repossessions nationwide have been down on an annual basis for the past 23 months. They rose in September in 12 states, including New Jersey, where they jumped 48 percent, and Indiana, where they increased 31 percent.

Between January and September, banks completed foreclosures on 505,585 homes. At that pace, the country is on track to end the year with about 675,000 completed foreclosures, down from around 800,000 last year, according to Daren Blomquist, a vice president at RealtyTrac.

Florida had the highest foreclosure rate in the country last month, a rate of one in every 117 households in some stage of foreclosure.

Arizona, California, Illinois and Georgia rounded out the top five states with the highest foreclosure rates in September.

 

Comments

donutshopguy

There will always be foreclosures. The reason are to numerous to mention. But, it looks like we have finally weeded out those government forced home loans. Normal due diligence by banks was not allowed. Everyone was entitled to owning a home.

In education, employment and home ownership the opportunity is there for all.The outcome can not be pre arranged by our government.

Julie R.

In Erie County a house doesn't need to be in foreclosure to be sold at a court-ordered scam sheriff sale. All it needs is idiot public officials like the ones in corrupt Erie County.

Home Boy

Of course, they're down. Look at how many there were.

deertracker

Government forced home loans? What exactly are those? Are you saying the Bush administration forced the government to give out bad loans? Due dilligence was not allowed? Who did not allow it? Help me out on this!

Randy_Marsh

The government forced the banks to loan to people who were not qualified, They had quota's to meet. This caused a Housing bubble because as the democrats like to say "Homeownership is a right".
http://www.businessinsider.com/o...
People really need to read more.

deertracker

What's that part about 1995? I missed the word "forced". If the banks had not been discrimating the need for the lawsuit would not have been there. Banks regularly discriminated agains minorities when it came to home loans. I know this for a fact. President Obama was not the source of the housing bubble nor reason for the collapse. Common sense Randy, common sense. Read about that why don't you?

Randy_Marsh

It was a link i had handy, The gov pressured the banks into making sub-prime loans. It was not a racial issue at all but more or less loaning to people who could not afford the houses. After 10 to 15 years those same loans caused the crash. Housing bubbles do not happen over night. If the banks didnt loan or make loans avaliable the government would come down on those same banks with lawsuits, Thats force. Loan or we will sue you.
BTW I do not think Obama is behind the housing bubble, But he is a symptom of what caused it.

deertracker

NO,the government wanted to make sure the banks were not discriminating in their lending. The lawsuit was not filed to force banks to make bad loans or force bankers to be corrupt. The government did not force the bank to give loans to people that they knew could not afford it. It was corruption the banks are solely responsible for. Give out bad loans, then sell those loans so you get paid either way then bet they are going to default. Alot of people made alot of money and the worst part is, it was mostly all legal!

Randy_Marsh

Deertracker
How would you go about giving loans to people living on the edge of poverty? Would you not give them out and face the government pressure or would you do as all banks do, Make variable adjustment loans so they may qualify for them on a low income? The banks were stuck and yes it was wrong to give loans to low income people but what were the alternatives? Obviously these people could not afford them and didnt pass the sniff test because in less than 20 years we see the fall out from these loans. Same as whats happening today with GM.http://news.investors.com/busine... Do you think this time will be any different?

deertracker

I would not give loans to anyone that could not afford them. Period!

Randy_Marsh

Then you would not be in compliance with the community reinvestment act of 1977 http://en.wikipedia.org/wiki/Com... Yeah, They were under pressure to loan.

deertracker

Randy, did you read this part of the article? "The law, however, emphasizes that an institution's CRA activities should be undertaken in a safe and sound manner, and does not require institutions to make high-risk loans that may bring losses to the institution.[3][4] An institution's CRA compliance record is taken into account by the banking regulatory agencies when the institution seeks to expand through merger, acquisition or branching. The law does not mandate any other penalties for non-compliance with the CRA.[6][9]" C'mon man READ! THERE WAS NO PRESSURE OR FORCE!

Randy_Marsh

Deertracker
"An institution's CRA compliance record is taken into account by the banking regulatory agencies when the institution seeks to expand through merger, acquisition or branching."
With a bad review the bank cannot expand. How do they get good reviews? By loaning to more people. When they are scraping the bottom of the barrel and the threat of bad reviews come in they start bad loan practices backed with the promise that fannie and freddie will take up the slack. Banks are in it to make money, With a guaranteed out *Selling toxic assets* and good reviews for expanding it is better than having a bad rating from the government who approves or turns down mergers and expansions. You cannot see that?

reader

And how many are underwater with the drop in housing values?

goofus

Who can remember the young lawyer Barry Soetero suing banks for discrimination in loans on behalf of his community organizer group Acorn!!

donutshopguy

People don't lose their house because they are underwater. It may not be worth what they bought it for but no one is taking it away. They may have to live in it longer than the want but no one forced them to buy or pay that price for the property.

deertracker

No one forced the bank to loan them the money either. People walk away from homes that are underwater because it's a bad deal for them. Would you pay for a home that was originally overpriced then continue to pay when the home has depreciated when it was suppose to appreciate? At some point you have to cut your losses. Yes, the homeowner was wrong for signing on the dotted line but the bank was just as wrong for approving the loan.

