Before we all give that collective sigh of relief that foreclosures are finally starting to ebb, it may be good to look a little harder at the latest quarterly data released today from RealtyTrac.
Superficially, the 4% decrease from the previous month to 332,172 property foreclosure filings in October does looks promising, as does the fact that it’s almost exactly the same total reported in October 2009. However, the brief respite may be little more than the calm in the eye of the storm.
“October marks the 20th consecutive month where over 300,000 U.S. homeowners received a foreclosure notice,” said James J. Saccacio, chief executive officer at RealtyTrac. “The numbers probably would have been higher except for the fallout from the recent 'robo-signing' controversy—which is the most likely reason for the 9% monthly drop in REOs we saw from September to October and which may result in further decreases in November."
Supporting that anticipated increased pace is the latest green light given the major banks by the Obama administration to put the foreclosure paperwork in the past. Banks had temporarily halted the foreclosure process due to questionable—and sometimes illegal—mortgage document signing. Generally, the administration’s advice to lenders is to proceed with caution and know that they are being closely watched.
For potential buyers, that green light may not be enough as skittish title insurance companies decide how much or how little risk they are willing to take on. In some cases, title insurers have already singled out to avoid certain banks whose foreclosed properties have what they consider to be questionably reliable paperwork.
Topping the list of foreclosure rates once again is Nevada, with 1 in 79 homes filing, nearly five times the national average. Florida and Arizona are second and third with 1 in 155 and 1 in 165, respectively.
Despite Florida’s five straight months of annual decreases, the state’s year-over-year increases the past two months fueled the nation’s second-highest state foreclosure rate for the third month in a row.
Similarly, Nevada’s seven straight months of annual decreases haven’t been enough to alleviate its past two months of year-over-year foreclosure decreases, and the state’s status of having the nation’s third-highest foreclosure rate for the third month in a row.
Despite a nearly 12% decrease from the previous month and a decrease of 22% from October 2009, topping the list of total amount of foreclosures is California. Its 66,475 properties receiving a foreclosure filing during the month represents 20% of the national total in October.
Again number 2 on the list is Florida. Its 56,858 Florida properties make it the nation’s second-highest state total and equal 17% of the national total.
Filling out the top five are Michigan, Illinois, and Arizona. With 6%, 5%, and 5%, respectively, the three states total 16% of the nation’s total. As a group, the top five states currently account for more than 50% of all foreclosures in the nation.
Matthew Phair is a freelance writer in New York.