RealtyTrac: Judicial States Filing More Foreclosures

More than 2.3 million foreclosure filings were reported on 1.8 million U.S. properties in 2012. Image: Fotolia

Foreclosure activity in 2012 increased in 25 states, with the majority using the court system to file the foreclosure, RealtyTrac said in its yearend report.

For the year, more than 2.3 million foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on 1.8 million U.S. properties in 2012. This figure is down 3% from a year ago and 36% less than the peak of 2.9 million housing units with foreclosure filings in 2010.

According to the Irvine, Calif.-based analytic firm’s report, 1.39% (one in every 72) of housing units had at least one foreclosure filing during the year.

Out of the 25 states that experienced a rise in foreclosure activity last year, 20 occurred in judicial states. Leading this list was New Jersey, which had 55% more foreclosures in 2012 compared to the prior year. Other judicial states that experienced a significant increase in foreclosure activity include Florida (up 53%), Connecticut (48%), Indiana (46%) Illinois (33%) and New York (31%).

Another sign that 2012 belonged to judicial states is that Nevada did not possess the highest foreclosure rate at the end of the year. This distinction went to Florida where 3.11% of housing units (one in 32) received a foreclosure filing. This is the first time the Sunshine State held this distinction since the housing crisis began.

Meanwhile, 19 nonjudicial states saw their foreclosure activity decrease year-over-year. This group was led by Nevada with a decline of 57%, followed by Utah and Oregon at 40%, Arizona at 33%, California was down 25% and Michigan dropped 23%.

Daren Blomquist, vice president of RealtyTrac, said there could be a backlog of delayed foreclosures building up in some of these nonjudicial states as well as recent state legislation and court rulings that could affect the foreclosure process for lenders in the near future.

“Although we are comfortably past the peak of the foreclosure problem nationally, 2013 is likely to be book-ended by two discrete jumps in foreclosure activity,” Blomquist continued. “We expect to see continued increases in judicial foreclosure states near the beginning of the year as lenders finish catching up with the backlogs in those states, and another set of increases in some nonjudicial states near the end of the year as lenders adjust to the new laws and process some deferred foreclosures in those states.”

At the end of the year, more than 1.5 million homes were in some stage of foreclosure or REO, RealtyTrac revealed. This number is 9% higher than last year, but still 31% below the peak of 2.2 million at the end of 2010.

Florida accounted for the biggest share of foreclosure inventory, or 20% of the national total, with 305,766 properties either bank-owned or in foreclosure. Other prominent states that had high amounts of foreclosed properties are California with 212,172, Illinois had 135,858, 76,015 in Ohio and New York with 69,044.

Lenders with the most inventory of REO properties in their portfolios were the government-backed entities of Fannie Mae, Freddie Mac and the Department of Housing and Urban Development with a combined 26% of all REO assets throughout the country. Following the GSEs on this list were Wells Fargo, US BankCorp and JPMorgan Chase with 8%, 6%, 4% and 4%, respectively.