Bank repossessions jumped in July, while foreclosure starts dropped to the lowest level in nearly a decade, according to RealtyTrac's monthly foreclosure market report.
Lenders repossessed about 46,957 properties in July – up 29% compared with June and up 81% compared with July 2014 to reach the highest level since January 2013.
States that saw the biggest increases in bank repossessions, on a year-over-year basis, in July included Florida (up 78%), California (up 23%), Texas (up 187%), Georgia (up 87%), Michigan (up 129%), Ohio (up 69%) and New Jersey (up 344%).
In a release, Daren Blomquist, vice president of RealtyTrac, says the increase in repossessions ‘represents banks flushing out old distress, rather than new distress being pushed into the pipeline.’ A lot of these mortgages, he explains, date back to the pre-crisis years.
Meanwhile, foreclosure starts in July were at the lowest level since November 2005. A total of 45,381 U.S. properties started the foreclosure process for the first time in July – down 8% from June and down 9% from July 2014, according to the report.
Foreclosure starts were less than one-fourth of their peak of 203,948 in April 2009 and below their pre-crisis average of 52,279 a month in 2005 and 2006.
States that saw the biggest year-over-year decreases in foreclosure starts in July included California (down 25%), New York (down 19%), Texas (down 40%), Illinois (down 18%), Georgia (down 24%), Ohio (down 22%), Michigan (down 37%) and Maryland (down 15%).
Due to the increase in repossessions, total foreclosure activity increased 7% compared with June and increased 14% compared with July 2014.
July marked the fifth consecutive month that the national foreclosure rate increased on a year-over-year basis, following 53 consecutive months of decreases, according to the firm. Overall, foreclosure activity – including default notices, scheduled auctions and bank repossessions – was up in the majority of the major markets tracked.
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