Foreclosure filings drop to five-year low in September
WASHINGTON -- Foreclosure filings fell in September to their lowest level in more than five years as a housing market rebound showed another sign of taking hold.
Substantial decreases in California and some other states hard-hit by the collapse of the housing bubble helped reduce filings to 180,427 last month, down 7% from August and 16% from a year earlier, according to foreclosure listing firm RealtyTrac.
The last time filings were that low was in July 2007.
Filings for the three-month period ending in September also were the lowest since the fourth quarter of 2007. RealtyTrac said there were 531,576 filings in the period, down 5% from the second quarter and 13% year-over-year, the ninth-straight quarter with an annual decrease.
“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac.
“Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year,” he said.
Those states, where a court order is required for foreclosure, include Florida, Illinois, Ohio, New Jersey and New York. They saw substantial increases in year-over-year foreclosure filings after complaints about robo-signing and other problems led to a slowdown last year, RealtyTrac said.
“A backlog of delayed foreclosures will likely build up in those states as lenders adjust to the new rules, with many of those delayed foreclosures eventually hitting down the road,” Blomquist said.
But states such as California, where no court order is required for foreclosure, saw their activity fall. Of the 24 so-called non-judicial foreclosure states, 20 reported a decrease in the third quarter compared to the previous year, led by Nevada, which was down 71%.
California foreclosure filings were down 29% in the third quarter compared to a year earlier.
Much of the improvement for the third quarter came because of steep drops in filings in September, RealtyTrac said. California’s filings dropped 45% last month compared with a year earlier, while Arizona was down 34%, Michigan 22% and Georgia 21%.
Foreclosure starts also dropped in California in September, falling to the lowest level since December 2006.
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