CoreLogic Reports Almost 65,000 Completed Foreclosures Nationally in February
March 29, 2012, Santa Ana, Calif. –
—Lower Foreclosure Rates than a Year Ago For Sixty-One of the Top 100 CBSAs—
CoreLogic (NYSE: CLGX), a leading provider of information, analytics and business services, today released its National Foreclosure Report for February, which provides monthly data on completed foreclosures, foreclosure inventory and 90+ delinquency rates. There were approximately 65,000 completed foreclosures in February 2012, compared to 66,000 in February 2011, and 71,000 in January 2012. The number of completed foreclosures for the 12 months ending in February was 862,000. From the start of the financial crisis in September 2008, there have been approximately 3.4 million completed foreclosures.
Approximately 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the foreclosure inventory as of February 2012 compared to 1.5 million, or 3.6 percent, in February 2011 and 1.4 million, or 3.4 percent, in January 2012. Nationally, the number of borrowers in the foreclosure inventory decreased by 115,000, a decline of 7.6 percent, in February 2012 compared to February 2011.
"The pace of completed foreclosures is down slightly compared to January, running at an annualized pace of 670,000, but compares favorably to the pace of completed foreclosures in February a year ago. Even though the pace of completed foreclosures has slowed, the overall foreclosure inventory is decreasing because REO sales were up in February," said Mark Fleming, chief economist for CoreLogic. "With the spring buying season upon us, the inventory may decline further as the pace of distressed-asset sales rises along with the rest of the housing market."
"In February, more than 60 major markets saw a decrease in their foreclosure rates compared to a year ago," said Anand Nallathambi, president and CEO of CoreLogic. "This combined with faster REO-clearing rates, better employment news, and continued historically low interest rates are all positive signs of improvement in the housing economy."
The share of borrowers nationally that were 90 or more days late on their mortgage payment fell to 7.3 percent in February 2012 from 7.8 percent in February 2011, but inched up from 7.2 percent in January 2012. At the same time, the inventory of real estate owned (REO) assets held by servicers nationwide grew faster in February 2012 than the pace of REO sales, as measured by the distressed clearing ratio. The distressed clearing ratio is calculated by dividing the number of REO sales by the number of completed foreclosures; the higher the ratio, the faster the pace of REO sales relative to the pace of completed foreclosures. The distressed clearing ratio for February 2012 was 0.73, up from 0.66 in January 2012.
Highlights as of February 2012
- The five states with the largest number of completed foreclosures during the 12 months ending in February 2012 were: California (154,000), Florida (87,000), Michigan (64,000), Arizona (63,000) and Texas (58,000). These five states account for 49.4 percent of all completed foreclosures nationally.
- The percent of homeowners nationally who were more than 90 days late on their mortgage payments, including homes in foreclosure and REO, was 7.3 percent for February 2012 compared to 7.8 percent for February 2011, and 7.2 percent in January 2012.
- The five states with the highest foreclosure rates were: Florida (12.0 percent), New Jersey (6.6 percent), Illinois (5.4 percent), Nevada (5.0 percent) and New York (4.9 percent).
- The five states with the lowest foreclosure rates were: Wyoming (0.7 percent), Alaska (0.8 percent), North Dakota (0.8 percent), Nebraska (1.0 percent) and Montana (1.4 percent).
- Of the top 100 markets, measured by Core Based Statistical Areas (CBSAs) population, 33 are showing an increase in the year-over-year change in the number of foreclosures in February 2012, two less than in January 2012 when 35* of the top CBSAs were showing an increase in the year-over-year change in the number of foreclosures.
- Of the top 100 CBSAs, 61 have lower foreclosure rates than a year ago.**
*January data was revised. Revisions are standard, and to ensure accuracy, CoreLogic incorporates newly released data to provide updated results.
** For the list of top 100 CBSAs, visit http://www.corelogic.com/downloadable-docs/top_100_cbsa.pdf.
To download a copy of the National Foreclosure Report, please visit www.corelogic.com/ForeclosureReport-February2012.
This report has state data separated into judicial vs. 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, while in non-judicial foreclosure states lenders can accomplish this same transition by issuing notices of default directly to the borrower without court intervention. It's important to note this distinction since judicial states, as a rule, have longer foreclosure timelines and thus affect foreclosure statistics as a result.
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 the CoreLogic National Foreclosure Report, because so few homes are actually redeemed following an auction, we assume the foreclosure process ends in "foreclosure by advertisement" states at the completion of the auction.
The foreclosure inventory represents the number of 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. Serious delinquency is typically defined as 90, 120, or 150 days delinquent (sometimes more), in foreclosure or in REO. 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 foreclosure inventory is measured only against homes that have an outstanding mortgage. Homes with no mortgage liens can never be in 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.
The distressed clearing ratio is calculated by dividing the number of REO sales by completed foreclosures. It is a measure of whether the REO inventory is growing or shrinking. The higher the ratio, the faster the REO inventory is clearing.
CoreLogic (NYSE: CLGX) is a leading provider of consumer, financial and property information, analytics and services to business and government. The Company combines public, contributory and proprietary data to develop predictive decision analytics and provide business services that bring dynamic insight and transparency to the markets it serves. CoreLogic has built one of the largest and most comprehensive U.S. real estate, mortgage application, fraud, and loan performance databases and is a recognized leading provider of mortgage and automotive credit reporting, property tax, valuation, flood determination, and geospatial analytics and services. More than one million users rely on CoreLogic to assess risk, support underwriting, investment and marketing decisions, prevent fraud, and improve business performance in their daily operations. The Company, headquartered in Santa Ana, Calif., has more than 5,000 employees globally. For more information, visit www.corelogic.com.
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