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March Foreclosure Activity Plunges To 5 Year Low

Tyler Durden's picture




 

While the naive public has been inundated with stories that the foreclosure pipeline has been finally unclogged following the robo-settlement (see here and here) and as a result the home "price discovery" process is well on its way, reality is just a tad different. Make that totally different. As usual, the only foreclosure report that matters, and that is even remotely close to reality, comes from RealtyTrac, and we are sad to say, it brings no good news. Quite the contrary. According to the real estate specialists, March 2012 foreclosures plunged from 206,900 in February to 198,853 in March, the first time the total number of foreclosures (either Default Notices, Foreclosure Auctions, or REOs) has dropped under 200,000 since July 2007! Which sadly means that the foreclosure dam wall has yet to crack. Of course, when it does, well "The Second Foreclosure Tsunami Is Coming, And Is About To Kill Any Hopes Of A "Housing Bottom."

From RealtyTrac:

Foreclosure filings were reported on 198,853 U.S. properties in March, a 4 percent decrease from February and a 17 percent decrease from March 2011. March’s total was the lowest monthly total since July 2007, and also the first monthly total below 200,000 since July 2007.

 

“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,” said Brandon Moore, chief executive officer of RealtyTrac. “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.”

 

Judicial foreclosure activity increases in first quarter

 

The nationwide decrease in foreclosure activity was caused primarily by decreasing activity in states that use the non-judicial foreclosure process. These 24 states combined, along with the District of Columbia, had 329,854 properties with foreclosure filings during the quarter, more than half the national total — but a decrease of 8 percent from the previous quarter and a decrease of 28 percent from the first quarter of 2011.

 

Twenty non-judicial states registered year-over-year decreases in foreclosure activity, led by Arkansas, with a 79 percent drop, and Nevada, with a 62 percent drop. Recent legislation or court cases have disrupted the normal foreclosure process in both these states. Other non-judicial states with substantial year-over-year decreases in foreclosure activity included Washington (down 55 percent), Arizona (down 41 percent), Texas (down 31 percent), and California (down 21 percent).

 

Meanwhile foreclosure activity increased in states that primarily use the judicial foreclosure process. These 26 states combined accounted for 243,074 properties with foreclosure filings during the quarter, an increase of 8 percent from the previous quarter and an increase of 10 percent from the first quarter of 2011.

 

Judicial states posting some of the biggest year-over-year increases in foreclosure activity in the first quarter included Indiana (up 45 percent), Connecticut (up 38 percent), Massachusetts (up 26 percent), Florida (up 26 percent), South Carolina (up 26 percent), and Pennsylvania (up 23 percent).

And visually:


 

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Thu, 04/12/2012 - 00:45 | 2336888 phungus_mungus
phungus_mungus's picture

Are we dead yet? 

Thu, 04/12/2012 - 00:59 | 2336909 slewie the pi-rat
slewie the pi-rat's picture

i think it was just too warm to work

especially for a fuking bank

Thu, 04/12/2012 - 06:12 | 2337069 I am Jobe
I am Jobe's picture

too fucking fat to work

Thu, 04/12/2012 - 01:04 | 2336915 non_anon
non_anon's picture

only if

Thu, 04/12/2012 - 01:09 | 2336918 SHEEPFUKKER
SHEEPFUKKER's picture

Mc-fucking-mansion, USA. 

Thu, 04/12/2012 - 01:11 | 2336919 vast-dom
vast-dom's picture

The banking sector and economy are only alive precisely because they don't want to add even more foreclosures to their swelling shadow books and/or to their regular books. It's scary out there in fantasy-banking-land.

Thu, 04/12/2012 - 08:15 | 2337203 bernorange
bernorange's picture

If it keeps on rainin, levees goin to break.

Thu, 04/12/2012 - 00:53 | 2336898 beenburnedtwice
beenburnedtwice's picture

My real estate agent buddies tell me that they're seeing more activity this Spring than in the last three...but agree it's too much too fast and something isn't quite right.  Does intuition work in this market?  And more people are "quitting" and that's good news, and heaven forbid, moving to new mortgages?  Glimmer's of Hope to be smacked down in 2013.

Thu, 04/12/2012 - 01:06 | 2336917 Floordawg
Floordawg's picture

It might depend on what one hopes for... For example, I'm hoping to trade one (1) AGE per house.

Thu, 04/12/2012 - 04:10 | 2337025 Western
Western's picture

Hi-larious.

They may also accept 10 ASE for a brief moment in time.

Thu, 04/12/2012 - 02:11 | 2336950 PersonalRespons...
PersonalResponsibility's picture

Activity as in buying?

 

What were the types of mortgages being used if any of the activity became a "buy"?

 

There's usually lots of activity in the stock marker, but what is the volume and is it buying or selling activity/sentiment...

