Are Foreclosures Increasing or Decreasing?

Recent headlines have created tremendous confusion regarding the foreclosure situation in the country. Let’s give an example. Which of these two headlines are accurate?

Foreclosure Starts Plunge to 71-Month Low

Foreclosures Increase for the First Time Since 2010

The challenge is that both headlines are 100% accurate. How can foreclosures have increased for the first time in two years and, at the same time, be at a six year low? Each headline was reporting on a different measurement. Below are the explanations for each of the measurements as per RealtyTrac’s most recent Mortgage Foreclosure Report.

Foreclosure Starts

Foreclosure starts are the first steps taken by the bank after the borrower becomes delinquent on their mortgage payments (default notices or scheduled foreclosure auctions, depending on the state). They were filed for the first time on 77,494 U.S. properties in November. This was:

• Down 13% from the previous month


• Down 28% from November 2011


• At the lowest level since December 2006

Foreclosures (Bank Repossessions)

This is when the lender completes the foreclosure process and repossesses the property. This occurred on 59,134 U.S. properties in November. This was:

• An 11 percent increase from the previous month


• A 5% increase from November 2011


• The first year-over-year increase in bank repossessions since October 2010, when the practice of robo-signing foreclosure documents came to light and caused a sharp slowdown in foreclosure activity in the following months

In the report, Daren Blomquist, vice president at RealtyTrac, explained:

“The drop in overall foreclosure activity in November was caused largely by a 71-month low in foreclosure starts for the month, more evidence that we are past the worst of the foreclosure problem brought about by the housing bubble bursting six years ago. But foreclosures are continuing to hobble the U.S. housing market as lenders finally seize properties that started the process a year or two ago — and much longer in some cases.”

We hope this brings some clarity to the situation.