Delays push foreclosures to 40-month low in April
More than 219,200 properties received a foreclosure filing in April, a 9% drop from March and the lowest level seen in 40 months, according to RealtyTrac. Filings – default notices, scheduled auctions, or repossessions – were actually 34% lower than one year ago. It's the seventh straight month of yearly declines. Last fall, servicers came under investigation for faulty foreclosure practices and held up the process to make corrections and improvements. RealtyTrac CEO James Saccacio said these "massive delays" in the process continue to bring down filings, not a housing recovery. "The first delay occurs between delinquency and foreclosure, when lenders and servicers are no longer automatically pushing loans that are more than 90 days delinquent into foreclosure but are waiting longer to allow for loan modifications, short sales and possibly other disposition alternatives,” Saccacio continued. According to the Mortgage Bankers Association, roughly 3.7 million properties are in this seriously delinquent stage. "The second delay occurs after foreclosure has started, when lenders are taking much longer than they were just a few years ago to complete the foreclosure process," Saccacio said. Ballooning timelines For the foreclosures completed in April, it took an average of 400 days to move the loan from the initial default notice to REO, according to RealtyTrac. That's up from 340 days in the first quarter of 2010 and more than double the 151-day average in the first quarter of 2007. But the timelines vary by state. In New York and in New Jersey, it took an average of 900 days – almost two and a half years – to move a loan from default to REO. That's more than three times the average in 2007 for both states. But New York isn't alone. The average foreclosure timeline in Florida was 679 days for first-quarter foreclosures, which was still four times the 169-day average one year ago. In California, the average was 330 days to complete a foreclosure, more than double the 134 days in the first quarter of 2007. Filings dropped in all stages of the process. Default notices dropped 14% from one month ago. Scheduled foreclosure auctions fell 7% to a 31-month low. And repossessions decreased 5%, though they remained above a 22-month low hit in February. Nevada still the leader Nevada held the nation's highest foreclosure rate in April for the 52nd straight month, according to RealtyTrac. One in every 97 homes there received a foreclosure filing in April even though overall activity dropped 9% from the previous month and 27% from one year ago. Bank repossessions, however, spiked 23% from March to 4,600 properties – an all-time monthly high since RealtyTrac began reporting the numbers in April 2005. Most of the activity occurred in Las Vegas, which continues to hold the highest foreclosure rate among major cities. There, one in every 82 homes received a filing. Arizona had the nation's second-highest foreclosure rate for the fifth-straight month. There, one in every 205 homes received a filing. While REO there dipped 3% from the previous month, levels remained 22% higher than one year ago. Overall foreclosure activity did drop in Arizona by 15% from the previous month. REO also jumped 22% in California, keeping the state at the third highest foreclosure rate in the country. One in every 240 homes there received a filing in April. Seven of the 10 highest metro foreclosure rates are located in California. Write to Jon Prior. Follow him on Twitter @JonAPrior.