Foreclosure filings during the month of February were down 2 percent from filings in January and 8 percent from the pace set in February 2011.  Data released on Thursday by RealtyTrac indicate that 206,900 U.S. properties were the subject of a filing during the month.  This equates to one in every 637 U.S. housing units.

RealtyTrac, based in Irvine, California, compiles a U.S. Foreclosure Market Report^TM each month by tracking documents filed in all three stages of foreclosure:

1.  Notice of Default (NOD) and Lis Pendens (LIS). This is the first legal notification from a lender that the borrower on a mortgage loan has defaulted under the terms of their mortgage and the lender intends to foreclose unless the loan is brought current.

2.  Auction - Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS): if the borrower does not catch up on their payments the lender will file a notice of sale (the lender intends to sell the property). This notice is published in local paper and contains information pertaining to the date, time and subject property address.

3.  Real Estate Owned or REO properties : "REO" stands for "real estate owned" and typically refers to the inventory of real estate that banks and mortgage companies have foreclosed on and subsequently purchased through the foreclosure auction if there was no offer higher than the minimum bid.

Nationally foreclosure filings decreased in two categories but default notices (NOD, LIS) increased one percent from January.  First-time filings affected a total of 58,886 properties during the month; this was a 7 percent decrease from the same month in 2011. Despite the graduate waning of the foreclosure crisis on a national basis, some states are exhibiting significant growth in some types of filings.

Default notices increased more than 30 percent in several states, all of them with judicial or quasi-judicial foreclosures processes.  The biggest increases were in Hawaii (+321 percent), Maryland (+157 percent), Connecticut (+64 percent), South Carolina (+58 percent), Indiana (+37 percent) and Pennsylvania (+35 percent.)  There were also states which saw a big drop in default notices; Nevada (-89 percent), Michigan (-72 percent), New York (-44 percent), Iowa (-28 percent) and Kentucky (-25 percent).  The decrease in Nevada is partially the result of a new law that requires an additional document to be filed before a notice of default. 

Foreclosure auctions (NTS, NFS) were scheduled for the first time on 84,180 U.S. properties in February, down 2 percent from January and down 13 percent from February 2011.  Here again there was a lot of variability among the states.  In 7 states there were increases of 50 percent or more in these filings compared to one year earlier including Kentucky (+190 percent), Illinois (+170), Iowa (+98 percent), Pennsylvania (+95 percent), Indiana (+92 percent), and Minnesota (+88 percent) and  Maryland (66 percent.)

A total of 63,834 properties were taken into REO in February, down 4 percent from January and 1 percent from a year earlier.  States with annual increases over 50 percent included Massachusetts (+114 percent), North Carolina (95 percent), Florida (+90 percent) South Carolina (+87 percent), Georgia (+76 percent) and Connecticut (+66 percent). 

"February's numbers point to a gradually rising foreclosure tide as some of the barriers that have been holding back foreclosures are removed," said Brandon Moore, CEO of RealtyTrac. "Although national foreclosure activity was pushed lower by decreases in a handful of larger states, 21 states posted annual increases in foreclosure activity, the most states with annual increases since November 2010.

"The foreclosure and mortgage settlement filed in court earlier this week will help pave the way to a properly functioning foreclosure process by providing a clear roadmap for necessary foreclosures," Moore continued. "That should result in more states posting annual increases in the coming months. Not surprisingly, many of the biggest annual increases in February were in states with the more bureaucratic judicial foreclosure process, which resulted in a larger backlog of foreclosures built up over the last 18 months in those states."

For the 62 consecutive months Nevada has led the nation in foreclosure activity although February filings represented a 58 month low.  One in every 278 housing units in the state had a foreclosure filing in February, more than twice the national average.  California posted the nation's second highest rate in February although foreclosure activity was at a 51-month low. A total of 48,422 California properties had a foreclosure filing during the month, one in every 283 housing units.  Arizona was the third most active state and filings there increased for the second month in a row due mainly to a 33 percent jump in scheduled auctions.  One in every 312 housing units received a riling during the month.

The complete report and related statistics can be read here.