National foreclosure data from May show that foreclosures and foreclosure inventory have decreased from May last year, by 9.4% and 37% respectively, according to the CoreLogic (NYSE: CLGX) May National Foreclosure Report.
There were 47,000 completed foreclosures nationally in May 2014, down from 52,000 in May 2013; and as of May 2014, about 660,000 homes in the United States were in some stage of foreclosure, known as the foreclosure inventory, compared to 1 million in May 2013.
Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 5 million completed foreclosures across the country.
Completed foreclosures increased by 3.8% from the 45,000 reported in April 2014. As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.
“The pace of completed foreclosures slowed in May compared to last month, but I expect this to be a temporary respite,” says Anand Nallathambi, president and CEO of CoreLogic, in the report. “There is still much more hard work to do to clear the backlog of foreclosed properties. Although difficult, we need to continue to aggressively clear distressed homes to ensure the return of a healthy housing market.”
Florida, Michigan, Texas, California and Georgia topped the list of states with the highest number of completed foreclosures for the 12 months ending in May 2014, with 122,000; 44,000; 39,000; 34,000; and 32,000 foreclosures respectively. These five states account for almost half of all completed foreclosures nationally.
However, every state posted double-digit year-over-year declines in completed foreclosures; and every state, excluding New York and the District of Columbia, posted double-digit year-over-year declines in foreclosures.
The five states, including the District of Columbia, with the lowest number of completed foreclosures for the 12 months ending in May 2014 were: the District of Columbia, with 71; North Dakota, with 334; West Virginia, with 515; Wyoming, with 710; and Alaska, with 856.
Thirty-eight states show declines in year-over-year foreclosure inventory of greater than 30% with Arizona, Utah, Nebraska and Minnesota experiencing declines greater than 50%.
“Significant gains have been made in the last year to reduce the foreclosure stock,” says Mark Fleming, chief economist for CoreLogic. “Yet, these improvements are occurring disproportionately in non-judicial states. The foreclosure inventory in judicial states is averaging 2.1%, which is more than twice the 0.9% average that is occurring in non-judicial states.”
In judicial foreclosure states, lenders must provide evidence to the courts of delinquency in order to move a borrower into foreclosure. In non-judicial foreclosure states, lenders can issue notices of default directly to the borrower without court intervention.
The distinction between judicial and non-judicial states is important, since judicial states, as a rule, have longer foreclosure timelines, thus affecting foreclosure statistics, CoreLogic says.
Access the full report here.
Written by Cassandra Dowell