Consumer Comeback Blog

Foreclosures Drop to Five-Year Low

The latest foreclosure rates show the nation may be healing from the wounds caused by the mortgage crisis. RealtyTrac’s September U.S. Foreclosure Market Report shows that foreclosures have dropped 7% from August and fell to a five-year low.

In the third quarter of 2012, the report showed 180,427 default notices, scheduled auctions and bank repossessions, the fewest reported since July 2007. September was also the second consecutive month with fewer foreclosures.

“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, said in a press release. “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.

States previously hit hardest by the mortgage crisis – California, Texas, Arizona showed significant decreases in non judicial foreclosures. California ranks among states with the top three highest foreclosures states, but September numbers hit a 69-month low, down 18% from August and 45% from a year ago.

Conversely, September was a bad month for states such as Florida, Illinois, Ohio, New Jersey and New York, which reported considerably higher rates of foreclosures. In Florida alone, foreclosure starts increased 24%, bringing the state to its 11th consecutive increase and landing the highest rate of foreclosures in the nation.

The report also showed continued decreases in home repossessions, which have been falling for 23 consecutive months. There were 505,585 foreclosures around the nation, and RealtyTrac estimates the year will end with 675,000 completed foreclosures, which is 800,000 less than last year.