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New REO Inventory in 2011 = 804,423 Homes, 1.9 million properties with a foreclosure filing
RealtyTrac’s year-end report released Thursday shows foreclosure filings – including default, auction, and bank repossession notices – were reported on 1,887,777 U.S. properties in 2011. Of that total, 804,423 homes were taken back by lenders as REO.
Last year’s tally of nearly 1.9 million properties with a foreclosure filing seems staggering, but it’s actually the lowest reported since 2007. It’s 34 percent below 2010, 33 percent below 2009, and 19 percent below the 2008 total.
RealtyTrac’s newly appointed CEO Brandon Moore describes foreclosure activity last year as being in “full delay mode.”
“The lack of clarity regarding many of the documentation and legal issues plaguing the foreclosure industry means that we are continuing to see a highly dysfunctional foreclosure process that is inefficiently dealing with delinquent mortgages – particularly in states with a judicial foreclosure process,” Moore said.
These delays, however, may be coming to an end. Moore says there were strong signs in the second half of 2011 that indicate lenders are finally beginning to push stalled foreclosures through in select local markets.
“We expect that trend to continue this year, boosting foreclosure activity for 2012 higher than it was in 2011, though still below the peak of 2010,” Moore said.
Despite signs that some markets are experiencing a pickup in foreclosures, RealtyTrac’s analysis shows that processing timelines continued to increase.
On the national stage, properties foreclosed in the fourth quarter took an average of 348 days to complete the process, up from 336 days in the third quarter and up from 305 days in the fourth quarter of 2010.
RealtyTrac says the length of the average foreclosure process has increased 24 percent from the third quarter of 2010, when lenders began to re-evaluate foreclosure procedures as a result of documentation and affidavit errors.
New York holds the title of ‘longest foreclosure process in the nation’ – an average of 1,019 days.
New Jersey documented the nation’s second longest end-to-end foreclosure process, at 964 days. Florida has the third longest at 806 days. Foreclosure activity in both these states dropped more than 60 percent from 2010 to 2011.
All three states with the longest foreclosure timelines employ the judicial foreclosure process.
Texas continues to register the shortest average foreclosure process of any state, at 90 days, but that still represents an increase from 86 days in the third quarter and 81 days in the fourth quarter of 2010.
At 106 days, Delaware has the second shortest foreclosure timeline in the nation, and Kentucky lays claim to the third shortest, at 108 days.
More than 6 percent of Nevada housing units (one in 16) had at least one foreclosure filing in 2011, giving it the nation’s highest state foreclosure rate for the fifth consecutive year. That’s despite a 31 percent decrease in foreclosure activity from 2010.
Arizona registered the nation’s second highest foreclosure rate for the third year in a row, with 4.14 percent of its homes (one in 24) receiving at least one filing in 2011.
California registered the nation’s third highest foreclosure rate for all of 2011, with 3.19 percent (one in every 31 homes).
Other states with 2011 foreclosure rates ranking among the nation’s 10 highest include: Georgia (2.71 percent), Utah (2.32 percent), Michigan (2.21 percent), Florida (2.06 percent), Illinois (1.95 percent), Colorado (1.78 percent), and Idaho (1.77 percent).
Related articles
- Foreclosure rates plummet to 2007 levels (agbeat.com)
- RealtyTrac: Boost In Foreclosure Activity Expected In 2012 (forexlive.com)
California Attorney General Forms Mortgage Fraud Strike Force
California Attorney General Kamala Harris announced the creation of a 25-person task force on Monday charged with protecting homeowners from mortgage fraud.
“Families are losing their homes, while those who perpetrated crimes and frauds against them walk free,” Harris said.
The Mortgage Fraud Strike Force will be staffed by Department of Justice attorneys and investigators and composed of both civil and criminal enforcement teams.
Harris has tasked the group with monitoring and prosecuting violations at every step of the mortgage process, from the origination of mortgage loans to the promotion of fraudulent foreclosure rescue services to the marketing of mortgage-backed securities (MBS) to the investing public.
Los Angeles Mayor Antonio R. Villaraigosa joined Harris at a press conference announcing the initiative and offered his support of the new strike force.
“With nearly 10,000 foreclosures in the city of Los Angeles last year,” he said, “this strike force is certain to help
countless residents and families from becoming victimized.”
“The fingerprints of illegal activity are all over the foreclosure crisis,” said Paul Leonard, director of the Center for Responsible Lending’s California office. “The attorney general’s effort marries the need to punish bad actors for the practices that brought our economy to the brink with the need to eliminate the scam artists who have since attempted to profit from it.”
The attorney general’s office says California has not only been hit hard by the foreclosure crisis, but by predators looking to take advantage of the millions of residents who are underwater on their mortgages, in foreclosure, or at risk of losing their homes.
Last year alone, the attorney general’s office reports there were foreclosure filings against 546,669 California homes, and it is projected that between 2009 and 2012, a total of 2 million California homes will enter the foreclosure process.
Within the last year, the California Department of Justice says it has received thousands of complaints related to foreclosure scams and mortgage servicing practices.
