Photo: Robert Clark
Nationwide foreclosure activity may have slid to its lowest level in over a decade in 2017, but New York and New Jersey are bucking the trend, with some types of foreclosure activity remaining at elevated levels.
A lack of inventory may be the reason for the overall decrease in foreclosure activity, according to a report released today by ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database.
Over the last year, national foreclosure filings — default notices, scheduled auctions and bank repossessions — were down 27 percent, with filings reported on 676,533 US properties in 2017. This was down a whopping 76 percent from 2.9 million filings recorded in 2010 at the height of the Great Recession, and was the lowest on record since 2005.
“Thanks to a housing boom driven primarily by a scarcity of supply, which has helped to limit home purchases to the most highly qualified — and low-risk — borrowers, the US housing market has the luxury of playing a version of foreclosure limbo in which it searches for how low foreclosures can go,” says Daren Blomquist, senior vice president at ATTOM, in the digital release.
The average number of days to foreclosure rose to 1,027 in the fourth quarter of 2017, up 28 percent year-over-year. This is the longest timeline on record since the first quarter of 2007, when data tracking began.
The increase in the average number of days to foreclosure is telling for the housing market.
“The market is still highly inefficient in dealing with distress, which is having a ripple effect on lender behavior, causing them to originate loans in an extremely conservative manner in order to avoid having to deal with loans that go bad,” Blomquist tells BuzzBuzzNews.
And that is a far better scenario than loose lending practices that led to the Great Recession, Blomquist adds.
But, New York and New Jersey are two notable exceptions to the national trend.
Foreclosure auctions in New York were up 9 percent year-over-year in 2017, the highest level on record since 2006 when data tracking began.
On the national level, a total of 318,165 properties were scheduled for public foreclosure auction, down 27 percent from last year to a new all-time low. The peak was recorded in 2006, when 1,600,593 properties were scheduled for public foreclosure auction.
Meantime, bank repossessions were up 19 percent year-over-year in New Jersey — an 11-year high — despite hitting an 11-year low on the national level in 2017. Some 291,575 properties were repossessed by lenders in 2017, down 23 percent from last year and down 72 percent from the peak recorded in 2010.
New Jersey was also the top state for overall foreclosure activity in 2017, claiming 1.61 percent of all foreclosure activity for the year.
And, on the metro level, the top two metros with the highest levels of foreclosure activity were also located in the Garden State — Atlantic City (2.72 percent) and Trenton (1.68 percent).
Interestingly, New York and New Jersey were the top two states with the highest percentage of “legacy” foreclosures in 2017 — foreclosures originated between 2004 and 2008 — despite a national drop of 55 percent in the number of legacy foreclosures.
“New Jersey and New York have two of the most inefficient and dysfunctional foreclosure processes in the country, resulting in a disproportionate volume of delayed distress, some dating back to the Great Recession,” Blomquist says.
Brooklyn was one of the counties with the largest number of legacy foreclosures recorded in 2017, as were two counties located in Long Island, NY.
Click here to read the entire report.