States Like Idaho Drive Decrease In National Foreclosures

RealtyTrac

To see RealtyTrac's March foreclosure data, click on the map above.

The number of foreclosures in Idaho has remained relatively stable since October of last year, according to data from RealtyTrac, out today.  Foreclosure filings made a slight .62 percent dip in the first quarter of 2012.

Compared to the first quarter of last year, filings have come down dramatically, falling by about 60 percent.  Nationally, the number of foreclosure filings has dropped by a much less substantial 16 percent over the same period.

RealtyTrac’s report notes that states like Idaho using the non-judicial foreclosure process are driving that national decrease.  Lenders in non-judicial foreclosure states do not have to prove in court that a mortgager is in default.  According to Robert Lang of Brookings Mountain West, that means non-judicial foreclosure states have tended to work through their backlogs of foreclosed homes more quickly.

“There are places where it’s pretty easy to get somebody out of the house quickly once they stop paying their mortgage,” Lang says.  “You don’t have to go through a formal review with a judge.  And so what it does is it makes a house go to sale much quicker.”

Judicial foreclosure states, on the other hand, have seen that inventory come to market more slowly.  “There are [states] where you have to go through a lot of steps and a very formal process to get somebody out of the house,” Lang explains.  “Then, there’s not an immediate flood of inventory onto a market and it tends to stabilize house prices.”

It’s a difference, more or less, of tearing the Band-Aid off, or easing it off slowly.  States that take the former route — widely viewed as less protective of homeowners — may have seen their housing markets fall off sharply.  But, Lang says, those markets also may be poised for earlier recoveries.

With one out of every 278 housing units in Idaho receiving a foreclosure filing in three months of this year, the state’s foreclosure rate stands at 16th in the nation.