Thu, 04/12/2012 - 06:41 | 2337083 smlbizman
smlbizman's picture

been,..if you would of said ur r.e buddy said it sucks , u would have had credibility....but at 54 yrs old i have never met yet a r.e person that ever said  a negative word about housing... 

Thu, 04/12/2012 - 09:45 | 2337517 Au Shucks
Au Shucks's picture

Agree entirely.  This Easter weekend I was at a family gathering when I overheard a cousin-in-law, a real estate agent of mediocre intelligence anyway (aren't most?), state emphatically that real estate prices were going up again.  somebody asked her "for real?", and she gave this emphatic look and said "yep, I got four listings in the past week alone, after no listings forever!".  of course, I had to bite my tongue because people don't like rain on their parade, but this reinforces your point/comment. 

humorously, this same person a few years back lost her home and had to have a short sale, has been renting since, and is just about now to buy again.  nothing like mixing and then drinking your own kool-aide, eh?

Thu, 04/12/2012 - 01:02 | 2336907 DormRoom
DormRoom's picture

wtf America.  you went from the Marshall Plan to rebuild Europe to leaving millions of uncleared shadow housing inventory so  the top 5 banks don't have to mark to market.. 

Thu, 04/12/2012 - 01:03 | 2336914 non_anon
non_anon's picture

that was the fleecing of US taxpayers to rebuild Europe, we haven't caught our breath from all the wars/rebuilding

Thu, 04/12/2012 - 01:22 | 2336924 slewie the pi-rat
slewie the pi-rat's picture

we couldn't afford to rebuild libya

china called us out on it, quoting a quaint tradition known as internationalLaw

tanks a lot dept (can't make this stuff up):

Nobody Hurt as Explosive Device is Thrown at UN Convoy in Libya No one was hurt Tuesday when an explosive device was thrown at a United Nations convoy travelling through the Libyan city of Benghazi, and carrying the head of the United Nations mission to Libya a spokesperson for the UN said.
Thu, 04/12/2012 - 00:58 | 2336908 chump666
chump666's picture

Nice Obama's mini credit/student/housing bubble looking tasty.  Implosion 3mths in...all depending on the ECB/Fed losing complete control of the credit market/bond spreads.  Grey/black swans chaos call it what you like.

Obama + ECB + EU + Fed  = death

 

Thu, 04/12/2012 - 01:00 | 2336911 LarryDavis
LarryDavis's picture

Banks don't want to foreclose. A friend of mine hasn't pad his mortgage in 2 years and hasn't even heard from the fucking bank. I doubt he is the only one.

Thu, 04/12/2012 - 02:12 | 2336953 PersonalRespons...
PersonalResponsibility's picture

Who is your friend's lender?

Thu, 04/12/2012 - 08:35 | 2337246 LiquidBrick
LiquidBrick's picture

2.5 yrs

Thu, 04/12/2012 - 10:36 | 2337750 Au Shucks
Au Shucks's picture

2 years, Citi

Thu, 04/12/2012 - 09:08 | 2337375 j0nx
j0nx's picture

Depends on the state. Here in Virginia Wells Fargo takes them in 3-6 months. My short sale expert says WF does not mess around here. She said BoA on the other hand drags things out and is by far the least likely of any of the banks to take your home in a timely fashion. All the others will foreclose your shit in 3-12 months with WF being the most agressive of the big banks.

Thu, 04/12/2012 - 01:01 | 2336913 non_anon
non_anon's picture

Is Linda Green back from vacation?

Thu, 04/12/2012 - 01:14 | 2336920 non_anon
non_anon's picture

double post

OT  but you and I are charitable, aren't we?

A convicted drug dealer — who cops said wanted to use cash from his taxpayer-funded EBT card to post bail

http://www.bostonherald.com/news/regional/view/20220411pols_welfare_abuse_runs_deep/srvc=home&position=1

courtesy Drudge

Thu, 04/12/2012 - 01:30 | 2336925 prains
prains's picture

so if you take the decrease in non-judicial foreclosures and combine them with the increase in judicial foreclosures it's a wash right? nobody was foreclosed on, we're good right?

Thu, 04/12/2012 - 01:38 | 2336931 Boilermaker
Boilermaker's picture

So, you're telling me it's a 'generational opportunity' to buy a home....right?

Thu, 04/12/2012 - 02:16 | 2336956 PersonalRespons...
PersonalResponsibility's picture

If you want to pay huge taxes and see the market drop more, out of pure facination, then yes it is.

