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Charlotte foreclosure filings drop to lowest level in 5 years

Charlotte area foreclosure filings plunged to their lowest level in five years last year, a fresh sign of the ongoing recovery in the region’s housing market.

Default notices, auctions and repossessions were reported on 10,147 properties, a 29 percent drop from 2012 and the lowest level since 9,802 in 2008, Irvine, Calif.-based RealtyTrac said Thursday in a report. Nationwide, fewer homes are falling into foreclosure, the data firm said, and properties already in foreclosure are poised to exit in large numbers as investors snap them up at auction.

“Millions of homeowners are still living in the shadow of the massive foreclosure crisis that the country experienced over the past eight years since the housing price bubble burst,” Daren Blomquist, RealtyTrac vice president, said in a statement. “But the shadow cast by the foreclosure crisis is shrinking.”

The decline in foreclosures comes as home prices continue to post large annual gains in Charlotte and elsewhere, buoyed in part by low numbers of properties for sale.

Average home prices in December rose 9 percent to $224,128 from a year ago, the Charlotte Regional Realtor Association said last week. December inventory in the region dropped to a 4.8-month supply, below the six months generally considered to be a balanced market.

Appreciation is helping homeowners who owe more than their homes are worth to regain equity and no longer be underwater – owing more on their properties than they are worth. Homeowners who are underwater are more likely to stop paying their mortgages and allow their homes to go into foreclosure.

Last week, RealtyTrac said 13 percent of Charlotte-area homeowners with a mortgage were seriously underwater, down from 17 percent in September. RealtyTrac defines a home as seriously underwater if it is worth at least 25 percent less than what is owed on the property.

Nationwide, foreclosure filings were reported on 1.4 million properties last year, the lowest annual total since 2007, when there were 1.3 million properties with filings. Foreclosure rates remain elevated in some states, such as Florida and Nevada, that were severely hurt in the housing downturn.

Of the banks that had taken back homes as of December, Charlotte-based Bank of America and Wells Fargo each had 11 percent of the inventory, the largest amount of any lender. Fannie Mae, Freddie Mac and the U.S. Department of Housing and Urban Development had a combined 41 percent of repossessed homes.

In the Charlotte region, foreclosure filings peaked during the housing downturn in 2010, when 14,732 properties had filings.

While Charlotte-area filings are down, they have further to go before returning to normal levels.

In 2006, 4,419 properties, or 0.7 percent of homes, had a foreclosure filing. Last year, the figure was 1.4 percent.

Roberts: 704-358-5248; Twitter: @DeonERoberts
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