1Q Foreclosure Rate Falls 19%

Mike Sorohan msorohan@mba.org

April 13, 2018

ATTOM Data Solutions, Irvine, Calif., reported a 4 percent increase in foreclosure filings in the first quarter but noted such filings fell by nearly 20 percent from a year ago.

The company's quarterly Foreclosure Market Report said 189,870 properties saw foreclosure filings in the first quarter, up by 4 percent from the fourth quarter but down by 19 percent from a year ago and 32 percent lower than the pre-recession average of 278,912. This represented the sixth consecutive quarter in which foreclosure activity fell below pre-recession averages.

ATTOM also reported 74,341 U.S. properties with foreclosure filings in March, up 21 percent from record low in the previous month but still down 11 percent from a year ago, the 30th consecutive month with a year-over-year decrease in U.S. foreclosure activity.

Earlier this week, CoreLogic, Irvine, Calif., reported 4.9 percent of mortgages were in some stage of delinquency (30 or more days past due, including foreclosure) in January, down by 0.2 percent from a year ago.

CoreLogic reported the foreclosure inventory rate fell to 0.6 percent, down 0.2 percentage points from 0.8 percent a year ago. Since August, the foreclosure inventory rate has held steady at 0.6 percent, the lowest level since June 2007. The January foreclosure inventory rate was the lowest for the month of January in 11 years.

The ATTOM report said 45 percent of all properties in foreclosure as of the end of the first quarter were tied to loans originated between 2004 and 2008, down from 50 percent as of the end of Q4 2017 and down from 51 percent from a year ago.

"Less than half of all active foreclosures are now tied to loans originated during the last housing bubble, one of several data milestones in this report showing that the U.S. housing market has mostly cleared out the backlog of bad loans that triggered the housing and financial crisis nearly a decade ago," said Daren Blomquist, senior vice president with ATTOM Data Solutions. "Meanwhile we are beginning to see early signs that some post-recession loan vintages are defaulting at a slightly elevated rate, a sign that some loosening of lending standards has occurred in recent years. Consequently, foreclosure starts are trending higher compared to a year ago in an increasing number of local markets--some of which are a bit surprising given the overall strength of housing in those markets."

ATTOM reported 92,703 U.S. properties started the foreclosure process in the first quarter, up 8 percent from the previous quarter but still down 10 percent from a year ago, the 11th consecutive quarter with a year-over-year decrease in U.S. foreclosure starts. Twenty-three of 53 metropolitan statistical areas with at least 1 million people (43 percent) posted a year-over-year increase in foreclosure starts in the first quarter, led by Indianapolis (up 148 percent); Minneapolis-St. Paul, (up 64 percent); Louisville, Ky. (up 36 percent); Austin, Texas (up 30 percent); and Oklahoma City (up 23 percent).

Lenders repossessed 65,413 U.S. properties through foreclosure in the first quarter, down 2 percent from the previous quarter and down 28 percent from a year ago, the eighth consecutive quarter with a year-over-year decrease in U.S. REOs.

ATTOM also reported properties foreclosed in the first quarter had been in the foreclosure process an average of 791 days, down 23 percent from an average 1,027 days for properties foreclosed in the fourth quarter and down 3 percent from an average of 814 days for properties foreclosed a year ago. States with the longest average foreclosure timeline for properties foreclosed in the first quarter were Nevada (1,765 days), Hawaii (1,584 days), Florida (1,247 days), Indiana (1,245 days) and New Jersey (1,182 days). States with the shortest average time to foreclose were Virginia (193 days), Mississippi (212 days), Wyoming (252 days), West Virginia (270 days) and Arkansas (282 days).

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