Foreclosure crisis is drawing to a close

CNN–Money

By Les Christie

The number of new foreclosure filings fell to an eight-year low in August.

Our long national foreclosure nightmare may be over.

The number of new foreclosure filings in August hit its lowest level in nearly eight years, according to RealtyTrac, an online marketer of foreclosed properties.

Soaring home prices and a big decline in underwater borrowers — those who owe more on their mortgage loans than their homes are worth — have helped drive the trend.

August’s initial foreclosure filings fell 44% to 55,575, just below the 56,063 that were recorded in October 2005. The foreclosure crunch began in summer 2006, at about the same time that housing prices hit their peak.

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“This is a strong indicator that the crisis is over,” said Daren Blomquist, vice president at RealtyTrac. “The foreclosure floodwaters have receded in most parts of the country, although lenders and communities continue to clean up the damage left behind,” he added.

The mopping-up process continues, however. In August, for example, the number of homes repossessed by lenders rose 6%, compared with July, to 39,277. But that still represents a drop of 25% year-over-year, and is more than 60% below the peak of repossessions in September, 2010.

The state with the highest rate of foreclosure filings was Nevada, with one for every 359 homes. According to Blomquist, many of those filings had been delayed by recent state legislation there that required lenders to redo their paperwork.

In Florida, one of every 383 homes had some kind of filing, the second highest rate among states. Ohio, Delaware and Maryland filled out the top five.

Florida cities accounted for six of the 10 hardest hit metro areas. Port St. Lucie topped the list, with a filing for one out of every 201 homes. Jacksonville, Miami and Ocala were also hard hit. Las Vegas reported the third highest rate and three Ohio cities — Toledo, Cleveland and Akron — also made the top 10 list.