RISMEDIA, Oct. 17, 2007-The real story in foreclosures today is NOT what’s up; it’s what’s down. Foreclosed homes dropped nearly 21.5% nationwide in September over August, according ForeclosureS.com, which has been analyzing and publishing real estate and foreclosure data for more than 20 years.
“Despite what some other data aggregators are saying, the big news is that many states, including some typically hit hard by rising foreclosures, actually saw a drop in the number of people who lost their homes to foreclosures last month,” says Alexis McGee, president of California-based ForeclosureS.com, and author of “The ForeclosureS.com Guide to Investing: Making Huge Profits Investing in Pre-Foreclosures Without Selling Your Soul” (John Wiley, September 2007).
Last month 30 states reported a drop in REO filings from August and one was unchanged. An REO (real-estate owned) filing is the final stage in the foreclosure process in which a property that does not sell at foreclosure auction reverts back to the bank or lender.
Among the foreclosure leaders with declining numbers were:
California (down 14.24%)
Colorado (down 57.97%)
Florida (down 14.18%)
Michigan (down 21.13%)
Ohio (down 29.22%)
Texas (down 1.65%)
On a regional basis, across the board fewer REO filings were reported in September compared with August. ForeclosureS.com reports based on analysis of its data base of more than 3.5 million listings nationwide.
“These new numbers are in stark contrast to what have been staggering month-to-month increases in foreclosures virtually nationwide,” adds McGee, also author of the upcoming “The ForeclosureS.com Guide to Real Estate Investing Secrets You Won’t Learn Anywhere Else” (Wiley, March 2008).
“Year over year, of course, the numbers of foreclosures – per capita and actual filings – are up as reported in the majority of states. Given all the real estate and credit market turmoil of the past year, that’s not unexpected,” adds McGee.
Nonetheless year-to-date seven states reported solid decreases in the number of REO filings over the same time period last year, McGee adds. Those states, according to ForeclosureS.com, include Massachusetts, Utah, Colorado, South Carolina, Oklahoma, Tennessee, and Pennsylvania.
“Don’t get too excited too quickly, though,” says McGee. “The foreclosure crisis isn’t over – far from it. Per capita and year to date plenty of homeowners still haven’t and won’t be able to extricate themselves successfully from escalating mortgage debt and have or will lose their homes to foreclosure as a result.”
So far this year, on a per capita basis five out of every 1,000 households or nearly 400,000 properties nationwide have been lost to foreclosure. That compares with 3.6 foreclosures per 1,000 households (285,826 filings) a year ago, according to ForeclosureS.com reports. Per capita can be a measure of the real impact of housing market trends.
“Those numbers will keep rising, too, as hundreds of thousands of ARMs (adjustable rate mortgages) continue to reset this year and next and leave homeowners with crippling and inescapable debt,” McGee adds. (See the Dollars and Cents of ARMs, Sidebar below) “But for other homeowners across the country a different story may be evolving,” says McGee. “As mortgage markets stabilize, investors and lenders who had been scared away by August’s subprime lender implosion slowly are returning to the market. For home buyers that means greater liquidity – the availability of more money to lend.
Another bright spot is the recent introduction of FHASecure, the federal government-sponsored program (H.R. 1852, the Expanding American Homeownership Act of 2007) to give qualified subprime borrowers an affordable refinancing alternative to foreclosure.”
Add to the mix, says McGee, the fact that the nation’s overall economy remains sound and interest rates at 45 year lows – the Fed last month cut its benchmark rate ½ point to 4.75%. The result is that in some areas of the country that may have experienced less rampant housing speculation and/or rapid price appreciation, markets are slowing coming back.
A recent report from Business 2.0 and Moody’s Economy.com even singled out 10 major metropolitan areas with solid home price growth ahead. “It all is beginning to add up to a light at the end of the foreclosure tunnel,” adds McGee.
Not for everyone, however, and certainly not yet, she adds. Perhaps indicative of that, last month pre-foreclosure filings – including notice of default and notice of foreclosure auction – nationwide continued their steady climb upward toward what likely will be the one million mark by year end. That’s despite total September filings (98,298) that were down from August numbers (117,696). Year to date 11.5 pre-foreclosure filings were reported for every 1,000 households nationwide, up from just less than 10 for every 1,000 households as of the end of August and just 6 in 1,000 a year ago. So far this year nearly 809,100 pre-foreclosure actions have been filed, according to ForeclosureS.com numbers.
On a brighter note, comparing this year’s third quarter with second quarter pre-foreclosures, the Midwest region of the country actually saw its numbers of pre-foreclosure filings drop 3% (43,106 vs. 44,232) but that still represents 3.2 filings out of every 1,000 households.
Let’s look at a few more numbers from ForeclosureS.com:
- Nevada had the most REO foreclosures on a per capita basis in the nation in September with 12.9 REO filings for every 1,000 households in the state in September. Year to date, it’s No. 2 also with 12.9 filings per 1,000.
- Nevada also leads the nation in pre-foreclosure per capita filings year to date with 34.7 out of every 1,000 households. Florida is No. 2 in pre-foreclosure filings with 24 filings per 1,000 households, and Colorado is third per capita with 18.1 filings per its 1,000 households.
- Several states with fewer REO filings in September vs. August remained among the top 10 on a per capita filings basis. Those states include Michigan (No. 2 with 12.3 filings per 1,000 households); Colorado (No. 5 with 10 filings per 1,000 households in the state); Ohio (No. 8, with 8.3 filings per 1,000 households), and Texas (No. 9 with 6.9 filings per 1,000 households).
- Leading the nation in REO filings year to date is Costilla County, Colorado with 265.5 filings for every 1,000 households. But that’s down almost 31% from per capita numbers a year ago.
- In contrast, in the No. 2 spot in REO filings is Valencia County, New Mexico with 81.7 filings for every 1,000 households, up nearly 1,157% from per capita numbers a year earlier.
- The top three counties in pre-foreclosure filings year to date include Lee County, Florida (50.5 filings per 1,000 households), Pinal County, Arizona (46.1 filings per 1,000 households), and Alpine County, California (45.5 filings per 1,000 households).
For more information, visit www.foreclosures.com.
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