RealtyTrac reported Thursday that one in every 389 U.S. housing units was the subject of a foreclosure filing in October. The 332,172 filings during the month represented, a 4 percent decrease from the September figures and was nearly identical to the number of filings in October 2009.
RealtyTrac, located in Irvine California, compiles a U.S. Foreclosure Market Report each month by tracking documents filed in all three stages of foreclosure:
- Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current.
- Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); If the borrower does not catch up on their payments the lender will file a notice of sale (the lender intends to sell the property). This notice is published in local paper and contains information pertaining to the date, time and subject property address.
- Real Estate Owned or REO properties : "REO" stands for "real estate owned" and typically refers to the inventory of real estate that banks and mortgage companies have foreclosed on and subsequently purchased through the foreclosure auction if there was no offer higher than the minimum bid.
October figures for each of the three stages of foreclosure declined from September, but year-over-year figures were mixed. The actual auction or repossession of properties may have been impacted by the moratoriums put on foreclosures by several lenders beginning in late September after the discovery of wide-spread "robo-signing," the mass processing of tens of thousands of foreclosure documents by servicers who neither read nor checked the underlying security instruments,. While this was initially a problem in states with a judicial foreclosure process, some lenders eventually suspended auctions in all states.
A total of 100,575 properties received default notices in October, down 2 percent from September and 19 percent from October 2009, the ninth straight month fewer default notices were filed than in the same period a year earlier.
The number of properties receiving NTS or NFS declined 3 percent to 138,351 last month but this was 6 percent higher than a year ago.
In September, shortly before the first postponements of foreclosures were announced, the number of auctions and repossessions set a new RealtyTrac record. In October that figure dropped 9 percent to 93,236, a figure still 21 percent higher than in October 2009. In 2010 bankers foreclosed on an average of more than 91,000 homes each month.
"October marks the 20th consecutive month where over 300,000 U.S. homeowners received a foreclosure notice," said James J. Saccacio, chief executive officer at RealtyTrac. "The numbers probably would have been higher except for the fallout from the recent 'robo-signing' controversy - which is the most likely reason for the 9 percent monthly drop in REOs we saw from September to October and which may result in further decreases in November."
State level data was mixed, with default notices decreasing in most states (although up dramatically in Illinois) and auction notices decreasing in 26 states and the District of Colombia. While bank repossessions were probably skewed, they decreased month-over-month in 33 states and the District, and year-over year in 14 states.
Nevada, Florida and Arizona are still suffering from the highest rates of distressed property in the country. In Nevada one in every 79 housing units received a foreclosure filing for the month, a total of 14,205 notices. This was a drop of 13 percent of September but was 3 percent higher than in September 2009. 56,858 notices were filed in Florida, a one in 155 unit rate, while Arizona retained its third place rate with 16,538 filings, one in every 165 housing units. Filings have spiked in Florida for two consecutive months after declining for five. Other states with foreclosure rates ranking among the top 10 in October were California, Michigan, Utah, Georgia, Idaho, Illinois, and Colorado.
Five states, California, Florida, Michigan, Illinois, and Arizona, accounted for half of all foreclosure filings in the U.S. in September. California alone had 20 percent of all filings and Florida 17 percent.
