During the first half of 2018 there was a 15% decline in foreclosure filings nationwide. Foreclosure filings are properties that had a default notice, a scheduled auction, or bank repossession. There were a total of 362,275 foreclosure filings, a far cry from the 1.6 million foreclosure filings eight years ago in the first half of 2010.
Even though the overall, nationwide number of foreclosure starts had decreased, there was an increase in foreclosure activity in 88 of 219 metro areas. A foreclosure start is defined as to when the foreclosure process begins, usually with a letter stating the borrower is in default. The top five metro areas for foreclosure starts are: Minneapolis-St. Paul, Minnesota (up 50%) Houston, Texas, up 25%, Detroit, Michigan up 23%, Dallas-Fort Worth, Texas up 17% and Las Vegas, Nevada up 7%.
One in every 370 housing properties nationwide had a foreclosure filing in the first half of 2018, bringing the average percentage to a 0.27% foreclosure rate.
Analysts have attributed these increases to relaxed lending standards and have nothing to do with any lingering housing crisis related to the Great Recession from loans originated in 2009 or later. In 2014, lenders, specifically for FHA-backed loans began to loosen their lending standards. FHA loans originated in 2014 and 2015 rose above the average FHA foreclosure rate.
Relaxing the lending standards, or sub-prime loans is what led to the foreclosure crisis our country saw beginning in 2008-2009. Subprime lending, which is also referred to as near-prime, subpar, non-prime and second-chance lending, had lenders making loans to borrowers who showed they had difficulty repaying loans and had lower credit scores than what was typically considered in order to secure a loan.
The top ten states that had the highest foreclosure rates the first half of 2018 are: New Jersey (0.80%), Delaware (0.57%), Maryland (0.50%), Illinois (0.44%) and Connecticut (0.40%), South Carolina (0.39%), Ohio (0.37%), Nevada (0.37%), Florida (0.37%) and New Mexico (0.35%). New Jersey has one in every 605 properties in some stage of foreclosure.
The top ten metropolitan areas (cities) that have the highest foreclosure rates are: Atlantic City, New Jersey (1.48%), Trenton, New Jersey (0.96%), Flint, Michigan (0.95%), Philadelphia, Pennsylvania (0.64%), Columbia, South Carolina (0.58%), Cleveland, Ohio (0.58%), Albuquerque, New Mexico (0.55%), Rockford, Illinois (0.53%), Peoria, Illinois (0.52%) and Baltimore, Maryland (0.52%).
Out of 133,290 properties that were repossessed by the bank (REO) during the first six months of 2018, only one state saw an increase - New Mexico. Bank-owned repossessions in New Mexico are up almost 35% and pre-foreclosures are up almost 18%.
If you are facing foreclosure, or your foreclosure proceeding has begun, it is prudent to contact a real estate attorney that is experienced in foreclosure defense. A qualified foreclosure defense attorney will discuss all your options with you, and not just steer you towards bankruptcy.
Contact the experienced real estate attorneys and foreclosure defense attorneys at Gantenbein Law Firm at 303-618-2122, or visit www.gantenbeinlaw.com. Gantenbein Law Firm is located in Denver and serves clients throughout Colorado.