CoreLogic Reports U.S. Foreclosure Inventory Down 35 Percent Nationally From a Year Ago

—Value of Shadow Inventory Down $70 Billion From One Year Ago—

/ PRNewswire / — CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled services provider, today released its February 2014 National Foreclosure Report with a supplement featuring quarterly shadow inventory data as of January 2014.
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According to the CoreLogic analysis:

  • There were 43,000 completed foreclosures in the United States in February 2014, down from 51,000 in February 2013, a year-over-year decrease of 15 percent. On a month-over-month basis, completed foreclosures decreased 13.1 percent from 50,000 in January 2014.*
  • National residential shadow inventory was 1.7 million homes as of January 2014 compared to 2.2 million in January 2013, a year-over-year decrease of 23 percent.

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 4.9 million completed foreclosures across the country.

As of February 2014, approximately 752,000 homes in the United States were in some stage of foreclosure, known as the foreclosure inventory, compared to 1.2 million in February 2013, a year-over-year decrease of 35 percent. Month over month, the foreclosure inventory was down 3.3 percent from January 2014. The foreclosure inventory as of February represented 1.9 percent of all homes with a mortgage, compared to 2.9 percent in February 2013.

At the end of February 2014, there were 1.9 million mortgages, or 4.9 percent, in serious delinquency, defined as 90 days or more past due, including those loans in foreclosure or real estate owned (REO).

“Although there is good news that completed foreclosures are trending lower, the bigger news is the impressive decline in the foreclosure and shadow inventories,” said Dr. Mark Fleming, chief economist for CoreLogic. “Every state has had double-digit, year-over-year declines in foreclosure inventory, which is reflected in the $70 billion decline in the shadow inventory.”

“The stock of seriously delinquent homes and the foreclosure rate are back to levels last seen in the final quarter of 2008,” said Anand Nallathambi, president and CEO of CoreLogic. “The shadow inventory has also declined year over year for the past 3 years as the housing market continues to heal, including double-digit declines for the past 16 consecutive months.”

Foreclosure Highlights:

  • The five states with the highest number of completed foreclosures for the 12 months ending February 2014 were Florida (118,000), Michigan (50,000), Texas (39,000), California (37,000) and Georgia (34,000).These five states accounted for almost half of all completed foreclosures nationally
  • Four states and the District of Columbia experienced the lowest number of completed foreclosures for the 12 months ending February 2014: The District of Columbia (60), North Dakota (421), Hawaii (519), West Virginia (571) and Wyoming (705).
  • The five states with the highest foreclosure inventory as a percentage of all mortgaged homes as of February 2014 were New Jersey (6.2 percent), Florida (6.0 percent), New York (4.7 percent), Maine (3.4 percent) and Connecticut (3.2 percent).
  • The five states with the lowest foreclosure inventory as a percentage of all mortgaged homes as of February 2014 were Wyoming (0.3 percent), Alaska (0.4 percent), North Dakota (0.5 percent), Nebraska (0.5 percent) and Colorado (0.6 percent).

Shadow Inventory Highlights:

  • The value of shadow inventory was $254 billion as of January 2014, down from $324 billion a year ago and down from $289 billion six months ago.
  • As of January 2014, year-over-year inventory of seriously delinquent homes decreased in all states by double digits. Twenty-four states experienced year-over-year declines in serious delinquency by at least 20 percent.
  • The shadow inventory is down 22 percent compared to January 2013.
  • Over the 12 months ending January 2014, shadow inventory has been decreasing at an average monthly rate of 41,000 units.
  • As of January 2014, Florida, California, New York, New Jersey and Illinois carried 42 percent of all distressed properties in the country. Florida continues to account for 15 percent of the nation’s distressed properties.

CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of properties that are seriously delinquent, in foreclosure or held as REO by mortgage servicers but not currently listed on multiple listing services (MLSs). Transition rates of “delinquency to foreclosure” and “foreclosure to REO” are used to identify the currently distressed, unlisted properties most likely to become REO properties. Properties that are not yet delinquent, but may become delinquent in the future, are not included in the estimate of the current shadow inventory. Shadow inventory is typically not included in the official reporting measurements of unsold inventory.

*January data was revised. Revisions are standard, and to ensure accuracy, CoreLogic incorporates newly released data to provide updated results.

Judicial Foreclosure States Foreclosure Ranking
(Ranked by Completed Foreclosures)

Non-Judicial Foreclosure States Foreclosure Ranking
(Ranked by Completed Foreclosures)

Foreclosure Data for the Largest Core Based Statistical Areas (CBSAs) Based on Population
(Ranked by Completed Foreclosures)

Figure 1: Foreclosure Inventory by State Map

Figure 2: Shadow Inventory
Detail In Thousands, Not Seasonally Adjusted

Figure 3: Months’ Supply Shadow Inventory
Detail Number of Months, Not Seasonally Adjusted

Foreclosure Inventory Methodology
The data in this report represents foreclosure activity reported through February 2014.

This report separates state data into judicial vs. 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 because 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.

Shadow Inventory Methodology
CoreLogic uses its Loan Performance Servicing and Securities databases to size the number of 90+ day delinquencies, foreclosures and real estate owned (REO) properties. Cure rates, which measure the proportion of loans in one stage of default that cured (versus moving to more severe states of default), are applied to the number of loans in default at each stage of default. CoreLogic calculates the share of loans in default that are currently listed on MLS by matching public record properties in default to MLS active listings. It applies the percentage of defaulted loans that are currently listed to the estimate of outstanding loans that will proceed to further stages of default to calculate the pending supply inventory and adds that to the reported visible inventory. Visible inventory is compiled from CoreLogic ListingTrends. To determine months' supply for visible and shadow inventories, CoreLogic uses the number of non-seasonally adjusted home sales according to CoreLogic data.

Source: CoreLogic
The data provided is for use only by the primary recipient or the primary recipient's publication or broadcast. This data may not be re-sold, republished or licensed to any other source, including publications and sources owned by the primary recipient's parent company without prior written permission from CoreLogic. Any CoreLogic data used for publication or broadcast, in whole or in part, must be sourced as coming from CoreLogic, a data and analytics company. For use with broadcast or web content, the citation must directly accompany first reference of the data. If the data is illustrated with maps, charts, graphs or other visual elements, the CoreLogic logo must be included on screen or website. For questions, analysis or interpretation of the data, contact Lori Guyton at lguyton@cvic.com or Bill Campbell at bill@campbelllewis.com. Data provided may not be modified without the prior written permission of CoreLogic. Do not use the data in any unlawful manner. This data is compiled from public records, contributory databases and proprietary analytics, and its accuracy is dependent upon these sources.

About CoreLogic
CoreLogic (NYSE: CLGX) is a leading global property information, analytics and data-enabled services provider. The company's combined data from public, contributory and proprietary sources includes over 3.3 billion records spanning more than 40 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit www.corelogic.com.

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For real estate industry and trade media:
Bill Campbell
bill@campbelllewis.com
212-995-8057

For general news media:
Lori Guyton
lguyton@cvic.com
901-277-6066

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