Homeowners are realistic about the value of their homes.

For the second consecutive month, home value perceptions remained steady with owners barely overvaluing their home, at a national level.

In September, the average appraisal was only 0.29 percent less than what owners expected, according the Quicken Loans National Home Price Perception Index This result is consistent with August, when appraisals were 0.28 percent lower than estimated. This gap between the two opinions is much improved from the previous year, when appraiser opinions were an average of 1.14 percent lower.

Home value perceptions may be holding steady, but the growth of appraisal values slowed in September. The National Quicken Loans Home Value Index showed the average appraisal value rose 0.35 percent since the prior month, less than half of the growth rate from August. The annual increases in value are more consistent, with 5.69 percent year-over-year jump in September compared with a 5.79 percent increase in August.

Home Price Perception Index: Nationally, the home values estimate owners give at the beginning of the mortgage process is nearly even with the price opinions appraisers provide near the end of the financing process. In September, the average owner estimate was 0.29 percent lower than the value supplied by the appraiser, according to the Nationally HPPI. Not only that, but the number of metro areas where appraisals were more likely to be lower than expected dropped by 40 percent in the last year.

“A wide gap between the estimated home value and the appraised value can cause a mortgage to be reworked, or in some cases, scrapped altogether,” said Bill Banfield, Quicken Loans Executive Vice President of Capital Markets. “All the more reason for homeowners to be realistic when their mortgage banker asks them what they think their home is worth when they start the financing process. Our hope is that the HPPI data on past neighbor transactions can help a homeowner better estimate the value of their home in order to set their financing up for success.”

Home Value Index: Home appraisal values rose 0.35 percent in September, according to the Quicken Loans HVI – the only measure of home value change based solely on appraisal data. Annually, home values posted healthy growth, increasing 5.69 percent year-over-year. The West was the only region to buck the trend of monthly gains, posting a 0.56 percent decline in value from August to September. All four regions analyzed show annual growth ranging from a 4.22 percent increase in the Northeast to a 7.06 percent jump in the South.

“Rapid price increases that have spanned more than half a decade have started to affect affordability as average wage increases struggle to keep up,” said Banfield. “While home values are still rising, especially with solid annual jumps, a slowdown in monthly growth is expected to allow the market balance with the more moderate inflation.”

New American Funding will deploy the Black Knight Servicing Digital solution, which provides borrowers with an easy way to manage their loans and access details about how much wealth can generated from their real-estate assets.

Servicing Digital will also help New American Funding strengthen customer relationships and increase retention by giving their consumers easy, round-the-clock access to home and loan information. New American Funding is a family-owned mortgage lender with a servicing portfolio of than 100,000 loans and a portfolio of $27 billion.

"Implementing Servicing Digital offered New American Funding a high-quality solution to quickly respond to our customers' need to easily access information and make real-time payments from their mobile devices," said Roger Stotts, executive vice president and chief servicing officer for New American Funding.

Servicing Digital gives homeowners the ability to easily perform tasks and view information related to their mortgages. The aim is to deliver mortgage, property and local housing market data to the consumer through Black Knight's servicing system. Also, it provides access to the firm’s property records database, advanced analytics, and automated valuation models.

"With this solution, our customers have access to the information they need to make better decisions about their loans and help them achieve their financial goals," said Stotts.

New American Funding will be implementing the solution's native mobile app, which will be branded with New American Funding’s log and colors. Servicing Digital will also be offered as a responsive web design.

"Our solution will help New American Funding improve how its customers manage their home wealth and help the company's business grow," said Joe Nackashi, president of Black Knight.

Foreclosure filings have declined to their lowest level in 13 years, almost setting a new 13-year low.

The number of properties that received foreclosure filings--default notices, scheduled auctions or bank repossessions—fell to 177, 146 properties in the third quarter of 2018, a decline of six percent, according to the most recent U.S. Foreclosure Market Report from Attom Data Solutions. Compared with the same period a year earlier, foreclosures declined eight percent to their lowest level since the fourth quarter of 2005.

"The biggest foreclosure risk in today's housing market comes from natural disaster events such as the twin hurricanes of a year ago,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Foreclosure starts spiked in the third quarter in many local markets impacted by those hurricanes. Second, we are seeing relatively modest, but more widespread, foreclosure risk associated with Federal Housing Administration loans originated in 2014 and 2015."

For the eighth consecutive quarter foreclosure activity was lower than the pre-recession average. In Q3 foreclosure activity 36 percent below the pre-recession average of 278,912 properties registered between Q12006-Q3 2007.

"A decade after poorly underwritten mortgages triggered a housing market crash, it's clear that the foreclosure risk associated with those problem mortgages has faded—average foreclosure timelines have dropped to a two-year low, and the share of foreclosures tied to 2004-to-2008 loans has dropped well below 50 percent," said Blomquist.

(The chart below illustrates the states where a foreclosure takes the most days, on average, to complete. Hawaii requires an average of 1,491 days to complete a foreclose, more than twice the national average.)

 Foreclosure starts down nationwide, up in 36 percent of local markets
Lenders started the foreclosure process on 91,849 properties in Q3 2018, down six percent from the previous quarter. The performance represents a decline of 3 percent from a year ago—the 13^th consecutive quarter with a year-over-year decrease in foreclosure starts.

Counter to the national trend, 15 states posted year-over-year increases in foreclosure starts in Q3 2018, including Florida (up 25 percent); Texas (up 3 percent); Maryland (up 13 percent); Michigan (up 32 percent); and Missouri (up 10 percent).

In contrast to the national trend, 79 of 219 metropolitan statistical areas analyzed in the report (36 percent) posted a year-over-year increase in foreclosure starts in Q3 2018, including Los Angeles, California (up 2 percent); Houston, Texas (up 51 percent); Washington, D.C. (up 2 percent); Miami, Florida (up 29 percent); and Detroit, Michigan (up 65 percent).

Other markets with at least 1 million people and a year-over-year increase of at least 15 percent in foreclosure starts in Q3 2018 were Minneapolis-St. Paul, Minnesota; Tampa-St. Petersburg, Florida; St. Louis, Missouri; Orlando, Florida; Las Vegas, Nevada; Austin, Texas, Milwaukee, Wisconsin; Jacksonville, Florida; and Grand Rapids, Wyoming.

Although overall performance was good, there were some underperforming results.

FHA foreclosure rates for 2014 and 2015 vintages above long-term average
FHA foreclosure rates for 2014 and 2015 loan vintages registered above the long-term average foreclosure rate for FHA loans, the only two post-recession vintages (2010 and later) above the long-term average.

FHA loans originated in 2014 had the highest foreclosure rate of any post-recession loan vintage nationwide, as well as in 31 states and in 63 of 115 metropolitan statistical areas analyzed (55 percent), including New York, Chicago, Dallas-Fort Worth, Philadelphia and Houston.

FHA loans originated in 2015 had the highest foreclosure rate of any post-recession loan vintage in 10 states and in 21 of 115 metropolitan statistical areas analyzed (18 percent), including Atlanta, Miami, San Antonio, Oklahoma City and Memphis.

Highest foreclosure rates in New Jersey, Delaware, Maryland
Nationwide one in every 757 properties had a foreclosure filing in Q3 2018. States with the highest foreclosure rates in Q3 2018 were New Jersey (one in every 267 housing units with a foreclosure filing); Delaware (one in every 315); Maryland (one in every 379); Florida (one in every 449); and Nevada (one in every 472).

Among 219 metropolitan statistical areas analyzed in the report, those with the highest foreclosure rates in Q3 2018 were Atlantic City, New Jersey (one in every 152 housing units with a foreclosure filing); Trenton, New Jersey (one in every 236); Fayetteville, North Carolina (one in every 253); Peoria, Illinois (one in every 299); and Philadelphia, Pennsylvania (one in every 326).

Bank repossessions drop to record low nationwide, but Increased in 17 states
Lenders repossessed 51,459 properties through foreclosure, or real estate owned, in Q3 2018, down 24 percent from the previous quarter and down 8 percent from a year ago to the lowest level since Attom began tracking in the second quarter 2005.

Bucking the national trend, the Washington, D.C. and 17 states posted year-over-year increases in real estate owned activity in Q3 2018, including New Jersey (up 4 percent); Texas (up 21 percent); New York (up 3 percent); Georgia (up 56 percent); and Missouri (up 27 percent).

Average time to foreclose drops to two-year low
Properties foreclosed in Q3 2018 had been in the foreclosure process an average of 713 days, a decline of seven days compared with Q2. That’s down from 899 days in Q3 2017, and the lowest level since Q2 2016— a two-year low.

States with the longest average foreclosure timelines for homes foreclosed in Q3 2018 were Hawaii (1,491 days); Indiana (1,295 days); Florida (1,177 days); Utah (1,170 days); New Jersey (1,137 days); and New York (1,092 days).

States with the shortest average foreclosure timelines for homes foreclosed in Q3 2018 were Virginia (179 days); Mississippi (209 days); New Hampshire (216 days); Alaska (237 days); and Nebraska (240 days).