What is Driving Continuous Decline in Foreclosure Inventory? Team Thayer Real Estate News
Team Thayer Real Estate News
Foreclosure inventory is back down to pre-recession levels, according to reports this month fromCoreLogic and Black Knight Financial Services, and a major driver of the steady decline of residential homes in foreclosure is the steady foreclosure outflow.
Black Knight found 739,000 homes in pre-sale foreclosure inventory for June (about 1.46 percent of mortgages), while fore CoreLogic the numbers were lower (472,000 homes, about 1.2 percent of mortgages). But both have been steadily on the decline – for CoreLogic, the 1.2 percent foreclosure inventory rate (a decline of 29 percent from the previous June) is the lowest level since January 2008.
The estimated total of 1.46 percent foreclosure inventory by Black Knight in June was a 22.6 percent decline year-over-year; while this was the lowest year-over-year decline in foreclosure inventory reported for one month since early 2013, the number of loans in foreclosure still declined by 210,000 since June 2014, according to Black Knight.
The foreclosure outflow was steady even with the lower year-over-year decline in foreclosure inventory; Black Knight found that 23 percent of all active foreclosures entering 2015 either were liquidated or went to sale during the six-month period ending June 30, 2015. An additional 7 percent of loans that entered 2015 in active foreclosure are now current and performing, according to Black Knight.
The 30 percent aggregate of loans that have either been liquidated or returned to current status is close to a post-crisis high, according to Black Knight. The aged foreclosure inventory has also seen substantial outflow; 22 percent of severely delinquent loans (defined as two years or more past due) that entered 2015 in active foreclosure were either liquidated or went to sale in the previous six months for the period ending June 30, 2015. It was the highest percentage of outflow for aged inventory since 2009, according to Black Knight.
Justin Lee Thayer is Lane counties expert in market analysis for real estate investors. Call Justin @ 541-543-7287