NEW YORK (TheStreet) -- The number of homes lost to foreclosure continued to decline in October, but the overall levels of foreclosure remain uncomfortably high.
Completed foreclosures declined to 58,000 in October, down 17% from October 2011 and 25% from the previous month, according to Core Logic data released Monday. Foreclosures in September were upwardly revised to 77,000 from 58,000. The larger-than-usual revision was in connection with an annual online auction of delinquent tax properties in Wayne County, Michigan.
Approximately 1.3 million homes, or 3.2 percent of all homes with a mortgage, were in the national foreclosure inventory as of October 2012 compared to 1.5 million, or 3.6 percent, in October 2011.
"A lower foreclosure inventory is a good indicator of improving housing markets," said Anand Nallathambi, president and CEO of CoreLogic. "The downward trend in foreclosure inventories over the past year is yet another signal that a recovery in housing is gaining traction."The decline in foreclosures has been welcome, defying early predictions of a "tidal wave." The big mortgage servicers- Bank of America (BAC), JPMorgan Chase (JPM), Citigroup (C), Wells fargo (WFC) and Ally Financial have pulled back from foreclosures after a $25 billion mortgage settlement over illegal foreclosure practices, forced them to comply with new servicing standards and pursue alternatives to foreclosures such as short sales, refinancing and loan modifications. Laws in states such as California and Nevada have also made it tougher for banks to foreclose. Exceedingly long foreclosure timelines has also led to the drop in foreclosure inventory. In Judicial states where the bank is required to prove the borrower is delinquent in court before initiating foreclosure action, the process can take years, with courts increasing scrutiny of cases following the "robo-signing" scandal. The average number of days a mortgage is in foreclosure from the notice of default to completion stood at 1072 days in New York and more than 900 days in Jersey in the third quarter, according to RealtyTrac. The foreclosure tide has not happened, because there "simply isn't the system bandwidth to handle them," Georgetown University Professor Adam Levitin notes in blog Credit Slips . "Servicers really can't move significantly more foreclosures through the courts/trustee systems if they wanted. If I started a foreclosure in New York state today, I probably wouldn't have title and possession until early 2015."
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV