More cities are emerging from the blight of the high foreclosure rates that led into the Great Recession, but some of the gains might be threatened by looser regulation, a national real estate analyst said.
ATTOM Data Solutions, a Los Angeles-based real estate data company, reported Thursday that 234,508 foreclosure filings — default notices, scheduled auctions and bank repossessions — were made in the first quarter of 2017, down 11% from the previous quarter and down 19% from a year ago to the lowest level since the third quarter of 2006. This year’s first-quarter foreclosure activity was 16% below the pre-recession average.
“U.S. foreclosure activity on a quarterly basis first dipped below pre-recession averages in the fourth quarter of last year, and this report shows that trend continuing for the second consecutive quarter,” ATTOM SVP Daren Blomquist said.
However, Blomquist said the trend of dwindling foreclosures is threatened by the attempts to weaken Dodd-Frank and the CFPB, which have helped to prevent lenders from taking on undue risk.
“On the horizon, that’s the most potentially imminent game changer when it comes to shifting foreclosures higher,” he said. “Very tight lending standards are keeping the foreclosure starts in check and under control.”
ATTOM’s U.S. Foreclosure Market Report found 102 out of 216 larger metro areas had foreclosure activity below their pre-recession average in the first quarter, compared with 78 that met that mark of health a year earlier.
Metro areas newly descended from post-housing bubble levels of foreclosures included: The Seattle-Tacoma-Bellevue, Wash., area (13.3% below); Portland-Vancouver-Hillsboro, Ore.-Wash., area (14.9% below); Buffalo-Cheektowaga-Niagara Falls, N.Y., area (0.1% below); Knoxville, Tenn. (2.9% below); Pensacola-Ferry Pass-Brent, Fla., area (4.1% below); Salem, Ore. (25.3% below) and Naples-Immokalee-Marco Island, Fla., area (32.7% below).
Together, the six metro areas were averaging about 28,000 foreclosure filings per quarter during their worst months of the recession, compared with an average of 5,500 filings per quarter from January 2006 through September 2007 — the seven quarters preceding the recession’s start in late 2007.
In 2017’s first quarter, they had 4,832 foreclosure filings, 12% below their pre-recession averages.
CoreLogic, a real estate data company based in Irvine, Calif., reported Tuesday that early-stage mortgage delinquencies, defined as those 30 to 59 days past due, were trending lower in January 2017 at 2.1% compared with 2.4% a year earlier. The share of mortgages 60 to 89 days past due was 0.7% in January, down from 0.8% a year earlier.
“Steady job and income growth, combined with full-doc underwriting, has led to low early-stage delinquencies,” Dr. Frank Nothaft, CoreLogic’s chief economist, said.
