Foreclosure filings continued to creep up in January, gaining 3% from December, according to data released today by RealtyTrac. A total of 210,941 properties—or one in every 624 housing units—received a filing during the month.
While January’s level remained 19% below year-ago levels, "we continue to see signs on a local and regional level that the frozen-up foreclosure process is beginning to thaw," said Brandon Moore, CEO at RealtyTrac, in a statement released today.
Evidence of a thaw has been mounting since robo-signing issues were resolved, resulting in rising numbers of filings in states where foreclosures don’t involve judicial action. But in January, that trend spread to judicial foreclosure states as well, for the first time since the robo-signing problems were discovered. "Foreclosure activity increased on a year-over-year basis for the first time in more than 12 months in Florida, Illinois, Indiana, and Pennsylvania, following a pattern we saw in late 2011 in states such as California, Arizona, and Massachusetts," Moore said.
And the growing trend is likely to pick up speed thanks to the recent settlement between some of the major lenders and 49 state attorneys general, says Daren Blomquist, a RealtyTrac spokesman, since the settlement provides clarity for banks on what it means to foreclose properly.
"That might not seem like a good thing for the market, but it's a necessary trend that we think has to happen before those markets can hit a true bottom and then start trending upward again," Blomquist said. "We need to deal with this backlog of distressed inventory."
Separated by filing type, first-time default notices were flat in January from the previous month at a total of 58,362, although down 22% year-over-year. Several states saw dramatic increases for the month, including Pennsylvania (up 112%), Maryland (up 100%), and Florida (up 36% and higher on an annual basis for the third consecutive month).
Foreclosure auctions were up 1% from December and down 20% from January 2011, with a total of 86,037 scheduled for the month. Four states saw a jump of more than 50%, including Massachusetts (up 57%), South Carolina (up 79%), Indiana (up 141%), and Illinois (up 141%).
Lender repossessions (REOs) were up 8% from the previous month and down 15% from the previous year, with a total count of 66,542.
Nevada posted the highest foreclosure rate among states with one in every 198 housing units receiving a filing during January, a 52-month low for the beleaguered state, an 8% drop from December, and a 52% drop year-over-year.
California, at a 50-month low for the state, came in at No. 2, with one in every 265 housing units receiving a filing—a total of 51,584 properties.
Arizona, at No. 3, was up 14% from the previous month with one in every 325 housing units the recipient of a filing, although the number was down 44% year-over-year.
Other states in the top 10 were Georgia, Michigan, Florida, Illinois, Delaware, Colorado, and Indiana.
Among cities, nine of the top 10 foreclosing metro areas were in California, with the only exception being Las Vegas. Of the top 20 metro areas for foreclosures, four posted year-over-year increases, including Lansing-East Lansing, Mich. (up 20%), Orlando, Fla. (up 55%), Chicago (up 13%), and Miami (up 21%).
As for the future, Blomquist doesn't anticipate that foreclosures will again reach the levels seen in 2009 and 2010, either in individual states or on a national level. However, "we have one more big bump in the road to get through with these delayed foreclosures. It's going to get a little worse before it gets better." Due to robo-signing issues, he said, last year was artificially low, which will force 2012 to be artificially high. "But once we get through that, we should see foreclosures hit a more long-term downward trend—provided no more wrenches are thrown into the foreclosure process."
Claire Easley is a senior editor at Builder.