Foreclosure activity reached a 5-year low in September with only 180,427 filings made on distressed properties, RealtyTrac said Thursday.
The filings surveyed include default notices, scheduled foreclosure auctions and bank repossessions.
Overall, September’s foreclosure numbers fell 7% from August and 16% from last year as more non-judicial foreclosure states moved through backlogs of foreclosure inventory.
“We’ve been waiting for the other foreclosure shoe to drop since late 2010, when questionable foreclosure practices slowed activity to a crawl in many areas, but that other shoe is instead being carefully lowered to the floor and therefore making little noise in the housing market — at least at a national level,” said Daren Blomquist, vice president at RealtyTrac. “Make no mistake, however, the other shoe is dropping quite loudly in certain states, primarily those where foreclosure activity was held back the most last year.”
The steep drop in activity is attributed to significant declines in foreclosure inventory levels within nonjudicial foreclosure states such as California, Georgia, Texas, Arizona and Michigan.
While the nonjudicial foreclosure state of California saw foreclosure starts fall 45% from last year, gains made in certain states could be disrupted by pending legislative changes.
Analysts have already projected California will become a quasi-judicial foreclosure state now that financial firms are wary of the state’s Homeowner Bill of Rights and the penalties associated with it.
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