CoreLogic: U.S. Residential Foreclosure Crisis Decade in Review

March 30, 2017

Foreclosure volume in the United States has finally normalized following the peak of the mortgage meltdown, according to a 10-year retrospect report released by CoreLogic.

Titled “United States Residential Foreclosure Crisis: 10 Years Later,” the report examines the path of the residential foreclosure crisis beginning with the relatively healthy years early in the 2000s, through the peak of the crisis, to present day. CoreLogic says that there are about now 22,000 completed foreclosures a month. Completed foreclosures reflect the total number of homes lost to foreclosure.

The foreclosure crisis began in some parts of the country as early as 2007 and later peaked nationwide in September 2010, with approximately 120,000 completed foreclosures occurring during that single month. Throughout the crisis years, CoreLogic monitored completed foreclosures, the foreclosure inventory and the serious delinquency rate. Many economists mark the beginning of the foreclosure crisis with the collapse of two Bear Stearns subprime funds in June 2007, with the crisis deepening as a result of the Lehman Brothers bankruptcy in September 2008. Since the beginning of 2007, there have been approximately 7.8 million completed foreclosures nationally. Beginning in Q2 2004 when homeownership rates peaked, there have been approximately 8.6 million homes lost to foreclosure.

At the end of 2016, the national foreclosure inventory, which reflects all homes in some stage of the foreclosure process, included approximately 336,000, or 0.9 percent, of all homes with a mortgage compared with 1.4 million homes, or 3.3 percent, at the peak of the residential foreclosure crisis in September 2010.

“The country experienced a wild ride in the mortgage market between 2008 and 2012, with the foreclosure peak occurring in 2010,” said Frank Nothaft, chief economist for CoreLogic. “As we look back over 10 years of the foreclosure crisis, we cannot ignore the connection between jobs and homeownership. A healthy economy is driven by jobs coupled with consumer confidence that usually leads to homeownership.”

During the housing crisis, CoreLogic also reported the number of mortgages in serious delinquency, defined as 90 days or more past due, including loans in foreclosure or REO. The delinquency rate (payments past due by 30, 60 or 90 days) continues to be a leading indicator of troubled markets. At the end of 2016, 1 million mortgages, or 2.6 percent of homes with a mortgage, were in serious delinquency, compared to the serious delinquency peak of 3.7 million mortgages, or 8.6 percent of homes with a mortgage, were in serious delinquency, in January 2010. In recent years, the decline in serious delinquencies has been geographically broad throughout the country with year-over-year decreases from December 2015 to December 2016 in 48 states and the District of Columbia.

Highlights of the Residential Foreclosure Crisis:

  • The national completed foreclosure total peaked in 2010 with approximately 1.2 million foreclosures for the year; closely followed by just over 1 million completed foreclosures in 2009.
  • From the peak in 2010, the completed foreclosures steadily declined each year, dropping by nearly 100,000 completed foreclosures per year through 2016.
  • The state with the highest percent of mortgages in the foreclosure inventory was Florida, during June 2011, with 12.5 percent of homes in some stage of the foreclosure process.
  • Of the 10 largest Core Based Statistical Areas (CBSAs) as measured by population, Miami-Miami Beach-Kendall, Fla., had the highest percent of all homes with a mortgage in the foreclosure inventory at its peak in February 2011.

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