U.S. Bank Repossessions Down 5 Percent in March, Lowest Since 2007

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According to RealtyTrac's latest U.S. Foreclosure Market Report for March 2014, U.S. foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 117,485 U.S. properties in March, a 4 percent increase from February but still down 23 percent from a March 2013.

The monthly increase in foreclosure activity was driven by a 7 percent month-over-month increase in foreclosure starts -- the initial public notice starting the foreclosure process -- and a 6 percent monthly increase in scheduled foreclosure auctions. Lenders repossessed 28,840 U.S. properties in March, down 5 percent from the previous month and down 34 percent from a year ago to the lowest level since July 2007 -- an 80-month low.

March was the 42nd consecutive month where U.S. foreclosure activity decreased from a year ago, helping to drop first quarter foreclosure activity to the lowest level since the second quarter of 2007. A total of 341,670 U.S. properties had a foreclosure notice in the first quarter, down 3 percent from the previous quarter and down 23 percent from a year ago. One in every 385 U.S. housing units had a foreclosure filing in the first quarter.

Despite the decrease in overall foreclosure activity in the first quarter, 29 states posted annual increases in scheduled foreclosure auctions, including Utah (up 226 percent), Oregon (up 177 percent), Connecticut (up 131 percent), New Jersey (up 79 percent), Delaware (up 49 percent), New York (up 47 percent), Maryland (up 46 percent), Massachusetts (up 37 percent), Nevada (up 21 percent) and Florida (up 21 percent).

Meanwhile foreclosure starts in the first quarter increased from a year ago in 19 states, including New Jersey (up 83 percent), Maryland (up 43 percent), Indiana (up 38 percent), Delaware (up 24 percent), Connecticut (up 13 percent), and California (up 10 percent). The increase in California was the first annual increase since the second quarter of 2012, and the first double-digit percentage increase since the fourth quarter of 2009.

"Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time," said Daren Blomquist, vice president at RealtyTrac. "This is most evident in judicial foreclosure states that were more likely to have impediments in the foreclosure process, but there are also signs of this catch-up trend happening in some non-judicial states like California, where an increasing number of judicial foreclosure filings boosted foreclosure starts in the first quarter.

"Banks will also now be able to devote more resources to dealing with the lingering inventory of nearly half a million already-foreclosed homes that still need to be sold," Blomquist continued. "Our estimates indicate only 10 percent of these bank-owned properties are listed for sale and more than half are still occupied by the former homeowner or tenant."

More than half of all bank-owned properties still occupied

RealtyTrac also included an update of occupied REOs -- bank-owned properties still occupied after the completed foreclosure -- in its first quarter report. Of the 259,783 bank-owned properties with owner-occupancy data available -- out of a total of 483,224 bank-owned homes nationwide -- 51 percent were still occupied by the former homeowner or a tenant. Metros with the highest percentage of occupied REOs included Nashville, Tenn. (80 percent), Richmond, Va. (80 percent), New York (73 percent), Houston (73 percent) and San Jose, Calif., (73 percent).

"There are always going to be homeowners who aren't able to make their house payments, but we are definitely back to a normal foreclosure rate," said Sheldon Detrick, CEO of Prudential Detrick/Alliance Realty, covering the Oklahoma City and Tulsa, Okla. markets, noting that first quarter foreclosure activity in Oklahoma dropped to its lowest level since the second quarter of 2007.  "The distressed listings we're seeing in the Oklahoma market are zombie and vampire foreclosures, where properties have either been lost in litigation or held off of the market until now."

"Foreclosure activity is down 34 percent in the Nashville-Murfreesboro MSA at the end of the first quarter compared to last year," said Bob Parks, CEO of Bob Parks Realty, covering the mid-Tennessee market.  "This continued decline in total foreclosure activity mirrors our recovering housing market and return to normalcy."

Average time to complete foreclosure up to 572 days nationwide

U.S. properties foreclosed in the first quarter of 2014 were in the foreclosure process an average of 572 days, up 1 percent from 564 days in previous quarter and up 20 percent from 477 days in first quarter of 2013.

New Jersey overtook New York as the state with the longest average time to foreclose in the first quarter with an average of 1,103 days to complete foreclosure. That was followed by New York (986 days), Florida (935 days), Hawaii (840 days), and Illinois (830 days).

The average time to foreclose was the shortest among all states in Alaska (151 days), followed by Texas (169 days), Delaware (177 days), New Hampshire (190 days), and Alabama (193 days).

"Distressed properties are not a huge part of the Southern California market at this point in time and haven't been for quite a while," said Chris Pollinger, senior vice president of sales at First Team Real Estate, covering the Southern California market, where the average time to foreclose decreased slightly in the first quarter.  "Since the market has significantly rebounded and home prices have increased, we are seeing banks moving through foreclosures at a faster pace because the current level of housing inventory can support it."

