Foreclosure Activity Increases for Third Straight Month

Foreclosure filings in October rose 7%  from the previous month, RealtyTrac reported Thursday.

Including default notices, scheduled auctions, and bank repossessions – which all increased month-over-month – filings were reported on 230,678 U.S. properties in October. That grand total is down nearly 31% from a year earlier, when servicers began putting the brakes on foreclosure actions due to paperwork issues. But RealtyTrac has documented a rise in filings for three consecutive months now – a sign that servicers are working through the backlog of cases that have been delayed.
While the October numbers indicate unpaid mortgages are finally making their way through the pipeline, James Saccacio, RealtyTrac’s CEO, says he’s concerned other forces at work could throw a wrench in foreclosure processing. “[R]ecent state court rulings and new state laws keep changing the rules of the foreclosure game on the fly,” Saccacio said, “creating more uncertainty in the housing market and threatening to prolong the road to a robust real estate recovery.”
Nevada is one example of a change in foreclosure rules. It saw a 34% decrease in filings, driven by a new state law that took effect in October and requires lenders to sign and record an affidavit with key information about any pending foreclosure. The foreclosure hotbed of Las Vegas recorded a 36% decrease in overall foreclosure activity, caused by an 80% drop in new default notices from September to October. Las Vegas had held onto the title of highest metro foreclosure rate for 22 consecutive months, but with October’s decline, it slipped to the No. 5 spot.
The 1,201 new defaults in the whole state of Nevada last month was its lowest since June 2006. Even with the sharp drop-off in activity, Nevada posted the nation’s highest state foreclosure rate for the 58th straight month. Defaults in California, Florida, and Michigan – on the other hand – all rose to their highest levels in at least a year. California default notices increased 17% from the previous month to 29,240, pushing the state’s foreclosure rate to the second highest in the nation.
A sharp monthly increase in both new default notices and scheduled auctions boosted the foreclosure rate in Florida to fourth highest among the states. A total of 15,234 new default notices were reported in Florida last month, up 28% from the previous month. Scheduled auctions in Florida hit 10,655 in October, up 57 percent from September. New default notices in Michigan also reached a 12-month high, increasing 13% from the previous month. The state posted the nation’s fifth highest foreclosure rate for in October. Wedged in there at No. 3 was Arizona. Total foreclosure activity there increased nearly 18% from the previous month, but was still down 36 percent from October of last year.
Other states with foreclosure rates ranking among the top 10 were Georgia, Illinois, Idaho, Oregon, and Colorado.

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