Underwater Homes at Lowest Level in Two Years

On April 3, CF Funding shared news that foreclosures and shadow inventory continue to decrease, and less than 1.9 million mortgages are in serious delinquency. Today the lender shares more good news, as the U.S. Home Equity & Underwater Report by RealtyTrac revealed that properties which are seriously underwater are at their lowest level in two years. The report covered the first quarter of 2014.

In the first quarter of 2013, 10.9 million properties (26 percent of all properties with a mortgage) were seriously underwater, in comparison to 9.1 million properties in the first quarter of 2014 (17 percent of all properties with a mortgage). The steady increase in home values seen in 2013 played a large part in restoring the equity to American homes over the past year. As CF Funding reported in February, this increase in home equity is “allowing homeowners to refinance and invest in remodeling projects.”

The percentage of homes which are “equity-rich,” meaning the home has 50 percent or more equity, rose 1 percent in the first quarter of 2014 to reach 9.9 million. The percentage of equity-rich homes in the fourth quarter of 2013 was 9.1 million or 18 percent. The states with the highest amount of seriously underwater properties were Nevada at 34 percent, Florida at 31 percent, Illinois at 30 percent, and Michigan at 29 percent.  According to the RealtyTrac website, the Naperville area has a foreclosure rate of 1 in every 1245. As seen in the geographical comparison chart below, the number of foreclosures in percentage of units by area (broken down by type of filing) puts Naperville at almost half the rate of Illinois and .01 percent lower than the national average. CF Funding hopes to see foreclosure rates for Illinois improve as home prices continue to rise.

CF Funding would like to remind homeowners who are underwater that foreclosure may be avoidable by refinancing or selling the home. As Daren Blomquist, vice president of RealtyTrac, said in the April 2014 report, “The relatively high percentage of foreclosures with equity is surprising to many because it would seem homeowners with equity could easily avoid foreclosure…but many distressed homeowners with equity may not realize they have equity and in some cases have vacated the property already, assuming that foreclosure is inevitable.” Those who have questions about refinancing to avoid foreclosure should contact a Loan Specialist at CF Funding Corporation today by calling (888) 344-4080 or visiting http://www.cffunding.com.

Foreclosures Down 35 Percent from Last Year

CF Funding is happy to share that foreclosures and shadow inventory continue to decrease, according to the February 2014 National Foreclosure Report by Corelogic. Foreclosure inventory is down 35 percent nationally from last year, and less than 1.9 million mortgages are in “serious delinquency.” CF Funding has shared previously that “foreclosures have decreased 31 percent nationally from December 2012 to December 2013” and “the U.S. has now seen over two years of declines in foreclosure inventory.” The lender hopes to see this trend continue into the rest of 2014.

The number of completed foreclosures in February 2014 was 43,000, which is down 15 percent in comparison to February 2013. February’s foreclosures are also down 13.1 percent in comparison to January 2014. As a point of comparison, Corelogic points out that “before the decline in the housing market in 2007, completed foreclosures averaged 21,000 per month nationwide between 2000 and 2006.” CF Funding hopes to see a continued decline to surpass previous foreclosure levels as the housing market improves. Fortunately, February marks the 14^th consecutive month of a 20 percent or more year-over-year decrease in the inventory of foreclosed homes.

The five states with the highest foreclosure inventory in the February 2014 report were New Jersey (6.2 percent), Florida (6.0 percent), New York (4.7 percent), Maine (3.4 percent), and Connecticut (3.2 percent). The five states with the lowest foreclosure inventory were Wyoming (0.3 percent), Alaska (0.4 percent), North Dakota (0.5 percent), Nebraska (0.5 percent), and Colorado (0.6 percent). The state of Illinois currently has a foreclosure inventory of 2.7 percent (-1.8 percent from a year ago) and had 24,210 completed foreclosures in the past 12 months as of February. The serious delinquency rate for Illinois is 6.3 percent. 34 states have shown year-over-year foreclosure inventory decreases of more than 30 percent (with Arizona showing more than 50 percent declines).

CF Funding is very optimistic about the future of the housing industry, as Corelogic reported that “the 12-month sum of completed foreclosures is at [the] lowest point since December 2007 and has declined every month for the past 26 consecutive months.” Shadow inventory, defined as “properties that are more than 90 days delinquent, in foreclosure and held as real estate owned (REO) by mortgage servicers,” has decreased 22 percent from January 2013 to January 2014. Almost half of the current shadow inventory (about 1.7 million) are homes that are not yet foreclosed. As seen in the chart above, the shadow inventory has continued to decrease since about January 2011.

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