According to data from RealtyTrac, foreclosure filings, which includes default notices, scheduled auctions and bank repossessions, declined 14 percent from January and 27 percent from the previous February. With 225,101 properties receiving a filing in February, this marked the lowest activity since February 2008, and the largest year-over-year decreased since the firm began tracking this reporting in 2005.
Taking a cautionary tone, CEO James J. Saccacio noted that there are reasons to believe that the decreases could be short lived. “While a small part of February’s decrease can be attributed to it being a short month and bad weather, the bottom line is that the industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures," Saccacio stated. "We expect to see the numbers bounce back, but that will likely take several months. And monthly volume may never return to its peak in March 2010 of more than 367,000 properties receiving foreclosure filings.”
Ten states with the most foreclosure activity accounted for more than 70 percent of all filings. California (56,229 filings), with almost three times the next stated, accounted for 25 percent of the national total, but a decline of 16 percent from January and 18 percent over February 2010. The other states were: Florida (18,760), Arizona (15,485), Michigan (14,003), Georgia (12,807), Texas (11,562), Illinois (9,592), Nevada (9,553), Ohio (8,598) and Wisconsin (4,478).
In terms of type of foreclosure activity, default notices which mark first time filings of Notice of Default or Lis Pendens decline by 16 percent from January and 41 percent over the previous February. A total of 63,175 default notices were filed, 28 percent of all filings in the month, reaching a 48 month low.
Foreclosure auctions totaled 97,293, or 43 percent of all activity, hit a 27 month low in decreasing by 10 percent from the previous month and 21 percent from the same month a year ago.
Lender foreclosures were at a 22 month low at 64,643 properties (29 percent of the total), with decreases of 17 percent from January and 18 percent over February 2010.
Although the decrease in foreclosure activity is a positive sign for the housing market, there is still a ways to go before these properties are cleared from the market, paving the way for growth. In addition to the issues noted by Saccacio, it is possible that some major servicers are delaying foreclosure filings in light of negotiations with 50 state attorneys general. The negotiations seeks commitments from major lenders and servicers seeking as much as $20 billion in fines or loan balance reductions.