CoreLogic Reports 45,000 Completed Foreclosures in December
—The foreclosure inventory fell 31 percent nationally in 2013—
Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 4.8 million completed foreclosures across the country. As a basis of comparison, prior to the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
As of December 2013, approximately 837,000 homes in the United States were in some stage of foreclosure, known as the foreclosure inventory, compared to 1.2 million in December 2012, a year-over-year decrease of 31 percent. The foreclosure inventory as of December 2013 represented 2.1 percent of all homes with a mortgage compared to 3.0 percent in December 2012. The foreclosure inventory was down 2.7 percent from November 2013 to December 2013.
“The foreclosure inventory fell by more than 30 percent in December on a year-over-year basis, twice the decline from a year ago,” said Mark Fleming, chief economist for CoreLogic. “The decline indicates that the distressed foreclosure inventory is healing at an accelerating rate heading into 2014.”
“Clearly, 2013 was a transitional year for residential property in the United States. Higher home prices and lower shadow inventory levels, together with a slowly improving economy, are hopeful signals that we are turning a long-awaited corner,” said Anand Nallathambi, president and CEO of CoreLogic. “The housing market should continue to heal in 2014, but we expect progress to remain very slow.”
Highlights as of December 2013:
- The five states with the highest number of completed foreclosures for the 12 months ending in December 2013 were Florida (119,000), Michigan (53,000), California (39,000), Texas (39,000) and Georgia (35,000).These five states accounted for almost half of all completed foreclosures nationally.
- The five states with the lowest number of completed foreclosures for the 12 months ending in December 2013 were District of Columbia (63), North Dakota (417), Hawaii (493), West Virginia (505) and Wyoming (759).
- The five states with the highest foreclosure inventory as a percentage of all mortgaged homes were Florida (6.7 percent), New Jersey (6.5 percent), New York (4.9 percent), Connecticut (3.6 percent) and Maine (3.6 percent).
- The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes were Wyoming (0.4 percent), Alaska (0.5 percent), North Dakota (0.6 percent), Colorado (0.6 percent) and Nebraska (0.6 percent).
*November data was revised. Revisions are standard, and to ensure accuracy, CoreLogic incorporates newly released data to provide updated results.
For ongoing housing trends and data visit the CoreLogic Insights Blog: http://www.corelogic.com/blog.
The data in this report represents foreclosure activity reported through December 2013.
This report separates state data into judicial versus non-judicial foreclosure state categories. In judicial foreclosure states, lenders must provide evidence to the courts of delinquency in order to move a borrower into foreclosure. In non-judicial foreclosure states, lenders can issue notices of default directly to the borrower without court intervention. This is an important distinction since judicial states, as a rule, have longer foreclosure timelines, thus affecting foreclosure statistics.
A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender. If the home is purchased by the lender, it is moved into the lender’s real estate owned (REO) inventory. In “foreclosure by advertisement” states, a redemption period begins after the auction and runs for a statutory period, e.g., six months. During that period, the borrower may regain the foreclosed home by paying all amounts due as calculated under the statute. For purposes of this Foreclosure Report, because so few homes are actually redeemed following an auction, it is assumed that the foreclosure process ends in “foreclosure by advertisement” states at the completion of the auction.
The foreclosure inventory represents the number and share of mortgaged homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan. Once a foreclosure is “started,” and absent the borrower paying all amounts necessary to halt the foreclosure, the home remains in foreclosure until the completed foreclosure results in the sale to a third party at auction or the home enters the lender’s REO inventory. The data in this report accounts for only first liens against a property and does not include secondary liens. The foreclosure inventory is measured only against homes that have an outstanding mortgage. Homes with no mortgage liens can never be in foreclosure and are, therefore, excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data.
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