RISMEDIA, October 14, 2010—RealtyTrac, a leading online marketplace for foreclosure properties, released its U.S. Foreclosure Market Report for the third quarter of 2010, which shows that foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on 930,437 properties in the third quarter, a nearly 4% increase from the previous quarter, but a 1% decrease from the third quarter of 2009. One in every 139 U.S. housing units received a foreclosure filing during the quarter.
Foreclosure filings were reported on 347,420 U.S. properties in September, an increase of nearly 3% from the previous month and an increase of 1% from September 2009. A record total of 102,134 bank repossessions were reported in September, the first time bank repossessions have surpassed the 100,000 mark in a single month.
“Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months,” said James J. Saccacio, chief executive officer of RealtyTrac. “We expect to see a dip in those bank repossessions—and possibly earlier stages of the foreclosure process—in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks.”
Impact of lender foreclosure halts
Foreclosure activity in the 24 judicial foreclosure states most affected by the foreclosure documentation issue accounted for 40% of all foreclosure activity in the third quarter and 36% of bank repossessions, or REOs.
“If the lenders can resolve the documentation issue quickly, then we would expect the temporary lull in foreclosure activity to be followed by a parallel spike in activity as many of the delayed foreclosures move forward in the foreclosure process,” Saccacio said. “However, if the documentation issue cannot be quickly resolved and expands to more lenders, we could see a chilling effect on the overall housing market as sales of pre-foreclosure and foreclosed properties, which account for nearly one-third of all sales, dry up and the shadow inventory of distressed properties grows—causing more uncertainty about home prices.”
Preliminary RealtyTrac foreclosure sales numbers for September show that overall foreclosure sales—including pre-foreclosure sales and REO sales—accounted for 31% of all sales during the month. REO sales alone accounted for 18% of all sales. Foreclosure sales in the 24 states most affected by the foreclosure documentation issue accounted for 32% of all foreclosure sales nationwide, based on the preliminary September data.
Foreclosure Activity by Type
During the quarter, a total of 269,647 properties received default notices (Notices of Default or Lis Pendens), a decrease of 1% from the previous quarter and a decrease of 21% from the third quarter of 2009, when default notices peaked at more than 342,000.
Foreclosure auctions were scheduled for the first time on a total of 372,445 properties during the quarter, the highest quarterly total for scheduled auctions in the history of the report. Scheduled auctions increased 5% from the previous quarter and were up 4% from the third quarter of 2009.
Bank repossessions (REOs) also hit a record high for the report in the third quarter, with a total of 288,345 properties repossessed by the lender during the quarter—an increase of 7% from the previous quarter and an increase of 22% from the third quarter of 2009.
Nevada, Arizona, Florida post top state foreclosure rates in third quarter
As it has for the past 15 quarters, Nevada continued to document the nation’s highest state foreclosure rate in the third quarter of 2010 despite a year-over-year decline in foreclosure activity. One in every 29 Nevada housing units received a foreclosure filing during the quarter, almost five times the national average. Nevada foreclosure activity increased nearly 1% from the previous quarter, but was down nearly 20% from the third quarter of 2009.
Arizona posted the nation’s second highest state foreclosure rate for the fifth consecutive quarter, with one in every 55 housing units receiving a foreclosure filing, and Florida posted the nation’s third highest state foreclosure rate for the fourth consecutive quarter, with one in every 56 housing units receiving a foreclosure filing.
With one in every 70 housing units receiving a foreclosure filing during the third quarter, California documented the nation’s fourth highest foreclosure rate, followed by Idaho, with one in every 86 housing units receiving a foreclosure filing during the quarter. A total of 7,424 Idaho housing units received a foreclosure filing during the quarter, an increase of nearly 20% from the previous quarter and an increase of nearly 14% from the third quarter of 2009.
Other states with foreclosure rates ranking among the top 10 in the first quarter were Utah, Georgia, Michigan, Illinois and Hawaii.
Five states account for more than 50 percent of nation’s third quarter total
California alone accounted for 21% of the nation’s total foreclosure activity in the first quarter, with 191,016 properties receiving a foreclosure notice—the nation’s largest foreclosure activity total. California foreclosure activity decreased nearly 1% from the previous quarter and was down nearly 24% from the third quarter of 2009.
Florida foreclosure activity increased 12% from the previous quarter and was flat from a year ago, giving the state the second largest foreclosure activity total, with 157,026 properties receiving a foreclosure filing.
With 49,103 properties receiving a foreclosure filing in the third quarter, Arizona posted the nation’s third largest state foreclosure activity total. Arizona foreclosure activity increased nearly 8% from the previous quarter, but was down 2% from the third quarter of 2009.
Illinois posted the nation’s fourth largest foreclosure activity total, with 47,802 properties receiving foreclosure filings, and Michigan posted the nation’s fifth largest foreclosure activity total, with 46,100 properties receiving foreclosure filings. Foreclosure activity in both Illinois and Michigan increased on a quarterly and annual basis in the third quarter.
Other states with foreclosure activity totals among the nation’s 10 highest were Georgia (41,231), Nevada (38,429), Ohio (36,677), Texas (34,187) and Washington (17,670)
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