California image via Shutterstock.

The number of homes hit with foreclosure-related filings during the first six months of the year fell nearly 11 percent from the same period a year ago, to 1.05 million homes, according to public records aggregated by RealtyTrac.

Compared to the second half of 2011, however, foreclosure activity was up more than 2 percent, with 1 in every 126 U.S. housing units receiving a foreclosure filing.

Overall, foreclosure-related filings — including default notices, auction sale notices and bank repossessions — decreased in June for the 21st consecutive month. But foreclosure starts were up on a year-over-year basis for the second month in a row.

“Foreclosure starts began boiling over in more markets in the first half of the year, particularly in the second quarter,” said Brandon Moore, CEO of RealtyTrac, in a statement. “The increases in foreclosure starts in the first half of the year will likely translate into more short sales and bank repossessions in the second half of the year and into next year,” he said.

The report also shows that foreclosure activity continues to burn some of the same metros in 2012 — like Stockton and Modesto in California’s Central Valley and Riverside-San Bernardino-Ontario just east of Los Angeles.

Among metros with populations larger than 200,000, these metros rank No. 1, No. 2 and No. 3, respectively, for foreclosure activity through the half-year and for June. In the second quarter, it was the same triumvirate, but Modesto and Riverside-San Bernardino-Ontario switched places in the rankings.

They aren’t the only California metros facing the brunt of the foreclosure fire.

An 18 percent year-over-year increase in foreclosure starts in California in June left the Golden State with the highest foreclosure rate of any state for the month, a jump that landed nine of its metros in the top 10 for June.

Looking at the first half of the year overall, California metros took the top five spots, with Stockton, Modesto, Riverside-San Bernardino-Ontario, Vallejo-Fairfield and Merced collectively averaging a foreclosure rate of 2.5 percent, with about 1 in 40 housing units in those markets receiving a foreclosure-related filing. Two California metros — Bakersfield (No. 8) and Visalia-Porterville (No. 10) — made the top 10, too.

Atlanta-Sandy Springs-Marietta, Ga. (No. 6); Phoenix-Mesa-Scottsdale, Ariz. (No. 7); and Las Vegas-Paradise, Nev. (No. 10) were the non-California metros in the top 10.

Despite the heavy California presence in the metro top 10, Nevada, even after seeing a 61 percent year-over-year drop in foreclosure activity, tops U.S. states with about 1 in every 57 of its housing units having received a foreclosure filing in the first half of 2012. Arizona, too, saw a drop (37 percent) in foreclosures from a year ago, taking the No. 2 spot on the list. Georgia is No. 3.

10 states with highest foreclosure rates

Area	Foreclosure rate (Jan. – June 2012)
U.S.	1 in 126 housing units
Nevada	1 in 57
Arizona	1 in 58
Georgia	1 in 63
California	1 in 64
Florida	1 in 65
Illinois	1 in 71
Michigan	1 in 98
Colorado	1 in 103
Ohio	1 in 106
Utah	1 in 108

Source: RealtyTrac

See the pages below for data from the 10 metros with the highest foreclosure rates during the first six months of 2012.

Location: Stockton, Calif.

 

Foreclosure rate (Jan. – June 2012)	1 in every 38 housing units
Percent change in foreclosure rate (July – Dec. 2011)	-13.42%
Total housing units	233,755
Metro population	685,306

The number of mortgage applications filed in the U.S. remained virtually unchanged for the week ending June 15, with the number of filings edging up a slight 0.8% from a week earlier. 

Overall, home purchase applications dropped off while refinancing activity slowed to a moderate pace, the Mortgage Bankers Association said.

The refinance index increased 1% from a week earlier, according to the latest MBA survey. Meanwhile, the purchase index declined more than 9% from the previous week and is down 2% from a year ago.

“Refinance volume increased again last week, but the composition of activity changed markedly,” said Michael Fratantoni, vice president of research and economics for the Mortgage Bankers Association. “Despite rates remaining near all-time lows, conventional refinance application volume declined, and the HARP share of refinance activity dropped to 20%.”

He added, “On the other hand, FHA refinance volume exploded to an all-time high, more than doubling over the week. New, lower FHA premiums on streamlined refinance loans came fully into effect, and borrowers seized the opportunity to lower their mortgage rates without increasing their FHA premiums. Purchase activity fell off last week, but this is likely only a recalibration following the Memorial Day holiday, as the level of activity remains within the narrow band seen for the past three years.”

Refinancings during the weeklong period made up 81% of total applications, compared to 79% a week earlier.

The 30-year, fixed-rate mortgage with a conforming loan balance of $417,500 or less declined to 3.87%, matching the lowest rate in the survey’s history. Meanwhile, the average 30-year FRM with a jumbo loan balance declined from 4.12% to 4.06%, the lowest rate recorded for that particular product.

In addition, the 30-year, FRM backed by the FHA edged up from 3.71% to 3.72%, and the average 15-year FRM increased from 3.23% to 3.25%. The 5/1 ARM rate declined to 2.75%, its lowest rate yet.

More than half of all Americans are concerned that a huge wave of backlogged foreclosures to be released by major lenders in the wake of the Robo-signing scandal ? approximately twice the size of annual foreclosure sales?will lower home values in their markets.

A new survey by Realtor.com found that the 55.7 percent of consumers fear that the backlogged foreclosure inventory that built up during the two year period following the Robo-signing scandal when lenders slowed down processing, especially in the 26 judicial states where a court order is required to foreclose.  Homeowners and non-homeowners are equally concerned.

April data released today by CoreLogic found that foreclosure inventories today are at about the same level they were at the first of the year, when the backlog was at its peak and before 49 state Attorneys General Agreement with major lenders was signed in March.  Approximately 1.4 million homes, or 3.4 percent of all homes with a mortgage, were in the national foreclosure inventory as of April 2012 compared to 1.5 million, or 3.5 percent, in April 2011 and 1.4 million, or 3.4 percent, in March 2012, according to CoreLogic.  The backlogged inventory at its current level represents about 39 percent of the approximately 3.6 million foreclosures completed across the country since the start of the financial crisis in September 2008, there have been.

Participants in the Realtor.com survey want lenders to take action to keep the ’shadow inventory’ of foreclosures from lowering home values.  One in four (28.3 percent) Americans prefer the lease-purchase option instead of:  Selling them slowly to preserve home values (12.8 percent); Selling them to investors to fix up and rent out (11 percent); Continuing business as usual (10.8 percent); Selling them quickly to eliminate the backlog even if home values suffer (10.6 percent); And renting them out until prices improve (8.7 percent).

“As lenders begin processing their distressed inventories and releasing them for sale at the local level, we look to them to move carefully and monitor conditions so recently gained home values aren’t diminished,” said Steve Berkowitz, chief executive officer of Realtor.com operator Move, Inc.

“The inventory of homes in foreclosure in judicial foreclosure states is growing, but this increase is being more than offset by declining inventories in non-judicial states where the processing timelines to clear a foreclosure are shorter,” said Anand Nallathambi, chief executive officer of CoreLogic. “Nationally the inventory of homes in foreclosure decreased 0.1 percent from what it was a year ago at this time, and has leveled off over the first four months of 2012.”

Four of the five states with the highest foreclosure inventory as a percentage of all mortgaged homes were judicial states: Florida (12.0 percent), New Jersey (6.7 percent), Illinois (5.3 percent), and New York (5.0 percent).  The five states with the highest number of completed foreclosures for the 12 months ending in April 2012 were: California (142,000), Florida (92,000), Michigan (60,000), Texas (58,000) and Georgia (57,000). These five states account for 48.8 percent of all completed foreclosures nationally.

The Realtor.com survey found that Interest in buying foreclosures has almost tripled among potential home buyers in the past two and half years, and 92.1 percent of those buyers plan to live in them rather than use them as investments, according to a new national survey released today by Realtor.com. This suggests the stigma once associated with buying a foreclosure as a home has faded.

Homebuyer interest in foreclosures jumped 159 percent since October 2009 when foreclosures accounted for 29 percent of all home sales. In fact, more than two-thirds (64.9 percent) of today’s homebuyers said they’re likely to buy a foreclosure compared to 25.3 percent two and a half years ago.  Only 6.9 percent of today’s potential home buyers are interested in buying a foreclosure as an investment, down from 13.2 percent in October 2009, the survey found.

Fear of losing a home to foreclosure has declined in recent years.  Today, approximately one third of Americans (34.9 percent) fear they or someone they know will face foreclosure in the next year, down -33.5 percent from March 2009 levels when 52.5 percent expressed this concern.  Fear of facing foreclosure today is greatest among those earning less than $30,000 a year and slightly higher among non-homeowners than homeowners.

Most Americans say they haven’t seen improvement in the foreclosure situation where they live. The Realtor.com survey found most Americans (49 percent) think the foreclosure situation is about the same as it was last year, while close to one in six (17.6 percent) say the foreclosure situation is worse.  Only 21.3 percent think the foreclosure situation in their market is better.  Foreclosures have in fact declined by 34 percent in the past 12 months.