Completed Foreclosures Plummet but Foreclosure Inventories Remain High

by 31 Oct 2012

Completed foreclosures fell to 57,000 in September 2012, a 68 percent decline from a year ago and a 3 percent decline from August.  However inventories of backlogged foreclosures remained high, virtually unchanged from a year ago at 1.4 million homes, or 3.3 percent of all homes with a mortgage, according to CoreLogic’s monthly foreclosure report released today.

In September 2012 at the height of the backlog the process had slowed following the Robogate scandal, the foreclosure backlog was 1.5 million, or 3.5 percent of all mortgaged. In the six months since the Attorneys General agreement was signed in March, the backlogged inventory has declined by only 100,000 homes, or 6.6 percent, despite strong demand and rising prices for foreclosures.  Since August, the national foreclosure inventory fell 1.1 percent.  The foreclosure inventory is the share of homes in any stage of the foreclosure process.

Since the financial crisis began in September 2008, there have been approximately 3.9 million completed foreclosures across the country. Completed foreclosures are an indication of the total number of homes actually lost to foreclosure.

Homes lost to foreclosure in September 2012 are down 50 percent since the peak month in September 2010 and 22 percent less than the beginning of the year.

“While there is significant progress to be made before returning to pre-crisis levels, the trend is in the right direction as short sales, up 27 percent year over year in August, continue to gain popularity,” said Mark Fleming, chief economist for CoreLogic.

Only five states accounted for nearly half, 47.7 percent of all completed foreclosures nationally.  States with with the highest number of completed foreclosures for the 12 months ending in September 2012 were: California (108,000), Florida (92,000), Texas (59,000), Georgia (55,000) and Michigan (51,000).

The five states with the lowest number of completed foreclosures for the 12 months ending in September 2012 were: South Dakota (20), District of Columbia (58), Hawaii (436), North Dakota (583) and Maine (625).

The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were: Wyoming (0.5 percent), Alaska (0.7 percent), North Dakota (0.7 percent), Nebraska (0.9 percent) and South Dakota (1.1 percent).


  • by The Great Foreclosure Trick or Treat | Marrocco De | 11/1/2012 2:40:05 AM

    [...] as high as it was a year ago and has fallen less than 7 percent since March, according to the latest report from CoreLogic released this morning. The national inventory stands at million homes, or 3.3 percent of all homes [...]

  • by William Matz | 11/1/2012 7:21:27 PM

    By itself this number tells us nothing. We don't know if the decline is due to overall fewer mortgages in distress, or whether the distressed mortgages are being resolved with a different mix of solutions (short sales, deeds in lieu, mortgage mods, or forbearances). HARP 2.0 may also save some homes that might have gone to foreclosure. New laws are pushing alternatives over foreclosure, which is likely contributing to the shift. Hopefully, we are starting to emerge from the crisis, but that is not yet clear.

  • by Steve Cook | 11/2/2012 5:31:21 AM


    Thanks for your comment.

    The foreclosure inventory numbers reported by CoreLogic are mortgages that are in the foreclosure process, e.g. they are not short sales, deeds in lieu, mortgage mods or forebearances, which CoreLogic categorizes as shadow inventory along with delinquencies older than 30 days.

    I agree with you that we are emerging from the crisis and the larger picture has been improving for more than two years. The situation I described is a short term view and distressed sales generally are improving significantly. Defaults are down 40 percent from a year ago and, unless we should suffer another serious economic downturn, the days of the Foreclosure Era are numbered.


Is TILA-RESPA a good or bad thing long term?