The Foreclosure Crisis Is Over, But Not in Every State

AJC.COM - Christine DiGangi 4:30 a.m. Thursday, Oct. 13, 2016  Business and Money news

Residential foreclosure activity fell in September to its lowest level since December 2005, according a monthly report from ATTOM Data Solutions, a housing data company. One in every 1,600 housing units had a foreclosure filing — including notices of default, scheduled auctions and bank repossessions — which is down nearly 24% from the same time last year.

Not only has overall foreclosure activity decreased, the average foreclosure process got a little shorter. The average foreclosure took 625 days to complete as of the third quarter of this year, which is down from 631 days in the second quarter and down from 630 days in the third quarter of 2015. It’s the first time there’s been a year-over-year decline in that timeline since ATTOM started tracking it at the beginning of 2007.

“Foreclosure activity has been on a steady slide downward over the past six years, finally dropping back below pre-crisis levels in September,” Daren Blomquist, senior vice president at ATTOM Data Solutions, said in a press release about the report. “While we’ve know[n] that the national foreclosure problem has been dying a long, slow death for quite some time, the final nail in the coffin of the foreclosure crisis is the year-over-year decrease in the average foreclosure timeline nationwide that we saw in Q3 2016.”

It’s not necessarily that clean-cut, however: The housing crisis played out differently state by state, and foreclosure can take a very long time in some jurisdictions. For example, among foreclosures completed in New Jersey last quarter, the process lasted an average of 1,262 days. That’s nearly 3 1/2 years between defaulting on the mortgage and actually losing the home, and when you figure that’s the average amount of time it takes, there are very likely people who defaulted on their loans during the recession who are still living in those homes.

“A lot of people who are delinquent on their loans are able to stay in their homes for two to five years, depending on what state they’re in. That has dragged out the entire foreclosure process,” Logan Mohtashami, a housing data analyst and a senior loan manager at AMC Lending Group in Irvine, California, said. “The foreclosure crisis, in the sense that new delinquencies were being created, ended years ago. The process of working through the foreclosures from the housing crisis is still going on.”

Additionally, the share of government sponsored loans that are seriously delinquent (more than 90 days past due) is still a little higher than it was pre-recession, according to data from Freddie Mac, Freddie Mae, the Mortgage Bankers Association and the Urban Institute. If you’re struggling to afford your mortgage, here are some things you can do to avoid losing your home to foreclosure and prevent devastating damage to your credit score. (You can see how your home loan and other accounts affect your credit by getting a free credit report summary every 14 days on Credit.com.)

Those states where the foreclosure crisis lingers are many of the same that have had high foreclosure rates for much of the last few years. Here’s where foreclosure rates are the highest, as of last month.

10. New Mexico

September 2016 foreclosure rate: 1 in every 1,324 housing units
Change from August 2016: down 14.27% (was No. 10)
Change from September 2015: down 8.67%

9. Connecticut

September 2016 foreclosure rate: 1 in every 1,290 housing units
Change from August 2016: down 1.37% (was No. 11)
Change from September 2015: up 2.58%

8. Utah

September 2016 foreclosure rate: 1 in every 1,258 housing units
Change from August 2016: down 27.26% (was No. 7)
Change from September 2015: up 18.30%

7. South Carolina

September 2016 foreclosure rate: 1 in every 1,049 housing units
Change from August 2016: up 1.83% (was No. 9)
Change from September 2015: down 13.59%

6. Maryland

September 2016 foreclosure rate: 1 in every 955 housing units
Change from August 2016: down 34.52% (was No. 2)
Change from September 2015: down 1.84%

5. Florida

September 2016 foreclosure rate: 1 in every 950 housing units
Change from August 2016: down 12.82% (was No. 5)
Change from September 2015: down 33.37%

You can see the full list of states where foreclosure rates are the highest on Credit.com

This article originally appeared on Credit.com.

See the full story at Christine DiGangi