Average time to sell a bank-owned property increases 34 percent

U.S. bank-owned properties sold in the first quarter had been bank-owned for an average of 226 days when they sold, up 34 percent from the average of 168 days in the first quarter of 2013.

States with above-average time to sell REOs included Texas (347 days), Michigan (342 days), Minnesota (313 days), Colorado (305 days), and Georgia (276 days).

Properties in the foreclosure process that sold during the first quarter took an average of 509 days to sell after starting the foreclosure process, up 33 percent from an average of 382 days in the first quarter of 2013.

States with above-average times to sell properties in foreclosure included Massachusetts (1,299 days), New York (854 days), New Jersey (830 days), Ohio (790 days), and Florida (720 days).

"Foreclosure filings have noticeably dropped in the Ohio market, but we have equally noticed lenders taking more properties back at sheriff's auctions and through deed in lieu activities, which has been adding to the REO inventory," said Michael Mahon, executive vice president/broker at HER Realtors, covering the Cincinnati, Columbus and Dayton, Ohio markets, noting that Ohio has the nation's seventh largest REO inventory.  "We believe that lenders are taking in more REO inventory in an attempt to take advantage of increasing equity of homes that has occurred in recent months due to lower available inventory in the overall Ohio markets."

Florida, Maryland, Nevada post top state foreclosure rates

Florida foreclosure activity in the first quarter decreased less than 1 percent from the previous quarter and was down 19 percent from a year ago, but the state still posted the nation's highest state foreclosure rate: one in every 129 housing units with a foreclosure filing during the quarter. Florida foreclosure activity has decreased annually for the past three consecutive quarters, including the first quarter.

Maryland foreclosure activity increased annually in the first quarter for the seventh consecutive quarter, helping it to post the nation's second highest state foreclosure rate: one in every 189 housing units with a foreclosure filing. A total of 12,589 Maryland housing units had a foreclosure filing during the quarter, down 1 percent from the previous quarter but still up 35 percent from the first quarter of 2013.

Nevada foreclosure activity in the first quarter decreased 8 percent from the previous quarter and was down 48 percent from a year ago, but the state still posted the nation's third-highest state foreclosure rate: one in every 129 housing units with a foreclosure filing.

Illinois posted the nation's fourth highest state foreclosure rate (one in every 230 housing units with a foreclosure filing) in the first quarter despite a 36 percent annual decrease in foreclosure activity, and New Jersey posted the nation's fifth highest state foreclosure rate (one in every 273 housing units with a foreclosure filing) in the third quarter, boosted by a 66 percent annual increase in foreclosure activity.

Other states with foreclosure rates ranking in the top 10 in the first quarter were Connecticut (one in every 277 housing units with a foreclosure filing), Ohio (one in every 278 housing units), Delaware (one in every 293 housing units), South Carolina (one in every 294 housing units), and Indiana (one in every 307 housing units).

New Jersey foreclosure activity increased 108 percent annually in February, and the state posted the nation's fourth highest state foreclosure rate -- one in every 739 housing units with a foreclosure filing. The No. 4 ranking was the highest ranking for New Jersey since October 2005.

Florida cities account for 8 of top 10 metro foreclosure rates in the first quarter

With one in every 99 housing units with a foreclosure filing in the first quarter, Port St. Lucie, Fla., posted the highest foreclosure rate among metropolitan statistical areas with a population of 200,000 or more.

Seven other Florida cities posted foreclosure rates in the top 10 highest nationwide: Miami at No. 2 (one in every 106 housing units with a foreclosure filing); Palm Bay-Melbourne-Titusville at No. 3 (one in every 112 housing units); Orlando at No. 4 (one in every 120 housing units); Tampa at No. 5 (one in every 122 housing units); Lakeland at No. 6 (one in every 127 housing units); Ocala at No. 7 (one in every 130 housing units); and Jacksonville at No. 8 (one in every 134 housing units).

Rockford, Ill., posted the ninth highest metro foreclosure rate in the first quarter, with one in every 153 housing units with a foreclosure filing, and Atlantic City, N.J., posted the 10th highest metro foreclosure rate, with one in every 165 housing units with a foreclosure filing.

Among the nation's 20 largest metropolitan areas based on population, the highest foreclosure rates were in Miami, Tampa, Chicago, Riverside, Calif., and Baltimore. Foreclosure activity declined annually in 16 of the 20 largest metros, but it increased in Washington, D.C. (up 28 percent), New York (up 21 percent), Baltimore (up 19 percent), and Philadelphia (up 10 percent).