Foreclosure filings, including default notices, scheduled auctions and bank repossessions, were reported on 123,109 properties nationwide in October, an increase of 15% compared to September but still down 8% compared to October 2013, according to RealtyTrac's monthly U.S. Foreclosure Market Report.
That means one in every 1,069 homes had a foreclosure filing during October.
RealtyTrac says it was the biggest month-over-month jump in foreclosure activity since March 2010.
In addition, scheduled foreclosure auctions increased 24% and bank repossessions increased 22% month-over-month, according to the report.
Daren Blomquist, vice president at RealtyTrac, says the sudden increase in foreclosure filings is due, in part, to a seasonal pattern wherein ‘banks try to get ahead of the usual holiday foreclosure moratoriums’ – however, this year, that's not the only cause.
‘The October foreclosure numbers are not a complete surprise given that over the past three years, there has been an average 8 percent monthly uptick in scheduled foreclosure auctions in October,’ Blomquist says in a release. ‘But the sheer magnitude of the increase this year demonstrates there is more than just a seasonal pattern at work.’
The 24% spike in foreclosure auctions is due, in part, to the fact that lenders are trying to more rapidly liquidate their real estate-owned (REO) properties. A total of 59,869 properties were scheduled for foreclosure auction during October, the highest level since May 2013.
Scheduled foreclosure auctions were up 21% in the judicial states and were up 27% in the non-judicial states, according to the report.
‘There is still strong demand from the large institutional investors at the foreclosure auction in some markets, but even in markets with decreasing demand at the foreclosure auction, banks can be confident in selling REO properties quickly and at a good price,’ Blomquist adds. ‘That's because there is still strong demand from buyers, particularly in the lower price ranges, combined with a dearth of distressed homes listed for sale.’
To view the full report, click here.