Despite predictions that a massive settlement between the states and five mortgage servicers would unleash a flood of foreclosures this year, the flood is more of a trickle.
The latest data from RealtyTrac, a company tracking U.S. foreclosures, shows default notices, scheduled auctions and bank repossessions were reported on 191,925 U.S. properties in July, a decrease of three percent from the previous month and a decrease of 10 percent from July 2011.
The report also shows one in every 686 U.S. housing units with a foreclosure filing during the month.
“U.S. foreclosure activity continued its uneven descent in July as the overall numbers declined on an annual basis for the 22nd straight month, but properties starting the foreclosure process increased on an annual basis for the third straight month,” said Daren Blomquist, vice president of RealtyTrac. “Recent foreclosure activity patterns vary significantly from state to state, often hinging on the level of dysfunction that exists in each state’s foreclosure process."
For example, Blomquist says 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.
REOs are down
The decline in overall foreclosure activity was driven primarily by a 21 percent year-over-year decrease in bank repossessions (REO) the data show. But no one is suggesting the foreclosure crisis has suddenly been resolved.
Blomquist notes that recent legislation and court rulings could lengthen the foreclosure process in some of the states with the shorter timelines, resulting in a temporary foreclosure lull and subsequent rebound in those states as well.