Foreclosure filings dropped to their lowest level in more than four years for the quarter ended March 31, according to RealtyTrac.
The measure — which includes default notices, scheduled foreclosure auctions and real estate owned properties — also fell to a 56-month low in March, dipping below 200,000 for the first time since July 2007.
Filings in the first quarter fell 2% and 16% from a quarter and year earlier.
Notably, Arizona dethroned Nevada for the nation’s highest foreclosure rate in March as a percentage of all homes. Nevada dropped to No. 2 after holding the rather unfortunate top spot for 62 months. Still, Nevada remained in the No.1 for the quarter when one in every 95 homes received a foreclosure filing.
The trends behind the numbers, however, tell conflicting stories.
Properties classified as REO plummeted 14% in March from February. But foreclosure starts — default notices or scheduled auction filings — rose for the third straight month.
That contrast might be due in part to a roughly yearlong timeline it takes to complete a foreclosure, said Daren Blomquist, a vice president at RealtyTrac. Foreclosed properties in the first quarter took on average 370 days to complete the process.
And a year ago, Blomquist said, lenders shied away from processing foreclosures in the midst of the robo-signing scandal, eventually resulting in the $25 billion settlement approved by a judge last week.
“The settlement is getting the lenders confident to say, ‘OK, we have the proper documentation,’ ” Blomquist said. “It’s going to take awhile for these properties to move through.”
There’s also the question, Blomquist said, of just how many of these properties will make it all the way through the foreclosures process, with more people advocating for short sales and loan modifications.
Judicial states, where the foreclosure process typically takes longer, actually saw an uptick in filings in the first quarter, increasing 8% and 10% in quarterly and year-earlier figures. Indiana led those 26 states with a 45% jump, followed by Connecticut at 38% and Massachusetts and Florida at 26%.
“For those judicial states, it’s what we expected,” Blomquist said. “We thought the numbers in 2011 were artificially low.”
First-quarter filings in nonjudicial states declined 8% from a quarter earlier and 28% from 2011.
Nevada's dethronement as the No. 1 state for its foreclosure rate in March is due mostly to a relatively new state law that requires an additional affidavit when filing a foreclosure. That law took effect in October.
“In our estimation that’s not going to prevent a whole lot of foreclosures,” Blomquist said. “It’s just going to delay them.”
Foreclosure starts in Nevada spiked 153% in March from February, the nation’s biggest jump.