West Coast States See a Surge in New Foreclosures – Washington, California, Nevada and Arizona

Foreclosure starts soared during the month of August in states along the country’s western coast, reversing what had been a declining trend over the past several months, according to the tracking firm ForeclosureRadar.

The California-based company keeps close tabs on foreclosure activity in the states of Arizona, California, Nevada, Oregon, and Washington. ForeclosureRadar recorded a spike in the first notice filed in the foreclosure process across its five-state coverage area last month.
ForeclosureRadar says the jump appears to have been primarily driven by Bank of America and its related entities, which initiated 116% more foreclosures in August than in July. Wells Fargo and U.S. Bank also saw increases in foreclosure start filings, while filings by JPMorgan Chase and Citibank were essentially flat. “Bank of America appears to be primarily responsible for the surge in foreclosure starts this month,” said Sean O’Toole, founder and CEO of ForeclosureRadar. “Since their average time to foreclose has recently increased to more than a year, it is unclear that these foreclosure starts will lead to an increase in foreclosure sales anytime soon,” O’Toole noted.
Foreclosure sales also increased throughout most of ForeclosureRadar’s coverage area in August. Investors bought more properties on the courthouse steps in August than in July everywhere except in Washington, while the number of properties taken back by the bank jumped significantly in Oregon and also rose in California and Nevada. In Arizona, ForeclosureRadar found that notice of trustee sale filings jumped 15% between July and August, reversing a four-month downward trend.
Foreclosed properties sold back to the bank as REO, however, continued a five-month decline, with an 8.0% drop from July to August, and a 42.8% drop compared to this time last year. Arizona investors were more active in August, with properties sold to third parties up 4.9% month-over-month and up 38.7% year-over-year.
Investor activity increased in August, with 19.8% more foreclosed properties sold to third parties in August than in July. Foreclosure cancellations declined for the fourth straight month, dropping 9.0% in August to the lowest level in 15 months. Time-to-foreclose in Nevada jumped 14.3% in August when compared to July’s timeline, reaching a new record of 368 days. The time to resell a foreclosed home increased month-over-month for both banks and third-party investors, to 179 days and 108 days, respectively. In Oregon notices of default were up in August over July by 35.6%, but filing activity remains 45.8% below this time last year. Properties returned to the bank rose dramatically in the state, up 243.3% month-over-month, as Recontrust, a subsidiary of Bank of America, began to clear the 2,800 foreclosures it started in April.
Washington saw a 3.4% increase in notice of trustee sale filings in August from July, which reversed four months of consecutive declines. Activity on the courthouse steps slowed as foreclosures sold back to banks dropped 29.4% month-over month, and those sold to third-party investors were down 33.3%.

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