Randy_Marsh

A bank loan is a contract. If you break a contract there should be consequences. If there are no consequences you would see all of the unions lose their jobs tomarrow. My home lost value due to stupid people signing loans they could not afford. Am i getting screwed? I would say YES because not only do i get to pay for my own home but i get to pay to bail out Fannie and freddie and the rest of the banks for loaning stupid people money that could not afford it.If you walk away from a home you have signed your name to, your name is no longer worth anything.

Swamp Fox

Dodd-Frank allowed Fannie & Freddie to insurance mortgages for 0% down and with sub prime credit ratings to quote"allow everyone home ownership."

"The tragedy is that the financial crisis continues because Congress misdiagnosed the problem and came up with a 2,000-page "solution" that will only make matters worse.

Despite the well-known problems with Fannie and Freddie, they were ignored in the Dodd-Frank Act. Why? Because many members of Congress had conflicts of interest in that Fannie and Freddie were very large contributors to the political campaigns of numerous members.

More direct conflicts of interest, by Senate Banking, Housing and Urban Affairs Committee Chairman Christopher J. Dodd and House Financial Services Committee Chairman Barney Frank, were well publicized, forcing Dodd to retire and causing Frank to loan personal money to his own re-election campaign.

The numbers show that government policies (including actions by the Fed), not greedy bankers, caused the financial meltdown.

As long as the government continues to force its agencies and private parties to give housing loans to those who cannot afford them, taxpayers will be on the hook for hundreds of billions of dollars in additional debt. But Washington is still in denial, from the president to the bureaucrats, including those at the Federal Reserve and, most of all, members of Congress — including, of course, the notorious Barney Frank, Charlie Rangel, Maxine Waters and Nancy Pelosi, all of whom won re-election rather than jail terms."

Richard W. Rahn is a senior fellow at the Cato Institute and chairman of the Institute for Global Economic Growth.

The Big Dog's back

Cato Institute? Are you serious? Puhleeeze. Nobody, but nobody forced the banks to make loans. The banks made the loans, reaped the benefits, and left the Gov holding the bag.

deertracker

Exactly right! Swamp is talking out the side of his neck. Obama was not even the President when this happened. These people actually consider themselves intelligent........I think! What a joke!

swiss cheese kat

In 2005 then-Senator Obama joined with his Democratic buddy Rahm Emanuel in stopping legislation that would have helped rein in the government-sponsored Fannie & Freddie mess. Senator Obama, was first in line when the little piggy’s lined up at the Fannie and Freddie trough for campaign money. How dumb can you be?

Swamp Fox

deertracker typical democrapper, where did I mention obbie in reference to Dodd-Frank, another example of the liberal based education system... Obbie's only knowledge of the housing market is purchasing a home with the assistance of a Chicago mobster Tony Rezko.......

doggie who barks without thinking. I would hope he knows that the Cato Insitutue is a Libertarian think tank that has criticized both major parties on a regular basis, but then again doggie thinking?

KURTje

Oh..kinda like the farmers in the eighties blaming the banks? NFW.

EZOB

Statistics are mainly a "JOKE". I can give many an explanation on any subject. One Million Homes to be foerclosed on. 950,000 completed and it is going to take a little more time to clean up the rest of the mess. I'll bet it is lower next month also. Say two years ago there were 75 million loans. It's been much harder to get a loan and now we are down to 30 million home loans. Less loans, Less in foreclosure.

coasterfan

The same yahoos who are trying to spin this obvious bit of GOOD news would be saying the exact same thing if the statistics showed the opposite. Stats are worse? It's Obama's fault. Stats are better? The stats are a lie.

The 2012 Republican Mantra: Ignore any signs of improvement in America since 2009, even blatantly obvious things. Ignore everything pre-2009. Must....not....give credence....to any good news. It would be an admission that the economy IS getting better and Obama's policies are indeed working.
Which, of course, is exactly what's happening...

Riskkbreaker

Coasterfan, you should probably read other people's comments before you post. The whole thing has been laid out and there is nothing you can say against it.

As to this good news of yours, of course there are less home foreclosures...there arent many homeowners left! Geez.

Ignore everything pre-2009? Isn't that what you are doing? I am pretty sure everyone here is talking about how Clinton set this in motion and the Democrats drove the nail in the coffin when they won control of Congress in 2006 (capitalizing on the anti-war sentiment and seizing the opportunity for an economic coup to "transform" America).

