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October 31, 2014

Foreclosures Rise as Banks Take More Action

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Foreclosures Rise as Banks Take More Action

Foreclosure activity rose last month by 4 percent, but it remains at the lowest level since 2007, RealtyTrac reports in its latest U.S. Foreclosure Market Report.

Last month’s increase was mostly attributed to a 7 percent month-over-month rise in foreclosure starts and a 6 percent rise in scheduled foreclosure auctions. Banks are increasingly turning more of their attention to properties that have been sitting in foreclosure limbo.

“Banks will now be able to devote more resources to dealing with the lingering inventory of nearly half a million already foreclosed homes that still need to be sold,” says Daren Blomquist, RealtyTrac’s vice president. “Our estimates indicate only 10 percent of these bank-owned properties are listed for sale, and more than half are still occupied by the former home owner or tenant.”

Metros with the highest percentage of occupied REOs include Nashville, Tenn.; Richmond, Va.; New York; Houston; and San Jose, Calif., according to RealtyTrac.

“Now that the foreclosure deluge has dried up, banks are turning their attention back to properties that have been sitting in foreclosure limbo for some time,” says Blomquist. “This is most evident in judicial foreclosure states that were more likely to have impediments in the foreclosure process, but there are also signs of this catch-up trend happening in some non-judicial states.”

Blomquist notes that California is seeing an increasing number of judicial foreclosure filings and foreclosure starts in the first quarter of this year (the state’s first double-digit percentage increase since the fourth quarter of 2009).

Foreclosure starts in the first quarter rose from year-ago levels in 19 states. The states that saw foreclosure starts rise by the most are New Jersey (up 83%); Maryland (up 43%); Indiana (up 38%); Delaware (up 24%); Connecticut (up 13%); and California (up 10%).

Twenty-nine states also posted annual increases in scheduled foreclosure auctions in March, including Utah (up 226%); Oregon (up 177%); Connecticut (up 131%); New Jersey (up 79%); and Delaware (up 49%), RealtyTrac reports.

Source: RealtyTrac

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