In addition to scams on the default side of the business, the task force will be on the lookout for fraud related to unfair and predatory practices in originating loans, investment and money laundering schemes related to both origination and foreclosure prevention, and misconduct and false claims involving investments and securities tied to subprime mortgages.
The Mortgage Fraud Strike Force will operate out of Department of Justice offices in Los Angeles, Fresno, San Francisco, and Sacramento.
Mortgage Fraud Up 44% in First Quarter: Report
The first three months of 2011 saw a 44 percent increase in the volume of mortgage fraud case activity, according to industry data released this week. The cases reported represent fraud on an estimated $1.2 billion in real estate loans, rising from $0.9 billion in the final period of last year.
These are the latest findings of the first quarter Mortgage Fraud Index from MortgageDaily.com. The index is based on mortgage fraud case activity tracked at the mortgage fraud blog FraudBlogger.com.
The index, which climbed to 990 from 126 in the fourth quarter of 2010, was still lower than 1,144, which was recorded for the first quarter of 2010.
“We’re seeing signs that repurchases are responsible for some of the latest increase,” said MortgageDaily.com founder and publisher, Sam Garcia. “Smaller firms that are forced to buy back loans from housing agencies or correspondent lenders are doing their own investigations and uncovering more fraudulent activity.”
Florida had the highest index at 130 followed by California and New York. California had the highest dollar amount with nearly $0.3 billion in mortgages associated with first-quarter case activity.
“The average quarterly index peaked in 2009 at 1,676 while loan delinquency also topped out that year,” Garcia said. “But subprime mortgage production peaked in 2005, suggesting an average lag time of around four years from when the actual fraud occurred to when the criminal case is prosecuted.”
According to Mortgage Daily, the report indicates that prosecution of mortgage fraud occurs around four years after the crime.
West Coast Foreclosures Counterintuitive After Robo-Signing Fixes
Foreclosure activity slowed in April in states along the country’s West Coast, but a local firm that tracks every pre-foreclosure notice, foreclosure auction, and foreclosure sale in the area is having trouble making sense of what it says is an unexpected trend.
According to market analysis released Tuesday by Discovery Bay, California-based ForeclosureRadar, foreclosure filings last month were down in Arizona, California, Nevada, and Washington, with Oregon being the sole exception where filings were up.
In fact, filings in California dropped to levels not seen since late 2008, when intervention by the state government to give homeowners in default more time to explore alternatives to foreclosure caused a massive drop in activity.
The company says foreclosure sales saw similar declines throughout its five-state coverage area, except in Washington. Notably, cancellations were up significantly across the board, leaving fewer properties scheduled for trustee sale.
“The drop in filings, and the rise in cancellations, is surprising,” said Sean O’Toole, CEO and founder of ForeclosureRadar. “Banks have had time to resolve robo-signing issues, so we should be seeing exactly the opposite results, with lenders starting to catch up from recent delays.”
In Arizona, notice of trustee sale filings were down 27.9 percent in April from the prior month, falling to their lowest point since ForeclosureRadar began tracking Arizona activity in August 2009. Trustee sale notices last month were 41.5 percent below April 2010.
Arizona saw a similar dip in foreclosure sales, with a 22.2 percent drop in homes that went back to banks as REOs
and a 15.4 percent decline in sales to third parties month-over-month. Cancellations rose 18.8 percent from March, which together with the drop in filings led to 10.6 percent fewer properties scheduled for foreclosure sale.
Foreclosure filings in California last month dropped to their lowest level in over two years. Notice of default filings were down 25.8 percent from March, while notices of trustee sale fell 10.9 percent. Filings in both these stages of the process were down around 30 percent from a year earlier.
Foreclosure sales cancelled in the Golden State rose 27 percent from March. Activity on the courthouse steps slowed from the prior month, with 17.2 percent fewer REOs taken back by lenders and a 15.8 percent drop in properties purchased by third party investors. At the same time, the average time-to-foreclose in California continued to climb, increasing 3.3 percent to 312 days.
Nevada’s default notice filings decreased 17.8 percent in April from the prior month, here too falling to the lowest point since ForeclosureRadar began tracking the state in August 2009. Notice of trustee sale filings were down 23.7 percent.
ForeclosureRadar says activity on Nevada courthouse steps was mixed, with sales back to the bank down by 2.7 percent, but sales to third parties up 6.9 percent from March and 81 percent from April 2010. Cancellations were 14 percent higher month-over-month and up 69.5 percent year-over-year.
Oregon saw a substantial jump in foreclosure filings, with notices of default up a staggering 236.2 percent from March.
Much of this increase came from ReconTrust, a subsidiary of Bank of America, filing 2,840 new default notices last month compared to the 131 it filed in the first three months of the year, ForeclosureRadar explained.
Oregon homes that went back to the lender as REO last month fell 17.8 percent, however, foreclosure sales to third parties increased 38.7 percent month-over-month.
Washington saw a 12.1 percent slip in notice of trustee sale filings from March, and a 25.4 percent drop compared to a year earlier.
But ForeclosureRadar reports the courthouse steps were active in Washington state last month with properties sold back to the lender up 38.7 percent, and those that went to third party investors up 40.5 percent from March.
