JANESVILLE — Foreclosure filings in Rock County are down significantly, signaling a trend that industry observers expect will continue.
But the precipitous drop in the first six months of this year could be more of an anomaly than a cue for wild celebration, they said.
According to Rock County Clerk of Courts Eldred Mielke, there were 317 foreclosure filings in the first six months of this year compared with 705 filings from January through June last year.
That's a decrease of 55 percent, which is even more pronounced when only unique filings are counted, said Russ Kashian, director of the Fiscal and Economic Research Center at UW-Whitewater.
With the help of the Wisconsin Realtors Association, Kashian routinely tracks foreclosure filings around the state. His numbers reflect only one-time filings and do not include those based on second mortgages or lenders' refilling efforts.
Kashian's numbers, which naturally include fewer filings than Mielke's numbers, show a 61 percent decrease in Rock County. Every neighboring county showed an improvement of at least 41 percent.
"Just about every county in the state went down, except for a couple that went up slightly," Kashian said. "The hardest hit counties like Rock, Kenosha, Racine and Milwaukee all went down dramatically.
"It really is a positive thing, and it's more than just the financial side of it. There's the emotional side of it, what it does to families and children."
Kashian and J. Michael Collins, faculty director of the Center for Financial Security and a professor at UW-Madison, said the huge decreases are noteworthy because they're being compared with equally significant increases last spring.
A $25 billion settlement reached in February 2012 between the nation's biggest mortgage lenders and state officials paved the way for banks to take action on unpaid mortgages, many of which had been in a procedural limbo for months or years.
Evidence of that was clear in Rock County, where foreclosure filings spiked in February 2012 and March 2012.
Lenders had a backlog of foreclosures that they've now mostly worked through, Collins said in an email.
"Plus, the market is more stable, and the flow of new foreclosures is slowing—people who are in trouble are getting back on their feet (and) fewer are losing work or facing declines in home values," he said.
The industry is recovering, he said, but there are still pockets where foreclosure rates make new buyers and remodelers nervous.
"This is still not ideal," he said. "I think 2013 will be better and 2014 better still, but still some continued elevated defaults through next year."
Only half-joking, Kashian said he thinks the Rock County market might be running out of homes to foreclose upon.
"There was such a large number of people exposed, and they got hit really hard," he said. "Now what's left is the rest of the population.
"There will always be foreclosures because of a medical crisis or a lost job, but after this period of the last five years, I think we're starting to return to normal."
Property tax foreclosures
The decline in mortgage foreclosures is finally showing up in property tax foreclosures.
Last year, Rock County officials started the foreclosure process on 288 parcels, filed in court for judgment on 164 and ended up foreclosing, or taking judgment, on 114, Rock County Treasurer Vicki Brown said in an email.
That was the highest level of activity in years.
Property tax foreclosures are different from mortgage foreclosures, in which people lose their homes because they don't make mortgage payments.
In property tax foreclosures, owners lose property over unpaid property taxes.
In 2013, the county started the process on 194 parcels and filed in June on 76 parcels. It will not go to court to take judgment until September.