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Foreclosures Down 24% in 2011

Foreclosures in December of 2011 declined year-over-year to 55,000 from 67,000. The foreclosure drop has been in the midst of recent months' news about the regulation regarding robo-signing, including a projected settlement resulting from the litigation between states and the nation's five biggest banks over mortgage-servicing practices.

The number of mortgages that are late 90 days or more fell to 7.3% from 7.8% a year earlier, but rose from 7.2% in the previous month. Foreclosure inventory also witnessed a similar downward slope to 8.4% from December 2010. Foreclosed homes totaled 1.4 million in December 2011, which is about 3.4% of all homes with outstanding loans. Real estate owned sales moved ahead of the completed foreclosures in December.  This is called "distressed-clearing ratio" which rose to 1.03 from 0.94 in November.  The new HARP 2.0 refinance guidelines should also help with a further drop in foreclosures.

Even though there have been factors helping the foreclosure filings such as judicial and regulatory constraints, this was the first time in a year that REO sales moved ahead of completed foreclosures, partly because of decrease in the foreclosure inventory.”

Florida came out on top again by far in foreclosure inventory as a percentage of all mortgages.  That number was 11.9% in December, though that's down 0.1% from a year earlier. New Jersey came in next with 6.4%, followed by Illinois at 5.4%, Nevada at 5.3% and New York at 4.6%. About 3.2 million foreclosures have closed since the onset of the financial crisis in September 2008.

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