Thu, 04/12/2012 - 02:33 | 2336963 HelioCentric
HelioCentric's picture

why is everyone here such a pessimist housing is clearly getting betterand we can see it from the rising home pricesand increased consumer spending infact banks have started loaning more and out and NAR EVEN PREDICTS MORE BUYING ACTIVITY HOUSING IS MAKIN A COMEBACK

Thu, 04/12/2012 - 03:25 | 2337011 cranky-old-geezer
cranky-old-geezer's picture

 

 

Fine, go buy one, put your money where your mouth is.

But no, we're nowhere near a bottom in housing, probably another 30% - 40% drop. 

Thu, 04/12/2012 - 05:08 | 2337051 r00t61
r00t61's picture

I like how he quotes NAR as his source of good housing news.

Like asking a drug dealer if it's a good time to buy drugs.

Thu, 04/12/2012 - 08:20 | 2337212 fockewulf190
fockewulf190's picture

Add an "R" and NAR becomes NARR...meaning fool in german.

Thu, 04/12/2012 - 04:51 | 2337040 jomama
jomama's picture

1/10

Thu, 04/12/2012 - 05:18 | 2337054 writingsonthewall
writingsonthewall's picture

why is everyone here such a pessimist

 

....maybe because we've read HISTORY? 

 

http://lachlan.bluehaze.com.au/books/galbraith_1929crash.html

 

Read those - and THEN realise you're reading about the 1930's and not the current crisis.

 

The lies are the same, the reactions are the same and the results will be the same (or worse because they didn't have Ben Bernanke back then) 

 

Getting better my arse - they said that for a decade in the 30's!

Thu, 04/12/2012 - 07:27 | 2337130 scragbaker a ca...
scragbaker a cape cod clamdigger's picture

AGREED !  GOOGLE "joliet remembers" and see headlines from the Great Depression - see what the leaders of the day were saying as the depression tightened it's noose !  Same bullshit as today

Thu, 04/12/2012 - 07:56 | 2337124 scragbaker a ca...
scragbaker a cape cod clamdigger's picture

     You cannot trust or believe anything that comes out of NAR !  All news is for 'self serving' reasons.  NAR called everyone to go 'all in' on housing just as the bubble was bursting.  Housing in most areas is not getting better - only in a select few areas are house prices rising, but for how long ? Those that feel compelled to purchase a home today because of percieved value may wish in a few years that they had waited.

      Housing in general will not climb out of it's slump when millions of people just like me are working harder today for less money than we were making five years ago. 

     WHAT LOOKS LIKE THE END OF THE HOUSING SLUMP MAY VERY WELL PROVE TO BE THE BEGINNING

Thu, 04/12/2012 - 11:21 | 2337991 Au Shucks
Au Shucks's picture

I think the Sun at the center of your universe is blinding you to truth and reality.  Good thing your avatar has shades, but you may want to consider blu-blockers

Thu, 04/12/2012 - 03:08 | 2337004 trying to make ...
trying to make sense of it all's picture

Interesting coincidence that this article was written today. Our family business is securing and maintaining foreclosed homes in Florida. Today we received a record number of "initial secures" since we started the business 5 yrs ago.

Thu, 04/12/2012 - 07:51 | 2337164 Slartebartfast
Slartebartfast's picture

Ah.  Scavengers do very well in any drought or disaster.  Meat all over the place for the taking.  Until there is no more.  Then the scavengers eat each other.

Thu, 04/12/2012 - 06:15 | 2337070 I am Jobe
I am Jobe's picture

WIC and SNAP for Homes next- Yeap house those idiots and give em teaser loans. Same crap all over.

Thu, 04/12/2012 - 06:50 | 2337087 tocointhephrase
Thu, 04/12/2012 - 07:21 | 2337123 LongSoupLine
LongSoupLine's picture

 

 

 

Hmmm, looks like it's time for another bullish NAR press release and bullish "rock star style" propaganda media tour.

Thu, 04/12/2012 - 08:47 | 2337289 vik1953
vik1953's picture

It is a complete cash market in FL. Investors by the drove are gobbling up properties. Condos are going for 25% of thier high price of 2005-2006, and single family homes are going for 40% of thier high. These are rough averages which do change from property to property depending on age, location, and how much it will cost to clean and repair. In Miami and South Florida, anything that is released by the Banks is getting 10-15 offers, and getting sold in days, but only offers from cash buyers with proof of funds are being considered. If you are pre approved for a loan, forget it, you can throw your hat in the ring, but it will not be counted, something I am not able to understand because how does it matter to the seller where the funds are comming from, but they just will not accept the offer even if it is the highest, and will sell it to next closest cash offer. The rental market is fair, you can buy properties cheap, (for a fraction of the construction/replacement cost) clean and fix it up, rent it out for a good return on investment on a monthly basis, and then wait three years. The investors will do well in 3 years. Just treat it like any other small business.

