October foreclosures back off Q3 spike – over 800 repossessions headed for Tri-Cities housing market

Foreclosure activity reverted to a more normal pace in October following a Q3 shocker that saw dramatic repossession increases in several Tri-Cities area counties. But even the normal rate combined with Q3’s numbers means over 800 foreclosures are in the pipeline and headed toward a local market with record-level sales and a tight inventory of homes for sale.

The local count for foreclosures and pending foreclosures in ATTOM Data Solutions October Foreclosure Report was 140 in the local NE Tennessee counties and 19 in the Bristol VA and Washington County VA markets.

Compared to October last year that was an increase of one for Carter, Greene, Hawkins, Johnson, Sullivan, Unicoi and Washington counties. The Bristol, Washington Co. VA market total was the same as October last year.

Washington Co. Tenn. saw the most foreclosures activity last month – just as it did during Q3. Lenders repossessed 15 properties, and there were filings for 30 pending foreclosures.

Carter and Sullivan’s counties saw 11 repossession each, but Notice of Trustee Sales in Sullivan were significantly higher – 22 compared to three in Carter.

October’s repossession total was 55, and there was 86 Notice of Trustee Sales.

Last month’s local foreclosure activity was opposed to an increase on the national level that surprised many market watchers.

October marked the 13th consecutive month where U.S. foreclosure activity decreased on a year-over-year basis, but the month-over-month increase in October was the biggest monthly increase since August 2007.

“The loans used in this housing recovery that appear to be most susceptible to foreclosure are those such as FHA and VA with low down payments,” said Daren Blomquist, senior vice president at ATTOM. “Our data shows FHA and VA loans combined represent 49% of all active foreclosure inventory for loans originated in the seven years ending in 2015. By comparison, FHA and VA loans only represent 12% of all active foreclosure inventory among loans originated in the previous seven-year period, from 2002 to 2008.”

ATTOM’s Foreclosure Report is a forward-looking market indicator since the REO repossessions won’t begin showing on the market until early next year at the earliest.

The CoreLogic Foreclosure and Delinquent Mortgage Rate reports – on the other hand – are trailing indicators with August being the most current release. They are also calculated on a Metropolitan Statistical Areas basis instead of counties.

The three-county Johnson City MSA’s August foreclosure rate was 0.40%. It’s at a pre-recession level but has been trending slightly higher since April. That matches the trend in ATTOM reports.

The four-county Kingsport-Bristol MSA’s August rate was 0.38%, which also a pre-recession level. It has been trending lower since February. Kingsport-Bristol foreclosure rate trend is also in line with the ATTOM trend.

CoreLogic’s reports show 2.04% of the outstanding mortgages in the Johnson City MSA were delinquent by 90 days or more in August. That rate has been trending lower since the first of the year when it was 2.65%.

In Kingsport-Bristol, 2.38% of the outstanding mortgages were delinquent in August. Delinquent mortgages in that market have also been trending lower since the first of the year.