Chicago Foreclosure Activity Hit New Low In September

ATTOM Data Solutions released their 3rd Quarter Foreclosure Market Report this morning and it shows that foreclosure activity for the nation was down 8% from a year ago. That’s a fairly modest decrease but that’s still a nearly 13 year low and 36% below the pre-recession average.
Daren Blomquist, senior vice president at ATTOM Data Solutions, also pointed out that

A decade after poorly underwritten mortgages triggered a housing market crash, it’s clear that the foreclosure risk associated with those problem mortgages has faded — average foreclosure timelines have dropped to a two-year low, and the share of foreclosures tied to 2004-to-2008 loans has dropped well below 50 percent. The biggest foreclosure risk in today’s housing market comes from natural disaster events such as the twin hurricanes of a year ago. Foreclosure starts spiked in the third quarter in many local markets impacted by those hurricanes. Secondarily, we are seeing relatively modest — but more widespread — foreclosure risk associated with FHA loans originated in 2014 and 2015.

There are several interesting points in his comments that are discussed elsewhere in the report. First, the average time required to foreclose dropped in the third quarter to only 713 days from 899 days a year ago but the report does not indicate why.

Average days to complete a foreclosure
The time required to complete a foreclosure is finally tapering off after increasing for 10 years.

Second, it’s pretty concerning that yet another government housing program may be headed off the rails. Apparently, “FHA loans originated in 2014 had the highest foreclosure rate of any post-recession loan vintage nationwide.” That foreclosure rate also exceeded the rate on the 2005 vintage loans. Imagine that! And who knows where the 2016+ vintages will end up once they have enough time to go bad.
I also updated my Chicago foreclosure activity tracking through September in the graphs below. The first one breaks down the 3 components of foreclosure activity. The total of all 3 components, as well as bank repossessions, fell to a new low since I began tracking this. Total activity in September was 22.1% lower than a year ago. And defaults came in at the very low end of the historic range.
Chicago Foreclosure Activity
Chicago foreclosure activity has steadily declined since the housing crisis.

Chicago Shadow Inventory

We continue to make progress in cleaning up the residue from the housing crash. The graph below tracks the backlog of homes in the foreclosure process and, once again, it hit another record low with a very healthy decline of 410 homes in September. That brings the current total to 7138 homes.

Chicago homes in foreclosure
Chicago’s shadow inventory of homes in foreclosure is about 1/4 of what it once was.

#Foreclosures #ChicagoForeclosures
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service real estate brokerage that offers home buyer rebates and discount commissions. If you want to keep up to date on the Chicago real estate market, get an insider’s view of the seamy underbelly of the real estate industry, or you just think he’s the next Kurt Vonnegut you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.

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