Foreclosures continued to plague the U.S. housing market last quarter, while a a growing backlog has caused the length of the foreclosure process to drag on and on.
Nationwide, foreclosure filings totaled 610,337 in the third quarter, an increase of less than 1% from the previous quarter, said RealtyTrac, an online marketplace for foreclosed properties.
Even though the increase was small, it is significant since it broke the trend of three consecutive quarterly decreases, said RealtyTrac Chief Executive James Saccacio.
“This marginal increase in overall foreclosure activity was fueled by a 14% 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,” he said.
Month-over-month, there were fewer foreclosures. Nationwide filings totaled 214,855 in September, a decrease of 6% from August and a 38% decrease from September, 2010.
“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,” said Saccacio.
From the Record:
Foreclosures in New Jersey take an average of 974 days, or more than 2 1/2 years, RealtyTrac Inc. reported Wednesday. That’s the second-longest process in the nation, just behind New York at 986 days.
RealtyTrac also reported that foreclosure activity remained low in the state in the third quarter, down 78 percent from the third quarter of last year, as lenders dealt with accusations of sloppy documentation and legal improprieties in the foreclosure process.
Nationally, foreclosure activity was down 34 percent in the third quarter, compared with the same period in 2010.
“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 Irvine, Calif.-based RealtyTrac, which tracks the foreclosure market nationwide.
One sign the process may be ramping up in New Jersey was a 29 percent increase in the number of default notices from the third quarter of 2010 to the third quarter of 2011. Default notices are the first step in the process.
Nationally, homes foreclosed in the third quarter took an average of 336 days to go through the system. New Jersey’s process is slower than some states’ because its foreclosures must go through the courts, which is not the case in about half the states.
The process was also slowed dramatically this year after state Chief Justice Stuart Rabner ordered six large lenders to show that they were following the rules and not filing unverified documents in foreclosures. The six lenders — GMAC Mortgage, Bank of America, Citibank, JPMorgan Chase Bank, OneWest and Wells Fargo — were cleared to begin foreclosure activity again in August and September.
In New Jersey, one in every 969 households received a foreclosure filing during the third quarter, compared with one in every 213 nationwide. Foreclosure activity in the third quarter remained highest in Nevada, California and Arizona, states that were hit hardest by the housing bust.