Foreclosure activity continued to slow in February, dropping 14% from the previous month and lowering a dramatic 27% from February 2010, according to RealtyTrac data released today. Yet the seemingly hopeful numbers belie the ongoing state of crisis merely slowed by the robo-signing and paperwork scandals that have forced banks to slow foreclosure operations.
“Foreclosure activity dropped to a 36-month low in February as allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets,” said James J. Saccacio, RealtyTrac’s CEO, in a statement released today. “While a small part of February’s decrease can be attributed to it being a short month and bad weather, the bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures. We expect to see the numbers bounce back, but that will likely take several months. And monthly volume may never return to its peak in March 2010 of more than 367,000 properties receiving foreclosure filings.”
Nevada—despite a 22% decrease in foreclosure activity from January—ranked highest among state foreclosure rates in February, the 50th month in a row it has claimed the unfortunate distinction. With one in every 119 homes receiving a foreclosure filing, a total of 9,553 properties, the beleaguered state’s numbers were down 13% year-over-year.
Arizona’s rate of one in every 178 homes receiving a foreclosure filing brought it in at No. 2 in the nation among foreclosure rates. California, with one in every 239 housing units having received a foreclosure filing, came in third.
Florida, which for several months last year held the second-highest foreclosure rate in the nation, is now ranked eighth and has no cities in the top 20 metro areas ranked by foreclosure rate.
“Florida is sort of the apex of everything going wrong with the paperwork,” Rick Sharga, senior vice president at RealtyTrac, told Builder in a phone interview last month. “Now the courts are backlogged as they have to reevaluate the paperwork, and 300,000 foreclosures are delayed and waiting for court activity.”
In terms of sheer numbers, California’s 56,229 foreclosure filings accounted for 25% of the nation’s total in February, according to RealtyTrac’s data. Still, the state’s foreclosure activity was 16% lower than what it was in January and down 18% year-over-year.
Florida, while down 65% from where it stood in terms of overall numbers a year ago, still got hit with 18,760 foreclosure filings, the second-highest number in the nation.
Arizona (15,485 filings), Michigan (14,003 filings), Georgia (12,807 filings), Texas (11,562 filings), Illinois (9,592 filings), Nevada (9,553 filings), Ohio (8,598 filings), and Wisconsin (4,478 filings) rounded out the top 10 for the month—a group that accounted for more than 70% of foreclosure filings nationwide.
Among metro areas, seven of the top 10 were held by California, including Modesto (No. 2), Stockton (No. 3), Riverside-San Bernardino-Ontario (No. 5), Vallejo-Fairfield (No. 6), Merced (No. 7), Bakersfield (No. 8), and Sacramento-Arden-Arcade-Roseville (No. 10).
The No. 1 spot was once again relinquished to Las Vegas, with a rate of one in every 106 homes receiving a foreclosure filing in February. Nevada’s Reno-Sparks metro area appeared at No. 9.
The Phoenix-Mesa-Scottsdale area filled out the top 10 at No. 4.
Foreclosure activity by type was down across the board. Default notices, with a total of 63,165 during the month, were at a 16% decrease from January and 41% below where they stood the year before.
Foreclosure auctions scheduled for the first time totaled 97,293, 10% lower than the previous month and down 21% from February 2010.
Properties that were foreclosed on reached 64,643 during the month, a decrease of 17% from the previous month and 18% lower than the previous year. Bank repossessions reached a 22-month low.
Claire Easley is senior editor, online, for Builder.
Learn more about markets featured in this article: Las Vegas, NV, Modesto, CA, Stockton, CA, Riverside, CA, Vallejo, CA, Merced, CA, Bakersfield, CA, Reno, NV, Phoenix, AZ, Greenville, SC, Los Angeles, CA.