Foreclosure Rates Up but Starts at Lowest Level Since November 2005

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Foreclosure Rates Up but Starts at Lowest Level Since November 2005

Irvine, CA, August 20, 2015—RealtyTrac has released its July 2015 U.S. Foreclosure Market Report, which shows a total of 124,910 U.S. properties with foreclosure filings in July, up 7% from the previous month and up 14% from a year ago.

July was the fifth consecutive month with a year-over-year increase in overall foreclosure activity, following 53 consecutive months of decreases.

“The increase in overall foreclosure activity over the last five months has been driven primarily by rapidly rising bank repossessions, which in July reached the highest level since January 2013,” said Daren Blomquist, vice president at RealtyTrac. “Meanwhile foreclosure starts in July were at the lowest level since November 2005—a nearly 10-year low that demonstrates the recent rise in bank repossessions represents banks flushing out old distress rather than new distress being pushed into the pipeline."

“This clearing of old distress is evident in the fact that properties foreclosed in the second quarter had been in the foreclosure process an average of 629 days, the longest in any quarter since we began tracking in the first quarter of 2007,” Blomquist continued. “It’s also evident that the recent surge in REOs is in fact clearing out more of the bad bubble-era loans from the so-called shadow inventory. RealtyTrac data now shows 61% of loans still in the foreclosure process were originated during the housing bubble years of 2004 to 2008, down from 68% last year and 75% two years ago.”

There were a total of 46,957 properties repossessed by lenders (REO) in July, up 29% from previous month and up 81% from a year ago to highest level since January 2013. Despite the recent increases, REOs in July were still less than half their peak of 102,134 in September 2010, but more than twice their pre-crisis average of 23,119 a month in 2005 and 2006.

REOs increased from a year ago in 44 states in July, including Florida (up 78%), California (up 23%), Texas (up 187%), Georgia (up 87%), Michigan (up 129%), Ohio (up 69%), and New Jersey (up 344%).