US foreclosures at lowest level in five years - RealtyTrac


By Atossa Araxia Abrahamian

Oct 11 (Reuters) - Foreclosure filings on U.S. homes inSeptember fell to their lowest level in five years, but somestates are still seeing their foreclosures rise, a report fromRealtyTrac said on Thursday.

The overall decrease put the combined number of reporteddefault notices, scheduled auctions, and bank repossessions at180,427 - the lowest total since July 2007. That's also 7percent less than August' s foreclosure rate, and down 16percent from September 2011.

"The five-year low, combined with the fact that theyear-over-year decrease in foreclosures was in its twenty-fourthstraight month, is evidence that we're past the worst offoreclosure crisis," said Daren Blomquist, vice president ofRealtyTrac.

September's decreased foreclosure activity helped dropforeclosures for the third quarter down to the lowest levelsince the fourth quarter of 2007.

Foreclosure starts - initial default notices or scheduledauctions - were down 12 percent nationwide in September fromAugust, and decreased in 31 states.

The news is not universally good. Fewer foreclosure starts,said Blomquist, could mean an increase in short sales. Shortsales, which take place before a home is formally repossessed,can drag down housing prices by increasing supply.

Still, Blomquist said, short sales are "still the lesserevil: foreclosures tend to sell at even lower prices."

And some states - particularly those that make lenders gothrough the courts to foreclose on properties - registered ayear-over-year increase in the number of foreclosures in thethird quarter because they are still dealing with a backlog.

The average number of days it took lenders to foreclose hita record 382 days overall.

"Much of the downward trend is good news, but part of it isexaggerated by the fact that it's taking longer to foreclose,which automatically reduces the foreclosure numbers," saidBlomquist. "A longer process means a bit less pain in theshort-term, but it means it takes longer for the housing marketto fully rid itself of the foreclosure albatross."

Only four states with non-judicial foreclosure rulesregistered an increase in activity in the third quarter.Washington state saw a 70 percent increase from the previousquarter, and was up 15 percent from the third quarter of 2011.

Florida, a judicial state, ranked highest in the nation inSeptember and the third quarter for the first time since 2005.One in 117 Florida housing units had a foreclosure filing in thethird quarter, more than twice the national average of one in248 housing units.

(Reporting By Atossa Araxia Abrahamian; Editing by Tim Dobbyn)