Foreclosure activity fell 8% in the second quarter from a year ago due to a decline in bank repossessions, according to RealtyTrac’s midyear foreclosure market report.
A total of 558,310 homes had some type of foreclosure filing—default notice, auction sale notice or bank repossession—in the second quarter of 2012. A year ago, foreclosure filings were reported on 608,235 U.S. properties.
Banks repossessed 159,797 properties between April and June 2012, which is approximately 40,000 less than the same time period last year. However, foreclosure starts increased annually for the first time since 4Q 2009.
The Irvine, Calif.-based analytics provider said 311,010 properties began the foreclosure process during the second quarter, a 9% increase from the first quarter and a 6% uptick year-over-year. Foreclosure starts posted year-over-year increases in 31 states during the quarter: 17 judicial and 14 nonjudicial states.
“Additional scrutiny on how lenders and servicers process foreclosures, along with aggressive foreclosure prevention efforts by the federal government and several state governments, continue to keep a lid on the foreclosure problem at a national level,” said Brandon Moore, CEO of RealtyTrac. “Still, foreclosure starts began boiling over in more markets in the first half of the year, particularly in the second quarter, when rising foreclosure starts spread from primarily judicial foreclosure states in the first quarter to more than half of all non-judicial foreclosure states in the second quarter.”
For homes that were foreclosed upon in the second quarter, the foreclosure process took an average of 378 days to complete, RealtyTrac said. This is up eight days from the previous quarter and sets a record high not seen since the first quarter of 2007.
Even though the average time to foreclose a property nationwide increased, the timelines were down in some of the longest processing states. For example, New York—which still maintains the longest timelines—saw its foreclosure process timeline decrease from 1,056 days in the first quarter to 1,001 days in the second quarter, a 5% drop.
New Jersey’s time period, the second longest nationwide, also fell 3% from 966 days. Furthermore, Pennsylvania was also down 1% while Florida remained the same quarter-over-quarter at 861 days.
Bank-owned properties that sold in the second quarter took an average of 195 days to sell from the time they were foreclosed, up from 178 days in the first quarter. REO properties took the longest to sell in New York, at 430 days, followed by Arkansas and New Jersey at 357 and 354 days, respectively.
