Huge Drop in Foreclosure activity: lowest level in 6 years

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The foreclosure filings in 2013 have reached the lowest level in six years, despite an increase reported by some states where court processes take longer.

As compared to 2012, there was a 26% drop in the number of foreclosure filings in 2013. According to market researcher RealtyTrac, almost 1.4 million homes were affected by foreclosure, marking a 53% decrease in filings from the 2010 peak.

There has been a visible improvement in foreclosure activity in the majority of states. Some of the distressed homes were resold and many loan defaults were eliminated. However, 10 states still reported more intense foreclosure activity in 2013 than in 2012. Among these states the most affected were Maryland, up 117%; New Jersey, up 44%; New York, up 34% and Connecticut, up 20%.

In the states that implemented consumer-protection measures several years ago, the foreclosure process slowed down. RealtyTrac says that the average time to complete a foreclosure in the fourth quarter was a record 564 days, nationwide.

The same source reported that the states with the longest foreclosure processes are New York, with 1,029 days; New Jersey, 999 days, and Florida, 944 days. At the other ‘extreme’ of the court process, with the fastest foreclosures, there were Texas, with an average 175-day time to foreclosure and Delaware with 176 days.

General statistics indicate that 1% of U.S. housing units had at least one foreclosure filing in 2013. This is a considerable decrease from the peak of 2.2% of units in 2010. The highest foreclosure rates last year were reported for Florida with 3% of units getting a foreclosure filing; Nevada, 2%; and Illinois, almost 2%.

RealtyTrac reported that almost 6 million U.S. homes have been repossessed by lenders from the total of 11 million that have entered foreclosure since 2006. In 2013, 463,000 homes were repossessed by lenders, and this number equals a major 31% decrease from the 2012 level.

Although it still looms over some states, the dark cloud behind the foreclosure crisis is getting smaller, with fewer distressed homes being resold or entering foreclosure.

There is a 33% decrease in the number of foreclosure starts, the first phase of the court process, compared to the previous year. Thirteen states saw starts increase from 2012. Maryland, Arkansas, New Jersey and Connecticut were among the thirteen states with an increase in starts.

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