Foreclosure starts have fallen to their lowest level in six-and-a-half years, after new regulations in California sharply reduced foreclosure actions there.
Notices of default - the first step in the foreclosure process - fell 11 percent in January from the previous month, reaching a level of 65,000 homes, their lowest since June 2006. On an annual basis, new foreclosures were down 28 percent from their January 2012 level.
A total of 151,000 homes were subject to foreclosure actions of all types in January - either a notice of default, scheduled auction or bank repossession - which also represented a 28 percent annual decline, but down only 7 percent from December's level.
Over 50,000 homes were reposed in January, a 4.9 percent decline from December and a one-year drop of 24 percent from January 2012.
California law has big effect
The one-month drop was spurred by new California legislation that took effect on Jan. 1, according to Darren Blomquist, RealtyTrac vice president. California foreclosure starts dropped by 62 percent in January compared to the month before, with the result that California dropped out of the top spot as the state with the most foreclosure filings for the first time since January 2007.
The legislation, called the Homeowner's Bill of Rights, puts into state law many of the terms of the national mortgage settlement, including a ban on "dual tracking" (when a mortgage servicer lender pushes ahead with foreclosure proceedings against a borrower being considered for a loan modification), requiring that servicers provide borrowers facing foreclosure with a single point of contact, and imposes fines of up to $7,500 for filing multiple unverified foreclosure documents.
Florida has most foreclosure actions
Taking over the #1 spot for the month of January was Florida, which had 30,000 foreclosure actions of all three types during the month. Unlike the nation as a whole, foreclosure filings in Florida are on the rise, increasing 12 percent from December's level and up 20 percent from January 2012.
Florida currently has the nation's highest foreclosure rate for the fifth month in a row, with one in 300 homes subjected to a foreclosure filing in January, compared to a national rate of one in 869. Nevada had the second-highest rate, one in 344, despite a 43 percent decrease in overall foreclosure filings compared to January 2012.
The states with the next highest rates of foreclosure filings were, in order, Illinois, Arizona, Georgia, Ohio, Washington, California, Indiana and Michigan.
Foreclosure numbers include only those homes that were subjected to specific foreclosure actions during the month and do not include those properties in foreclosure that were not subject to a new filing.
First published at: https://www.mortgageloan.com/new-foreclosures-lowest-2006-9365