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Foreclosure Inventory Falls 21 Percent in October 2015

Only Three States Had Year-Over-Year Increases in Foreclosure Inventory

Molly Boesel    |    Mortgage Performance

  • The foreclosure inventory fell 21.5 percent year over year in October 2015.
  • The seriously delinquent inventory fell 19.7 percent year over year in October 2015.
  • The foreclosure rate in judicial states is still two and a half times the pre-crisis rate.

The national foreclosure inventory – the number of loans in the foreclosure process – fell 21.5 percent year over year in October 2015 to approximately 463,000 homes, or 1.2 percent of all homes with a mortgage, according to the latest CoreLogic Foreclosure Report. The foreclosure inventory has fallen on a year-over-year basis every month since November 2011 (Figure 1) and in October 2015 was 70.4 percent below the January 2011 peak.

The October 2015 foreclosure rate – the share of all loans in the foreclosure process – fell to 1.2 percent, down from 1.5 percent in October 2014 and the lowest in eight years. But that was still above the pre-crisis foreclosure rate of 0.6 percent.

Figure 2 shows that, collectively, judicial foreclosure states1 continued to have a much higher average foreclosure rate (2 percent) in October 2015 than non-judicial states (0.6 percent). The collective foreclosure rate in non-judicial states is close to the pre-crisis rate of 0.4 percent, while the foreclosure rate in judicial states is two and a half times the pre-crisis rate of 0.8 percent. As of October 2015, judicial states had 42 percent of the nation’s outstanding mortgages but 70 percent of all loans in foreclosure.

There were 47 states that posted year-over-year declines in their foreclosure inventory in October 2015, and 15 of those states had decreases of more than 20 percent. The five states with the largest year-over-year drop in the foreclosure inventory were Florida (-40.5 percent), Idaho (-27.5 percent), Oregon (-27.1 percent), Michigan (-27 percent) and Colorado (-26.7 percent). Only Massachusetts (+20 percent), Rhode Island (+3.1 percent), Wyoming (+2.9 percent) and the District of Columbia (+2.3 percent) experienced year-over-year increases in the foreclosure inventory.

The seriously delinquent rate – the share of loans 90 or more days overdue – was 3.4 percent in October 2015, down from 4.1 percent in October 2014. The October 2015 inventory of seriously delinquent mortgages fell 19.7 percent year over year.

[1] In judicial foreclosure states, lenders must provide evidence of delinquency to the courts 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 foreclosure states have longer foreclosure timelines, thus affecting foreclosure statistics.

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