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Data Shows That Foreclosures Dropped In June

Data from CoreLogic shows the foreclosure inventory declined by 24.5 percent and completed foreclosures declined by 6.9 percent compared with May 2015. The number of completed foreclosures nationwide decreased year over year from 41,000 in May 2015 to 38,000 in May 2016, representing a decrease of 67.9 percent from the peak of 117,813 in September 2010.

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The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6.3 million completed foreclosures nationally, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 8.3 million homes lost to foreclosure.

As of May 2016, the national foreclosure inventory included approximately 390,000, or 1.0 percent, of all homes with a mortgage compared with 517,000 homes, or 1.3 percent, in May 2015. The May 2016 foreclosure inventory rate is the lowest for any month since October 2007.

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CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due including loans in foreclosure or REO) declined by 21.6 percent from May 2015 to May 2016, with 1.1 million mortgages, or 2.8 percent, in this category. The May 2016 serious delinquency rate is the lowest in more than eight years, since October 2007.

“The foreclosure rate fell to 1 percent in May, which is twice the long-term average of 0.5 percent. However, this masks the underlying progress at the state level,” said Dr. Frank Nothaft, chief economist for CoreLogic. “Twenty-nine states had foreclosure rates below the national average, and all but North Dakota experienced declines in their foreclosure rate compared to the prior year.”

“Delinquency and foreclosure rates continue to drop as we experience the benefits of a combination of tight underwriting, job and income growth and a steady rise in home prices. We expect these factors to remain in place for the remainder of this year and for delinquency and foreclosure rates to decline even further,” said Anand Nallathambi, president and CEO of CoreLogic. “As we finally move past the housing crisis, we need to increase our focus on expanding the supply of affordable housing and access to credit for first-time homebuyers in sustainable ways to ensure the long-term health of the U.S. housing market.”

Foreclosures Fall, But Inventory Still High

CoreLogic released its October National Foreclosure Report, which provides data on completed U.S. foreclosures and the foreclosure inventory. According to CoreLogic, for the month of October 2014, there were 41,000 completed foreclosures nationally, down from 55,000 in October 2013, a year-over-year decrease of 26.4 percent and down 65 percent from the peak of completed foreclosures in September 2010. On a month-over-month basis, completed foreclosures were down by 34.1 percent from the 62,000 reported in September 2014. As a basis of comparison, before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.

Completed foreclosures are an indication of the total number of homes actually lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 5.3 million completed foreclosures across the country, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 7 million homes lost to foreclosure.

As of October 2014, approximately 605,000 homes nationally were in some stage of foreclosure, known as the foreclosure inventory, compared to 875,000 in October 2013, a year-over-year decrease of 30.9 percent and representing 36 consecutive months of year-over-year declines. The foreclosure inventory as of October 2014 made up 1.6 percent of all homes with a mortgage, compared to 2.2 percent in October 2013. On a month-over-month basis, the foreclosure inventory was down 2.1 percent from September 2014. The current foreclosure rate of 1.6 percent is the lowest inventory level since May 2008.

“While there has been a large improvement in the reduction of foreclosure inventory, completed foreclosures remain high and serve as one of the obstacles to new single-family construction,” said Sam Khater, deputy chief economist for CoreLogic. “Until the flow of completed foreclosures declines to normal levels, new-home construction will not pick up because builders have little incentive to compete with foreclosure stock.”

“The foreclosure inventory is less than 2 percent and seriously delinquent loans are trending lower right now,” said Anand Nallathambi, president and CEO of CoreLogic. “At current rates, we can expect the foreclosure inventory to slip below 500,000 units during 2015.”

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