It has taken nine years, but the number of US homes in foreclosure has fallen to a level not seen since before the 2008 housing crisis.
More troubled borrowers are making their way through the foreclosure process, which can take more than five years on average in some US states.
The number of properties in active foreclosure declined by 24,000 to 631,000 last month, according to Black Knight Financial Services.
That is the lowest since October 2007. Neighborhoods across the US were in the coming years flooded with more than 2 million notices from banks.
The wave of foreclosures crested in 2010 when banks seized a record 1.2 million properties and served even more with notices of default, auction or repossession.
People suffering from the worst economic crisis since the Great Depression just “mailed their keys to the banks and just said ‘take it,’” Black Knight chief technology officer Ben Graboske said.
The huge inventory of foreclosures has taken years for lenders and borrowers to work through.
“We are finally getting back to a very clean slate,” Graboske said.
With US incomes slowly rising and unemployment claims the lowest since the 1970s, more borrowers are staying current with their payments.
Delinquencies on home loans across the country fell to 4.08 percent last month, the lowest since March 2007, according to Black Knight.
The most recent data suggests that the US has put its crisis-era foreclosures behind it, United Nations Federal Credit Union chief investment officer Christopher Sullivan said.
Housing markets across the US have been marked by an uneven recovery, but the pace of improvement has generally been positive, Sullivan said.
In some cases home prices have appreciated so much that further increases might be “unwelcomed” as higher home values put off potential first-time home-buyers, he said.
The reduction in late payments and foreclosures is allowing some of the nation’s biggest banks to further cut resources at units that specialize in handling delinquent borrowers.
The largest US mortgage lender Wells Fargo & Co last week announced the elimination of about 250 positions as lenders scale back groups that deal with delinquencies, according to a person with knowledge of the matter, who asked not to be identified citing lack of authorization to speak publicly.
The Charlotte Observer reported the job cuts last week.
Although the data suggest that the recovery is well under way, the US’ housing markets “still have a ways to go,” real-estate data provider CoreLogic deputy chief economist Sam Khater said.
While most foreclosure or distress metrics are the lowest in nine years, they are still above the late 1990s when the market was “last normal,” he said.
UNEXPECTED DECLINE
News home sales in the US unexpectedly declined for a third month last month, falling 1.5 percent to an annualized rate of 511,000 units, a US Department of Commerce report showed on Monday.
The figures were the latest to show uneven progress last month and a labored start to the housing industry’s busiest selling period of the year.
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