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).

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