For the first time in a year foreclosure sales outpaced completed foreclosures--which at yearend 2011 decreased by 24%--contributing to a notable decrease in the foreclosure inventory, according to CoreLogic.
CoreLogic data indicate servicers “stepped up the rate” of processing distressed assets in December 2011 increasing the distressed clearing ratio that compares the number of the REOs sold with that of completed foreclosures or new REOs—from 0.94 in November 2011 to 1.03.
That means the REO inventory is clearing faster thus shrinking the inventory of foreclosed properties.
According to Mark Fleming, chief economist with CoreLogic, while foreclosure filings continue to be curtailed by a variety of judicial and regulatory constraints, “mortgage servicers are completing REO sales faster than they are completing foreclosures.”
Completed foreclosures for all of 2011 totaled 830,000, down from 1.1 million in 2010. That brought the yearend foreclosure inventory to 1.4 million REO properties.
The first national CoreLogic Foreclosure Report of monthly data on completed foreclosures, foreclosure inventory and 90+ delinquency rates also shows that since from the start of the financial crisis in September 2008, there have been approximately 3.2 million completed foreclosures—the current inventory is approximately 56% lower than its peak in 2008.
Nationally, the number of loans in the foreclosure inventory decreased 8.4% (130,000 properties nationwide) in December 2011 compared to December 2010, following a 5.3% decrease in November 2011.
Both improved REO sales rates and a 7.3% decrease in December 2011 in the share of seriously delinquent borrowers who were 90 days or more delinquent on their mortgage payments, including homes in foreclosure and REO, compared to 7.8% in December 2010 indicate that regardless of the much talked about shadow inventory problem the foreclosure market is changing for the better.
The new data from CoreLogic also show that nationally 1.4 million homes, or 3.4% of all homes with a mortgage, were in the foreclosure inventory as of December 2011 with roughly one-third of homeowners owning their homes outright.
As of December 2011 Florida remained at the top of the nation's highest foreclosure inventory rating at 11.9%, followed by New Jersey with 6.4% and Illinois 5.4%. Meanwhile, Nevada, consistently the number one foreclosure state in the nation in the recent past, has dropped to the fourth place with 5.3%.
CoreLogic also reports an improvement in the performance of the top 100 Core Based Statistical Areas based on population. In December 2011 34 of these markets had increased foreclosure inventories compared to a year ago, compared to 46 that showed annual improvements in November 2011.
