01/17/2013 BY: KRISTA FRANKS BROCK
Foreclosure filings were doled out to 1.84 million homes in 2012, which is 3 percent fewer homes than in 2011 and 36 percent below the foreclosure peak in 2010 when 2.9 million properties received foreclosure filings.
In December, foreclosure activity fell 10 percent month-over-month to a 68-month low.
While down overall in 2012, foreclosure activity increased in the majority of judicial states, prompting RealtyTrac VP Daren Blomquist to call 2012 “the year of the judicial foreclosure.” Of the 26 judicial states, foreclosures rose in 20.
At the same time, foreclosures declined over the year in 19 of the 24 states that do not rely on the judicial process to complete a foreclosure. However, Blomquist said these states could begin to experience their own foreclosure backlogs due to recent state legislation that could slow the foreclosure process.
“We expect to see continued increases in judicial foreclosure states near the beginning of the year as lenders finish catching up with the backlogs in those states, and another set of increases in some non-judicial states near the end of the year as
lenders adjust to the new laws and process some deferred foreclosures in those states,” Blomquist said.
Currently, the national time to foreclose is 414 days, according to ReatlyTrac’s fourth-quarter data. The timeline continues to rise and is up from 382 days in the third quarter. In fact, the fourth-quarter timeline is the longest recorded since RealtyTrac began observing in 2007.
The longest foreclosure timeline in any state is 1,089 days in New York, followed by New Jersey with 987 days. Florida experienced a decrease in its foreclosure timeline, but with 853 days, it still ranks third in the nation.
Texas has the shortest foreclosure timeline at 113 days, but even its timeline rose in the fourth quarter, up 17 percent from the third quarter.
Florida reigned in the highest foreclosure ranking in 2012 with 2.11 percent of homes receiving a foreclosure filing during the year—well above the national average of 1.39 percent.
Florida was followed by Nevada (2.7 percent), Arizona (2.69 percent), Georgia 2.58 percent), and Illinois (2.58 percent).
While foreclosure activity declined in 2012, foreclosure inventory ended the year 9 percent above the level recorded at the end of 2011. In total, more than 1.5 million houses were either bank-owned or in the foreclosure process.
Again ranking at the top, Florida claimed 20 percent of the nation’s foreclosure inventory. California ranked second with 14 percent and was followed by Illinois at 9 percent, and Ohio and Illinois both with 5 percent.
The lower foreclosure inventory over the year contributed to a seller’s market in which sellers received 99 percent of their asking price on average.
Markets that experienced rising foreclosures in 2012 are likely to see an increase in foreclosure inventory, which “could result in some short-term weakness in home prices,” according to Blomquist.