In One Year, Idaho’s Foreclosure Rate Posts A 60 Percent Drop

Molly Messick / StateImpact Idaho

A year ago, Boise resident Carmel Crock talked to StateImpact about the painful experience of losing her home in a short sale.

Idaho’s foreclosure rate was the fifth highest in the nation when housing data provider RealtyTrac released its numbers at this time a year ago.  At that time, John Starr of Collier’s International gave a folksy, downbeat description of the local foreclosure problem.

“You can’t swing a dead cat without hitting somebody who has been personally affected or has a family member or an acquaintance who has been affected,” he said. 

Now, the news is different.  RealtyTrac’s August numbers are out this morning, and Idaho’s foreclosure rate is 18th in the nation, with one out of every 935 housing units experiencing some sort of foreclosure filing within the month.  That means the state’s foreclosure rate has declined by more than 60 percent over the last year, RealtyTrac says.

Its report attributes the improvement to the fact that Idaho is a nonjudicial foreclosure state. That means lenders don’t have to prove in court that the borrower is in default.  Nonjudicial foreclosure states are sometimes characterized as less protective of borrowers than states relying on a judicial foreclosure process, but they also appear to have worked through their foreclosure problems more rapidly.

Gavin Gee, Director of the Idaho Department of Finance, remarked at a foreclosure intervention workshop in August that he believes Idaho is wise to be a nonjudicial foreclosure state.  “You don’t have the backlog of foreclosures that you see in states where it’s a judicial process, and courts are clogged with other work and the process tends to drag out,” he explained.

Illinois — a judicial foreclosure state — posted the nation’s highest foreclosure rate last month, the first time the state has had that unwelcome distinction.

StateImpact Idaho is nearing its first anniversary, and some of our earliest broadcast stories focused on Idahoan’s experiences in a troubled housing market.  Those stories are available here and here.