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June Foreclosure Filings Plummet07-30-13 | News

June Foreclosure Filings Plummet

National foreclosure filings in June declined by 35 percent in June compared with a year earlier, but more than a million homes remain in the foreclosure process. Many of these homes are in "judicial foreclosure" states, where banks need court permission to begin the foreclosure process. Filings in these states are up 34 percent from a year earlier.

Foreclosure filings in June fell to their lowest level since December 2006 and are down more than a third since June 2012.

According to a July 10 report from RealtyTrac, filings for foreclosure were made on 127,790 properties in June, 14 percent less than May and 35 percent less than June 2012. In the first half of 2013, 801,359 filings were reported, 23 percent less year-over-year and 19 percent less than the last six months of 2012. The average length of the foreclosure process, as reported in June, was 526 days.

Bank repossessions are also on the decline. From January to June, 248,538 property seizures were reported, placing repossessions on a pace that would fall below 500,000 properties for the year. In contrast, total repossessions in 2012 reached above 671,000 properties.

"It is becoming increasingly evident that while foreclosures are no longer a problem nationally they continue to be a thorn in the side of several state and local markets, particularly where a backlog of delayed distress has built up thanks to a lengthy foreclosure process," said Daren Blomquist, vice president at RealtyTrac.

While foreclosure activity has declined nationally, so-called "judicial states" – where banks need court approval to proceed with a foreclosure – are still catching up with a years-long list of distressed homes. In New York and New Jersey, both judicial foreclosure states, the process currently takes 1,033 days, nearly double the national average. Judicial foreclosure auctions were up 34 percent in June year-over-year.

"The increases in judicial foreclosure auctions demonstrate that these delayed foreclosure cases are now being moved more quickly through to foreclosure completion," Blomquist said. "Given the rising home prices in most of these markets, it is an opportune time for lenders to dispose of distressed properties, either at foreclosure auction to a third-party buyer, or by repossessing the property at auction and subsequently selling it as a bank-owned home."