Foreclosure Losses Lowest Since 2007

The number of homes lost to foreclosure has fallen to its lowest level in nearly five and a half years, the real estate data firm RealtyTrac reported today.

There were just over 45,000 bank repossessions in February, according to RealtyTrac, the fewest reported since September 2007. In total, over 154,000 properties were subject to a foreclosure filing during the month, a 25 percent annual decline but a 2 percent increase over January.

The figure includes notices of default and scheduled foreclosure auctions, in addition to actual repossessions. Properties in foreclosure that did not advance in the process are not included.

Occasional flare-ups still expected

Although the foreclosure crisis appears to be winding down, a backlog of distressed properties remains and will likely continue to produce occasional spikes in states with long foreclosure timelines, according to Daren Blomquist, RealtyTrac vice president.

“At a high level the U.S. foreclosure inferno has been effectively contained and should be reduced to a slow burn in the next two years,” Blomquist said. “But dangerous foreclosure flare-ups are still popping up in states where foreclosures have been delayed by a lengthy court process or by new legislation making it more difficult to foreclose outside of the court system. Foreclosure starts have been steadily building in those states over the last several months and likely will end up as bank repossessions or short sales later this year.”

New foreclosures up

As a case in point, foreclosure starts were up 10 percent in February after three straight months of declines, with filings on nearly 71,500 properties during the month. The figure still represented a 25 percent annual decline since February 2012.

Among the nation’s hot spots were Washington state and Maryland, where foreclosure filings have now increased for at least seven months in a row.

California, Nevada see sharp increases

New foreclosures jumped in California, increasing 47 percent in February to nearly 6,500, after hitting a seven-year low in January. Overall foreclosure activity in the state continues to decline, however, and the state dropped to the 13^th spot for overall foreclosure rate, after long ranking in the top five in the years after the crash.

Foreclosure starts have been rising dramatically in Nevada, increasing 334 percent over the past year after a temporary lull. The nearly 2,000 new foreclosures in Nevada in February were the highest monthly total in nearly a year-and-a-half.

Nevada currently has the nation’s second-highest foreclosure rate, trailing only Florida, where one in every 282 homes was subject to a foreclosure filing during the month of February. The national foreclosure rate in February was one in every 849 homes subjected to a filing.

First published on MortgageLoan.com at: http://www.mortgageloan.com/foreclosure-losses-lowest-2007-9395