NEW YORK (
) -- The number of completed foreclosures continue to drop, but the pace of declines might moderate as some states continue to deal with a large backlog of distressed assets.
According to the latest report from
, there were 51,000 foreclosures in September, unchanged from the previous month, but down 39% from the previous year.
The foreclosure inventory rate -- percentage of homes in some stage of foreclosure -- has steadily improved over the past three years. As of September 2013, it stood at 902,000 or 2.3% of all homes with a mortgage compared to 1.4 million a year earlier. This is roughly equivalent to 2009 levels.
Still, the number of completed foreclosures remains elevated. Prior to the crisis, completed foreclosures averaged 21,000 a month, half the current rate.
But the foreclosure picture varies from state to state. Two-thirds of the foreclosure inventory is concentrated in states with a judicial foreclosure process, which requires banks to prove in court that a borrower has defaulted.
For instance, in Florida, the foreclosure inventory rate remains at 7.4% compared to the national average of 2.3%. In New Jersey and New York, the respective foreclosure inventory rates are 6.5% and 4.8%.
The average time to foreclose on properties in these states is now more than three years.
With the bulk of the foreclosure inventory in these states, "the pace of overall improvement in the inventory will slow down and distressed assets will cast a long shadow over housing markets in states with judicial foreclosure," according to Mark Fleming, chief economist at CoreLogic.
-- Written by Shanthi Bharatwaj in New York.