Just my observations since my wife is a real estate agent, and she has a lot of deals in the pipeline - almost 100% REO's and short sales, all to cash buyers. I guess smart money has got tired of Bernankes 2% treasury bond yield and the risks associted with it, and of wall street fraud in stocks. (think MF Global and HFT) The future will be in tangible assets, Precious metals, and income producing real estate if bought right, at select good locations. You make money when you buy, not when you sell, and I think the investors are buying right when they are gobbling up these properties in cash at these prices.

Thu, 04/12/2012 - 08:59 | 2337341 chunga
chunga's picture

Cash buyers are responsible for their own title insurance.

Thu, 04/12/2012 - 08:52 | 2337307 michigan independant
michigan independant's picture

First report: In Kalamazoo County, for example, the number of homes taken back by lenders in 2007 jumped to 969, more than double the total in 2004. A similar trend is occurring in Van Buren, Allegan and St. Joseph counties, officials there said.

Second report current: KALAMAZOO - Property-tax foreclosures in Kalamazoo County more than doubled in the last year, but the county treasurer says the growing problem isn't directly related to the current housing and mortgage-foreclosure crisis

Trust no one in Office. The market or the government since no other solution will ever exist.

Thu, 04/12/2012 - 08:57 | 2337328 chunga
chunga's picture

I hope all the Tylers don't feel this way.

"we are sad to say, it brings no good news"

F* The Banks Presents - Breakup of BofA

Bank of America (B of A) is a morally and financially dead “zombie bank” poised to shock the entire global economy into crisis. Its time to break up this criminal bank!

This Friday, April 13th, 2pm Liberty Plaza!

Thu, 04/12/2012 - 09:27 | 2337453 Rubbish
Rubbish's picture

The facts are, the pool of credit worthy renters has dried up. Go ahead be a landlord but you better price your rents for lost revenue on an annual basis. Fact the courts are full with foreclosures and evictions, the process just takes longer now, free rent.

 

Landlords are forced to take credit issue tenants, yes they will play you, they hate you.

Thu, 04/12/2012 - 10:22 | 2337672 MachoMan
MachoMan's picture

One thing many people don't consider on the foreclosure issue is the pressure on foreclosure mills post roboscandal...  All of these folks are on notice that everyone else is on notice of what they've been doing for so long...  In many areas (since it's a frowned upon area of the law anyway), there are monopolies...  one foreclosure mill to rule them all.  When that mechanism dries up, it takes the market participants quite a while before the slack is picked back up...

Further, you had a lot of non-judicial states that revamped their procedures in the wake of the roboscandal (requiring additional documentation/proof by the foreclosing party).

I know I harp on it each and every time it comes up...  but the clearing mechanism for all of this mess is starting to turn its gears...  holding shadow inventory has a significant cost...  not just in waste to the property, but in the interim costs like insurance and taxes.  These properties are likely not only uninsured (if you're not paying the note, why the shit are you paying insurance?), but are also delinquent on property taxes...  the local governments are more than happy to slap a lien, take title, and find a new owner who will put the land to its best and most productive use...  this means someone other than the mortgagee... 

The government is the de facto (sometimes de jure) insurer/financier for these banks...  I think there exists a duty to step in and prevent waste (or, alternatively, allow the market to correct)...  the failure to do so is pretty telling about the government's intentions.

Thu, 04/12/2012 - 12:11 | 2338291 Au Shucks
Au Shucks's picture

Homes in foreclosure that are occupied by the orginal mortgage holder are having their property taxes and insurance paid by the lender.  Lenders are not allowing the houses to be taken due to tax delinquencies and are certainly not letting them go uninsured (of course, unless the house is an absolute dump in which case it is easier/less expensive to let the house be taken and dealt with by the county). 

So, this means that what you're referring to must be homes that are owned outright, in which case these are truly the victims of the whole mess as they are losing 100-300K + homes due to a 3-15k in taxes/insurance they can pay.  If these are the homes that are being cleared by virtue of the "clearing mechanism gears", then this mechanism is most certainly not a good thing and is doing nothing to clear the actual backlog of in-process or pre-foreclosure properties.

Fri, 04/13/2012 - 09:51 | 2341363 MachoMan
MachoMan's picture

I dispute this not only presently, but also in terms of trends.  Which lender are you talking about?  The originator?  Or the 300th assignee down the line?  A now defunct MERS?  A GSE?  The FED?  Does insurance pay when banks willfully allow waste?  Are banks more or less likely, as time goes on, to pay the taxes and insurance?

Sure, property owned by a local bank has a vastly higher likelihood of being current on taxes and properly insured (as well as being foreclosed on, but I digress).  But I think what many people are going to see is that they have a mistaken view due to the time lag for the law's saving mechanisms...  in other words, the avalanche has yet to hit and the snow racing down the mountain has yet to be materially revealed (although publicly available).  Aside from the real meat of the potato being other than locally owned property...

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