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Foreclosures down nationwide, still increasing in Phila. region

Foreclosure filings nationwide last year fell to their lowest level since 2006 and were down by more than a million properties from 2010's recession-aftermath peak of roughly 2.87 million.

Foreclosure filings nationwide last year fell to their lowest level since 2006 and were down by more than a million properties from 2010's recession-aftermath peak of roughly 2.87 million.

RealtyTrac, an Irvine, Calif., housing data and analytics provider that tracks filings across the United States, reported Thursday that last year's 1,117,426 total filings, while down considerably from that peak, still represented an increase of 400,000 since the housing boom of the last decade began to go bust.

The company has said it considers the 500,000 foreclosure filings in 2005 a normal year. A single property may be represented by several filings as the financial and legal aspects of a foreclosure are worked out.

Since the financial crisis began in September 2008, there have been 5.5 million completed home foreclosures, the real estate data provider CoreLogic reported Wednesday.

Homeownership rates peaked in the second quarter of 2004, and since then seven million U.S. homes have gone into foreclosure, CoreLogic said.

Despite the national decline in filings in 2014, portions of the housing market in the eight-county Philadelphia region are still mired in foreclosures, short sales, and bank repossessions, the RealtyTrac data show.

According to RealtyTrac, "The list of states with increased activity in the last months of 2014 includes those with judicial foreclosure backlogs, such as Massachusetts, New Jersey, Pennsylvania, and New York."

Such backlogs mean that in New Jersey and Pennsylvania, the foreclosure process often takes three years or more. Many mortgage lenders deferred pursuing foreclosures because of the backlogs, and the 2014 increase reflected attempts to catch up.

Last year, New Jersey had the second-highest increase nationally in filings, RealtyTrac said, and was No. 2 among the 50 states in number of filings.

The number of bank-owned repossessions - houses that went all the way through New Jersey's lengthy foreclosure process - rose 34 percent statewide, to 5,780, over 2013's level, the RealtyTrac report said. Camden, Burlington, and Gloucester Counties accounted for about 18 percent of 2014 filings statewide.

Still, bank-owned homes and foreclosures "have declined in our area," said Val Nunnenkamp of Berkshire Hathaway Home Services Fox & Roach Realtors, in Marlton - to about 18 percent of the for-sale inventory from 30 percent.

Nunnenkamp added that "there are still numerous abandoned homes that have not come to the market yet, which could increase the percentage."

These are "zombie houses" - more than 6,100 in the eight-county region - vacated by borrowers at the start of never-completed foreclosure proceedings.

Pennsylvania foreclosure filings were down 3 percent from 2013. Filings in Philadelphia, Montgomery, Bucks, Delaware, and Chester Counties accounted for 42 percent of the state's 2014 total.

Distressed houses can depress prices in their neighborhoods. The reason for the current level of such housing here, though still not as extensive as in other areas of the country over the last eight years, is simple, said economist Kevin Gillen of the University of Pennsylvania's Fels Institute of Government.

"Philadelphia's housing has lagged the national trends in terms of prices, sales, and its recovery. The fact that distressed inventory is down substantially at a national level but we are still working it off here is consistent with our past behavior," Gillen said.

In Northeast Philadelphia, among the harder-hit parts of the city, "certain areas are feeling the impact as far as decrease in value more than others," said Carol McCann of Re/Max Millenium, in Somerton.

"For instance, in pockets with more than half of properties used as rentals, high rents as well as less-stringent lending guidelines are moving tenants out, and many investors are selling blocks of their investment properties at lower prices," she said.

Short sales - in which the lender agrees to accept less than is owed on the mortgage - are common in the Northeast, said Chris Artur of Artur Realty, in Mayfair, and "every market area is further broken down block to block by age and style of homes."

Other areas show similar signs of distress. For example, seven of the 15 houses that sold for $123,000 or less in Norwood, Delaware County, between late summer and November were bank-owned foreclosures, likely sold to investors who will renovate and resell them, said Anne D. Hanson of Coldwell Banker Preferred.

Andrew Frank of Long & Foster Real Estate, who handles distressed sales in Montgomery and Bucks Counties as well as in the city, said he has "yet to see a decline nor hear about a decline."

"The litigation process actually seems like it is getting longer in Pennsylvania," Frank said, adding that he has had some properties for two to three years before an official eviction.

If prospective home buyers are looking at properties as a result of the filings, that's where things are different, said Chris Nelson of Re/Max Services, in Collegeville.

"We all know that banks are now selling notes, auctioning homes, and every other creative thing we can think of" to get them off their balance sheets, Nelson said.

215-854-2472 @alheavens

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