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Foreclosure pace continues to wane

Although levels are still above normal, the serious mortgage default rate has hit a 5-year low.

The housing market continues to heal with the number of completed foreclosures declining 29 percent year-over-year in November, according to the latest data from CoreLogic. 

According to the report, there were 46,000 completed foreclosures during November. That is still more than double the normal rate of foreclosures. In the pre-bubble days between 2000 and 2006, foreclosures averaged 21,000 a month. 

However, the pace of foreclosures has been declining rapidly. Foreclosures were down 8 percent from the previous month. About 812,000 homes were in some stage of foreclosure, down 29 percent from a year earlier.

Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since September 2008, 4.7 million homes have been lost to foreclosure.

The declining pace of foreclosures has been one of the major factors behind the housing recovery. In the early years following the bust, home prices failed to recover as the market was flooded with foreclosed homes. 

There were fears that more homes would eventually wind up in foreclosure. Fears of a large “shadow inventory” of homes also weighed on home prices. 

Those concerns have waned in the past couple of years as fewer people defaulted on their loans and banks began to pursue alternatives other than foreclosures such as loan modifications and short sales.

Shadow inventory — or the number of properties that could eventually wind up in foreclosure — stood at 1.7 million homes in October, according to CoreLogic’s estimate. That is down 26.4 percent from a year earier and the lowest level since August 2008. 

CoreLogic estimates the current stock of properties in the shadow inventory, also known as pending supply, by calculating the number of properties that are seriously delinquent, in foreclosure or held as REO (real estate owned) by mortgage servicers but not currently listed on multiple-listing services.

Seriously delinquent loans — those more than three months past due — accounted for less than 5 percent of all mortgage loans, the lowest level since November 2008. 

All these numbers are still elevated relative to historical levels, but the trend is heading decidedly lower. 

“Nationally, loan performance continues to improve. The rate of seriously delinquent loans is at a new five-year low, down 26 percent relative to a year ago,” said Mark Fleming, chief economist for CoreLogic. “The shadow inventory continues to decline as well, decreasing at an average monthly rate of 46,000 units over the last year. Healthy market levels of shadow inventory are around 650,000 units, so there is more to be done, but the trend is in the right direction.”

According to the report, the five states with the highest number of completed foreclosures for the 12 months ending in November 2013 were Florida (115,000), Michigan (54,000), California (42,000), Texas (40,000) and Georgia (36,000). These five states account for almost half of all completed foreclosures nationally.


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About The Author

Joseph Sabeh Jr.

Please let me introduce myself, I am Joseph Sabeh, Jr a full time licensed professional realtor. I have been with Executive Homes Realty for over 13 years and was trained by my late father and Broker, Joseph Sabeh. I recently incorporated the company and we moved the office to 43513 Mission Blvd just last summer. I could not have found a more honorable place to work. After earning my experience selling high end Ralph Lauren suits and studying business management in southern California, I decided to pursue my dream of selling real estate and working with my father. He had already had such an excellent reputation and established a niche market of high end clientele that catered to the very best. I wanted to become the consummate professional just like him and have strived to become just that being just a phone call or email away from getting back to my client’s immediate needs! Known by my clients for my tenacity, perseverance , and excellence in negotia- tion(Certified Negotiation Expert), I have always strived to meet my clients high demands and goals. As a result of my professionalism, I have achieved an extensive portfolio of referrals from past and present clients. I credit my current values from my upbringing of my parents and the credit is due to them without question. Their integrity, pride, and willingness to sacrifice for the better of my life and my sister’s always left a mark on me that one day I will pass on. Their desire to achieve a better life and live it to the fullest is one that some families dream of and I certainly am appreciative of all of the education and etiquette I have learned from them both. I have sold condos up to 3.2 million dollar homes and I am here for any and all of your future real estate needs and wishing you the very best experience in your future real estate endeavors with me.

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