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National Foreclosure Inventory Down 34 Percent Year Over Year in December 2014

Utah Experienced Largest State Improvement in Foreclosure Inventory From a Year Ago

Shu Chen    |    Mortgage Performance

Today, CoreLogic reported that the national foreclosure inventory fell by 34.3 percent year over year in December 2014 to approximately 552,000 homes, or 1.4 percent of all homes with a mortgage, down from 840,000, or 2.1 percent, in December 2013. This marks 38 months of continuous year-over-year declines in the inventory of foreclosed homes, including 23 straight months of declines greater than 20 percent, as shown in Figure 1. Also in December 2014, the 12-month sum of completed foreclosures continued to decline, dropping 14.9 percent from a year ago to 563,000. The seriously delinquent inventory fell to 1.6 million loans, a 21.6-percent decline from December 2013.

The five states with the largest year-over-year drop in the foreclosure inventory were: Utah (-48.8 percent), Florida (-48.6 percent), Maine (-45.9 percent), Idaho (-45.1 percent) and Iowa (-43.4 percent). All 50 states posted declines in the foreclosure inventory from December 2013, with 45 states showing decreases of more than 20 percent. Only the District of Columbia (+21.7 percent) experienced a year-over-year increase in the foreclosure inventory. As such, some of the country’s largest banks have been working on a legislative fix to facilitate a faster foreclosure process in D.C.

Judicial Foreclosure States Continue to Have Higher Foreclosure Rates

Judicial Foreclosure States Continue to Have Higher Foreclosure Rates

Judicial foreclosure states1, on average, continue to have higher foreclosure rates than non-judicial states, averaging 2.4 percent and 0.7 percent, respectively, in December 2014. Figure 2 shows foreclosure rates for judicial states and non-judicial states. The foreclosure rate for judicial states peaked in February 2012 at 5.3 percent, and had fallen more than half as of December 2014. Non-judicial states experienced foreclosure rates peaking a full year earlier (in January 2011), and were about one-fourth of that peak value, or 0.7 percent, in December 2014.

[1] 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 foreclosure states have longer foreclosure timelines, thus affecting foreclosure statistics.

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