This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

New Foreclosure Filings Fall to Seven-Year Low

NEW YORK (TheStreet) -- Foreclosure activity fell 27% in September from last year but rose 2% from a month earlier, according to the latest report from RealtyTrac.

Foreclosure filings, which includes notices of default, scheduled auctions and bank repossessions, have declined annually for 36 consecutive months.

There were a total of 376,931 properties with foreclosure filings at the end of the third quarter, down 7% from the previous quarter and down 29% from the year-earlier quarter.

New foreclosure filings or foreclosure starts fell 39% from a year earlier to a seven-year low.

Must Read: Why Janet Yellen Will Craft the Greatest Fedspeak Ever

Foreclosure activity started to decline in October 2010 after lenders and servicers were accused of improperly signing off on foreclosure documents in a practice called "robo-signing."

After a moratorium was imposed on foreclosure activity, the five biggest servicers, including Bank of America (BAC - Get Report), JPMorgan Chase (JPM) and Wells Fargo (WFC) entered into a $25 billion mortgage settlement with regulators that required them to offer billions of dollars in mortgage relief and foreclosure prevention to borrowers.

States including California and Nevada have since enacted tougher foreclosure laws that have made it increasingly difficult for banks to foreclose on borrowers.

States that follow a judicial foreclosure process, which requires banks to prove the borrower is in default in court, have seen a growing backlog of foreclosures as courts are overwhelmed by the sheer number of cases.

The average time to complete a foreclosure is now 551 days nationwide, up from 526 days in the second quarter and up 44% from 382 days in the third quarter of 2012.

The average time to foreclose in New York takes 1,037 days. New Jersey, Florida, Illinois and Connecticut are also known for particularly long timelines.

"In a healthy housing market foreclosures are rare but streamlined while still protecting the rights of the homeowner," said RealtyTrac Vice President Daren Blomquist. "While foreclosures are clearly becoming fewer and farther between in most markets, the increasing time it takes to foreclose is holding back a more robust and sustainable recovery."

The length of the foreclosure process is one reason why banks have increasingly opted for alternatives such as loan modifications and short sales in recent years, which has helped stem the tide of foreclosures.

Still, foreclosure activity fluctuates widely from month to month as banks work through the backlog of problem loans, with many eventually finding their way to foreclosure.

"The sharp jumps in foreclosure activity in some local markets may come as a surprise to some," Blomquist said. "These spikes in activity demonstrate that while millions of distressed homeowners have been pulled back from the precipice by foreclosure prevention programs over the past several years, once those programs expire or are exhausted, a percentage of these troubled homeowners are still susceptible to falling into foreclosure. In addition even slight economic downturns at the local or regional level can push these homeowners hanging on by a thread over the edge."

-- Written by Shanthi Bharatwaj in New York.

>Contact by Email.

Disclosure: TheStreet's editorial policy prohibits staff editors and reporters from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
XLF $23.25 -1.10%
XHB $33.48 -1.50%
IYR $77.39 -0.24%
BAC $14.36 -2.78%
AAPL $95.18 1.64%


Chart of I:DJI
DOW 17,750.91 -140.25 -0.78%
S&P 500 2,063.37 -18.06 -0.87%
NASDAQ 4,763.2240 -54.37 -1.13%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs