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Thursday, August 08, 2013

MBA National Delinquency Survey: Judicial vs. Non-Judicial Foreclosure States

by Calculated Risk on 8/08/2013 09:41:00 PM

Earlier I posted the MBA National Delinquency Survey press release and a graph that showed mortgage delinquencies and foreclosures by period past due. There is a clear downward trend for mortgage delinquencies, however some states are further along than others. From the press release:

States with a judicial foreclosure system continue to bear a disproportionate share of the foreclosure backlog. .... The rate of new foreclosures in New York hit an all-time high during the second quarter and is now essentially equal with Florida. The percentage of loans in foreclosure in New Jersey remains about the same as the rates in California, Arizona and Nevada combined. The foreclosure percentages in Connecticut are back to near all-time highs for that state.
MBA In-foreclosure by stateClick on graph for larger image.

This graph is from the MBA and shows the percent of loans in the foreclosure process by state. Posted with permission.

The top states are Florida (10.58% in foreclosure down from 11.43% in Q1), New Jersey (8.01% down from 9.00%), New York (6.09% down from 6.18%), and Maine (5.62% down from 5.80%).  Nevada is the only non-judicial state in the top 10, and this is partially due to state laws that slow foreclosures.

California (1.64% down from 1.76%) and Arizona (1.51% down from 1.77%) are now well below the national average by every measure.

Judicial vs. non-Judicial statesFor judicial foreclosure states, it appears foreclosure inventory peaked in Q2 2012 (foreclosure inventory is the number of mortgages in the foreclosure process).  Foreclosure inventory in the judicial states has declined for four consecutive quarters.  This was three years after the peak in foreclosure inventories for non-judicial states.

It looks like the judicial states will have a significant number of distressed sales for several more years.