RealtyTrac: Foreclosure Starts Jumped 12% In October

Posted by Patrick Barnard on November 12, 2015 No Comments
Categories : Mortgage Servicing

A total of 48,605 properties started the foreclosure process for the first time in October – an increase of 12.0% compared with September but a decrease of 14.0% compared with October 2014, according to RealtyTrac's U.S. Foreclosure Market Report.

It was the largest month-over-month increase in foreclosure starts since August 2011, when there was a 24% increase.

Foreclosure starts increased from the previous month in 34 states, including Maryland (up 300%), Michigan (up 37%), Washington (up 34%), California (up 21%), Illinois (up 20%), New Jersey (up 15%) and Florida (up 13%).

A total of 5,126 Maryland properties had a foreclosure filing in October – up 100% from the previous month but still down 14% from a year ago. Maryland's foreclosure rate jumped to No. 1 in October thanks to the surge in foreclosure starts. One in every 466 Maryland housing units had a foreclosure filing in October – more than 2.5 times the national foreclosure rate, RealtyTrac reports.

A total of 46,698 U.S. properties were scheduled for foreclosure auction in October, an increase of 12% compared with September but a decrease of 22% compared with October 2014, the firm reports.

Scheduled foreclosure auctions – which can be foreclosure starts in some states – increased from a year ago in 17 states, including New York (up 47%), Massachusetts (up 45%), North Carolina (up 24%), New Jersey (up 17%), and Maryland (up 3%).

Bank repossessions, meanwhile, decreased in October. There were a total of 36,582 properties repossessed by lenders – a decrease of 9% compared with September but up 31% from a year ago.

States that saw the most completed foreclosures for the month included Florida (5,760 real estate owned properties, or REOs), California (2,697 REOs), Illinois (2,624 REOs), New Jersey (1,960 REOs) and Texas (1,776 REOs).

Despite the annual increase, REOs in October were about one-third of their peak of 102,134 in September 2010.

Through the first 10 months of this year, there have been 369,920 completed foreclosures – up 33% from 277,815 during the same time period in 2014. This is an indication that lenders and servicers are clearing out the last of the foreclosure inventory left over from the financial crisis that began in 2008.

Bank repossessions increased from a year ago in 36 states in October – including New York (up 320%), New Jersey (up 275%), Texas (up 119%), North Carolina (up 89%), Nevada (up 83%) and Illinois (up 62%).

Daren Blomquist, vice president of RealtyTrac, says a spike in foreclosure starts in October is not that unusual; however, this spike was larger than the ones seen in previous Octobers.

‘We've seen a seasonal increase in foreclosure starts in October for the past five consecutive years,’ Blomquist says in a release. ‘However, the 12 percent increase this October is more than double the average five percent monthly increase in the past five Octobers, and the even more dramatic monthly increases in some states is certainly a concern. The upward trend in foreclosure starts in those states, in some cases, could be an indication of fissures in economic fundamentals driving more distress and in other cases is more likely an indication of long-term delinquencies finally entering the foreclosure pipeline.’

Looking at all foreclosure activity, including default notices, scheduled auctions and bank repossessions, a total of 115,134 U.S. properties saw filings in October – an increase of 6% compared with September but a decrease of 6% compared with a year ago.

About one in every 1,147 U.S. housing units had a foreclosure filing during the month.

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