CoreLogic Reports 38,000 Completed Foreclosures in May 2016
July 12, 2016, Irvine, Calif. –
—National Foreclosure Inventory Down 24.5 Percent from May 2015—
CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled services provider, today released its May 2016 National Foreclosure Report which shows the foreclosure inventory declined by 24.5 percent and completed foreclosures declined by 6.9 percent compared with May 2015. The number of completed foreclosures nationwide decreased year over year from 41,000 in May 2015 to 38,000 in May 2016, representing a decrease of 67.9 percent from the peak of 117,813 in September 2010.
The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6.3 million completed foreclosures nationally, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 8.3 million homes lost to foreclosure.
As of May 2016, the national foreclosure inventory included approximately 390,000, or 1.0 percent, of all homes with a mortgage compared with 517,000 homes, or 1.3 percent, in May 2015. The May 2016 foreclosure inventory rate is the lowest for any month since October 2007.
CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due including loans in foreclosure or REO) declined by 21.6 percent from May 2015 to May 2016, with 1.1 million mortgages, or 2.8 percent, in this category. The May 2016 serious delinquency rate is the lowest in more than eight years, since October 2007.
“The foreclosure rate fell to 1 percent in May, which is twice the long-term average of 0.5 percent. However, this masks the underlying progress at the state level,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Twenty-nine states had foreclosure rates below the national average, and all but North Dakota experienced declines in their foreclosure rate compared to the prior year.”
“Delinquency and foreclosure rates continue to drop as we experience the benefits of a combination of tight underwriting, job and income growth and a steady rise in home prices. We expect these factors to remain in place for the remainder of this year and for delinquency and foreclosure rates to decline even further,” said Anand Nallathambi, president and CEO of CoreLogic. “As we finally move past the housing crisis, we need to increase our focus on expanding the supply of affordable housing and access to credit for first-time homebuyers in sustainable ways to ensure the long-term health of the U.S. housing market.”
Additional May 2016 highlights:
- On a month-over-month basis, completed foreclosures increased by 5.5 percent to 38,000 in May 2016 from the 36,000 reported for April 2016.* As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
- On a month-over-month basis, the foreclosure inventory was down 3.0 percent compared with April 2016.
- The five states with the highest number of completed foreclosures were Florida (63,000), Michigan (45,000), Texas (27,000), Ohio (23,000) and California (23,000).These five states account for almost half of all completed foreclosures nationally.
- Four states and the District of Columbia had the lowest number of completed foreclosures: the District of Columbia (139), North Dakota (323), West Virginia (494), Alaska (648) and Montana (690).
- Four states and the District of Columbia had the highest foreclosure inventory rate: New Jersey (3.6 percent), New York (3.2 percent), Hawaii (2.1 percent), the District of Columbia (2.0 percent) and Maine (1.9 percent).
- The five states with the lowest foreclosure inventory rate were Alaska (0.3 percent), Arizona (0.3 percent), Colorado (0.3 percent), Minnesota (0.3 percent) and Utah (0.3 percent).
*April 2016 data was revised. Revisions are standard, and to ensure accuracy CoreLogic incorporates newly released data to provide updated results.
For ongoing housing trends and data, visit the CoreLogic Insights Blog: http://www.corelogic.com/blog.
The data in this report represents foreclosure activity reported through May 2016.
This report separates state data into judicial versus non-judicial foreclosure state categories. In judicial foreclosure states, lenders must provide evidence to the courts of delinquency in order to move a borrower into foreclosure. In non-judicial foreclosure states, lenders can issue notices of default directly to the borrower without court intervention. This is an important distinction since judicial states, as a rule, have longer foreclosure timelines, thus affecting foreclosure statistics.
A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender. If the home is purchased by the lender, it is moved into the lender’s real estate-owned (REO) inventory. In “foreclosure by advertisement” states, a redemption period begins after the auction and runs for a statutory period, e.g., six months. During that period, the borrower may regain the foreclosed home by paying all amounts due as calculated under the statute. For purposes of this Foreclosure Report, because so few homes are actually redeemed following an auction, it is assumed that the foreclosure process ends in “foreclosure by advertisement” states at the completion of the auction.
The foreclosure inventory represents the number and share of mortgaged homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan. Once a foreclosure is “started,” and absent the borrower paying all amounts necessary to halt the foreclosure, the home remains in foreclosure until the completed foreclosure results in the sale to a third party at auction or the home enters the lender’s REO inventory. The data in this report accounts for only first liens against a property and does not include secondary liens. The foreclosure inventory is measured only against homes that have an outstanding mortgage. Generally, homes with no mortgage liens are not subject to foreclosure and are, therefore, excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. CoreLogic has approximately 85 percent coverage of U.S. foreclosure data.
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