Economy Watch: Foreclosures Jump in October, Still Low Compared With 2010

Foreclosure activity nationwide was up 7 percent in October, but there was some good news domestically, such as a decrease in jobless claims. And the European panic took a break for the day.

November 11, 2011
By Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user Kevin Krejci

Foreclosure activity nationwide was up 7 percent in October compared with September, according to foreclosure specialist RealtyTrac on Thursday. But foreclosure activity — which for RealtyTrac includes the spectrum of default notices, scheduled auctions and bank repossessions — was down a considerable 31 percent compared with October 2010. Things haven’t been quite the same since robo-signing became frowned upon, it seems.

“The October foreclosure numbers continue to show strong signs that foreclosure activity is coming out of the rain delay we’ve been in for the past year as lenders corrected foreclosure paperwork and processing problems,” James Saccacio, CEO of RealtyTrac, noted in a statement. “However, recent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly, creating more uncertainty in the housing market.”

Nevada retained its title in October as foreclosure champ among the states for the 58th straight month in a row. One in every 180 Nevada residential units suffered a foreclosure filing during the month, still more than three times the national average. But there was a sharp drop — 75 percent month-over-month — in new default notices in the state, likely the result of a new law that (as of October) requires foreclosing lenders to sign and record in public records an affidavit with key information about any foreclosure.

Spots of Good News for the Economy

Despite all the hubbub overseas, there were some unexpected bits of good news emerging from the domestic economy on Thursday. For one thing, the U.S. Department of Labor reported that during the week ending November 5, initial unemployment claims were 390,000, a decrease of 10,000 from the previous week’s revised figure of 400,000. The less volatile four-week moving average was 400,000, a decrease of 5,250 from the previous week, and at that psychologically important 400,000 threshold.

Also, the country’s international trade deficit in goods and services decreased to $43.1 billion in September from $44.9 billion (revised) in August, as exports increased more than imports, according to the Census Bureau on Thursday. Imports from China, for instance, were down 2.5 percent. It was the narrowest overall trade deficit since the beginning of 2011.

This week average mortgage rates dropped below 4 percent (for 30-year fixed rate loans) for only the second time since the introduction of Arabic numerals, according to Freddie Mac on Thursday. About a month ago, the average was 3.94 percent, but afterwards rates ticked upward again. For the week ending Nov. 10, the GSE reports, the average was 3.99 percent.

Investors Take a Pause in Panic

The news from Europe on Thursday wasn’t as dramatic as earlier in the week. Italian sovereign debt, whose yields had spiked above the convention-wisdom danger point of 7 percent, was back below that level, and the Greeks found a technocrat to run their government. Word is that the Italians might find one, too, since a billionaire playboy as prime minister didn’t really work out over the long run.

Wednesday’s Euro-inspired mini-panic thus gave way to better feelings among investors on Thursday, with the Dow Jones Industrial Average scoring a 112.85-point, or 0.96 percent, gain. The S&P 500 was up 0.86 percent and the Nasdaq advanced 0.13 percent.