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Foreclosures hit 11-year low in 3Q

IRVINE, Calif. – Oct. 12, 2017 – ATTOM Data Solutions’ Q3 2017 U.S. Foreclosure Market Report finds a total of 191,824 U.S. properties with foreclosure filings – default notices, scheduled auctions or bank repossessions. That’s down 13 percent from the previous quarter and 35 percent from a year ago.

It’s the lowest level of foreclosures since Q2 2006 – a more than 11-year low.

Foreclosures have not just dropped to their “normal” level before the foreclosure crisis, they’ve actually dropped lower than what was considered normal before the recession. It was 31 percent below the pre-recession average, and it was the fourth consecutive quarter where it has done so.

“Legacy foreclosures from the high-risk loans originated between 2004 and 2008 have largely been cleared out of the distressed market pipeline,” says Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile, loans originated during the housing boom of the last five years are posting foreclosure rates below historic averages, with the notable exception of FHA loans originated in 2014, which have the highest foreclosure rate of any FHA loan vintage since 2009 – 29 percent above the historic average for FHA loans although still 55 percent below the peak in 2007.

“Elevated foreclosure rates on 2014 vintage FHA loans reflect a gradual loosening of credit as the sustained housing boom is slowly bolstering confidence and increasing risk tolerance in the real estate market,” Blomquist added. “This trend also explains increasing foreclosure starts in the third quarter in some of the nation’s hottest housing markets, counter to the national trend. If we see this pattern continue for 2015- and 2016-originated loans as those vintages age, we would expect to see a more widespread – although still relatively modest – lift in foreclosure activity in the next few years.”

ATTOM has a Florida county-by-county breakdown on foreclosures and homes for sale posted on its website.

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