Foreclosure filings fell to the lowest levels in years. Still, the chief of the company that reports the numbers is providing a dire warning about an explosion of upcoming foreclosures and the impact on the real estate market. The time it takes to complete a foreclosure lengthened and is nearing three years in New York.
Mortgage borrowers on 198,853 U.S. properties were hit with some sort of foreclosure filing during March.
Foreclosures fell from February, when 206,900 properties faced a filing.
Last month’s activity was also an improvement from March 2011, when around 239,783 foreclosures were filed based on previously reported data from RealtyTrac. In fact it was the best month since July 2007, when 179,599 filings were made.
The statistics reportedly reflect documents filed for all three phases of foreclosure — default, auction and real state owned — in more than 2,200 counties that account for more than 90 percent of the U.S. population.
During the first three months of 2012, foreclosures were filed on 572,928 properties. First-quarter activity was the lowest since the fourth-quarter 2007, when 642,150 filings were made on 527,740 properties.
But the improved data is deceiving.
“The low foreclosure numbers in the first quarter are not an indication that the massive reservoir of distressed properties built up over the past few years has somehow miraculously evaporated,” RealtyTrac Chief Executive Officer Brandon Moore warned in the report. “There are hairline cracks in the dam, evident in the sizable foreclosure activity increases in judicial foreclosure states over the past several months, along with an increase in foreclosure starts in many judicial and non-judicial states in March.
“The dam may not burst in the next 30 to 45 days, but it will eventually burst, and everyone downstream should be prepared for that to happen — both in terms of new foreclosure activity and new short-sale activity.”
Foreclosure filings were made on 45,122 California properties last month, the most of any state. Golden State filings improved from February’s 51,584.
At 26,758, Florida foreclosures were the second-worst and more than the 26,337 state foreclosures during February.
No. 3 was 13,820 in Illinois, then 11,322 in Georgia and 9,497 in Arizona.
Only 12 Washington, D.C., properties faced a filing, fewer than any state.
The U.S. foreclosure rate was one filing for each 662 housing units during March. That was a little better than the one-in-637 rate a month earlier.
Year-to-date March 31, one foreclosure filing has been made on each 230 U.S. housing units.
Last month’s rate was worst in Arizona at one-in-300. Arizona moved up from the No. 2 position in February, when its rate was slightly better at one-in-312.
March’s second-worst state, Nevada, improved to a one-in-301 rate from February’s one-in-278 rate and landed in the No. 2 position last month.
California was third with a one-in-303 rate during March, then one-in-336 in Florida and Georgia’s one-in-361 rate.
Washington, D.C.’s, one filing for each 24,727 housing units was the best rate in the nation.
Mortgage servicers completed fewer foreclosures in March: 55,075. The number of real-estate-owned filings in February was 63,834, while the March 2011 total was 72,270.
During the first three months of this year, REO filings totaled 180,074 on a national basis.
Completed foreclosures fell to 7,471 in Florida from February’s 9,023, though that was still more than any other state during March.
California repossessions declined to 6,571 last month from 8,544, leaving it ranked No. 2 in REOs.
After that was 4,387 completed foreclosures in Georgia, 4,151 in Michigan and 3,576 in Arizona.
REO filings numbered 12 in the District of Columbia, fewer than any state.
It took 370 days to process the average U.S. foreclosure during the first quarter, lengthening from the prior quarter’s 348 days and the longest timeline since the first-quarter 2007.
California cut its turnaround to 320 days from the fourth-quarter 2011’s 352 days. It was the 12th consecutive quarterly improvement for the state.
New York’s 1,056-day timeline was the longest in the country, followed by New Jersey’s 966 days and Florida’s 861 days.