According to RealtyTrac's 2015 Year-End U.S. Foreclosure MarketReport, released Thursday, overall foreclosure activity dropped toa nine-year low in 2015 – the lowest since before the recession in2006. The trend is the result of a 10-year low in foreclosurestarts, RealtyTrac said.

“This is largely the result of much tighter loan originationstandards found in previous years, primarily 2010 and forward,”Daren Blomquist, vice president for RealtyTrac, said. “That is,we are reaping the rewards of that in much lower foreclosure rates.At the same time, we are finally getting through the backlog ofdistressed properties that were left behind from the last housingcrisis.”

Blomquist said the crisis is mostly behind us, with theexception of in some markets.

Foreclosure activity did increase in some states, notably inTexas, Oklahoma and North Dakota. According to RealtyTrac, this isan indication that lower oil prices took a toll on some housingmarkets in 2015.

The average time to foreclosure in the fourth quarter of 2015declined slightly from the previous quarter. However, six stateshad an average foreclosure time of more than 1,000 days.

While foreclosures have, on average, declined, repossessionshave, on average, increased. Bank repossessions (which refer to alllenders, including credit unions) increased in 2015, following fourconsecutive years of decreases.

“This doesn't mean new problems in the housing market,”Blomquist said. “Rather, it means that banks are finally gettingaround to dealing with some of this distress after jumping througha number of hoops in previous years that involved giving peopleevery opportunity to avoid foreclosure.”

In other words, this is primarily the result of the “long tail”of distressed properties still remaining from the last housingcrisis, which is reflected by more repossessions.

Some of the biggest increases in repossessions took place in NewJersey (up 226%), New York (up 194%), Texas (up 115%), NorthCarolina (up 108%) and Pennsylvania (up 61%).

“The majority of these states are judicial foreclosure states,which have lengthier and more protracted foreclosure processes,meaning that it takes lenders longer to get through the process onmany of the properties that got into trouble years ago,” hesaid.

One big exception is Texas, where a different story tookplace.

“Some of the big REO increases here are related to the backlogof distressed properties, but there are new cracks in thefoundation of the housing market in that state because of theweakness of oil prices,” Blomquist said. “We actually started tosee increases in foreclosures in Texas around the end of 2014 andincreases in repossessions in 2015.”

What can credit unions learn from these trends?

“The big takeaway is that tightening up lending standards reallydoes work by reducing risk,” Blomquist said. “This has been provenby the numbers we are seeing here. Looking forward, I think thiswill create a much more favorable market in 2016 for creditunions.”