Fewer U.S. homes enter foreclosure

LOS ANGELES — The number of U.S. homes set on the path to foreclosure slid to a seven-year low in the third quarter, reflecting a gradually improving housing market and fewer homeowners falling behind on mortgage payments.

Lenders initiated foreclosure action on 174,366 homes in the July-September period, the lowest level since the second quarter of 2006, foreclosure listing firm RealtyTrac Inc. said Thursday.

Foreclosure starts declined 13 percent from the previous quarter and were down 39 percent from the third quarter last year, the firm said.

The national slowdown in foreclosure starts comes as the U.S. housing market continues to recover from a deep slump, a rebound driven by rising home prices, steady job growth and fewer troubled loans dating back to the housing bubble days. Fewer homes entering the foreclosure pipeline should translate into fewer properties that eventually end up lost to foreclosure.

“It’s looking really good that there are not more coming into the pipeline,” said Daren Blomquist, a vice president at RealtyTrac. “Barring any other economic shock to the system, we expect that to bode well going forward.”

Foreclosure starts fell on an annual basis in the third quarter in 38 states, including Colorado, Arizona, California and Illinois. They increased from a year earlier in 11 states, including Maryland, Oregon, New Jersey and Connecticut.

While fewer homes are entering the foreclosure process, lenders stepped up home repossessions, which led to a quarterly increase in homes lost to foreclosure.

Completed foreclosures rose 7 percent in the third quarter versus the April-June period, the firm said. Completed foreclosures were down 24 percent from the third quarter last year, however.

All told, 119,485 homes were taken back by lenders in the July-September quarter. That puts the nation on pace to end this year with roughly 507,497 completed foreclosures, or down about 24 percent from 2012’s total.

Foreclosures peaked in 2010 at 1.05 million and have been declining ever since.

The number of homes taken back by banks in the third quarter climbed from the previous quarter in 26 states, including New York, New Jersey, Illinois and Virginia, RealtyTrac said.

Much of the quarterly increase in foreclosures came about in states where courts oversee the foreclosure process. Those courts were backed up with cases two years ago, but have been making progress working through their backlog.

Even so, it’s taking longer for homes in many states to complete the foreclosure process.

In the third quarter, it took an average of 551 days, or 1.5 years, for a U.S. home to move from initial default status to ultimately being repossessed by the lender, the firm said.

That’s up from an average of 526 days in the second quarter and an increase from 382 days in the third quarter of last year.

“It’s a sign that we’re still dealing with the wreckage of the last housing bust,” Blomquist said.

In New York, it took an average of 1,037 days, or nearly three years, for the foreclosure process to run its course in the third quarter, the longest of any state. Maine clocked the shortest average time to foreclose at 160 days.

The impact of foreclosures remains sharply elevated in some states.

Florida topped the nation with a foreclosure rate of more than twice the national average in the third quarter.

Rounding out the top 10 states with the highest foreclosure rates in the July-September period were: Nevada, Maryland, Illinois, Ohio, Connecticut, Delaware, New Jersey, Indiana and South Carolina.

More in Herald Business Journal

Peoples, HomeStreet banks bump lowest salaries after tax cut

The banks with Snohomish County branches will raise minimum salaries for employees to $15 an hour.

Electroimpact cuts Mukilteo staff by 9 percent

“What we’re missing now is a monster anchor project,” the company’s VP said.

Exotic animals find compassionate care in Bothell (video)

At the Center for Bird and Exotic Animal Medicine, vets treat snakes, hedgehogs and even kangaroos.

How can you tell if you are getting good financial advice?

Assume that it’s still the same buyer-beware market that has always existed.

Amanda Strong (left) tries on an Angel of the Winds Arena hat as she and Courtney Brown hand out gift bags after the renaming ceremony Dec. 13 in Everett. The new name replaces the Xfinity name. (Andy Bronson / Her file)
Angel of the Winds to break ground on $60M casino expansion

“We think we’re on the cusp of becoming a major resort.”

In this Dec. 20, 2017, photo, a clerk reaches to a shelf to pick an item for a customer order at the Amazon Prime warehouse, in New York. (AP Photo/Mark Lennihan, File)
Amazon’s potential HQ2 sites leaves many cities disappointed

And yet, some municipal leaders are looking at the bright side of being rejected.

How do you retrieve an errant Boeing 737 from a muddy slope?

Turkish authorities used cranes to lift a plane that skidded off a runway.

Don’t take economic forecasts to the bank — or the casino

Air travel delays could spur a rebirth of passenger rail service.

Emirates orders 20 more Airbus A380 jumbos, saving program

The Dubai carrier also has options to buy 16 more. The program seems safe until 2029.

Most Read