Good News for Homeowners: Fewer Foreclosures in June

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Matt York/AP

NEW YORK -- U.S. home foreclosure filings tumbled in June to a 6½-year low, a further sign the housing market is getting back on better footing, a report from RealtyTrac showed Thursday.

Overall, 127,790 properties had foreclosure filings last month, down 14 percent from May, and down 35 percent from a year earlier. It was the lowest level since December 2006.

There were also fewer homes entering the foreclosure process, while lenders seized less homes. In the first six months of the year, banks took over 248,538 homes, putting repossessions on track for about 500,000 for the year, which would be down from the over 671,000 seen last year.

"We are getting tantalizingly close to being back to normal, healthy foreclosure levels, at least on a nationwide basis," said Daren Blomquist, vice president at RealtyTrac.

Repossessions were down in 34 states in June from a year ago, though some states saw significant increases, including Arkansas, Oklahoma and Maryland.

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The housing market has gotten back on its feet in the last year with home prices rising and sales improving. Fewer foreclosures have also helped the sector heal and improved homebuyer confidence.

States that process foreclosures through the court system, known as judicial states, appeared to be loosening the logjam of pending cases that has plagued the market.

Judicial foreclosure auctions were scheduled for 28,296 properties in June, up less than 1 percent from May but a jump of 34 percent from last year.

Some of the states with the biggest yearly increases in scheduled auctions are also states that have struggled the most with a backed-up pipeline of distressed homes, including New Jersey, Florida and New York.

Still, the time it takes to foreclose continued to lengthen. Properties foreclosed in the second quarter took an average 526 days to foreclose, up from 577 days in the first quarter.

"Once that number turns the corner and starts going down, that will be a strong indication that the lenders and courts have worked through the backlog and now we're just dealing with the fresher vintage of foreclosures," Blomquist said.

Foreclosure times were the longest in New York and New Jersey, with both states taking 1,033 days.

Hard-hit Florida had the highest foreclosure rate in the first half of the year, with a foreclosure filing on 1.7 percent of homes, or one in every 58. That's nearly three times the national average of one in every 164 homes.