Stockton tops nation for foreclosures in 2012

IRVINE
January 16, 2013 9:13pm

Despite a 25 percent decrease in foreclosure activity from 2011, the Central Valley city of Stockton posted the nation's highest foreclosure rate in 2012 among metropolitan statistical areas with a population of 200,000 or more, according to a report Wednesday night from foreclosure information company RealtyTrac Inc. of Irvine.

Its figures show Stockton had a foreclosure rate of 3.98 percent of housing units or one in 25.

Six other California cities ranked in the top 20 highest metro foreclosure rates for the year, including Riverside-San Bernardino-Ontario at No. 2 (3.86 percent of housing units with a foreclosure filing), Modesto at No. 3 (3.82 percent), and Vallejo-Fairfield at No. 4 (3.73 percent). All seven California metro areas in the top 20 posted decreasing foreclosure activity from 2011.

Florida cities accounted for eight of the top 20 highest metro foreclosure rates in 2012, led by Miami at No. 5 (3.71 percent of housing units with a foreclosure filing), Palm Bay-Melbourne-Titusville at No. 6 (3.60 percent), and Orlando at No. 8 (3.46 percent). Seven out of the eight Florida metro areas in the top 20 documented an increase in foreclosure activity for the year.

Other metro areas with foreclosure rates in the top 20 were Atlanta at No. 7 (3.51 percent of housing units with a foreclosure filing), Chicago at No. 9 (3.31 percent), Rockford, Ill., at No. 10 (3.28 percent), Las Vegas at No. 16 (3.10 percent), and Phoenix at No. 17 (3.09 percent).

RealtyTrac says that nationally, a total of 2,304,941 foreclosure filings -- default notices, scheduled auctions and bank repossessions -- were reported on 1,836,634 U.S. properties in 2012, down 3 percent from 2011 and down 36 percent from the peak of 2.9 million properties with foreclosure filings in 2010.

The report also shows that 1.39 percent of U.S. housing units (one in every 72) had at least one foreclosure filing during the year, down from 1.45 percent of housing units in 2011 and down from 2.23 percent of housing units in 2010.

Other high-level findings from the report:

Foreclosure activity in 2012 increased from 2011 in 25 states -- 20 of which primarily use the longer judicial foreclosure process -- including New Jersey (55 percent increase), Florida (53 percent increase), Connecticut (48 percent increase), Indiana (46 percent increase), Illinois (33 percent increase) and New York (31 percent increase).

Foreclosure activity in 2012 decreased from 2011 in 25 states -- 19 of which primarily use the more streamlined non-judicial foreclosure process -- including Nevada (57 percent decrease), Utah (40 percent decrease), Oregon (40 percent decrease), Arizona (33 percent decrease), California (25 percent decrease) and Michigan (23 percent decrease).

Florida posted the nation's highest state foreclosure rate in 2012, with 3.11 percent of housing units (one in 32) receiving a foreclosure filing during the year. Other states with top 5 foreclosure rates were Nevada (2.70 percent), Arizona (2.69 percent), Georgia (2.58 percent), and Illinois (2.58 percent).

December foreclosure activity dropped 10 percent from the previous month to the lowest level since April 2007, a 68-month low, and fourth quarter foreclosure activity was at the lowest quarterly level since the third quarter of 2007 despite a 9 percent quarterly increase in bank repossessions.

The average time to complete a foreclosure nationwide in the fourth quarter increased 8 percent from the previous quarter to a record-high 414 days.

Lower foreclosure inventory gave sellers the upper hand and helped median sales prices in the first 10 months of 2012 to increase from the same time period in 2011 in 25 states. Median sales prices nationwide during the first 10 months of 2012 on average were 99 percent of median list prices.

In January 2013, 10.9 million homeowners nationwide -- representing 26 percent of all outstanding homes with a mortgage -- were seriously underwater, meaning they owed at least 25 percent more on their home than what it was worth. That was down from 12.5 million homeowners representing 28 percent of all homes with a mortgage a year earlier in January 2012.

"2012 was the year of the judicial foreclosure, with foreclosure activity increasing from 2011 in 20 of the 26 states that primarily use the judicial process, and a judicial state -- Florida -- posting the nation's highest state foreclosure rate for the first time since the housing crisis began," says Daren Blomquist, vice president at RealtyTrac. "Meanwhile foreclosure activity continued to decline in 19 of the 24 states that use the more streamlined non-judicial foreclosure process, but there could be a backlog of delayed foreclosures building up in some of those states as well as the result of recent state legislation and court rulings that raise the bar for lenders to foreclose."

"That could mean that although we are comfortably past the peak of the foreclosure problem nationally, 2013 is likely to be book-ended by two discrete jumps in foreclosure activity," says Mr. Blomquist. "We expect to see continued increases in judicial foreclosure states near the beginning of the year as lenders finish catching up with the backlogs in those states, and another set of increases in some non-judicial states near the end of the year as lenders adjust to the new laws and process some deferred foreclosures in those states."