November 2015 National Foreclosure Report which shows the foreclosure inventory declined by 21.8 percent and completed foreclosures declined by 18.8 percent compared with November 2014. The number of completed foreclosures nationwide decreased year over year from 41,000 in November 2014 to 33,000 in November 2015. The number of completed foreclosures in November 2015 was down 71.6 percent from the peak of 117,657 in September 2010.
The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6 million completed foreclosures across the country, and since home ownership rates peaked in the second quarter of 2004, there have been about 8 million homes lost to foreclosure.
As of November 2015, the national foreclosure inventory included approximately 448,000, or 1.2 percent, of all homes with a mortgage compared with 573,000 homes, or 1.5 percent, in November 2014. The November 2015 foreclosure inventory rate is the lowest for any month since November 2007.
Core Logic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due, including loans in foreclosure or REO) declined by 21.7 percent from November 2014 to November 2015, with 1.3 million mortgages, or 3.3 percent, in this category. The November 2015 serious delinquency rate is the lowest since December 2007.
“After peaking at 3.6 percent in January 2011, the foreclosure rate currently stands at 1.2 percent—a remarkable improvement,” said Dr. Frank Nothaft, chief economist for Core Logic. “While there are still pockets of areas with high foreclosure activity, 30 states have foreclosure rates below the national average which is evidence of the solid improvement.”
“Tight post-crash underwriting standards coupled with much improved economic and housing market fundamentals have combined to push new mortgage delinquencies to 15-year-lows,” said Anand Nallathambi, president and CEO of Core Logic. “Although judicial states will likely continue to lag, given current trends, it is reasonable to expect a continued and significant drop in the rate of serious delinquencies and foreclosure starts in 2016.”
Additional November 2015 highlights:
On a month-over-month basis, completed foreclosures decreased by 10.9 percent to 33,000 in November 2015 from the 38,000 reported in October 2015.* As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
The five states with the highest number of completed foreclosures for the 12 months ending in November 2015 were Florida (83,000), Michigan (51,000), Texas (29,000), California (24,000) and Georgia (24,000). These five states accounted for almost half of all completed foreclosures nationally.
Four states and the District of Columbia had the lowest number of completed foreclosures for the 12 months ending in November 2015: the District of Columbia (78), North Dakota (225), Wyoming (543), West Virginia (565) and Hawaii (686).
Four states and the District of Columbia had the highest foreclosure inventory rate in November 2015: New Jersey (4.4 percent), New York (3.5 percent), Hawaii (2.5 percent), Florida (2.4 percent) and the District of Columbia (2.4 percent).
The five states with the lowest foreclosure inventory rate in November 2015 were Alaska (0.3 percent), Minnesota (0.3 percent), Arizona (0.4 percent), Colorado (0.4 percent) and Utah (0.4 percent).
*October 2015 data was revised. Revisions are standard, and to ensure accuracy Core Logic incorporates newly released data to provide updated results.
The data in this report represents foreclosure activity reported through November 2015.
This report separates state data into judicial versus non-judicial foreclosure state categories. 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 states, as a rule, have longer foreclosure timelines, thus affecting foreclosure statistics.
A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender. If the home is purchased by the lender, it is moved into the lender’s real estate-owned (REO) inventory. In “foreclosure by advertisement” states, a redemption period begins after the auction and runs for a statutory period, e.g., six months. During that period, the borrower may regain the foreclosed home by paying all amounts due as calculated under the statute. For purposes of this Foreclosure Report, because so few homes are actually redeemed following an auction, it is assumed that the foreclosure process ends in “foreclosure by advertisement” states at the completion of the auction.
The foreclosure inventory represents the number and share of mortgaged homes that have been placed into the process of foreclosure by the mortgage servicer. Mortgage servicers start the foreclosure process when the mortgage reaches a specific level of serious delinquency as dictated by the investor for the mortgage loan. Once a foreclosure is “started,” and absent the borrower paying all amounts necessary to halt the foreclosure, the home remains in foreclosure until the completed foreclosure results in the sale to a third party at auction or the home enters the lender’s REO inventory. The data in this report accounts for only first liens against a property and does not include secondary liens. The foreclosure inventory is measured only against homes that have an outstanding mortgage. Generally, homes with no mortgage liens are not subject to foreclosure and are, therefore, excluded from the analysis. Approximately one-third of homes nationally are owned outright and do not have a mortgage. Core Logic has approximately 85 percent coverage of U.S. foreclosure data.