Formal Foreclosures Fall 21 Straight Months

By Mike Colpitts

Formal foreclosures fell for the 21st straight month in July as repossessions on U.S. residential properties ran into additional snags. Lenders completed 53,654 foreclosures during the month, foreclosure a 1% fall from June and a 21% drop from a year ago, according to RealtyTrac.

Bank owned REO activity also fell on an annualized basis in 38 states and the District of Columbia. Some of the biggest drops in foreclosed property sales were in many of the hardest hit states, including Nevada, Virginia, California and Georgia, all of which are non-judicial foreclosure states.

Still, foreclosure starts, including initial notices of default and additional foreclosure notices were filed against 191,925 residential properties in July. The figure represented a 10% fall from a year ago.

An increase in bank assisted short sales and mortgage modifications by some lenders involved in the robo-signing scandal are attributed for the decline. Foreclosure starts rose in 27 out of 50 states, including 16 judicial states, which halted foreclosures during the robo-signing scandal and just resumed the process in the past few months.

“Foreclosure activity patterns vary significantly from state to state, often hinging on the level of dysfunction that exists in each state’s foreclosure process,” said RealtyTrac vice president Daren Blomquist.

“In states like Florida, Illinois and New Jersey, where processing and procedural issues slowed foreclosure activity to a crawl last year, foreclosure numbers continue to rebound off those artificially low levels.

“But in states like Texas, Arizona and Virginia, where the average time to foreclose is well below the national average of 378 days, foreclosure activity continues on a long-term downward trend.”

New laws and consumer driven legislation enacted in many states are likely to lengthen the time it takes to finalize a foreclosure, and halt foreclosures in some states all together. However, foreclosure starts initiated by banks increased for the third straight month in July, with 98,174 being filed, RealtyTrac figures showed.