states playing catchup were behind a rise in foreclosure activity in October according
to RealtyTrac's U.S. Foreclosure Market Report.
Foreclosure filings - default
notices, scheduled auctions and bank repossessions - were reported on 133,919
U.S. properties in October, a 2 percent increase from the previous month but a
28 percent decrease from a year ago. This represents a filing on one in every
978 U.S. housing units.
While most of the components of
foreclosure activity are decreasing on a national basis there are increases,
some of them large, in a number of states.
States with a judicial foreclosure system, one in which the courts must
approve certain steps in the process, continue to work through what are in some
cases huge backlog of distressed properties.
There were a total of 30,023 scheduled judicial foreclosure auctions nationwide
in October, up 10 percent from the previous month and up 7 percent from a year
ago, the 16th consecutive month of annual increases.
States with the biggest annual
increases in scheduled judicial foreclosure auctions included Maryland (+177
percent), Delaware (+142 percent), New York (+98 percent), New Jersey (+97
percent), and Pennsylvania (+58 percent).
"The backlog of delayed judicial
foreclosures continues to make its way through the pipeline, with many of these
properties now being scheduled for the public auction after starting the
foreclosure process last year or earlier this year," said Daren Blomquist, vice
president at RealtyTrac. "Lenders are likely moving these properties more
rapidly to the public auction given that there is strong demand from
institutional buy-to-rent investors at the auction and that rising home prices
mean more of the loan losses can be recouped, either by selling to an investor
at the auction or by repossessing the property and reselling as bank
Foreclosures were initiated on
58,939 properties nationwide, an increase of 2 percent from September but down
34 percent from one year earlier.
October was the 15th consecutive month where foreclosure
starts have decreased on an annual basis.
Starts increased in 22 states and some of these increases were
substantial including in Colorado (+124 percent), Florida (+36 percent), and
Illinois (+30 percent).
Foreclosures were completed (i.e.
bank repossessions or REO) on a total of 37,775 bank repossessions nationwide
in October, down 1 percent from the previous month and down 29 percent from a
year ago - the 11th consecutive month where bank repossessions have
decreased annually. Fifteen states saw repossessions
increase from a year ago, including Oklahoma (+59 percent), Maryland (+54
percent), Virginia (+47 percent), Ohio and Washington (+30 percent each.)
RealtyTrac quoted Oklahoma
City/Tulsa real estate executive Sheldon Detrick about the large increase in
his state. "People who defaulted three
years ago are just now beginning the rest of the foreclosure process, which
explains the recent rise in bank repossessions in Oklahoma. When home prices were heading downward banks
would sometimes send default notices to homeowners but allow them to stay in
the home without making payments if the homeowner would maintain the home and
keep it in good condition. Now that the economy is improving and home
prices are rising, banks are willing to complete the foreclosure process if
homeowners don't start making their payments again."
Perennial foreclosure hotspots
Florida and Nevada continue to top the charts.
Florida saw a 22 percent month-over-month increase in foreclosure
activity driven primarily by a 36 percent increase in foreclosure starts. A total of 26,962 Florida properties had
foreclosure filings during the month, one in every 332 housing units. Nevada, while still second in activity
nationwide, saw a 39 percent decrease from September's 21 month high when many
banks apparently rushed to complete foreclosures ahead of implementation of the
Nevada Homeowner Bill of Rights.
Maryland posted the nation's third
highest state foreclosure rate in October, up from the No. 4 spot in September,
thanks to a 10 percent monthly increase and 201 percent year-over-year increase
in foreclosure activity, the 16th consecutive month where Maryland
foreclosure activity has increased on an annual basis. One in every 516
Maryland housing units had a foreclosure filing in October.
Other states in the top ten were Ohio
where one in every 525 housing units received a foreclosure filing, and
Illinois (one in every 552 units.), Utah, South Carolina, Delaware,
Connecticut, and Georgia. Miami, Tampa, Chicago, Baltimore and Riverside-San
Bernardino, were the metropolitan areas among the country's 20 largest with the
highest foreclosure rates.