Utah ranks 6th in foreclosures
By Jasen Lee
SALT LAKE CITY — The Beehive State recorded the sixth-highest rate of foreclosure filings nationwide, according to a new report.
The RealtyTrac U.S. Foreclosure Market Report for the third quarter of 2010 showed only Nevada, Arizona, Florida, California and Idaho ranked ahead of Utah for the rate of foreclosure-related filings — default notices, scheduled auctions and bank repossessions.
One in every 88 Utah housing units received a filing during the three-month period from July to September of this year, the data indicated.
"This stems probably from people either being 'upside down' in their mortgage and deciding to walk away from it or the fact that they are unemployed and can't meet their obligations," said John Watkins, economics professor at Westminster College. "The other issue in Utah is the relatively low wages and people probably overextending themselves."
Watkins said how the nation deals with the potential fallout from the recent foreclosure document controversy involving many of the country's largest institutional mortgage lenders could have a major impact on the economic future Utah and every other state.
Nationally, the number of foreclosure filings rose almost four percent from the previous quarter, but declined one percent from the third quarter of 2009. One in every 139 U.S. housing units received a foreclosure filing during the quarter, the report stated.
"Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months," said James Saccacio, chief executive officer of RealtyTrac — an Irvine, Calif.-based market research firm. "We expect to see a dip in those bank repossessions — and possibly earlier stages of the foreclosure process — in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks."
Foreclosure activity in the 24 judicial foreclosure states most affected by the foreclosure documentation issue accounted for 40 percent of all foreclosure activity in the third quarter and 36 percent of bank repossessions, or REOs.
"If the documentation issue cannot be quickly resolved and expands to more lenders we could see a chilling effect on the overall housing market as sales of pre-foreclosure and foreclosed properties, which account for nearly one-third of all sales, dry up and the shadow inventory of distressed properties grows — causing more uncertainty about home prices," Saccacio said.
As it has for the past 15 quarters, Nevada continued to register the nation's highest state foreclosure rate during the third quarter of 2010 despite a year-over-year decline in foreclosure activity. One in every 29 Nevada housing units received a foreclosure filing during the quarter, almost five times the national average. Nevada foreclosure activity increased nearly 1 percent from the previous quarter but was down nearly 20 percent from the third quarter of 2009.
Arizona posted the second highest state foreclosure rate for the fifth consecutive quarter, with one in every 55 housing units receiving a foreclosure filing, followed by Florida with one in every 56 housing units receiving a foreclosure filing.
The Golden State of California was fourth with one in every 70 housing units receiving a foreclosure filing during the third quarter, followed by Idaho at with one in every 86 housing units receiving a foreclosure filing during the period.
The other states besides Utah with foreclosure rates ranking among the top 10 were Georgia, Michigan, Illinois and Hawaii.