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Foreclosure starts slip 10 percent in November

By: James Abbey, January 18, 2016

Mortgage estimates and refinance rates have served budget-conscious consumers well over the past year. Affordable rates have enabled more people to avoid foreclosure, according to newly released data from real estate information company RealtyTrac. The latest example was November, when distressed property filings tumbled.

During the 30-day period, approximately 104,111 foreclosure starts took place nationwide, according to RealtyTrac. That's down 10 percent from October and by 7 percent on a year-over-year basis, translating to 1 in every 1,268 housing units.

Daren Blomquist, RealtyTrac vice president, pointed out how the foreclosure pipeline is slowly but surely emptying its backed-up inventory fueled by the housing meltdown in 2009.

"The share of active foreclosures tied to bubble-era loans is shrinking, with 59 percent of all loans in foreclosure originated between 2004 and 2008," Blomquist referenced. "While that is still a disproportionate share of active foreclosures, it continues to decrease from 61 percent earlier this year and 75 percent two years ago."

Starts rose in nine states

"Foreclosure starts boomed in Oklahoma by 246 percent."

At the same time, there were those states where foreclosure activity picked up in frequency. This was most apparent in Oklahoma. Foreclosure starts in the Sooner State rose more than 246 percent versus November 2014, by 180 percent in Arkansas, 39 percent in Virginia, 14 percent in Massachusetts and 5 percent in Maine.

While the early phases of foreclosure filings were higher in these and four other states, there was a 15 percent decrease in starts nationwide, RealtyTrac reported, helping to push overall default notices, scheduled auctions and bank repossessions down 10 percent on a month-over-month basis.

Mortgages rates diminish once again
Contributing to favorable financing conditions in November – not to mention 2015 as a whole – were low-interest mortgage rates. For prime borrowers, many are able to get online loan quotes in the 3 percent to 4 percent range. For the week ending Dec. 3, 30-year fixed rate mortgages averaged 3.9 percent, the third consecutive week in which it dropped, according to Freddie Mac's most recent Primary Mortgage Market Survey. Last year during the same week, 30-year FRMs were slightly lower at 3.8 percent.

For almost the entire year, 30-year FRMs have held at or below the 4 percent threshold, enabling more people to pay off their loans quickly. There is a chance, however, that rates could head higher, depending on what the Federal Reserve decides to do regarding short-term interest rates.

Sean Becketti, Freddie Mac chief economist, noted that it's anyone's guess what the Fed will do.

"[Fed chair] Janet Yellen implied that the economy is ready for a rate hike in December," Becketti referenced. He added that the jobs report, which was released Dec. 4, will likely be the deciding factor over whether a rate hike is justified or it's better to keep things as they are.

The U.S. Department of Labor reported the economy added 211,000 jobs In November, outperforming how many economists predicted it would fare.