States where foreclosures are stubbornly high

Christine DiGangi | Credit.com

The foreclosure crisis in the U.S. is dying a very slow death. Even though there are many fewer homes entering the foreclosure process now than there were before the housing bubble burst, two-thirds of all home loans in some state of foreclosure were originated between 2004 and 2008, according to the most recent foreclosure report from RealtyTrac. Of the foreclosures in progress in the first half of the year, the average foreclosure took 629 days to complete — that’s the longest the foreclosure process has been since RealtyTrac started tracking the metric in 2007.

The good news is foreclosure starts (a first notice of loan default or notice that a lawsuit has been filed regarding the ownership of a property) are at a 10-year low. The bad news is it’s taking forever to get those bad, crisis-era loans through the system. In New Jersey, a state with a consistently high foreclosure rate, foreclosures completed in the first half of 2015 took an average of 1,206 days from the notice of default to the bank sale or repossession of the home. That’s more than three years. Even once that long process comes to an end, the financial repercussions continue. It takes years to rebuild your credit after something like defaulting on a mortgage, but you make an action plan for doing so and get your free credit score every 30 days on Credit.com.

Overall, the national foreclosure rate in the first half of this year was down slightly (3%) from where it was from January through June of 2014, with one in every 221 housing units in some state of foreclosure (notice of default, scheduled auction or bank repossession). Homes that entered the foreclosure market years ago continue to linger and keep that rate above pre-crisis levels. Here are the states where foreclosure rates remain particularly high:

10. Tennessee

Total properties with foreclosure filings from January through June 2015: 14,846

Foreclosure rate from January through June 2015: 1 in every 190 housing units

Change from January through June 2014: up 156%

Changes in the way RealtyTrac collects data in Tennessee may have driven up the number of reported foreclosures, hence the large change since last year’s data was collected, the report notes. Tennessee had some spikes in foreclosure activity earlier in the year, but from May to June, its foreclosure rate fell to 62% to rank 15th in the country.

9. South Carolina

Total properties with foreclosure filings: 11,479

Foreclosure rate: 1 in every 187

Change from last year: down 13%

Despite an overall decline in the first six months of the year, South Carolina’s foreclosure activity increased a bit in June, up nearly 3% from May and up 13% from June 2014. A large portion of those homes are scheduled for auction.

8. Indiana

Total properties with foreclosure filings: 15,227

Foreclosure rate: 1 in every 184

Change from last year: down 13%

Like South Carolina, Indiana’s foreclosure rate in the first half of 2015 was down from last year but spiked in June, up more than 16% from June 2014.

7. Ohio

Total properties with foreclosure filings: 29,821

Foreclosure rate: 1 in every 172

Change from last year: down 16%

Ohio’s foreclosure rate fell in June, down 14% from June 2014 and down 11% from May.

6. Delaware

Total properties with foreclosure filings: 2,503

Foreclosure rate: 1 in every 163

Change from last year: down 9%

Foreclosure activity in Delaware is down significantly (26%) in June from the same month last year, as well as a 17% decrease from May.

5. Illinois

Total properties with foreclosure filings: 39,107

Foreclosure rate: 1 in every 135

Change from last year: down 9%

Illinois is one of 19 states where foreclosure starts have reached or fallen below where they were prior to 2006. At the same time, Illinois had a city in the top-10 metro areas (with a population of 200,000 or more) with the highest foreclosure rates in the first half of the year. Rockford, Ill., had the nation’s seventh-highest metro foreclosure rate, with 1 in every 87 housing units in some state of foreclosure.

4. Nevada

Total properties with foreclosure filings: 9,328

Foreclosure rate: 1 in every 126

Change from last year: up 10%

Nevada had the sixth-highest increase (76%) in home repossessions in June, compared to June 2014. It also had the sixth-highest increase (28%) in foreclosure starts over the same time period.

3. Maryland

Total properties with foreclosure filings: 21,880

Foreclosure rate: 1 in every 109

Change from last year: down 1%

Foreclosure activity hasn’t changed much in Maryland since the first half of last year, though it declined 18% from May to June. Its foreclosure rate is only slightly lower than New Jersey’s.

2. New Jersey

Total properties with foreclosure filings: 32,713

Foreclosure rate: 1 in every 109

Change from last year: up 24%

Atlantic City, N.J., posted the highest foreclosure rate of any metro area (1 in every 59) in the first half of 2015. New Jersey also had the largest increase in activity, third behind New York (up 31%) and Massachusetts (up 43%). On top of that, New Jersey has the longest timeline for foreclosure completion: In the first half of 2015, completed foreclosures took an average of 1,206 days to get to that end point.

1. Florida

Total properties with foreclosure filings: 95,129

Foreclosure rate: 1 in every 95

Change from last year: down 22%

Despite a large decrease in foreclosure activity from the first half of 2014, Florida remains the poster child of foreclosure in the United States. Eight of the 10 metro areas with the highest foreclosure rates were in Florida and it has the fifth-longest timeline from foreclosure start to completion (an average of 989 days).

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