IBJNews

Home seizures by banks rise in Indiana, nationally

Back to TopCommentsE-mailPrintBookmark and Share

U.S. home repossessions rose to a nine-month high in November, even as the number of homes starting on the path to foreclosure declined to the lowest level in six years.

Home seizures rose in 29 states and the District of Columbia, led by increases of 96 percent in Indiana, 88 percent in Arkansas and 87 percent in Missouri, foreclosure listing firm RealtyTrac Inc. said Thursday.

Repossessions declined in 21 states, falling 64 percent in Nevada, 58 percent in Oregon and 49 percent in Massachusetts.

Overall, home seizures climbed 11 percent from the previous month.

Home seizures nationally rose 5.4 percent in November compared with November 2011, the first year-over-year gain in two years, as lenders sought to manage the flow of distressed properties without disrupting the housing recovery, according to RealtyTrac.

Banks repossessed 59,134 homes, up from 56,124 in November 2011, the Irvine, Calif.-based data firm said. The year-over-year increase was the first since October 2010, when foreclosures slowed after allegations that lenders were using faulty practices to take property from delinquent homeowners.

Meanwhile, the number of homes entering the foreclosure process or scheduled for auction for the first time, so-called foreclosure starts, sank to 77,494. That's a decline of 13 percent from October and a drop of 28 percent from November last year, the firm said.

It's also the lowest number of foreclosure starts since they hit 72,163 in December 2006.

The combination of declining foreclosure starts and a sharp increase in the number of homes taken back by lenders signals that banks are moving to complete foreclosures on homes with mortgages that have gone unpaid for a year or two, if not longer.

And it's likely that the borrowers who owned these homes already tried to refinance, get a loan modification or sell the home as a short sale — when the bank agrees to accept less than what is owned on the mortgage — but did not succeed, said Daren Blomquist, a vice president at RealtyTrac.

"Now foreclosure is the final recourse the banks have to go forward on these properties," Blomquist said.

There are close to 1 million U.S. homes that are in some stage of the foreclosure process, and any of those could potentially end up repossessed by a lender.
But several factors are now working to stem, or in some cases merely delay, foreclosures. That's a stark change from two or three years ago, when the foreclosure crisis was more severe.

Mortgage servicers and banks are increasingly favoring short sales as an alternative to foreclosure. Efforts by federal and state lawmakers to slow down the foreclosure process or make loan modifications a more likely option for homeowners also are having an impact. And borrowers are getting better about keeping up with mortgage payments.

The percentage of mortgage-holding homeowners who were at least two months behind on their payments sank in the third quarter to the lowest level in more than three years, according to credit reporting firm TransUnion.

In addition, an improving housing market, rising home prices and stronger hiring likely has helped some homeowners avoid foreclosure.

Even so, bank repossessions remain elevated and on pace to exceed 650,000 this year, according to RealtyTrac. That would be down from 800,000 last year.

"We're seeing more signs of the light at the end of the tunnel, with foreclosure starts being down," Blomquist said. "But the market still has to deal with the properties that already started foreclosure, and that could keep the (bank repossession) numbers stubbornly high the next year."

Also, lenders are still adjusting to new foreclosure ground rules set forth in a $25 billion settlement reached in February between five major banks and federal and state government officials over claims that many lenders had processed foreclosures without verifying documents.

As banks get a handle on those rules, they may move more quickly against late-paying mortgage-holders, Blomquist said.

All told, banks filed foreclosure-related notices on 180,817 properties last month, down 3 percent from October and down 19 percent from a year earlier.
Foreclosure activity, which RealtyTrac measures as the number of homes receiving a notice of default, scheduled auction or bank repossession, increased on an annual basis in 23 states and Washington, D.C.

At the state level, Florida had the highest foreclosure rate of any other state, with one in every 304 households in some stage of foreclosure, or twice the national average.

Rounding out the top 10 states by foreclosure rate were Nevada, Illinois, California, South Carolina, Ohio, Arizona, Georgia, Michigan and Indiana.

Indiana had a foreclosure rate of one in every 684 housing units in November. Almost 1,200 homes in Marion County were involved in some kind of foreclosure activity.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. By Mr. Lee's own admission, he basically ran pro-bono ads on the billboard. Paying advertisers didn't want ads on a controversial, ugly billboard that turned off customers. At least one of Mr. Lee's free advertisers dropped out early because they found that Mr. Lee's advertising was having negative impact. So Mr. Lee is disingenous to say the city now owes him for lost revenue. Mr. Lee quickly realized his monstrosity had a dim future and is trying to get the city to bail him out. And that's why the billboard came down so quickly.

  2. Merchants Square is back. The small strip center to the south of 116th is 100% leased, McAlister’s is doing well in the outlot building. The former O’Charleys is leased but is going through permitting with the State and the town of Carmel. Mac Grill is closing all of their Indy locations (not just Merchants) and this will allow for a new restaurant concept to backfill both of their locations. As for the north side of 116th a new dinner movie theater and brewery is under construction to fill most of the vacancy left by Hobby Lobby and Old Navy.

  3. Yes it does have an ethics commission which enforce the law which prohibits 12 specific items. google it

  4. Thanks for reading and replying. If you want to see the differentiation for research, speaking and consulting, check out the spreadsheet I linked to at the bottom of the post; it is broken out exactly that way. I can only include so much detail in a blog post before it becomes something other than a blog post.

  5. 1. There is no allegation of corruption, Marty, to imply otherwise if false. 2. Is the "State Rule" a law? I suspect not. 3. Is Mr. Woodruff obligated via an employment agreement (contractual obligation) to not work with the engineering firm? 4. In many states a right to earn a living will trump non-competes and other contractual obligations, does Mr. Woodruff's personal right to earn a living trump any contractual obligations that might or might not be out there. 5. Lawyers in state government routinely go work for law firms they were formally working with in their regulatory actions. You can see a steady stream to firms like B&D from state government. It would be interesting for IBJ to do a review of current lawyers and find out how their past decisions affected the law firms clients. Since there is a buffer between regulated company and the regulator working for a law firm technically is not in violation of ethics but you have to wonder if decisions were made in favor of certain firms and quid pro quo jobs resulted. Start with the DOI in this review. Very interesting.

ADVERTISEMENT