The average time to process a foreclosure in New York State in the third quarter is now 986 days, the longest of any state and a new record for New York. When sales time is added, the time from default to a new owner closes is now 1179 days, or 3.2 years.
U.S. properties foreclosed in the third quarter took an average of 336 days to complete the foreclosure process, up from 318 days in the second quarter and the highest number of days going back to the first quarter of 2007. The second longest average foreclosure process was in New Jersey, at 974 days, and the third longest average foreclosure process was in Florida, at 749 days, according to RealtyTrac’s latest Foreclosure Market Report.
The average time to sell foreclosures also hit a record high in the third quarter. Properties in the foreclosure process that sold during the third quarter (usually short sales) took an average of 318 days to sell after entering the foreclosure process, up from 245 days in the previous quarter. Bank-owned properties sold in the third quarter took an average of 193 days to sell after being repossessed by the bank, up from 178 days in the second quarter.
As increasingly tardy foreclosure processing extends the pain of distressed prices upon local markets, the good news is that more than one third fewer homes are entering the foreclosure process this year compared to last.
Foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 610,337 properties in the third quarter, an increase of less than 1 percent from the previous quarter and a decrease of 34 percent from the third quarter of 2010. One in every 213 U.S. housing units had a foreclosure filing during the quarter.
Foreclosure filings were reported on 214,855 U.S. properties in September, a 6 percent decrease from August and a 38 percent decrease from September 2010. September marked the 12th straight month where foreclosure activity decreased on a year-over-year basis.
“U.S. foreclosure activity has been mired down since October of last year, when the robo-signing controversy sparked a flurry of investigations into lender foreclosure procedures and paperwork,” said James Saccacio, chief executive officer of RealtyTrac. “While foreclosure activity in September and the third quarter continued to register well below levels from a year ago, there is evidence that this temporary downward trend is about to change direction, with foreclosure activity slowly beginning to ramp back up.
“Third quarter foreclosure activity increased marginally from the previous quarter, breaking a trend of three consecutive quarterly decreases that started in the fourth quarter of 2010,” Saccacio continued. “This marginal increase in overall foreclosure activity was fueled by a 14 percent jump in new default notices, indicating that lenders are cautiously throwing more wood into the foreclosure fireplace after spending months spent trying to clear the chimney of sloppily filed foreclosures.”
Default notices (NOD, LIS) were filed on 195,878 U.S. properties in the third quarter, up 14 percent from the previous quarter but down 27 percent from the third quarter of 2010. In September, default notices were filed on 70,710 U.S. properties, down 10 percent from a nine-month high in August and down 31 percent from September 2010.
Some of the states with the biggest quarterly increases in default notices included Massachusetts, with a 65 percent quarter-over-quarter increase; New Jersey, with a 29 percent increase; Florida, with a 24 percent increase; Ohio, with a 21 percent increase; and California, also with a 21 percent increase.
Foreclosure auctions (NTS, NFS) were scheduled for the first time for 217,929 U.S. properties in the third quarter, down 6 percent from the previous quarter and down 41 percent from the third quarter of 2010. In September, foreclosure auctions were scheduled for the first time for 79,098 U.S. properties, down 6 percent from August and down 45 percent from September 2010.
Lenders foreclosed on 196,530 U.S. properties during the third quarter, a 4 percent decrease from the previous quarter and a 32 percent decrease from the third quarter of 2010. In September, lenders foreclosed on 65,047 U.S. properties, an increase of less than 1 percent from August but down 36 percent from September 2010, when REO activity hit a monthly peak of 102,134 bank repossessions.
A handful of states posted significant quarterly increases in REO activity in the third quarter, bucking the national trend. Those states included Massachusetts, with a 62 percent quarter-over-quarter increase; Oregon, with a 47 percent increase; Georgia, with a 42 percent increase; and Illinois, with a 27 percent increase.