Foreclosure filings fell to an 11-year low in the third quarter, according to ATTOM Data Solutions Q3 2017 U.S. Foreclosure Market Report™, out Thursday.
A total of 191,824 U.S. properties were hit with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the third quarter, down 13% from the previous quarter and down 35% from a year ago to the lowest level since Q2 2006.
U.S. foreclosure activity in Q3 2017 was 31% below the pre-recession average of 278,912 properties with foreclosure filings per quarter between Q1 2006 and Q3 2007 — the fourth consecutive quarter where U.S. foreclosure activity has tracked below the pre-recession average.
“Legacy foreclosures from the high-risk loans originated between 2004 and 2008 have largely been cleared out of the distressed market pipeline,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile loans originated during the housing boom of the last five years are posting foreclosure rates below historic averages, with the notable exception of FHA loans originated in 2014, which have the highest foreclosure rate of any FHA loan vintage since 2009 — 29% above the historic average for FHA loans although still 55% below the peak in 2007.”
Lenders started the foreclosure process on 93,724 U.S. properties in Q3 2017, down 7% from the previous quarter and down 16% from a year ago to the lowest level since ATTOM began tracking, in Q2 2005.
Counter to the national trend, 51 metro areas (24% of the 217 analyzed in the report) posted a year-over-year increase in foreclosure starts in Q3 2017, including Dallas-Fort Worth, Texas (6% increase); Denver, Colorado (12% increase); Cincinnati, Ohio (5% increase); Cleveland, Ohio (29% increase); and Columbus, Ohio(23% increase).
Other major metros with a year-over-year increase in foreclosure starts in Q3 2017 included Austin, Texas (up 29%); Nashville, Tennessee (up 17%); Milwaukee, Wisconsin (up 97%); Oklahoma City, Oklahoma (up 34%); and Louisville, Kentucky (up 27%).
FHA foreclosure rates on 2014 vintage loans were at an 11-year high in Austin and Denver, a 10-year high in Oklahoma City and Nashville, and a nine-year high in Cincinnati, Cleveland, Columbus and Dallas.
Third quarter foreclosure activity was below pre-recession averages in 123 of the 217 metro areas analyzed in the report (57%), including Los Angeles, Chicago, Dallas, Houston, and Miami.
Counter to the national trend, Q3 2017 foreclosure activity was above pre-recession averages in 94 of the 217 metros analyzed in the report (43%), including New York, Philadelphia, Washington, D.C., Baltimore, and Virginia Beach.
Among 217 metropolitan areas with at least 200,000 people analyzed in the report, those with the highest foreclosure rates in Q3 2017 were Atlantic City, New Jersey (one in every 150 housing units with a foreclosure filing); Trenton, New Jersey (one in 234); Cleveland, Ohio (one in 275); Fayetteville, North Carolina (one in 283); and Columbia, South Carolina (one in 284).
Lenders completed the foreclosure process (REO) on 55,993 U.S. properties in Q3 2017, down 29% from the previous quarter and down 35% from a year ago to the lowest level since Q3 2006.
