Foreclosure filings around the country fell 26% in the last year to their lowest level since December 2006, according to RealtyTrac.
Four of the 20 largest metropolitan areas, however, saw foreclosures increase year-over-year. Filings in Boston’s metro area were up 44%, followed by regions centered around New York, NY (up 23%), Washington D.C. (up 8%), and Philadelphia (up 5%).
|Metro Area||YY Growth in Foreclosure Filings|
|Boston, Cambridge, Quincy, MA-NH||44%|
|New York, Northern New Jersey, Long Island, NY-NJ-PA||23%|
|Washington, Arlington, Alexandria, DC-VA-MD-WV||8.2%|
|Philadelphia, Camden, Wilmington, PA-NJ-DE-MD||5%|
|Chicago, Naperville, Joliet, IL-IN-WI||-12.71%|
RealtyTrac’s Daren Blomquist explained the foreclosure uptick in these areas as a the local market playing catch-up with the rest of the nation. In states like New York, creditors have to surmount relatively stringent procedural hurdles before being able to foreclose on a property. As a result, underwater homes in these regions are hitting the market long after other states have already dealt with much of their distressed property.
In the first quarter of 2014, the average foreclosure in New York took 1,103 days to reach completion; 706 days in Massachusetts; and 633 days in Pennsylvania. Average time for the entire United States: 572 days.
“It’s not surprising that some of the states with the longest foreclosure timelines are those with markets still dealing with increasing foreclosure activity even as the country as a whole continues to hit new lows,” said Blomquist. “On the other hand, the increase in bank repossessions in some states with shorter foreclosure timelines like California and Oregon demonstrates there is still some pent-up foreclosure activity in those states as well.”
|New Jersey||1,103 days|
|New York||986 days|
For those worried about foreclosure, the lender can make as much difference as the state they live in. Rob O’Donnell, a Re/Max agent who handles distressed properties in Massachusetts, says some lenders are more aggressive than others when it comes to repossession.
“Some mortgage companies and banks foreclose more quickly than others, and there are some banks that don’t foreclose,” says O’Donnell. In his experience, small lenders and private companies are quicker to pull the trigger. Larger mortgage firms are either simply slower or more reluctant to foreclose for fear they might run afoul of the law. Blomquist recounted one instance where a major Nevada lender reportedly went months without filing a foreclosure notice while the company familiarized itself with with new regulations.
In areas where foreclosures have increased, more properties are being gobbled up at auction by investors before they can hit the open market; something that could be bad news for regular buyers, who prefer multiple listings services over the courthouse steps to find their homes. Blomquist says auction purchases have gone up significantly since last year, driving up housing prices and fueling banks’ interest in more foreclosures.
“In some markets, there’s quite a bit of competition [for distressed real estate] because it’s selling for use as a rental,” says Blomquist. At auction, “banks can get more than they ever expected to recover on that loan.”
|Major Metros With Highest Foreclosure Rate in May|
|Tampa, St. Petersburg, Clearwater, FL|
|Miami, Fort Lauderdale, Pompano Beach, FL|
|Chicago, Naperville, Joliet, IL-IN-WI|
|Riverside, San Bernardino, Ontario, CA|
|Baltimore, Towson, MD|
Other foreclosure stats: The Tampa and Miami metros led the way in foreclosure rates, followed by Chicago, San Bernardino, and Baltimore. In May, one in every 1,199 housing units was the subject of a foreclosure filing, from initial notices of default to final bank repossessions.