EZOB

Things are better? What the heck are you smoking?
16 Trillion, Less and cheaper jobs, $3.50 &$4.00 gas, still in Iraq, now in Afghanistan, Soldiers still being killed, and "NO" Transparency and things are getting better. Yes, Muslims have it better, Illegal Immigration has exploded, no threat to those responsible to Fast and Furious, and those responsible for 9/11 still have no worries. I guess it's better for those of you but to Red-Blooded Americans and our Troops it's Worse.

44846GWP

"those responsible for 9/11 still have no worries" What? Almost all are dead or locked up. Explain.

Swamp Fox

Never confuse a liberal with bright objects or facts. Chris Dodd (D) personally received favorable deals from (defunct) Countrywide Mortgage who had written record number of sub-prime loans insured by Fannie & Freddie.
Both Fannie & Freddie gave lenders incentives and lowered their standards to back the loans. The vast number of these sub-prime loans ended up in foreclosure.

Contango

Heck, FHA is allowing sub-prime home loans now. No money down.

The required 3% down payment can be rolled over into the mortgage payments = $0.00 down.

Also, the Fed Resv. is buying tens of billions of dollars of mortgage-backed securities helping to prop up the housing market.

Smoke and mirrors.

---------------------

Under Mr. Obama, the govt. took over the student loan program. Over $1 trillion in student loans - the next bubble awaiting collapse.

44846GWP

Spin it Winnie, spin it!!

Swamp Fox

Contango, I do agree with you the FHA is allowing the 3% rolled into the loan, the only difference now compared to the mid 90's is a much higher credit score is required to qualify. In the mid 90's because of the relaxed FHA standards including low credit scores if you had a pulse you could buy a home.
The next financial crisis will be the commercial real estate collapse. Many of the properties are on 5 or 7 year balloons, with the increased taxes on business and rising health insurance costs on business from Obamacare many of these properties will be in trouble refinancing.

EZOB

Swamp Fox & Contango,
A good friend of mine in another state (Robbie) recently divorced was asked by His neighbor if He would consider selling His House instead of renting it out. He moved into His sisters much larger home close by. He said certainly but didn't think it would sell anytime soon. She asked, how much and 99,900 was the price. He had figured he'd have been happy with 75 or 80. The very next day a guy from the bank calls him to make an appointment to see the house. She had been pre-approved for a 100,000 loan. This all happened in the month of September. In two weeks He was out and She was in. Now the catch, She has been his neighbor for years and She makes less than 15,000 a year. He couldn't believe all this was still going on. He met His state Senator the first of October at His place of Employment (Pharmaceutical Industry) and the senator didn't make a comment when asked about the housing loans.

Swamp Fox

EZOB, question, what type of loan did she obtain, how much down down did she have, was the house purchased in her name, did she have a recent divorce or civil settlement, had she recently sold a home? I find it difficult to to believe that the loan closed in two weeks using any type of goverment insured loan. At the current time all goverment insured loans (VA. FHA, HUD) are taking a minimum of 45 days, up to 60. If she obtained a conventional loan depending on her credit score she would have to pay anywhere from 10-20% down.

CAST THE FIRST STONE

Of course there are less. How many homes can one person lose. They are renting now and those homes they lost are the ones being rented

EZOB

Swamp Fox,
Single Mom, FHA Loan, I don't know how much She had down but was pre-approved for 100,000. She was renting the House next to Robbie and wasn't recently divorced. I was with a local doctor and a couple guys who live in the immediate area, it's a true story. Robbie has known this lady His whole life and said there is no way she is going to be able to pay for the house on her own. Maybe she'll marry the loan officer???? Just joking but I'll keep everyone informed but it will be on a different Blog topic. I'll add, My son is a real estate agent and don't believe Me.

lmile61

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Swamp Fox

EZOB, I believe you but again ask any loan officer the FHA loans cannot be processed in two weeks they take a minimum of 30-45 days, totally out of the hands of any loan officer to get it done in two weeks. Whats the address of this property?

From a FHA informational pamphlet,

"There are many variables at work with an FHA home loan, so there is no set time period. Many lenders may use a stock answer of between 30 and 45 days, but you should not expect an FHA loan to close within a week to ten days of the mortgage application.

It is very important to point out that pre-qualifying for an FHA loan is not the same as having the lender process the loan application data, verify income and employment, and pull your credit reports.

That process definitely takes time, which is why the 30-45 day window is often cited. Pre-qualification FHA loan procedures don’t involve the verifications, so your lender needs to time not only to request the credit reports AND have have the credit agencies respond and send out the credit data.

If you have a lengthy employment history over the last 24 months (frequent job changes or seasonal/freelance income that must be followed up upon) your application may take a bit longer".

Contango

Foreclosures remain a regional issue.

FL and IL are still high on the list.

http://www.chicagotribune.com/bu...

thinktwice

Hard to foreclose when theres nothing left to foreclose on.

ptech38

They don't need to sale by court and need to decide with together and then take further action.
http://www.promos10.com

lmile61

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tuneseo

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raok7

Now a thing is that what Obama can do for getting loans for the people and their home loan and etc.every one is waiting for upcoming news.
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