Economic recovery has reached the nation's bootstraps.
Foreclosure and repossession rates, the last measures in mortgages to be affected by changes in the economy, have declined nationwide, according to surveys released last week.
Only California bucked the trend.
According to the Mortgage Bankers Association of America, foreclosures dropped a modest 0.01% to 1.01% in the third quarter of this year.
Repossessions on Decline
And statistics from TRW Redi Property Data, Riverside, Calif., show that actual repossessions of property are on the decline everywhere except California.
The improved rates are "in a way mirroring the reports that we have seen on regional economic performance," said Nima Nattagh, a market analyst at TRW Redi.
Declining foreclosure rates are a sign to Robert Van Order, chief economist at the Federal Home Mortgage Corp., that the economy is rebounding though not fully recovered.
But he said the vanilla rates in the Northeast and California were indicators of weak real estate markets.
Property-Value Impact
When homes lose their equity, delinquent homeowners cannot sell their homes to escape foreclosure.
Marketers at ERA Real Estate say a "high percentage" of their repossessed, or real-estate owned, properties are in real estate markets with decline property values.
According to TRW Redi, almost 20,000 homes in southern California alone went into foreclosure this year.
Time Requirements Vary
Mr. Nattagh of TRW Redi said REOs on the California market are having a major downward impact on prices there.
Because time requirements for foreclosures change from state to state, economists cannot pin down an absolute turnaround point for foreclosure rates.
Mr. Van Order at Freddie Mac estimated foreclosure rates would decline more substantially in six to 10 months.
He said foreclosure rates would increase more dramatically in the years following.
