Bank repossessions surged past 100,000 for the first time in September, according to a report by foreclosure data site RealtyTrac. The site tracks properties that receive foreclosure filings: default notices, scheduled auctions, and bank repossessions.
A record 102,134 properties became bank-owned last month.
"Lenders foreclosed on a record number of properties in September and in the third quarter, taking a bite out of the backlog of distressed properties where the foreclosure process was delayed by foreclosure prevention efforts over the past 20 months," said James J. Saccacio, RealtyTrac’s CEO, in a statement.
Overall, 930,437 properties received foreclosure filings in the third quarter — a 3.9 percent rise from the second quarter but a 1 percent drop compared to third-quarter 2009. Foreclosure activity in September rose nearly 3 percent month-to-month and 1 percent year-over-year, to 347,420 properties.
Broken down by type, default notices accounted for 29 percent of third-quarter filings, a total of 269,647. That’s a 1 percent quarter-to-quarter drop and a 21 percent drop from their peak in 2009’s third quarter, the report said.
Scheduled auctions hit a record high of 372,445 properties in the third quarter, rising 5 percent from the second quarter and 4 percent from 2009’s third quarter.
The total for bank repossessions was 7 percent higher than in the second quarter and 22 percent higher than in the third quarter of 2009.
"We expect to see a dip in those bank repossessions — and possibly earlier stages of the foreclosure process — in the fourth quarter as several major lenders have halted foreclosure sales in some states while they review irregularities in foreclosure-processing documentation that has been called into question in recent weeks," Saccacio said.
The so-called "robo-signing" scandal has prompted Bank of America to halt foreclosures in all 50 states — a move some fear will prompt other lenders to follow suit, effectively freezing the foreclosure market. GMAC Mortgage and JP Morgan Chase have halted foreclosure proceedings in 23 judicial foreclosure states.
"If the lenders can resolve the documentation issue quickly, then we would expect the temporary lull in foreclosure activity to be followed by a parallel spike in activity as many of the delayed foreclosures move forward in the foreclosure process," Saccacio said.
"However, if the documentation issue cannot be quickly resolved and expands to more lenders, we could see a chilling effect on the overall housing market as sales of preforeclosure and foreclosed properties — which account for nearly one-third of all sales — dry up and the shadow inventory of distressed properties grows, causing more uncertainty about home prices."
According to the report, 40 percent of all foreclosure activity and 36 percent of bank repossessions, specifically, in the third quarter took place in the judicial foreclosure states most affected by the scandal.
Preliminary figures show that preforeclosure and REO sales accounted for 31 percent of all sales in September, while sales in the most affected states made up 32 percent of all foreclosure sales, the report said.
Overall, one in every 139 housing units nationwide received a foreclosure filing in the third quarter, the report said.
Top 10 states with the highest foreclosure activity in Q3:
1. Nevada (1 filing per 29 homes)
2. Arizona (1 in 55)
3. Florida (1 in 56)
4. California (1 in 70)
5. Idaho (1 in 86)
6. Utah (1 in 88)
7. Georgia (1 in 98)
8. Michigan (1 in 98)
9. Illinois (1 in 110)
10. Hawaii (1 in 126)
In a separate press release, RealtyTrac announced a new feature for subscribers: the ability to see property information for recently sold listings in any area nationwide within the past three, six and nine months. Property details include sales price, sales date, foreclosure status of the property when it sold, number of bedrooms and bathrooms, square footage, lot size, and year built.
"The new recently sold feature will help our users determine what buyers have recently paid for properties in any neighborhood nationwide," Saccacio said in a statement. "It will help homebuyers determine how much to offer; it will help sellers determine how much to ask; it will help homeowners determine how much their property is worth; and it will help investors determine the profit and cash-flow potential of a neighborhood."
Subscribers will be able to compare recently sold properties to nearby preforeclosures, auctions, bank-owned homes and resale homes on an interactive map, the company said.
The addition of 2.5 million recently sold listings to 2 million foreclosure listings and 1.5 million for-sale listings brings the site’s total properties count to 6 million, the company said.
The recently sold homes data is based on arm’s-length sales deed data from public records, which may not be as current as similar data from multiple listing services.
Realtor.com operator Move Inc. is currently collecting data from more than 50 MLSs and displaying it publicly on Realtor.com.
Users of virtual office websites (VOWs) such as ZipRealty and Redfin can also see recent sold listings data from MLSs in some areas.