Last year’s total figure is down 26% from 2012 and is less than 53% from the peak of 2.9 million properties with foreclosure filings in 2010, RealtyTrac said in its yearend foreclosure market report.
One in every 96 housing units nationwide had at least one foreclosure filing during the year, which is down 1.4% from a year ago.
“The shadow cast by the foreclosure crisis is shrinking as fewer distressed properties enter foreclosure and properties already in foreclosure are poised to exit in greater numbers in 2014 given the greater number of scheduled foreclosure auctions in 2013 in judicial states—which account for the bulk of U.S. foreclosure inventory,” says Daren Blomquist, vice president at RealtyTrac.
Total foreclosure activity increased in 10 states compared to the prior year, including Maryland (up 117%), New Jersey (44%), New York (34%), Connecticut (20%), Washington (13%) and Pennsylvania (13%).
Scheduled judicial foreclosure auctions rose by 13% on a yearly basis. This is the highest level in three years, the Irvine, Calif.-based firm said. Foreclosure auctions were also the only foreclosure document type to post a year-over-year increase.
Some of the biggest increases in scheduled judicial foreclosure auctions was found in Maryland, up 107%, New Jersey had a 64% rise, Connecticut was up 55%, and Florida at 53%.
“The push to schedule these auctions is certainly coming at an opportune time for the foreclosing lenders,” Blomquist added. “There is unprecedented demand from institutional investors willing to pay with cash to buy at the foreclosure auction, helping to raise the value of properties with a foreclosure filing in 2013 by an average of 10% nationwide.”
More than 747,000 housing units across the country began the default foreclosure process in 2013. This represents a 33% decline from the previous year and is the lowest annual total since RealtyTrac started reporting on foreclosure starts in 2006.
Meanwhile, 13 states did not follow the downward trend, with Maryland, Arkansas, New Jersey, Connecticut, New York, and Nevada all seeing respective increases in foreclosure starts ranging from 194% to 21%.
Additionally, there were 462,970 properties repossessed by lenders over the course of 2013, a yearly decline of 31%. REO activity decreased in 2013 compared to 2012 in 38 states, with California, Texas, Arizona, Georgia, Michigan and Illinois experiencing the greatest drop-off.
The government-backed enterprises Fannie Mae, Freddie Mac and the Department of Housing and Urban Development, have the highest inventory of bank-owned assets with a combined 41%, RealtyTrac noted. Other top beneficiaries were Bank of America (11% of all active REO inventory), Wells Fargo (11%), JPMorgan Chase (8%), US Bancorp (7%), Deutsche Bank (5%) and CitiGroup (4%).