Foreclosure starts drop to lowest level since November 2005

A total of 45,072 U.S. properties started the foreclosure process for the first time in August, down 1 percent from previous month and down 19% from year ago to lowest level since November 2005. So far in 2015, foreclosure starts have averaged 49,362 per month, below the pre-crisis average of 52,279 per month in 2005 and 2006.

Foreclosure starts decreased from a year ago in 30 states, including California (down 29% from year ago), Florida (down 40%), New Jersey (down 38%), Texas (down 17%), and Maryland (down 26%).

Counter to the national trend, foreclosure starts increased from a year ago in 19 states, including New York (up 20%), Virginia (up 16%), Missouri (up 77%), and Massachusetts (up 61%) and Minnesota (up 20%).

Bank repossessions increase from a year ago in 36 states

There were a total of 36,792 U.S. properties repossessed by lenders through foreclosure (REO) in August, down 22% from previous month but still up 40% from a year ago, the sixth consecutive month with REOs increasing on a year-over-year basis. Bank repossessions in August were still well above their pre-crisis average of 23,119 per month in 2005 and 2006, but well below their peak of 102,134 in September 2010.

Bank repossessions increased from a year ago in 36 states, including Florida (up 23%), California (up 31%), Texas (up 168%), Ohio (up 35%), and New Jersey (up 295%).

“Foreclosure sales from the Trustee still require cash at the time of sale, so as a result lower-priced properties to mid-priced properties tend to sell for close to full value,” said Greg Smith, owner/broker at RE/MAX Alliance, covering the Denver market. Higher-priced foreclosures, while rare, can sometime present an opportunity. With stricter lender requirements we are most likely a few years away from foreclosures truly having an impact on home values in the area,”

Counter to the national trend, bank repossessions decreased from a year ago in 13 states, including Georgia (down 55%), Illinois (down 22%), Wisconsin (down 7%), Connecticut (down 36%), and Kentucky (down 45%).

Scheduled foreclosure auctions drop to nine-year low

A total of 41,308 U.S. properties were scheduled for a future foreclosure auction in August, down 14 percent from the previous month and down 19 percent from a year ago to the lowest level since May 2006 — a more than nine-year low. Scheduled foreclosure auctions in August were about one-fourth of their peak of 158,105 in March 2010 but still above their pre-crisis average of 33,634 a month in 2005 and 2006.

Despite the national decrease, scheduled foreclosure auctions increased from a year ago in 23 states, including New Jersey, Pennsylvania, New York and New York.

One in every 507 Nevada housing units had a foreclosure filing in August, more than twice the national average.

Florida's foreclosure rate dropped out of the top three highest among the states for the first time since June 2012 thanks in part to a 33 percent year-over-year decrease in foreclosure activity in August to the lowest level since April 2007.

Report methodology

The RealtyTrac U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the RealtyTrac database during the month — broken out by type of filing. Some foreclosure filings entered into the database during the month may have been recorded in previous months. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90% of the U.S. population. RealtyTrac's report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee's Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). The report does not count a property again if it receives the same type of foreclosure filing multiple times within the estimated foreclosure timeframe for the state where the property is located.

Foreclosure Market Data by State – August 2015